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					</table>The <a href="https://powermin.gov.in/" target="_blank" rel="noopener">Ministry of Power</a> has written to all states and union territories (UTs) to adhere to the recently issued “Resource Adequacy Guidelines” to ensure sufficient growth in power generation capacity in line with the rapidly increasing electricity demand in the country.
As per the guidelines <a href="https://www.mercomindia.com/government-guidelines-resource-adequacy-framework" target="_blank" rel="noopener">issued</a> in June last year, distribution companies (DISCOMs) were required to develop 10-year electricity demand forecasts and ensure adequate power supply to meet the projected peak demand.
The DISCOMs are required to have at least 75% of their total capacity requirements covered by long-term contracts as specified in the long-term national resource adequacy plan or by the respective state electricity regulatory commissions. Medium-term contracts are recommended to constitute 10-20% of the capacity, with the remaining power demand being met through short-term contracts.
This will be essential to fulfill the Electricity (Rights of Consumers) Rules’ 2020 mandate of supplying round-the-clock power to consumers apart from a few categories for which the state regulators have set lower supply hours.
The Central Electricity Authority has conducted studies on resource adequacy until 2031-32 for 23 states and UTs. The remaining states, namely Delhi, Goa, Sikkim, Haryana, Bihar, West Bengal, Chandigarh, Puducherry, and Jammu and Kashmir, have been asked to provide data up to 2033-34 to enable nationwide resource adequacy planning.
All states and UTs have been directed to complete their respective Resource Adequacy Plans for 2024-25 to 2033-34 based on the guidelines, as the plans are key to ensuring that the power supply grows in tandem with the economy.
The ministry noted that India&#8217;s economy is projected to become the third largest in the world by 2030, which will drive up electricity consumption. Peak power demand has already increased by 79% from 136 GW in 2014 to 243 GW, it said, while generation capacity has expanded by 72.4% in this period.
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Ministry Urges States to Ensure Adequate Growth of Power Generation Capacity

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					</table>The <a href="https://powermin.gov.in/" target="_blank" rel="noopener">Ministry of Power</a>, in consultation with the Central Electricity Authority (<a href="https://cea.nic.in/?lang=en" target="_blank" rel="noopener">CEA</a>), has released a set of guidelines to establish an institutional mechanism for resource adequacy, spanning from the national level down to the distribution companies (DISCOM).
The guidelines are put in place to ensure the availability of resources at each level to meet the demand. Additionally, the framework will help proactively assess the requirements for new generation capacities, energy storage, and other flexible resources well in advance.
The guidelines for the resource adequacy planning framework have been formulated by the Ministry of Power under Rule 16 of the Electricity (Amendment) Rules, 2022, which were officially <a href="https://www.mercomindia.com/new-electricity-rules-curb-hikes-open-access-surcharge" target="_blank" rel="noopener">announced</a> on December 29, 2022.
Last October, CEA <a href="https://www.mercomindia.com/amidst-rise-renewables-cea-ways-maintain-adequate-generation" target="_blank" rel="noopener">issued</a> the draft resource adequacy plan to maintain adequate generation capacity to meet future energy demands.
Under the new framework, the DISCOMs will create a report detailing the expected demand, the rate of demand growth, the current contracted capacity, and the amount of power obtained from power exchanges.
The objective of the plan is to optimize the generation of electricity at the lowest possible cost while meeting the demand. This includes minimizing overall system costs, such as operational and maintenance expenses, costs for obtaining spinning reserves, fuel costs, and the costs associated with starting up and shutting down power-generating units.
The optimization process takes into account various constraints related to power plant operations, such as limits on ramping up or down generation, costs associated with starting up or shutting down units, generation limits, energy storage operations, interconnection limits for importing or exporting power, renewable purchase obligation (RPO) targets, capacities for solar rooftop or distributed generation, and planning reserve margin.
The resource adequacy exercise will be conducted with a ten-year planning horizon on a continuous basis.
Mechanism for Resource Adequacy and Compliance Monitoring
According to the new guidelines, the National Load Despatch Center (NLDC) is required to release an annual short-term national resource adequacy plan covering one year.
The plan should encompass various parameters such as demand forecasts, resource availability based on the progress of new projects under construction, scheduled maintenance plans for existing stations, historical forced outage rates for each station, and decommissioning plans.
The demand forecasts used by CEA and NLDC on an hourly basis should be synchronized with the projections provided by individual DISCOMs to CEA and NLDC.
To facilitate this alignment, the State Transmission Utility (STU) or the State Load Despatch Center (SLDC), acting on behalf of the DISCOMs in each state, should submit the details of demand forecasts (both peak and energy requirements) for the next ten years to CEA and NLDC by May every year.
The DISCOM is required to demonstrate to the State Electricity Regulatory Commission (SERC) or the Joint Electricity Regulatory Commission (JERC) a tie-up with the power generator for 100% of the energy for the first year and a minimum of 90% tie-up for the second year to fulfill their obligation in contributing towards meeting the national peak.
Each DISCOM should develop a resource adequacy plan spanning ten years to ensure they can meet their peak demand and electrical energy requirements.
The guidelines also specify the timeframe within which DISCOMs must complete the procurement process for each type of generation. This will ensure the procured capacity becomes available at the required time to meet the projected load.
The DISCOMs are required to present their plan for meeting peak demand and energy requirements to the SERC or JERC through the long-term distribution licensee resource adequacy plan. This plan should include a combination of long-term, medium-term, and short-term contracts.
According to the guidelines, DISCOMs should strive to have at least 75% of their total capacity requirements covered by long-term contracts as specified in the long-term national resource adequacy plan or by the respective SERC.
Medium-term contracts are recommended to constitute 10-20% of the capacity, while the remaining power demand can be fulfilled through short-term contracts.
In cases where there is a shortfall in capacity needed to meet the short-term distribution resource adequacy plans, the NLDC must conduct bidding processes by aggregating the individual plans of DISCOMs to acquire the required capacity.
The DISCOMs will be responsible for submitting the contracted capacity details for the upcoming year, which will fulfill the resource adequacy requirement for the national peak, to the respective STU or SLDC.
The submission should be made after obtaining approval from the respective SERC or JERC, and the deadline for submission will be January.
The STUs will then aggregate the total contracted capacities at the state level and forward the information to the corresponding Regional Load Despatch Center (RLDC). The RLDCs, in turn, will aggregate the capacities at the regional level and submit the information to the NLDC by February.
The NLDC would then consolidate the capacities at the national level and ensures compliance with the short-term national resource adequacy plan. If any shortfall is identified for the upcoming year, the NLDC should either inform the SERC or JERC for necessary compliance or facilitate a national-level auction to address the balance.
The STU or SLDC will be responsible for preparing a one-year ahead short-term distribution resource adequacy plan on an annual basis at the state level, which will aid in operational planning.
In line with the long-term national resource adequacy program, every DISCOM should develop individual plans for ten years to secure the necessary capacity and meet the planning reserve margin at the national level.
Similarly, in a manner akin to the NLDC, all SLDCs should also create comprehensive annual operational plans specific to their respective states. The plans will be based on the actual availability of generating stations.
Guidelines for Procurement of Required Resources
The DISCOM will be responsible for securing an optimal mix of resources through contracting to meet future demand and fulfill resource adequacy requirements. This should be done based on the findings obtained from the long-term national resource adequacy plan study.
The DISCOM should consider entering into long-term, medium-term, and short-term firm contracts with generation resources to contribute to the resource adequacy requirement. The future capacity mix may comprise existing capacities, planned capacities, and capacity addition required to meet the increasing demand of the utility, considering the appropriate gestation period of the generation resource.
When procuring power from renewable energy sources to meet RPO targets, the DISCOM should consider the renewable energy potential in their respective state and adhere to the fungibility provisions within renewable resources per the latest RPO order.
Furthermore, the procurement of power from wind, solar, wind-solar hybrid, and round-the-clock (RTC) projects should be conducted per tariff-based competitive bidding process guidelines.
The DISCOMs must ensure that the procurement process for the projected demand is initiated and completed well in advance. This ensures the procured capacity becomes available when required to serve the anticipated load.
Recently, CEA <a href="https://www.mercomindia.com/renewable-developers-must-comply-connectivity-rules" target="_blank" rel="noopener">directed</a> renewable energy developers who have applied for connectivity until April 30, 2023, to comply with CEA Connectivity Regulations by September 30 or face disconnection.
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Government Issues Guidelines for Resource Adequacy Planning Framework

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					</table>The Central Electricity Authority (<a href="https://cea.nic.in/?lang=en" target="_blank" rel="noopener">CEA</a>) has prepared a draft resource adequacy plan to maintain adequate generation capacity to meet future energy demands.
The document says that it had become imperative to plan for the increasing share of variable renewable energy in the total energy mix. Distribution licensees seeking to move away from long-term power purchase agreements (PPAs) could lead to erroneous calls on contracting. This could result in over or under-provisioning of generation and lead to surplus or deficient situations in the short term as renewable energy generation fluctuates.
One of the main aspects of resource adequacy planning was to ensure that adequate generation capacities were available to cater to the demand. The draft plan said that it was necessary to develop a resource adequacy framework to suggest the optimal capacity mix required to minimize the total system cost in meeting the projected demand for the future.
It was important to determine the duration of time when a loss of load can occur due to demand forecast errors, generation forecast errors, outages, and weather phenomena.
The draft report points out that energy storage and other resources, which can help balance out the variability and intermittency of renewable energy, must be considered to ensure reliability and reduce system costs.
The draft plan says utilities must undertake an optimal reserve margin study to determine the planning reserve margin through any scientific method, provided the determined planning reserve margin is higher than the national-level planning reserve margin. The capacity planning by utilities should be developed through an integrated resource plan.
Integrated resource planning 
A utility prepares an integrated resource plan to determine the target generation capacities for meeting the forecasted energy demand over a specified period.
The plan requires many inputs, such as demand profiles, demand growth rates, contracted capacities, and cost for new capacities. The model can optimize for various technologies such as renewable, conventional, distributed energy resources, demand-side management (DSM), and energy storage resources.
The proposed plan states that the model would undertake the least cost generation optimization to meet the demand to minimize the overall system cost, including capital costs, operations and maintenance costs, costs to procure spinning reserves, fuel costs, transmission costs, and start-up and shutdown costs.
Resource adequacy will be determined based on resource availability and accessibility after consideration of sharing reserves from other utilities and states through the national markets or bilateral mechanisms.
Compliance monitoring 
CEA will publish the long-term national resource adequacy plan, which will determine the optimal planning reserve margin requirement at the all-India level conforming to the loss of load probability and normalized energy not served targets.
It will publish the optimal generation mix required for the next ten years to ensure that the national-level system is resource adequacy-compliant while meeting the all-India demand at the least cost.
The Power System Operation Corporation (POSOCO) will annually publish a one-year look-ahead short-term national resource adequacy plan which will include parameters such as demand forecasts, resource availability based on the under-construction status of new projects, planned maintenance schedules of existing stations, station-wise historic forced outage rates, and decommissioning plans.
The hourly demand forecasts used by POSOCO will be aligned with the projections per the individual distribution licensees. The state transmission utility or the state load despatch center, on behalf of the state&#8217;s distribution licensees, will provide POSOCO with the details regarding hourly demand forecasts for the next five years by June every year.
The distribution licensees should demonstrate to the state electricity regulatory commission a 100% tie-up for the first year and a minimum 90% tie-up for the second year to meet the requirement of their contribution towards meeting coincident national peak.
For the next three years, the distribution licensee should submit a plan for 100% capacity tie-ups to meet the estimated requirement of their contribution towards meeting the coincident national peak for SERC&#8217;s approval.
The optimal target level or planning reserve margins should be arrived at through measures such as the loss of load probability and normalized energy not served. Loss of load can happen due to factors such as forced outages, planned maintenance of conventional generation, unforeseen real-time excursion in demand, demand forecast errors, generation forecast errors, and renewable energy intermittency.
Determination of capacity credits for renewable resources
According to the draft report, it is important to determine how much energy-limited resources (hydro, wind, solar, storage) will count toward resource adequacy requirements. Generation planning will become more complex as larger amounts of weather-based, variable renewable generation are added to the system.
Each generator can provide a &#8216;firm capacity,&#8217; representing the amount of power the generator can reliably provide. Capacity credit expresses firm capacity as a percentage of the installed nameplate capacity.
The following are the various methodologies adopted internationally to determine capacity credits of renewable energy.
<ul>
<li>Capacity credit approximation with top demand hours: In this case, a basic approximation of capacity credit can be obtained by averaging the historical contribution during peak demand hours. However, the selection of how many peak demand hours to include often varies across geographies.</li>
<li>Capacity credit approximation with top net load hours: In this case, consideration is given to the fact that periods of system stress occur when high demand coincides with low renewable energy generation. The net load is the total renewable energy generation subtracted from overall demand, which must be met from dispatchable resources like thermal plants and hydro projects.</li>
<li>Expected load-carrying capability: The model uses hourly time-series demand data for a particular period in this method. It also uses the availability of different generation resources at each hour of the year. Random outages of generators are also applied, considering the historical and expected outage conditions.</li>
</ul>
The utilities must plan their firm capacity as per the coincident peak, which implies that the capacity credits of all resource types are to be calculated on the national-level load profile.
According to CEA&#8217;s recently released National Electricity Plan, India <a href="https://mercomindia.com/india-188-gw-renewable-capacity-5-years-meet-peak-demand-cea/" target="_blank" rel="noopener">needs</a> to add 224.9 GW of renewable energy generation capacity by 2032 to meet the peak demand and energy requirement for the financial year 2031-32.
The all-India peak power demand <a href="https://mercomindia.com/peak-power-demand-touches-all-time-high-of-201-gw/" target="_blank" rel="noopener">touched</a> an all-time high of 201.066 GW on April 26, 2022, surpassing the peak power demand of 200.539 GW met on July 7, 2021.

Amidst Rise in Renewables, CEA Suggests Ways to Maintain Adequate Generation Capacity

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