Electricity market reform – Karnataka case study

The document investigates how Karnataka can manage its increasing flexibility needs—driven by high solar and wind capacity—through a portfolio of demand-side measures, energy storage, and powerplant operational changes. It argues that a balanced portfolio of these options can reduce system costs by up to 10% and carbon emissions by up to 35% by 2030, potentially making new coal capacity redundant. Key recommendations include amending grid codes to allow cost recovery for flexible thermal operations, completing agricultural feeder separation, and developing a 'data mission' to support locational pricing and market design.

• Implementing flexibility through markets and resource development can significantly lower costs and emissions for an isolated Karnataka system, reducing electricity costs by up to 10% and carbon emissions by up to 35%.
• A balanced portfolio combining demand flexibility, energy storage, and powerplant flexibility is more effective and less risky than relying on any single resource, delivering the highest optimization for cost, curtailment, and emissions.
• Integration into a wider India-wide market with strong transmission links could further reduce system costs in Karnataka by approximately 7%.
• Demand flexibility is generally the least expensive resource. Key potentials include agricultural pumping, which could provide 30GWh of daily energy shifting by 2030, and EV charging, which could offer 7GWh of daily shifting potential from light duty vehicles alone.
• Karnataka's coal-fired plants can provide significant flexible capacity if technical minimums are lowered. Reducing the mandated technical minimum from 70% to 55% could unlock 15% additional daily shifting capacity; further reduction to 40% would release another 15%.
• With sufficient flexibility, Karnataka could eliminate its 1.6GW pipeline for the expansion of the Udupi Thermal Power Plant without sacrificing reliability.
• Battery storage remains a high-capital cost resource, but its competitiveness improves when 'stacking' multiple services (e.g., combining energy shifting with voltage support) to amortize costs.
• Industrial demand, particularly in the textile sector (offering up to 25% load shifting), provides a low-cost opportunity for seasonal load shifting through the management of maintenance and production schedules.

APA

Udetanshu, Baghel, H., & Nelson, D. (2020). Electricity market reform – Karnataka case study. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/12/Electricity-market-reform-Karnataka-case-study-December-2020.pdf

Chicago

Udetanshu, Himanshu Baghel, and David Nelson. Electricity market reform – Karnataka case study. Climate Policy Initiative, 2020. https://www.climatepolicyinitiative.org/wp-content/uploads/2020/12/Electricity-market-reform-Karnataka-case-study-December-2020.pdf.

Wikipedia

{{cite report |last1=Udetanshu |last2=Baghel |first2=Himanshu |last3=Nelson |first3=David |title=Electricity market reform – Karnataka case study |publisher=Climate Policy Initiative |date=September 2020 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2020/12/Electricity-market-reform-Karnataka-case-study-December-2020.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{udetanshu2020electricity, author = {Udetanshu and Baghel, Himanshu and Nelson, David}, title = {{Electricity market reform – Karnataka case study}}, institution = {Climate Policy Initiative}, year = {2020}, month = sep, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2020/12/Electricity-market-reform-Karnataka-case-study-December-2020.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }