Government Working on Grid Strengthening and Preventing Future Grid Disturbances

The Central Electricity Regulatory Commission (CERC) has issued its fourth amendment to the deviation settlement regulations. These regulations will come into force from January 1, 2019.

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.

Key Amendments

  • Now, Area Clearing Price (ACP) will mean the price of a time block electricity contract established on the power exchange after considering all valid purchase and sale bids in areas after dividing the market across constrained transmission corridors.
  • Clauses pertaining to Day Ahead Market (DAM) and time block have been included in the new regulations.
  • The Deviation Settlement Mechanism (DSM) rate vector will have a dynamic slope determined by joining the identified price points at 50 Hz, (daily simple average ACP), frequency of 49.85 Hz ₹8 (~$0.11322) per unit and 50.05 Hz (zero) daily.
  • The maximum ceiling limit applicable for average Daily ACP discovered in the DAM segment of Power Exchange at 50.00 Hz will be ₹8 (~$0.11322)/kWh.
  • Daily simple average ACP in the day-ahead market (exclusive of any transmission charges and transmission losses) will be used as the basis for market linked DSM price at 50 Hz.
  • The daily simple average ACP of the power exchange having a market share of 80 percent or more in energy terms on a daily basis will be taken into consideration for linking to the DSM price vector.
  • If no single power exchange is having a market share of 80 percent or more, the weighted average day-ahead price will be used for linking to the DSM price.
  • In case of non-availability of daily simple average ACP due to no-trade on a given day, daily simple average ACP of the last available day will be considered for determining the DSM charge.
  • The charges for the deviation for the generating stations whose tariff is determined by the CERC, when actual injection is higher or lower than the scheduled generation, will not exceed the upper cap fixed in these regulations.
  • The charges for the deviation for the generating stations whose tariff is not determined by CERC, irrespective of the fuel source, when actual injection is higher or lower than the scheduled generation, will not exceed the upper cap of ₹3.0304 (~$0.04289)/kWh.
  • In the event of sustained deviation from schedule in one direction (positive or negative) by any regional entity (buyer or seller), such regional entity will have to change sign of their deviation from schedule, at least once, after every six, time blocks.
  • The additional charge for violation of sign change stipulation will be levied for each such violation during a day.

Mercom previously reported that an expert group had 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 proposed the new measures.

The draft regulations had been issued in July 2018 and have been finalized now.

In August 2018, CERC also amended the regulations for Open Access in Interstate Transmission, which were first passed in 2008. The new regulations are called the CERC (Open Access in Interstate Transmission) (Fifth Amendment) Regulations, 2018.

Saumy Prateek Saumy is a senior staff reporter with covering business and energy news since 2016. Prior to Mercom, Saumy was a copy editor at Thomson Reuters. Saumy earned his Bachelors Degree in Journalism & Mass Communication from the Manipal Institute of Communication at Manipal University. More articles from Saumy Prateek.