The power sector in India, like other countries, is going through a disruptive transition, driven by changing economics and concerns regarding climate change. As a result, coal-based generation is likely to gradually morph from a firm, baseload, round-the-clock supplier to a swing supplier to meet demand when renewables are not sufficient. Toward ensuring that this disruption is minimised and well-managed, the introduction of flexibilisation measures across policy, planning, and operation of the coal-based generation value chain is necessary. 

Flexibilisation is required because renewable sources, which will dominate the sector in the years to come, are intermittent. In addition, there is increasing uncertainty even in electricity demand patterns. However, existing mechanisms and contracts in the coal-based generation value chain are premised on predictable generation and demand. 

Some measures for flexibility – such as provision to trade surplus power – already exist, but are insufficiently used. Going forward, regulators can ensure that these are used more effectively. In accounting for changing sector realities, it is also essential that flexibilisation measures are incorporated by sector actors at the planning stage itself.  However, introducing and strengthening flexibility measures is a complex issue that requires differed consideration for existing coal-based assets and assets yet to be contracted. 

In this context, this paper proposes a few ideas such as: better designed incentives for availability and generation; a different approach for providing schedules; explicit consideration of uncertainties in planning; better designed and enforced fuel supply agreements; minimising round-the-clock contracts in future; and encouraging more liquid, transparent, participative markets for coal and power.