India has moved from a power-deficit scenario to a surplus scenario, achieving an installed capacity of 382 GW against the peak demand of 187 GW during 2020-21. In this scenario, it is important that generators are despatched based on merit order, that is, from lower cost to higher cost, for the efficient utilisation of resources. However, this has been difficult to achieve in the current scenario, where distribution utilities (discoms) are mostly procuring their power through long-term contracts on a self-scheduling basis.
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