The Central Electricity Regulatory Commission (CERC) has issued new guidelines to supplement the Deviation Settlement Mechanism (DSM) Regulations 2022 to maintain grid security.

The Commission has added a new category of wind-solar generators and introduced charges for DSM. Further, it has also hiked monetary incentives for both generators and procurers to maintain the grid frequency between the safe range of 49.95-50.05 Hz.

The Commission said there is an urgent need for the system operator to estimate and procure adequate reserves and deploy them prudently to avoid frequency fluctuations and help maintain grid frequency.

While the market participants adjusted to the new regime, it had become incumbent upon the Commission, given the continued frequency fluctuations, to intervene in the interest of grid security and ensure grid participants help maintain grid frequency.

Last December, CERC had reverted to a frequency-linked DSM as an interim measure to protect grid stability which had come under pressure for three weeks owing to a change in regulations. The grid frequency had deviated dangerously away from the acceptable range of 49.90 -50.05 Hz. It oscillated from 50.5 Hz and 49.41 Hz on December 20.

Background

The DSM Regulations 2022 came into force on December 5, 2022, after which wide frequency fluctuations in the grid had occurred. The Commission stipulated certain measures to contain frequency within the operating band.

As directed by the Commission, Grid-India provided weekly operational feedback on the implementation of DSM Regulations, highlighting the high and low-frequency events.

Grid-India noted some improvement in the frequency profile excursions above 50.05 Hz but said the overall frequency profile continued to be a concern.

While the frequency remained within the operative band for ~75-80% of the time before December 5, 2022, it deteriorated to the level of ~54% during December 5-26 before improving to ~60% post after December 26.

Commission’s analysis

The Commission stated that the normal rate of charges for deviations for a time block should be equal to the higher of the weighted average Area Clearing Price (ACP) of the Day-Ahead Market segments of all the power exchanges and the weighted average ACP of the Real-Time Market segments for that time block subject to a ceiling of ₹12 (~$0.145)/kWh.

For a general seller (other than a run of river generating station or a generating station based on municipal solid waste), the deviation charges remain the same. However, the Commission added two new categories, namely for the wind-solar seller being a generating station based on the wind resource and for the wind-solar seller being a generating station based on solar or a hybrid of wind-solar resources.

The deviation charges payable by a seller under these two new categories are given below:

The deviation charges in a time block payable by a buyer are given below:

When the frequency is under 49.95 Hz

For frequency less than 49.95 Hz, the general seller (other than an RoR generating station or a generating station based on municipal solid waste) will be paid back for deviation by way of over-injection at 120% of the reference charge rate when the frequency is between 49.90 Hz and 49.95 Hz and at 150% of reference charge rate when the frequency is less than 49.90 Hz.

Further, the general seller (other than an RoR generating station or a generating station based on municipal solid waste) will pay for deviation by way of under-injection at 150% of the reference charge rate or at 120% of the regular rate of charge for deviation, whichever is higher. When the frequency is between 49.90 Hz and 49.95 Hz, the general seller will have to pay 200% of the reference charge rate or 150% of the normal deviation charge, whichever is higher, when the frequency is less than 49.90 Hz.

The buyer will be paid back for deviation by way of under-drawal at 120% of the normal rate of charge for deviation when the frequency is between 49.90 Hz and 49.95 Hz and at 150% of the normal deviation charge when the frequency is less than or equal to 49.90 Hz.

The buyer will pay for deviation by way of over-drawal at 150% of the normal rate of charge for deviation when the frequency is between 49.90 Hz and 49.95 Hz and at 200% of the normal rate of charge for deviation when the frequency is less than or equal to 49.90 Hz.

When the frequency is over 50.03 Hz

The general seller (other than an RoR generating station or a generating station based on municipal solid waste) will be paid back for deviation by way of over-injection at 50% of the reference charge rate when the frequency is between 50.03 Hz and 50.05 Hz. No charges apply when the frequency exceeds 50.05 Hz.

The general seller (other than an RoR generating station or a generating station based on municipal solid waste) will pay for deviation by way of under-injection at 75% of the reference charge rate when the frequency is between 50.03 Hz and 50.05 Hz and at 50% of reference charge rate when the frequency is 50.05 Hz or higher.

The buyer will be paid back for deviation by way of under-drawal at 50% of the normal rate of deviation charge when the frequency is between 50.03 Hz and 50.05 Hz. No charges will apply when the frequency is 50.05 Hz or higher.

The buyer will pay for deviation by way of over-drawal at 75% of the normal rate of charge for deviation when the frequency is between 50.03 Hz and 50.05 Hz. If the frequency exceeds 50.05 Hz, the buyer will not have to pay any charges.

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