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					</table>The drive towards energy security and cleaner power sources has led to robust renewable energy capacity additions in India. Among renewables, solar and wind energy  &#8211; both intermittent sources have been added at a larger scale and must ensure reactive power (grid inertia) compensation and voltage stability for grid safety.
The solar and wind capacity in the total installed power capacity has risen from less than 10% at the end of 2013 to about 25.5% as of December 2022, according to <a href="https://www.mercomindia.com/research" target="_blank" rel="noopener">Mercom India Research</a>.
When renewable energy penetration in the power grid was much lower, it could be connected or disconnected without impacting grid stability significantly. However, with the increased renewable integration, any deviation seriously affects the stability and reliability of the grid.
Reactive power services are used to make sure voltage levels remain within a mandated range. The voltage support physically moves power from generation sources to the load. Reactive power significantly affects grid security as it impacts voltages in the system.
The government during the year has implemented measures after various energy loss incidents put the national grid at risk.
The Central Electricity Authority (<a href="https://cea.nic.in/?lang=en" target="_blank" rel="noopener">CEA</a>) recently reported 28 incidents where grid frequency deviated outside the prescribed limits, involving the loss of over 1,000 MW of renewable energy since January 2022. This has added to worries about more frequent power outages.
Most of the reported incidents were categorized under overvoltage during the switching operation, low-frequency oscillations of renewable energy, and faults near the renewable energy complex.
An analysis of these incidents revealed that inadequate reactive power support from variable renewable energy was one of the contributing factors both in static and dynamic conditions.
Solar and wind energy projects, which <a href="https://www.mercomindia.com/solar-share-installed-power-capacity-q2-2023" target="_blank" rel="noopener">account</a> for almost 63% of the country&#8217;s installed renewable capacity, defy CEA&#8217;s requirement of reactive power capability of 33% of the project&#8217;s generation capacity, particularly in the northern region. India <a href="https://www.mercomindia.com/indias-solar-generation-up-21-yoy-q2-2023" target="_blank" rel="noopener">generated</a> 30 billion units of solar energy alone during the second quarter of 2023.
Following this, the CEA has <a href="https://www.mercomindia.com/renewable-developers-must-comply-connectivity-rules" target="_blank" rel="noopener">directed</a> all renewable energy developers applying for connectivity until April 30, 2023, to comply with CEA Connectivity Regulations by September 30 or face disconnection.
According to the regulations, it is necessary to have dynamically varying reactive power support during low voltage ride through (LVRT) and high voltage ride through (HVRT).
This is because fixed capacitor banks can only provide reactive support during steady-state conditions and deliver support in steps after a time delay. Therefore, providing dynamically varying reactive power support is crucial to ensure grid stability and security.
Dynamic support allows injection or drawal of reactive power within milliseconds to prevent outage during current/voltage overloads.
Speaking to Mercom, a system operator at <a href="https://posoco.in/" target="_blank" rel="noopener">GRID Controller of India</a>, said, &#8220;A reason for the occurrence of low voltage, even 85% or below the nominal value, is the inability of the solar or wind generators to provide dynamic reactive support. In the case of solar projects connected to a pooling station, as the power injection to the grid increases with solar irradiation, the load on the outgoing high-capacity transmission lines also increases. This, in turn, causes the voltage at the pooling substation/connection point of the renewable generators to fall and even go below 85% of the nominal voltage.&#8221;
&#8220;Solar and wind projects that fail to comply with the CEA standards may then trip, leading to significant generation loss. Again, the unloading on outgoing lines may, in turn, trigger high voltage conditions. In this case, the wind and solar generator&#8217;s inability to provide adequate dynamic reactive power support is responsible for the voltage dip,&#8221; he said.
The higher the renewable energy generation, the greater the requirement for reactive power support.
According to a renewable energy project developer Mercom spoke to, the fluctuations and the tripping issues happen when there is no grid inertia or reactive power, which is created in most regions by the thermal or hydropower projects that have the capability of supplying the reactive power support as well as drawing it from the grid as and when required.
He said, &#8220;The issue particularly stems from regions like Rajasthan, where there is 66 GW of renewable capacity in the pipeline, and Gujarat, where 25-30 GW capacity is planned in Khavda region alone, and there are not many thermal or hydropower plants available to maintain the reactive power supply to avoid the grid from failing. Most renewable power projects built in the past never factored it in, which is why the Rajasthan grid collapses now and then, particularly in the renewable energy areas.&#8221;
In the absence of grid inertia from thermal or hydropower projects, it becomes necessary to install a variable compensator that can supply reactive power to the grid and draw it whenever required.
The System Operator explained, &#8220;For renewable projects, 0.95 power factor is fairly reasonable; generators located far from the load centers should have the capability to operate from 0.90 power factor lagging to 0.95 power factor leading, while those close to the load centers should be capable to operate from +0.85 lagging to -0.95 leading. For renewable generators, the 0.95 power factor translates to 33% of the active power, which is the reactive power capability that should be available up to the rated active power.&#8221;
To solve this pressing issue, developers have been advised to install a FACTS (flexible alternating current transmission system) device, like a static var compensator or a static synchronous compensator (STATCOM). These devices can vary their reactive power output at a faster rate, depending on their controller action. They use an Insulated Gate Bipolar Transistor (IGBT) and other thyristor control, supporting faster conversion capability.
Without clear instructions under CEA Connectivity Regulations to install these devices, many project developers have failed to factor in this obligation of providing reactive power support and hence consider its cost while bidding through the years.
Existing renewable projects without such devices are required to have a reserve capacity of inverter installed within the system. This ensures that even if they generate at full load, they still have the margin to provide some lagging or leading reactive power support to prevent that point of interconnection voltage from going outside the acceptable limits. The only other way is to go for external compensation at the plant terminal, a type of dynamic compensation device.
However, even with just capability, inverters go into sleep mode whenever the grid goes off, thus making a static or variable dynamic reactive power compensator necessary.
Another renewable energy project developer said, &#8220;The developers never had to worry about these factors previously because it was mostly taken care of at the substation level or by Grid India. With the rising renewable energy injection into the grid, it has become mandatory for developers to install such devices. For a 100 MW project on average, we would need to install 10 MVAr STATCOMs, which could easily cost around ₹3 to ₹4 billion (~$36.15 million to $48.2 million) and is a heavy price to factor into project costs.&#8221;
He added, &#8220;These additional requirements for existing projects were expected to be dealt with under the change in law clause in the PPAs. When the Grid Code came into existence in 2017, there were deliberations on what had to be installed &#8211; static capacitor banks, or a dynamic reactor, and then the STATCOM. All these equipments are capable of compensating the reactive power requirement of the grid. Developers are not saying no to installing this equipment, but the cost is a concern. This cost has not been factored into the tariffs bid earlier and hence has to come under the law change; otherwise, it will make the project unviable.&#8221;
A senior official at a government implementing agency agreed that installing devices for dynamic reactive power support would definitely impact the project costs and ultimately reflect in the tariffs in the future.
He said, &#8220;Previously, STATCOM devices were installed under the CTU scope. However, the CEA has recently enforced its connectivity regulations, insisting project developers install these devices at the power generating stations. For projects with finalized tariffs, the developers can approach the Central Electricity Regulatory Commission with requests to consider a &#8216;Change in Law&#8217; condition for such cases and claim compensation. It will ultimately be up to the CERC to decide whether they want to grant it or not. As far as the government implementing agencies are concerned, we hold grid safety as the utmost priority and will ensure such devices are in place to avoid any grid failures.&#8221;
With grid security being a significant factor in managing the increasing renewable energy capacity, there seems to be no other alternative but to install the required STATCOM devices for projects in operation, ultimately leading to increased project costs, which may or may not be compensated under the change in law clause.
In the future, project developers will have to factor in these costs when bidding. Clean energy is bound to get more expensive, but the upside is that India can expect more disciplined and stable grid management, enabling effective injection of renewables into the system.

Reactive Power Support for Renewables Key to Prevent Blackouts, But Who Pays?

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					</table>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) has expanded the scope of operation of the Reserve Regulation Ancillary Services (RRAS) Regulations, 2015, to facilitate the availability of adequate power reserves with the system operator to manage the peak demand.
The aim of the RRAS Regulations 2015 is to restore the frequency at the desired level and to reduce congestion in the transmission network.
The ancillary services ensure generation to meet the excess demand during peak hours.
Expanding the scope of RRAS Regulations, the Central Commission has included state-generating stations whose tariffs have been determined or adopted by the State Commission and are willing to participate in RRAS.
Also, included under the purview of RRAS Regulations are generating stations that have been mandated by the central government to participate in RRAS and have their tariffs discovered through a competitive bidding process.
This is in addition to the regional entities whose tariffs have been determined and adopted by the Central Commission.
Also, the nodal agency’s merit order stack must now encompass state-generating stations whose tariffs have been determined or adopted by the State Commission and generating stations mandated by the central government to participate in RRAS, as well as regional generating stations whose tariffs have been determined and adopted by the Commission.
Under the existing RRAS Regulations 2015, only generating stations that are regional entities with their tariff determined or adopted by the Central Commission are eligible to offer RRAS.
Grid-India reported that this made it difficult to use other projects whose tariffs had yet to be determined or adopted by the Commission for RRAS.
After examining the power supply status across the nation, the Commission noted that on April 18, 2023, the highest level of demand reached 215.9 GW. This is anticipated to escalate even more due to rising temperatures in the coming months.
Grid-India informed the Commission of the steps taken by the system operator to guarantee the dependable operation of the grid.
Furthermore, to ensure that reserves are sufficient, Grid-India requested the Commission to expand the scope of RRAS Regulations 2015 to include resources other than the generating stations regulated by the Central Commission.
Recently, CERC  <a href="https://www.mercomindia.com/measures-reduce-grid-frequency-fluctuations" target="_blank" rel="noopener">issued</a> regulations to limit frequency fluctuations within the operating band in the interest of grid security. The regulator has set the normal rate of charges for deviation for a given time block.
Earlier, CERC had <a href="https://www.mercomindia.com/cerc-new-deviation-guidelines-maintain-grid-security" target="_blank" rel="noopener">issued</a> new guidelines to supplement the Deviation Settlement Mechanism (DSM) Regulations 2022 to maintain grid security. The Commission added a new category of wind-solar generators and introduced charges for DSM. Further, it also hiked monetary incentives for both generators and procurers to maintain the grid frequency between the safe range of 49.95-50.05 Hz.
Subscribe to Mercom&#8217;s real-time <a href="https://mercomindia.com/product/mercoms-renewable-energy-regulatory-updates/" target="_blank" rel="noopener">Regulatory Updates</a> to ensure you don&#8217;t miss any critical updates from the renewable industry.

Regulator Amends Ancillary Services Norms to Meet Peak Power Demand

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					</table>The Central Electricity Regulatory Commission (<a href="https://cercind.gov.in/" target="_blank" rel="noopener">CERC</a>) 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 <a href="https://mercomindia.com/cerc-reverts-to-frequency-linked-mechanism-as-grid-security-faces-threats/" target="_blank" rel="noopener">reverted</a> 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 <a href="https://mercomindia.com/explainer-why-new-regulations-made-grid-unstable/" target="_blank" rel="noopener">dangerously</a> 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 <a href="https://mercomindia.com/cerc-dsm-regulations/" target="_blank" rel="noopener">remain</a> 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:
<a href="https://mercomindia.com/wp-content/uploads/2023/02/CERC-DSM-Regulations-3.png"><img loading="lazy" decoding="async" class="alignnone wp-image-49083 size-full" src="https://mercomindia.com/wp-content/uploads/2023/02/CERC-DSM-Regulations-3.png" alt="CERC DSM Regulations-3" width="764" height="457" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/02/CERC-DSM-Regulations-3.png 764w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/02/CERC-DSM-Regulations-3-300x179.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/02/CERC-DSM-Regulations-3-650x389.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/02/CERC-DSM-Regulations-3-624x373.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/02/CERC-DSM-Regulations-3-600x359.png 600w" sizes="(max-width: 764px) 100vw, 764px" /></a>
The deviation charges in a time block payable by a buyer are given below:
<a href="https://mercomindia.com/wp-content/uploads/2023/02/CERC-Deviation-Regulations-4.png"><img loading="lazy" decoding="async" class="alignnone wp-image-49084 size-full" src="https://mercomindia.com/wp-content/uploads/2023/02/CERC-Deviation-Regulations-4.png" alt="CERC Deviation Regulations -4" width="738" height="503" srcset="https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/02/CERC-Deviation-Regulations-4.png 738w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/02/CERC-Deviation-Regulations-4-300x204.png 300w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/02/CERC-Deviation-Regulations-4-650x443.png 650w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/02/CERC-Deviation-Regulations-4-624x425.png 624w, https://mercomindia.s3.ap-south-1.amazonaws.com/wp-content/uploads/2023/02/CERC-Deviation-Regulations-4-600x409.png 600w" sizes="(max-width: 738px) 100vw, 738px" /></a>
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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CERC Issues New Deviation Settlement Guidelines to Maintain Grid Security

The Andhra Pradesh High Court at Amaravati has asked the Power System Operation Limited (<a href="https://srldc.in/" target="_blank" rel="noopener noreferrer">POSOCO</a>) to look into the reasons behind the curtailment of renewable power in the state.
The petitioners, in this case, were, <a href="http://www.mytrah.com/" target="_blank" rel="noopener noreferrer">Mytrah</a> Vayu (Pennar) Private Limited, Mytrah Vayu (Krishna) Private Limited, Mytrah Vayu (Indravati) Private Limited, and Mytrah Vayu (Tungabhadra) Private Limited, the special purpose vehicles of Mytrah Energy, a renewable energy independent power producer (IPP). Walwhan Renewable Energy (formerly Welspun Renewable Energy), ACME Solar Holdings and its subsidiary Aarohi Solar, Dayanidhi Solar, Vishwatma Solar, and Niranjan Solar were among the other petitioners.
The petitioners had gone to court against Andhra Pradesh DISCOMs’ inability to pay the dues and resorting to the curtailment of power from the projects.
Mytrah Vayu had earlier alleged that the Andhra Pradesh Southern Power Distribution Company Limited (APSPDCL) curtailed the power generated by the projects despite the renewable energy projects being granted the must-run status. The petitioners argued that since these projects were under the ‘must-run’ status, they are not subject to “merit order despatch” which is wholly unsustainable.
The court had earlier directed the distribution companies (DISCOMs) not to curtailment power from renewable energy projects unless necessary, that too not without prior notice.
In July 2019, the Andhra Pradesh government had <a href="https://mercomindia.com/mnre-andhra-pradesh-committee-solar-wind-ppa/" target="_blank" rel="noopener noreferrer">decided</a> to revisit the PPAs of renewable energy projects against which renewable energy project developers <a href="https://mercomindia.com/andhra-court-stay-order-solar-wind-tariffs/" target="_blank" rel="noopener noreferrer">managed</a> to get a stay order on the revision of PPAs. However, even after the stay order, the state <a href="https://mercomindia.com/wind-curtailment-andhra-ppa-revision/" target="_blank" rel="noopener noreferrer">began</a> severely curtailing wind power. The Amaravati High Court later <a href="https://mercomindia.com/must-run-solar-wind-andhra-high-court/" target="_blank" rel="noopener noreferrer">issued</a> an order asking the state load despatch center (SLDC) and the state’s transmission company (APTRANSCO) to stop the curtailment of power from solar and wind energy projects.
The petitioners also pointed out that the curtailment was also due to the higher tariffs in the agreement, while the DISCOMs argue that the curtailment was due to grid security. Now, since both the APSLDC and APERC are party to this curtailment and are state government bodies, the court finds it necessary for an independent central agency to investigate the facts in this matter.
So, the court has asked POSOCO, an independent central agency, to find out the reason behind the power curtailment by APSLDC and submit a report.
The court has directed the developers and DISCOMs to submit their claims to POSOCO within a week supported by documents. APSLDC has been given a week to file its objections on the claim.
The report prepared by POSOCO will then be sent to the court within four weeks.
Aditya K Singh, an advocate at HSA Advocates, told Mercom, “It appears that nowadays, curtailments are happening more for commercial reasons than due to grid security (which is permissible). This is one of the first orders where any judicial/quasi-judicial forum has taken an extra effort to constitute an independent committee to look into the justifications given for curtailment. It was also one of the allegations by the developers that they are being directed to curtail generation on the pretext of “grid security” without citing any detail of threat on the grid. High Court had observed in clear terms that the single bench had specifically given directions against any curtailment, and concerned authorities should have taken leave of the court before taking any such action. Curtailment of generation has become a regular occurrence in various renewable energy rich states and renewable energy developers which has no fuel costs, are concerned about the impacts of curtailment on project economics.”
“In the instant order, the Hon’ble High Court has taken cognizance of the action of APSCLDC,” he added.
Considering the situation of the DISCOMs in the state, and the fact that developers require liquidity to keep their projects running, the Andhra Pradesh High Court at Amravati in December 2019, had directed the state DISCOMs to immediately clear the dues of solar and wind developers within a month. According to the court’s order, the DISCOMs were <a href="https://mercomindia.com/court-andhra-discoms-clear-solar-wind-dues/" target="_blank" rel="noopener noreferrer">directed</a> to pay ₹2.43 (~$0.0341)/kWh and ₹2.44 (~$0.0343)/kWh to wind and solar developers, respectively. The DISCOMs then submitted an affidavit to make the payment within four weeks from December 20, 2019. Mercom has also <a href="https://mercomindia.com/andhra-discoms-clearing-part-dues-batches-wind-solar-developers/" target="_blank" rel="noopener noreferrer">reported</a> that solar and wind power developers in the state are beginning to receive part of their dues in batches.
According to Mercom <a href="https://mercomindia.com/product/india-solar-tender-tracker/" target="_blank" rel="noopener noreferrer">India Solar Project Tracker</a>, 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).

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