Andhra Proposes to Raise Deviation Settlement Charges for Renewable Projects

The Transmission Corporation of Andhra Pradesh (APTRANSCO) has issued a notice to the Andhra Pradesh Electricity Regulatory Commission (APERC) seeking amendments to the existing regulations for forecasting, scheduling, and deviation settlement for variable renewable energy (VRE) projects.

It said that the Andhra Pradesh State Load Despatch Center (APSLDC) made a detailed report highlighting the difficulties they face in everyday operations because of the existing regulations. The distribution company (DISCOM) said that offering generation forecasts a day ahead daily has become challenging because of several factors.

Variable renewable energy sources like solar and wind projects come with a lot of inconsistencies because the availability of sunlight and wind is inconsistent and unpredictable. This leads to spikes and dips in the amount of power generated, especially in shorter periods.

This, along with other inconsistencies like intra-day changes in VRE forecasts, significant variations in the day ahead forecast and the actual power generated, unavailability of intra-day power because of unexpected changes in power generation, and thermal project limitations have made day-ahead forecasting a challenge.


The DISCOM stated that these issues were negligible earlier, but because of the large-scale integration of VRE, the problems have been amplified to a point where these uncertainties are affecting the reliability of conventional generators, as well. It explained that variations between forecasted generation and actual power generated in absolute terms ranged between 50 MW – 2 GW (over or below forecasts). The APSLDC stated that DISCOMS could not deal with these surpluses or the shortfalls daily as they’ll be forced to give load relief (power cuts) or purchase power at high prices.

The DISCOM noted that there are no market mechanisms to avail power at such short notice. It said that under the current regulations, it is essential for forecasts to match the actual generation, and if they do not, challenges arise.  The existing regulations require generators to pay deviation charges based on the percentage of the shortfall from the forecasted generation amount.

APERC - Existing Forecasting and Scheduling Charges

The report proposed that if the current allowable deviation margins are narrowed down, and deviation settlement charges are raised, it would hold generators more responsible for the effective functioning of the grid.

APERC - Proposed Forecasting and Scheduling Charges

The report suggested that the amendment of these provisions would result in better grid discipline and grid security as the difficulties faced by utilities because of uncertainty in the renewable generation would be removed.

It also recommended the removal of rescheduling of forecasts every one and a half hours during the day and sticking to a schedule on a day-ahead basis. This would give DISCOMs time to plan and optimize the purchase and sale of power through power exchanges.

Under the existing regulations, DISCOMs would have to pay high prices to make up for shortfalls. State Load Despatch Centers (SLDCs) would also have to deal with violation notices from the Southern Regional Load Despatch Centre (SRLDC), forcing DISCOMs to resort to load shedding.

Additionally, the report also proposed that the definition of “virtual pooling” be removed from the regulations. Current regulations define it as the virtual grouping of various stations that different generators can account for their deviations together to mitigate losses.

The APSLDC’s report stated that this would put the burden of the indiscipline of one or a few generators on all the generators in the group and that this provision does not exist in any other Indian state.

Meanwhile, the Andhra Pradesh State Load Dispatch Center (APSLDC) has filed a review petition before the state’s high court against Power System Operation Corporation Limited’s (POSOCO) appointment to look into the reasons behind the curtailment of renewable energy in the state, due to it being an independent central agency. The state high court in its order dated January 27, 2020, had asked the Power System Operation Limited to investigate the reasons behind the curtailment of renewable power in Andhra Pradesh, as reported earlier by Mercom.

According to Mercom India Solar Project Tracker, Andhra Pradesh accounts for 3.4 GW of large-scale solar projects in operations, and approximately 1.7 GW of projects are under the development pipeline. According to the MNRE, Andhra Pradesh has 4.1 GW of wind power capacity (as of October 2019).