SECI Proposes Scaling Contract-for-Difference Framework from 1 GWh Pilot to 10 GW

Solar Energy Corporation of India Limited (SECI) has initiated a 1 GWh pilot tender for peak power supply under a Contract-for-Difference (CfD) construct and proposed scaling the framework to 10 GW for the Indian power market.

The initiative is aimed at exploring market-linked contracting mechanisms that can support reliable renewable power supply during periods of peak electricity demand while enabling greater flexibility in power procurement.

Under the pilot, SECI is seeking to test the CfD construct for 1 GWh of peak power supply, with the objective of enabling renewable power to be available when demand is high. The initiative comes as India’s power system continues to integrate increasing volumes of renewable energy and energy storage.

Building on the pilot, SECI has proposed a 10 GW CfD framework for the Indian power market. The proposed scale-up is intended to examine how the mechanism could contribute to deeper, more flexible and efficient power markets.

The proposed framework could support greater flexibility in power procurement and facilitate the integration of renewable energy and storage. It could also help improve market participation and the utilisation of available generation resources through market-linked contracting arrangements.

The initiative could create opportunities for a broader range of participants across the power sector, including renewable energy and storage developers, generators, traders, power exchanges, distribution companies (DISCOMs) and large consumers.

SECI said the proposed construct could also enable new contracting and participation models, potentially creating additional avenues for ecosystem development as India’s power market evolves.

The CfD initiative is part of SECI’s broader efforts to explore innovative market mechanisms and support the development of more efficient power markets. The proposed framework is intended to complement the changing structure of India’s electricity sector while supporting the increasing integration of renewable energy and energy storage.

SECI has also indicated that continued policy guidance from the Ministry of New and Renewable Energy (MNRE) and other stakeholders will be important as the potential scale-up of the CfD construct is explored.

The move from a 1 GWh pilot towards a proposed 10 GW framework represents an effort to examine how market-linked mechanisms can evolve alongside India’s growing renewable energy capacity and the increasing need for flexible, reliable and efficient power procurement.