The Central Electricity Regulatory Commission (CERC) has approved the procedure for scheduling, metering, accounting, and settlement submitted by the National Load Despatch Centre (NLDC) for a 150 MW/300 MWh standalone Inter-State Transmission System (ISTS)-connected Battery Energy Storage System (BESS) pilot project at 400/220 kV Fatehgarh-III substation in Rajasthan.

Background

The NLDC filed a petition for the advance procurement and dispatch of a 150 MW/300 MWh BESS. This project is part of a larger 500 MW/1000 MWh standalone BESS pilot project.

The project, set up under tariff-based global competitive bidding, was awarded to JSW Renew Energy Five by the Solar Energy Corporation of India (SECI). The BESS is intended for primary, secondary, and tertiary reserve ancillary services, aligning with the 2022 Ancillary Services Regulations and the Grid Code.

NLDC proposed a draft procedure for scheduling, metering, accounting, and settlement for the ancillary portion of the BESS project. The monthly capacity charges were discovered to be ₹1.08 million (~$13,008)/MW/month through competitive bidding.

SECI, acting as the trading agency for the project, has earmarked 150 MW/300 MWh for ancillary services based on NLDC’s requirements. The project anticipates a minimum round-trip efficiency of 85% and allows up to two daily discharge cycles.

The NLDC’s petition requested the admission, approval of the proposed procedure, approval of fixed charges payment methodology, and the provision of the first right to use the BESS system to NLDC after its 12-year lifespan, should it remain functional.

Further, the petition included prayers for SECI to handle the invoicing to NLDC, with provisions for TDS deductions from the northern region Deviation Settlement Mechanism (DSM) pool by the Northern Regional  Load  Despatch Centre. It also sought that the yearly fixed charge, including SECI’s trading margin and applicable Goods and Services Tax (GST), be settled from the DSM Pool, prioritizing weekly charges payable to SECI.

Commission’s Analysis

Metering and Deviation Mechanism

Initially, separate metering was proposed for different parts of the BESS project. However, due to technical limitations, it was agreed to have a single metering point at 220 kV level for the entire project. JSW pointed out that separate metering was not feasible technically as per the Ministry of Power’s bidding guidelines, which specify a single metering point.

The Commission acknowledged the need for separate accounting for different contracts but accepted the consensus on a single metering point due to the technical limitation.

It directed that the BESS developer must provide segment-wise monitoring for the state of charge, performance, and computation of incentives for ancillary services using SCADA, power managemnt unit, or other signals as required by NLDC.

The Commission will specify separate deviation charges for the BESS through the amendment of the DSM Regulations.

The Commission noted that SECI’s role was that of an intermediary/aggregator, responsible for aggregating BESS capacity and selling it to buying entities, not for managing deviations or DSM charges. JSW, as the BESS developer and grid-connected entity, would be responsible for DSM, reactive energy, and congestion settlement.

Additional Trading Margin

The Ministry of Power initially nominated NTPC Vidyut Vyapar Nigam to handle sale/purchase and SECI for fixed charges, each earning a trading margin. The petitioner suggested appointing SECI as the sole trading agency to avoid double payment and reduce costs. SECI agreed to take on additional responsibilities, including charging/discharging and scheduling, but only if compensated with an additional trading margin ₹0.07 (~$0.00084)/kWh.

The Commission ordered that the cumulative trading margin (including the 0.5% capacity charge and additional margin for BESS operations) not exceed ₹0.07 (~$0.00084)/kWh. If power is charged through ancillary services, only the 0.5% capacity charge applies, with no additional margin for SECI.

Sale Agreement for 150 MW ancillary portion

The BESS pilot project involves an intermediary agency, SECI, which aggregates power from developers and sells it to end procurers. NLDC, as a statutory body, dispatches reserves under ancillary services and is not the off-taker of power. The Commission directed that the BESS portion earmarked for NLDC would provide ancillary services without needing a sale agreement.

Payments for the BESS project, including fixed charges, trading margin, GST, and incentives, would be made from the DSM and ancillary pool account operated by NLDC.

Power System Development Fund

The MoP’s Monitoring Committee approved the Power System Development Fund (PSDF) to support the BESS project, with specific allocations for DISCOM and ancillary services. Initially, a method was proposed for paying capacity charges from the DSM pool account, adjusting for grants from the MoP and other costs, and SECI claiming additional charges through PSDF.

The Commission directed that all charges be paid to SECI for the ancillary service portion of the BESS project directly from the DSM pool every week, with adjustments to be made once the PSDF grant is received.

It also directed the annual truing up of rebates and surcharges for the ancillary portion of the BESS project, if any. It agreed with the NLDC’s view that weekly charges payable must be given priority over all other payments from the DSM pool.

Recently, CERC released the draft DSM Regulations 2024 to provide a framework of charges and penalties to treat and settle deviations from scheduled generation or drawal of electricity to ensure grid stability.

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