Uttarakhand Commission Proposes Amendments to Deviation Settlement Mechanism

The Uttarakhand Electricity Regulatory Commission has issued a draft amendment to its Deviation Settlement Mechanism and Related Matters Regulations, 2017.

Stakeholders have time until March 22, 2022, to submit their comments.

The Deviation Settlement Mechanism (DSM) rate vector will have a dynamic slope determined by joining the identified price points at 50 Hz as per the draft amendment (daily simple average area clearing price), frequency of 49.85 Hz at ₹8(~$0.013) /kWh and 50.05 Hz at zero cost daily.

The nominal frequency of operation in the grid specified by the Indian Electricity Grid Code (IEGC) is 50.0 Hz.


Uttarakhand Deviation Settlement Mechanism Price Vector

The maximum ceiling limit applicable for the average daily area clearing price (ACP) discovered in the day-ahead market (DAM) segment of power exchange at 50.00 Hz will be ₹8 (~$0.013)/kWh.

Charges for deviation for each 0.01 Hz step will be equivalent to the slope determined by joining the price at ‘Not below 50.05 Hz’ and ‘identified price at 50.00 Hz’ in the frequency range of 50.05-50.00 Hz, and to the slope determined by joining the ‘price identified at 50.00 Hz’ and the price at ‘below 49.85 Hz’ in frequency range ‘below 50 Hz’ to ‘below 49.85 Hz’.

The daily simple average ACP of the power exchange having a market share of 80% or more in energy terms on a daily basis will be considered for linking to the DSM price vector. If no single power exchange has a market share of 80% or more, the weighted average day-ahead price will be used for linking to the DSM price.

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.

Based on a review, the Commission may decide on the proposed mechanism within one year. If the Commission is satisfied that the market conditions permit, the basis for market-linked DSM price will be substituted by the time block-wise ACP in the day-ahead market or as and when the real-time market is introduced. This will be done by the hourly ACP or the ACP of such periodicity as the Commission may consider appropriate.

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 charges.

The deviation price will be rounded off to the nearest two decimal places.

Principal regulations state that in the event of sustained deviation from the schedule in one direction, positive or negative, by any state entity for six-time blocks, such entity should correct its position by making the sign of its deviation from schedule changed or by remaining in the range of +/- 2% with reference to its schedule, at least once, latest by the seventh time block. Any violation of this will entail an additional charge at 3% of daily base DSM charge payable or receivable first to the fifth violation, 5% of daily base DSM charge payable or receivable for sixth to the tenth violation, and 10% of daily base DSM charge payable or receivable from eleventh violation onwards.

In September 2021, the Central Electricity Regulatory Commission (CERC) issued the draft ‘Deviation Settlement Mechanism and Related Matters Regulations, 2021.’ According to the proposed regulations, wind and solar power generators will not have to pay penalties for up to 10% deviation in scheduling power. For deviation beyond 10%, they will have to pay charges at 10% of the normal rate.

Subscribe to Mercom’s real-time Regulatory Updates to ensure you don’t miss any critical updates from the renewable industry.