CERC Prepares Blueprint for Power System Development Fund

India’s power sector has been grappling with transmission related issues for a long time. With the problems aggravated in the face of higher power generation and demand. The creation of a separate fund for the development of transmission and power sector related infrastructure is a step in the right direction. It is a boost to the confidence of stakeholders and the implementing agencies that have been tasked with the job of setting up renewable energy as well as conventional power projects.

In line with this, the Central Electricity Regulatory Commission (CERC) has issued draft regulations for Power System Development Fund. The proposed regulations deal with the creation of a power system development fund and its implementation.

The draft is up for comments by stakeholders and the general public up to June 21, 2019. These regulations will come into force from the date of their publication in the Official Gazette.

The funds will be credited to the power system development fund (PSDF) every month or as decided by the central government. The PSDF will be maintained and operated through the public account of India.



The fund is to be utilized for funding of projects or programs for the creation of necessary infrastructure, necessary transmission systems of strategic importance based on operational feedback by load despatch centers for relieving congestion in the interstate transmission system (ISTS) and intrastate systems which are incidental to the ISTS.

Funds could also be utilized for installation of shunt capacitors, series compensators and other reactive energy generators for the improvement of voltage profile in the grid. It may be used for the installation of standard and special protection programs, pilot and demonstrative projects and for setting right the discrepancies identified in the protection audits on a regional basis; renovation and modernization of transmission and distribution systems for relieving congestion and any other project such as conducting technical studies and capacity building.

The national load despatch center will be the nodal agency for the implementation of the projects or schemes under these regulations. The nodal agency will prepare an annual report of the PSDF and submit it to the central government and the CERC.

A few months ago, the CERC issued new regulations for the cross-border trade of electricity. These regulations will apply to the participating entities in India and neighboring countries which are engaged in cross-border trade of electricity with India. Cross-border trade of power between India and the neighboring countries will be allowed through mutual agreements between Indian entities and entities of the neighboring countries under the overall framework of CERC (Cross Border Trade of Electricity Regulations), 2019.

Later, it also issued draft regulations for fees and charges of regional load despatch centers. These regulations are applicable for the determination of fees and charges to be collected by RLDCs from the generating companies, distribution licensees/companies (DISCOMs), interstate transmission licensees, buyers, sellers, and inter-state trading licensees and any other users.

Image credit: Bajaj Electricals