India’s power sector faces mounting challenges due to rising electricity demand, increasing renewable energy integration, and the urgent need for decarbonization. Traditional supply-side solutions alone are proving inadequate to meet these evolving demands. Demand flexibility (DF), which enables altering electricity consumption in response to grid conditions, offers a cost-effective and scalable approach to improving grid stability and reducing costs. However, widespread adoption of DF has been limited due to the lack of regulatory and fiscal incentives, scalable deployment models, standardized operating, contracting, and measurement and verification protocols, as well as limited distribution company (DISCOM) capacity.

The Envisioning a National Grid Flexibility Programme for India report presents a vision for a transformative approach to scaling DF in India. It aims to create a digital infrastructure built upon an open network architecture to enable the discovery, ordering, fulfilment, and post-fulfilment of aggregator-led DF services. It supports open standards, interoperability across resource types, and transparent measurement and verification and settlement.

By supporting aggregators that can bundle sizeable flexible demand capacity and orchestrate dispatch of individual resources, the envisioned National Grid Flexibility Programme (NGFP) will enhance the grid benefits and impact of DF. Ultimately, it can make DF more financially attractive by lowering entry barriers for DF providers, reducing complexity and cost to procure DF for DISCOMs, and developing viable incentive models.

By 2027, the NGFP seeks to identify and enroll 1 gigawatt (GW) of DF potential and operationalize an aggregator model where third-party service providers consolidate DF capacity for DF buyers. The long-term vision is to scale this initiative across the nation to 5 GW by 2030, which will require proactive support from central- and state-level policymakers, regulators, and DISCOMs. The critical pillars of support for scaling the NGFP include:

1. Establishing a robust regulatory framework that creates a conducive environment for DF programs to integrate in day-to-day grid operations, establishes standard cost-benefit analysis guidelines, and supports transparent price discovery of DF services for buyers.

2. Testing and implementing an open communication standard to enable interoperability across DF use cases, providers, and geographies.

3. Developing credible national protocols for measurement and verification of DF services and data sharing and privacy.

4. Building stakeholder capacity and expertise via technical workshops for prospective buyers, policy roundtables with regulators, and consumer outreach programs to build awareness among all stakeholders about the value proposition and financial incentives of participating in DF programs.

5. Building stakeholder trust in the NGFP by establishing robust mechanisms for oversight, governance, and routes for recourse for market players. Implementing proof-of-concept DF projects through regulatory sandboxing can also help build trust in the NGFP’s DF solutions.

The NGFP is designed to work in concert with India’s broader digitalization efforts in the energy sector. The India Energy Stack (IES), a Ministry of Power initiative, aims to build digital public infrastructure for the power sector. Sharing the core foundations of the IES, including transparent discovery, open standards, and interoperability, the NGFP represents a domain-specific application of these principles for aggregator-led DF. As the IES landscape matures, the NGFP is well-placed to demonstrate DF as a critical use case to unlock a digital energy future. The success of the NGFP will benefit DISCOMs and consumers, enhance grid resilience, help India achieve its ambitious clean energy goals, and set a precedent for integrating DF into modern power systems globally.

The authors acknowledge the following organisations for providing their valuable input and feedback: All India Discoms Association (AIDA), Foundation for Interoperability in Digital Economy (FIDE), and Alliance for an Energy Efficient Economy.