Thermal Power

Sectors

Electricity

Thermal Power

The Power generation sector in India has transitioned from power deficit to capacity surplus largely on account of significant capacity addition by Central sector generators and IPPs. Besides, the significant capacity push on the renewable side has landed the utilities in a power surplus position.

The contract structures in Indian context are largely cost plus for Central and State generators and competitive for most of the IPPs. The cost plus projects are prone to change in the regulations on a periodic basis which poses threat to cost recovery of fixed charges and pass through of actual fuel cost. Similarly, the plants operating under competitive bidding have to struggle before appropriate Regulatory commissions to get a pass through of any additional cost pursuant to Change in Law.

From the perspective of Regulatory Commission, only the prudent costs need to be allowed as a pass through and the policy and regulatory return should be commensurate with the changing/reduction in risks in the sector.

Mercados with its in-depth expertise in the sector, supports it clients by providing strategic advice on policy and regulatory interpretations and legal precedence while dealing with the issues.


Transmission

Mercados plays an active role in the South Asian region in assisting the transmission policy initiatives including formulation of transmission pricing for the Electricity Regulator and Assessment of the impact of alternative pricing methodologies based on global studies.

Mercados also assists private clients in understanding the commercial position of new assets with respect to the prevailing transmission pricing methodology


Distribution

The distribution sector is experiencing a fundamental shift owing to key policy initiatives like UDAY. Mercados EMI is helping distribution companies improve operational and financial performance through implementing loss reduction strategies, power purchase cost optimization organisational restructuring and reengineering.

Mercados is currently assisting one of the largest Utilities in India for achieving the loss reduction targets under UDAY.Our management solutions are based on our own innovative approaches, supported by proprietary information systems.


Power Markets

Now and then Indian Power sector has evolved from a conventional market to a competitive market where the participation is scaling from a single industrial consumer to multiple discoms. After introducing Open Access in power sector, the market has seen an exponential growth in both participation as well as volumes which created a bench mark for procurement of power in Short term market. This brings out the importance for statistical and simulating models to forecast the demand and prices of exchange so as to mitigate the risk of participation and selection of volume for generators and discoms.

Mercados assists clients to mitigate the risk of price volatility on exchange and providing price forecast from day ahead to month ahead considering various risk and opportunity cost in the market. Mercados is providing services to discoms and generators in demand forecasting and procurement planning from short term to long term considering the different available market instruments.


Power Systems

As the transmission systems are becoming more complex with the integration of Renewable energy systems, the Utilities are looking to re- visit the transmission master plans developed considering predominant coal based generation.

Mercados EMI has been assisting Utilities to develop next level transmission plans which allows them to plan capex and opex according the RE mix envisaged to be installed in their system.