Rajasthan RE Generators to Pay 50% of Deviation Settlement Charges from Oct ‘19-March 2020

RERC has waived off DSM charges until September 30, 2018


The Rajasthan Electricity Regulatory Commission (RERC) has issued its amended regulations for Forecasting, Scheduling, Deviation Settlement of Solar and Wind Generation Sources Regulations, 2017.

The commission was responding to a petition filed by the Indian Wind Power Association in June 2019, challenging the validity of the deviation settlement mechanism regulations passed by the state commission and requested it to be scrapped.

In response, the commission has stated that forecasting and scheduling of renewable energy is the most critical issue for the future addition of the renewable energy capacity and stable operation of the grid, and all stakeholders need to maintain necessary discipline. The commission has considered the challenges pointed out by the stakeholders in implementing the regulations and has given directions and relaxed some regulations for easier implementation.

The commission believes that the current practice of pooling station wise aggregation methodology is not required, and the regulation related to the virtual pool is proposed to be deleted.

The request for aggregation was rejected as the commission said  – “The Commission agrees with the view of the SLDC that Aggregation at State level would result in no deviation charges for the error band of +/- 15% for such a large penetration of Renewable Energy and such magnitude would be detrimental to the stability of the Grid. This would result in a huge liability of DSM charges on the State Discoms, which will otherwise have to be passed on to the end consumers.”

One issue of contention was the order in which inter-state and intra-state power were adjusted under pooling stations where electrical separation is not possible. The previous regulation resulted in higher charges for the inter-state operations. Now the order states that:

In case of electrical separation not being possible, then a combined schedule of inter and intrastate transaction with bifurcated interstate (with state wise bifurcation) and intrastate (with Discoms/ deemed licensee wise bifurcation) schedule shall be allowed and actual generation of the connected generators shall be considered and adjusted in the ratio of inter and intrastate schedules.”

Renewable energy generators are instructed to install a check meter (ABT meter) at Rajasthan Rajya Vidyut Prasaran Nigam Limited (RVPN) grid sub-stations (GSS) within four months at the point where renewable energy generators inject the pooled power.

Within six months, the RE generators have to provide telemetry, SCADA, and relevant data of the interconnection points to facilitate the grid operations to the state load dispatch center (SLDC).

The SLDC is directed to create a web portal and necessary IT-based tools and applications within three months for timely and transparent sharing of data with all the stakeholders, including the qualified coordinating agencies (QCAs) and generators.

The SLDC has been given three months to initiate the process of developing a common platform for sharing real-time data of the output from an individual generator, weather-related data, and any other data as the SLDC finds significant. The access to this common platform is to be made available to all generators and QCAs. SLDC has been given a deadline of 36 months to complete this process.

Only one QCA per pooling substation can interact with the SLDC. Change of QCAs is permitted by giving a month’s notice to the concerned QCA and the SLDC. This change will be accepted only when more than 50% of the generators managed by the QCA agree to it.

The commission also stated that it considers it important to provide flexibility to the SLDC so that it can resolve operational issues seamlessly.  SLDC has been directed by the commission to display the data regarding the capacity handled by QCAs in Rajasthan and accuracy levels achieved by them on the website of the SLDC.

These regulations will be applicable from October 1, 2018.  From October 2018 until March 2020, the deviation settlement mechanism (DSM) charges calculated based on the regulations will be recovered in a phased manner.

Intra-State transactions:  Deviation charges for under or over-injection of power within the state payable by the wind or solar generator, or the QCA on their behalf, to the state pool account:

Deviation Charges in Case  of Under or Over-Injection for Sale of Power

Interstate transactions: Deviation charges in case of under injection payable to the wind or solar generator, connected to the state grid but selling power outside the state or the QCA on their behalf, to the state pool account:

Deviation Charges in Case of Under Injection Payable by Wind or Solar Generators

Interstate transactions: Deviation Charges in case of over injection payable to the wind or solar generator, connected to the state grid but selling power outside the state or the QCA on their behalf, to the state pool account:

Deviation Charges in Case of Over Injection Payable to the Wind or Solar Generators Connected

The commission has directed the SLDC to revise the bills towards deviation charges already issued by it and raise fresh bills for all generators/QCAs. Bills up to August 2019 need to be raised by November 15, 2019, by giving 15 days for filing objections by the generators/QCAs who should deposit the amount within 30 days of issue of finalized bills. From September 2019 onwards, the SLDC and the generators/QCAs will adopt the timelines given in the procedure.

The SLDC has made available the state-level system-centric forecast on its website from October 1, 2019.

The timelines for making DSM payment after the finalization of accounts are extended from the existing seven working days to 15 working days.

Discussing the regulation, Vishal Pandya, co-founder of RE Connect Energy, said, While RERC and RVPNL have justified the reasoning for removal of this clause, overall, it’s a significant loss to the industry. States like Karnataka and Andhra Pradesh have successfully implemented DSM regulations. Aggregation clause could have been retained and perhaps reduced the error band to a lower level than 15% if error alone was an issue. More than accuracy, infrastructural issues, integrity and quality of ABT Meter data are still the issues to be resolved. These are not specific to Rajasthan alone; they do persist in many other states as well. The current order also places significant emphasis on this. Lack of or rather inadequate infrastructure will only multiply the financial risks on RE Generators in absence of aggregation.

Talking about the implications of this order, he added, that despite the due acknowledgment of various operational issues by the RERC and RVPNL, it is also evident from the order that how some of the service providers have advocated against the aggregation as well as providing any relaxation in the regulatory compliance only to serve their self-interests at the cost of entire industry.

When asked how deviation settlement laws in India compare to other countries, Pandya told Mercom that forecasting and unit commitment (scheduling) has now become a fundamental building block for efficient RE integration for all the major renewable energy markets. Be it the U.S., many European countries, Australia, and even smaller RE systems like Vietnam, Morocco, and many Middle Eastern countries are now making forecasting systems as mandatory compliance on the part of RE Generators or the energy dispatcher representing RE generators. One of the recent reports by the World Bank, which has focused on RE Grid Integration states that “Forecasting (of RE) is a relatively inexpensive strategy to enable higher VRE offtake.” With many Indian states resorting to curtailment of renewable energy, forecasting along with infrastructural developments like REMCs, SAMAST projects would only minimize RE curtailment in coming times.

Mercom also got in touch with Amit Gupta, head of forecasting and scheduling services at Statkraft, to get his point of view on the order.

Talking about the aggregation clause that was rejected, he commented, “Aggregation of different PSS across Rajasthan State for calculating DSM charges is one of demand of RE generators which was in line with the concept in other RE rich states of Karnataka and Andhra Pradesh has been rejected by the regulatory commission. This could have brought down DSM charges for intrastate connected generators. Aggregating across different geographical locations and large number of wind farms reduced absolute error.

He further added, “The order has given temporary relief to RE generators on DSM charges and has given time to make up all tethering problems which have arisen due to these regulations. DSM charges implementation in steps will help all stakeholders to be better prepared.

Talking about the deviation settlement laws in India compared to other countries, Gupta said, “Deviation Settlement in India is different from other developed markets where the concept of aggregation is prevailing. Aggregator usually creates a VPP (Virtual Power Plant) for the scheduling of their pool plants. Imbalance charges are handled in the real-time market.

DSM charges should be kept at low levels in the beginning and increased gradually with more maturity of the market and technology. Introducing real-time balancing market will also support in bringing more efficiency to the system. This will require change in how energy settlements are done RE for example from settlement based on actual injection to schedule and settlement of imbalance cost by TSO based on auctions for reserves.”

Earlier this year, the RERC had issued draft amendments to the 2017 regulations on deviation settlement mechanism for grid-connected power.

Recently, the state issued a methodology for sign change and additional charges for its violation under the DSM. According to the commission, if there is a sustained deviation from the schedule in one direction (positive or negative) for 12 time blocks continuously, the entity (buyer or seller), will correct its position by making the sign of its deviation from schedule change or by remaining in the range of +/- 20 MW with reference to its schedule, at least once, latest by the 13th time block.