ANALYSIS OF MPERC DRAFT REGULATIONS ON FORECASTING, SCHEDULING, DEVIATION SETTLEMENT OF WIND AND SOLAR GENERATING STATIONS

Madhya Pradesh Electricity Regulatory Commission (MPERC) has published draft regulations for forecasting and scheduling for wind and solar projects. Important aspects of the regulation are discussed below.

Earlier Odisha, Gujarat, Karnataka, Tamil Nadu, Rajasthan, Jharkhand, Andhra Pradesh and Chhattisgarh had come out with their draft DSM Regulation on Forecasting & Scheduling of Wind & Solar.  So far, Karnataka is the only state that has published final regulations.

Executive Summary:

  • Forecasting and scheduling will be mandatory for all the wind and solar generators connected to the State grid, including those connected via pooling stations.

  • Error will be calculated on the basis of Available Capacity (AvC), with permissible deviation of ±15% for old wind projects and ±10% for new wind projects (i.e., projects commissioned after May 2017).

  • Settlement will be done through the “Qualified Coordinating Agency” or QCA. However there is no mention of Aggregation.

  • The Deviation charges shall be paid within 10 days of the issue of Statement of Charges for Deviation into the “State Deviation Pool Account”.

  • 16 intraday revisions will be allowed for wind and solar energy (one revision every 1.5 hours). Revisions will be effective starting from 4th time block onwards.

  • QCA will be treated as a state entity, registered with SLDC. The preparation and settlement of ‘Deviation Pool Accounts’ shall be undertaken on weekly basis coinciding with mechanism followed for regional energy accounts.

  • SCADA & Telemetry data is to be mandatorily provided to SLDC by the generators. SLDC shall formulate Data/information exchange requirements and protocols for the same.

Detailed Analysis:

MPERC has recently come up with draft regulation for forecasting and scheduling and deviation settlement mechanism. The primary objective is twofold: a) facilitate large-scale grid integration of solar and wind generating stations b) maintaining grid stability and security. Highlights of the draft regulation are below:

Applicability:

All Wind & Solar Pooling sub-stations, irrespective of their capacity, commissioning date and connectivity voltage level, have to provide a day-ahead and intra-day revisions to a maximum of 16/day, and one revision for each 1.5Hr interval.

Error calculation and penalty bands:

  • Payment for generation shall be as per actual generation (this is different from the inter-state regulation, where payment is on the basis of scheduled generation).

  • Error is calculated based on Available Capacity (this is same as in the case of draft regulations of TN, Gujarat, Odisha, Rajasthan and Jharkhand).

  • The deviation slab has been kept as (+/-) 10% for new projects and (+/-) 15% for old projects. The reference date for old and new projects is 26.5.2017.

Detailed Mechanism defined for Deviation Settlement

 

In case of Intra-State transmission, Penalty Mechanism for wind generating station or pooling station commissioned prior to 26.5.2017

 
In case of Intra-State transmission, Penalty Mechanism for wind generating station or pooling station commissioned after to the regulations are notified.
It is to be noted that the new projects commissioned after the regulations are notified, have to comply by stricter deviation norms, and may have to consider the costs and liabilities of this mechanism in their project financial planning.

ANALYSIS OF GERC DRAFT REGULATION ON FORECASTING, SCHEDULING, DEVIATION SETTLEMENT OF WIND AND SOLAR GENERATING STATIONS

Gujarat Electricity Regulatory Commission (GERC) has published draft regulations for forecasting and scheduling for wind and solar projects. Important aspects of the regulation are discussed below.

Earlier Odisha, Madhya Pradesh, Karnataka, Tamil Nadu, Rajasthan, Jharkhand, Andhra Pradesh and Chhattisgarh had come out with their draft DSM Regulation on Forecasting & Scheduling of Wind & Solar.  So far, Karnataka is the only state that has published final regulations.

The last date for giving comments and suggestions is 16th February 2017.

 

Executive Summary:

  • Forecasting and scheduling will be mandatory for all the wind and solar generators connected to the State grid, including those connected via pooling stations.
  • Error will be calculated on the basis of Available Capacity (AvC), with permissible deviation of ±12% for old wind projects and ±8% for new wind projects (ie, projects commissioned after Jan 2010). Permissible deviation for solar project will be ±7%.
  • Aggregation of more than one pooling station is allowed.
  • Penalty rates are different than those in the model FOR regulations. For wind, the initial penalty is Rs 0.35/unit, increasing to Rs 0.70 and Rs 1.05 per unit in higher penalty bands. For solar, the initial penalty is Rs 0.60/unit, increasing to Rs 1.2 and Rs 1.8 per unit in higher penalty bands.
  • 16 and 8 intraday revisions will be allowed for wind and solar energy respectively (one revision every 1.5 hours). Revisions will be effective starting from 4th time block onwards.
  • Settlement will be done through the “Qualified Coordinating Agency” or QCA. QCA will be treated as a state entity, registered with SLDC.
  • SCADA & Telemetry data is to be mandatorily provided to SLDC by the generators. SLDC shall formulate Data/information exchange requirements and protocols for the same.

 

Detailed Analysis:

GERC has recently come up with draft regulation for forecasting and scheduling and deviation settlement mechanism. The primary objective is twofold: a) facilitate large-scale grid integration of solar and wind generating stations b) maintaining grid stability and security. Highlights of the draft regulation are below:

Applicability:

All Wind & Solar Pooling sub-stations, irrespective of their capacity, commissioning date and connectivity voltage level, have to provide a day-ahead and a three day ahead schedule, and intra-day revisions to a maximum of 16/day for wind and 8/day  for solar energy.

Aggregation of more than one pooling station by the QCA will be allowed.

Error calculation and penalty bands:

  • Payment for generation shall be as per actual generation (this is different from the inter-state regulation, where payment is on the basis of scheduled generation).
  • Error is calculated based on Available Capacity (this is same as in the case of draft regulations of TN, MP, Odisha, Rajasthan and Jharkhand).
  • The deviation slab has been kept as (+/-) 12% for old projects and (+/-) 8% for new projects. The reference date for old and new projects is 30.01.2010.
  • Unlike all other DSM regulations, the absolute error for wind energy generators will be reduced by 1% every year from start of fourth year till subsequent 5 years.
  • At the end of 5th year the absolute error shall become <=7% for old projects and <=3% for new projects in case of wind projects.
  • Similarly in case of solar projects the absolute error shall be reduced by 1% every year from start of the fourth year till subsequent 5 years, reaching the minimum of <=2%.
  • Penalty is calculated at fixed amounts per unit (whereas, for Inter-state it is calculated as a percentage to PPA rate).
  • A tripartite agreement will be formed amongst the Generator, QCA and SLDC, in case the generator fails to pay the deviation charges within specified timeline.
  • Energy accounts shall be prepared by SLDC on 10 day basis.
  • De-pooling shall be done in proportion to available capacity, energy generated in each time block, absolute error of individual generator or any other methodology between QCA & Generators.

 

Detailed Mechanism defined for Deviation Settlement

In case of Intra-State transmission, Penalty Mechanism for wind generating station or pooling station commissioned prior to 30.01.2010

 

 

In case of Intra-State transmission, Penalty Mechanism for wind generating station or pooling station commissioned after to 30.01.2010

In case of Intra-State transmission, penalty mechanism for solar generating station or pooling station

A brief comparison of the draft regulation of the 6 states and the Model Regulation is given in the table below:

 

QCA:

The qualified coordinating agency (QCA) will be required to meet certain eligibility criterion. Briefly, these are:

  • Providing F&S services for more than 2 years
  • Having a net-worth of more than Rs 2.5 crore
  • Have experience of working in different “terrains and regions”
  • QCA should have a well qualified team in-house, including skills of data science, statistics and software development
  • QCA should be using software of a “at least CMMI Level 3 certified” company

 

Karnataka defers implementation of Forecasting & Scheduling regulation

The  F&S regulation was notified on 31st May 2016 by Karnataka Electricity Regulatory Commission, with 6 months warming period given to all stakeholders, after which the commercial settlement scheme was to be implemented from December this year. Karnataka had become the first state in India to come out with final regulations for Forecasting and Scheduling.

However, KERC has deferred the implementation of the regulation by six months. Wind and solar generators will now be required to comply with the regulations from 1 June 2017.

The notification can be accessed here.

Analysis of Regulation on Forecasting and Scheduling of Wind and Solar Generating Stations at State level in Andhra Pradesh

In the follow-up after the FOR – Model Regulation for the Intra State level projects, APERC has come out with a Draft Regulation on Forecasting & Scheduling for the Wind & Solar projects at Intra State level in Andhra Pradesh, based on the mechanism suggested in the Model Regulation. Earlier Odisha, Madhya Pradesh, Karnataka, Tamil Nadu, Rajasthan and Chhattisgarh had come out with their DSM Regulation on Forecasting & Scheduling of Wind & Solar.

Executive Summary:

  • Forecasting and scheduling will be mandatory for all the wind and solar generators connected to the AP State grid and connected via pooling stations irrespective of their capacity (MW) and date of commission of the plant.
  • Deviations will be calculated on the basis of Available Capacity (AvC).
  • The deviation slab has been kept as (+/-) 10% for all the wind and solar generators beyond which penalty is applicable at fixed rate as defined below. Whereas the deviation slab for plants commissioned prior to the effect of the regulations is kept at (+/-) 15%.
  • Settlement will be done through the “Qualified Coordinating Agency” or QCA, or the “Aggregator”.
  • SCADA & Telemetry data is to be mandatorily provided to SLDC. Protocols for the same shall be determined later by the SLDC through the detailed procedures.
  • Provision of six months for existing wind and solar generators to comply with the regulation from the date of publication of these regulations in the official gazette.
  • All the new wind and solar generators which shall be commissioned after six months from the effective date of the regulation shall comply these norms before commissioning of the project and connecting with the state grid.
  • 16 revisions allowed during the intraday with each revision effective from 4th time block.
  •  Payment for generation shall be as per the actual generation.

Detailed Mechanism defined for Deviation Settlement

In case of Intra-State transmission, Penalty Mechanism for existing generators:

In case of Intra-State transmission, Penalty Mechanism for new generators:

The regulation can be accessed here.

 

Analysis of Regulation on Forecasting and Scheduling of Wind and Solar Generating Stations at State level in Karnataka

In the follow-up after Draft Regulation on Forecasting & Scheduling for the Wind & Solar projects at Intra State level in Karnataka and based on the mechanism suggested in the Model Regulation, KERC has finally released the notification for DSM regulation on Forecasting and Scheduling for wind and solar in Karnataka.

Executive Summary:

 Forecasting and scheduling will be mandatory for all wind generators having a combined installed capacity of 10 MW and 5 MW for wind and solar respectively at the pooling station.

 Deviations will be calculated on the basis of Available Capacity (AvC).

 The deviation slab has been kept as (+/-) 15% for all the wind and solar generators beyond which penalty is applicable at fixed rate as defined below.

 Settlement will be done through the “Qualified Coordinating Agency” or QCA, or the “Aggregator”.

 SCADA & Telemetry data is to be mandatorily provided to SLDC. Protocols for the same shall be determined later by the SLDC through the detailed procedures.

 Provision of six months for existing wind and solar generators to comply with the regulation from the date of publication of these regulations in the official gazette.

 All the new wind and solar generators which shall be commissioned after six months from the effective date of the regulation shall comply these norms before commissioning of the project and connecting with the state grid.

 16 revisions allowed during the intraday with each revision effective from 4th time block.

 Payment for generation shall be as per the actual generation.

Error Calculation:

% Error (deviation) = 100 x (Actual Generation – Scheduled Generation)/ Available Capacity (AvC)

The penalty mechanism based on % deviation for all obligated generators:

The final order can be accessed here.

Analysis of Draft Regulations on Forecasting and Scheduling of Wind and Solar Generating Stations – Rajasthan

CERC had notified forecasting and scheduling (F&S) regulation for inter-state sale of power a few months back. Subsequently, the Forum of Regulators (FoR) had come up with model regulations for forecasting and scheduling at the intra-state level. Rajasthan has published the draft forecasting and scheduling regulations

in line with the FoR model Regulations. Rajasthan is the fourth state to do so in recent days – MP, Karnataka and Tamil Nadu are the others.

Executive Summary:

  • The regulations will be applicable on all wind and solar generators with individual or combined capacity of 5MW and above that are connected to the state grid
  • Deviation will be calculated on the basis of available capacity
  • Settlement with the buyer will be on the basis of actual generation

Qualifying Coordinating Agency (QCA) will play a key role in the total process. QCA will be  responsible for forecasting, telemetry, scheduling and settlement of deviation.

The draft regulations are in-line in every aspect with the model F&S regulations released by FoR earlier. However, the model FoR regulations had proposed a 10% deviation band for new projects and 15% for existing projects. Rajasthan has proposed a 15% band for all projects.

Detailed Analysis:

Forum of Regulators have recently come up with model regulation for forecasting and scheduling and deviation settlement mechanism. The primary objective is two fold :

a) facilitate large-scale grid integration of solar and wind generating stations, and b) maintaining grid stability and security.

Highlights of the regulation are below: -

  • All solar and wind generators connected to State grid have to provide day-ahead and week-ahead schedule – Revisions can be made on a one-and-half hourly basis.
  • Payment for generation shall be as per actual generation (this is different from the inter-state  regulation, where payment is on the basis of scheduled generation).
  • The deviation slab has been kept as (+/-)15% for all generators at Intra-state level.
  • Penalty is calculated at fixed amounts per unit (whereas, for Intra-state it is calculated as a percentage to PPA rate) -
  • RPO accounting can continue as per existing arrangement, and needs no change.

The SLDC will also conduct a forecast of its own with the primary purposed of ‘secure grid operations by planning for the requisite balancing  resources.

Applicability of Regulations

  • All wind and solar generators connected to the State grid are covered:
  •  Having capacity of 5MW and above individually or in aggregate.
  • Regardless of date of commissioning.
  •  Including those connected via pooling stations
  • Selling power within or outside the state. Detailed Mechanism defined for Deviation.

Settlement calculation or Intra-state sale of power is as follows:

Detailed Mechanism defined for Deviation Settlement  calculation or Intra-state sale of power is as follows

In case of Intra-State transmission, Penalty Mechanism for existing generators :

The Draft Order can be accessed here.

 

Analysis of Model Regulations on Forecasting and Scheduling of Wind and Solar Generating Stations at State Level

As you may be aware, CERC had notified forecasting and scheduling (F&S) regulation for inter-state sale of power a few months back. Now, with the intent of having compatible regulations, the Forum Of Regulators (FOR) has come up with model regulations. It is expected that states will adopt this model regulation or something on these lines in the near future.

Executive Summary:

  • Forecasting and scheduling will be required by all wind and solar project, regardless of the date of commissioning and capacity
  • Deviations will be calculated on the basis of total available capacity
  • Penalty is a fixed amount beyond the error range (10% in case of new projects, 15% in case of old projects)
  • Settlement will be done through the “Qualified Coordinating Agency” or QCA.

Detailed Analysis:

Forum of Regulators have recently come up with model regulation for forecasting and scheduling and deviation settlement mechanism. The primary objective is two fold: a) facilitate large-scale grid integration of solar and wind generating stations, and b) maintaining grid stability and security.

Highlights of the model regulation are below:

-          All solar and wind generators connected to State grid have to provide day-ahead and week-ahead schedule

-          Revisions can be made on a one-and-half hourly basis.

-          Payment for generation shall be as per actual generation (this is different from the inter-state regulation, where payment is on the basis of scheduled generation). .

-          The deviation slab has been narrowed for upcoming projects (i.e., +/-10%) but has been kept as (+/-)15% for existing generators at Intra-state level

-          Penalty is calculated at fixed amounts per unit (whereas, for Inter-state it is calculated as a percentage to PPA rate)

-          RPO accounting can continue as per existing arrangement, and needs no change.

Applicability of Regulations

All wind and solar generators connected to the State grid are covered:

  • regardless of date of commissioning,
  • including those connected via pooling stations
  • selling power within or outside the state.

Detailed Mechanism defined for Deviation Settlement

Deviation calculation both for Inter-state and Intra-state has been kept as :

*Available Capacity would ideally be the Installed Capacity, unless any of the turbines are on outage. Similarly for solar panels.

In case of Intra-State transmission, Penalty Mechanism for existing generators :

In case of Intra-State transmission, Penalty Mechanism for up-coming generators :

The detailed Regulation can be accessed here.

 

ET: Startups take to providing forecasting and energy management solutions

With energy management assuming a vital role across sectors, startups such as Ecolibrium Energy, LoudCell and REConnect are providing forecasting and energy management solutions to large and medium-scale manufacturing and retail companies in India. These startups are able to improve fuel and power efficiency through real-time data analytics, forecasting, sourcing of power and switching to green energy where it’s possible.

“Our technology has a hardware device along with software support on the cloud, which helps them (clients) get real-time data of energy consumption on their premises, and we also help them take steps to optimise energy utilisation, plug leakages as well as help them access the cheapest source of power,” said Chintan Soni, co-founder and chief executive of Ecolibrium Energy, based in Ahmedabad. The company has 500 clients including companies such as Delhi Metro, Fiat, Arora Steels and Gobain. Companies investing in the technology saw energy costs go down 10-25%, Soni claimed.

The company, started three years ago, has been incubated by IIM-Ahmedabad and has received funding of Rs 7.5 crore from International Finance Corporation and Infuse Capital. It is targeting revenue of Rs 12 crore in the next two years.

“Since using their technology, my utility costs have come down 20%, and machine running costs have gone down 12%. I have been able to reduce transmission losses by 6%,” said Prakash Rawal, internal and project manager of Harsha Engineering, an Ecolibrium client which manufactures automotive parts. “With the device, we can replace manual reading with software reports.

REConnect, which provides forecasting and power sourcing services to energy companies, helps them reduce carbon footprint, besides trading in renewable energy certificates.

“We also help renewable energy clients in wind and solar energy with close to real-time forecasts as per requirement of the Central electricity Regulatory Commission. Our revenue comes on closing certain units of energy transaction and we charge per unit of transaction. We are looking at revenue of “We also help renewable energy clients in wind and solar energy with close to real-time forecasts as per requirement of the Central electricity Regulatory Commission. Our revenue comes on closing certain units of energy transaction and we charge per unit of transaction. We are looking at revenue of Rs 75 lakh in 2014-15 and target around Rs 3.5 crore in 2015-16,” said CEO Vishal Pandya.

The Media Article in Economics Times

MPERC Amendment in RE Generation Regulation, 2010

Madhya Pradesh Electricity regulatory Commission (MPERC) on 10th September 2014 has ordered amendment for its Cogeneration and Generation of Electricity from Renewable Sources of Energy Regulation 2010. MPERC earlier invited the comments and suggestion and held a public hearing on 9th September 2014.

According to the new amendment the scheduling of Wind power plant with capacities of 10 MW and above and the solar power plants with capacities 5 MW and above shall be mandatory, whereas in principle regulation of 2010 this was missing.

On the other hand, MPERC had proposed 3nd amendment to MPERC (Cogeneration and generation of electricity from renewable sources of energy) Regulations, 2010, in which it wanted to include energy generated from fossil fuel based Co-generation plant under RPO compliance, and exclude such energy generated from availing REC’s. After hearing various stakeholders, MPERC finally decided to drop this amendment with regard to Co-generation, and approved the afore mentioned amendment regarding scheduling of RE power.

Earlier CERC in its order on 06th January 2014(Refer), suspended the RRF mechanism but directed the RE Generators to continue the scheduling and forecasting according to the previous regulation.

The MPERC Draft can be accessed here.

Contributed by Dheeraj Babariya.

Reinstatement of Accelerated Depreciation benefit for wind and its impact on the Renewable Energy Industry

Earlier last month, when the Union Budget was presented, there was a mention of reinstatement of Accelerated Depreciation ( AD ) for Wind Energy generators, in the Hindi version of the budget, whereas it found no mention in the English version. This caused confusion in the RE industry circles. However, the government clarified that AD has indeed been brought back on wind investments.

Wind Power development in India started in the early 90s. As per Section 80(J) of Income Tax Act 1961, industries were allowed 80% depreciation on capital invested. Since then till 2012 (when the benefit was removed), Wind Power development and growth has always relied primarily on Accelerated Depreciation (AD).

New wind capacity additional peaked in 2011-12 at about 3,200 MW, falling sharply to 1,700 MW the next year as AD benefits were removed. The argument put forward at that time by policy makers was that wind industry had matured, and the focus needed to shift to solar. This fits well with the objectives of the National Solar Mission.

The decline in wind investment due to withdrawal of AD coincided with healthy growth of close to 60% in Solar Power in 2012-13 and 2013-14. The market momentum had definitely shifted in favor of Solar. Our analysis suggests that Wind AD market had an investing capital of close to 7300 crores. This shifted to Solar AD market which saw increase in investments worth Rs 7500 crores during 2012-13.

The new government has announced that it was reintroducing AD (80%) in 2014, much to the delight of Wind Power stakeholders. We believe that the investment momentum will shift again to wind due to more mature policies and attractive tariffs.

Wind tariff in recent years have become very attractive and are close to solar tariff in many states. In Rajasthan, Maharashtra and MP, tariff in the range of Rs. 5, whereas solar tariffs are generally in the range of Rs. 6, leaving a very small gap.

With this, there will certainly be a diversion in investments from Solar to Wind power in the times to come.

These can also be understood from the table and graph below.

The green dots represent the advantage to the sector.

 

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