CERC Issues Draft Regulations for Deviation Settlement Mechanism

Stakeholders can submit their comments and suggestions by July 31, 2018


The Central Electricity Regulatory Commission (CERC) has issued regulations for Draft Central Electricity Regulatory Commission (Deviation Settlement Mechanism and related matters) for the year 2018.

This will be the fourth amendment to the regulations first issued in 2014.

According to the explanatory memorandum of the fourth amendment, the main objective for the changes in regulation is to “maintain grid discipline and grid security provided under the Grid Code through the commercial mechanism for deviation settlement through withdrawal and injection of electricity by the users of the grid.”

An expert group has examined various aspects such as weighted average prices in different market segments, the cumulative capacity and variable charges of RRAS (Routing and Remote Access Service), highest variable cost generator dispatched in ancillary services, and has proposed several measures. Below are some of these measures –

  • Forecasting and planning for procurement by the utilities need improvement.
  • Along with deviations, Area Control Error (ACE) should also be monitored.
  • A ‘gate closure’ concept should be introduced for better optimization of the scheduled despatches.
  • The DSM price vector should be linked to the existing market discovered prices (day-ahead market)
  • More time slots should be created in power exchange market to provide adequate opportunities for participants.

Any comments or suggestions from the stakeholders on the draft regulations can be sent by July 31, 2018. Amended regulation will come into effect from September 1, 2018. In case of a change to this date, CERC will notify with another date.

Recently, CERC released procedural regulations for granting Inter-State Transmission System (ISTS) connectivity to renewable energy projects.

As reported previously by Mercom, CERC recently set the national average power purchase cost (APPC) at ₹3.53 (~$0.0518)/kWh for open access.  The CERC had proposed this national APPC in April 2018.