CERC Postpones New Deviation Settlement Regulations Again Amid COVID-19

The implementation has now been delayed to December 1, 2020


The Central Electricity Regulatory Commission (CERC) has once again rescheduled the implementation of the fifth amendment to the deviation settlement mechanism regulations (DSM). The earlier date for its implementation was June 1, 2020, which has now been extended to December 1, 2020.

In the wake of coronavirus outbreak in the country, the Commission had earlier rescheduled implementing the fifth amendment of deviation settlement regulations from April 1, 2020, to June 1, 2020.

In line with this extension, the Commission has extended the applicability of the existing provisions up to November 30, 2020.

This extension was announced after the Commission received representations from various stakeholders expressing difficulties in implementing the provisions of DSM given the current crisis.

In May 2020, Gujarat State Load Dispatch Center (GSLDC) submitted that the nationwide lockdown imposed by the Government of India to contain the spread of COVID-19 had a severe impact on grid operation. Although the state demand and renewable energy variations remain on the higher side, the revenue collections of state distribution companies have dropped drastically. It added that both the state-owned and private distribution companies are facing a financial crunch. Due to less demand, many state generators are being kept in “reserve shutdown.

“In such a situation, it will be very difficult to change the sign of the deviation after every six-time blocks,” it added.

Similarly, the Transmission Corporation of Andhra Pradesh Limited (APTRANSCO) had pointed out that under drawl in real-time is due to reasons like the high generation of renewable energy (more than the forecast), a sudden change in weather, rigid short-term open access (STOA) and power exchange transactions, contractual limitations in backing down long-term access and medium-term open access (MTOA), and minimum units required to meet peak loads. It added that there is a difference between readings of supervisory control and data acquisition (SCADA) and structural equation modeling (SEM) data.

The APTRANSCO said that it is difficult to implement the regulation unless the SEM data is made available to the SLDCs on a real-time basis.

APTRANSCO further requested the Commission that the sign change requirement after every 12-time blocks, which was applicable up to May 31, 2020, should continue forever, and the sign change requirement for every six-time blocks may be withdrawn.

“Higher DSM rate itself is leading to self-regulation by states. The introduction of the real-time market (RTM), will push backward the right to revision or call back, by four additional time blocks to seven-time blocks. As a result, the problem faced by the drawee entities will be further aggravated. Further, the recovery of grid demand is very slow in the present lockdown situation,” it added.

Rajasthan Urja Vikas Nigam Limited (RUVNL) stated that since the penetration of wind energy was on the higher side, it had become difficult to manage surplus power. It also pointed out that due to the lockdown, revenue collection of the distribution companies had severely been affected. So, it requested to extend the implementation of the proposed amendment by another three months.

Besides agreeing to provide the extension, the Commission also emphasized that the stakeholders should take steps to channel their short-term energy requirement through organized markets and refrain from depending on the grid.

Notably, the Power Exchange India Limited (PXIL) and the Indian Energy Exchange (IEX) started their real-time market trading platforms for electricity transactions on June 1, 2020. The real-time market is a platform widely used across the world. The RTM is designed as a half-hourly market, comprising 48 auction sessions of 15-minute duration each. The auction sessions would be conducted during even time blocks of the hour with delivery to commence from one hour after the closure of the trade session.

Image credit:  Dusty Matthews from Keller, United States / CC BY