RRF Mechanism close to be operationalized

The implementation of Renewable Regulatory Fund mechanism which was scheduled on 01.07.2013 has now been deferred by 15 days and hon’ble CERC in its order dated 09.07.2013 has come up with following implementation plan:

• RRF to be implemented effectively from 15.07.2013.
• Role of Coordinating Agency (CA) has been defined as follow:
• Each pooling sub-station need to appoint CA and declare it to SLDC/RLDC
• CA to provide schedules and revised schedules to SLDC/RLDC as per the Grid Code
• CA to coordinate metering, data collection & trans-mission, communication to SLDC/RLDC/RPC/DISCOMs and other agencies
• CA to undertake commercial settlement of all the charges on behalf of generators & settlement of re-gional/state UI pool account through concerned SLDC
• CA to manage de-pooling of settlement amount among the Generators
• RRF guidelines also to be made applicable on CA
• CA to provide data acquisition system to transfer data at SLDC
• RRF mechanism shall not be made applicable to COLLECTIVE Transactions to be made at Power Ex-changes as PX transactions can’t accommodate revi-sions in schedules.
• Operational Timelines – Hon’ble commission has also specified operational timelines for effective imple-mentation of RRF.
• Weekly Reconciliation of account: for a week (W) starting from Monday 00.00 Hrs (Day 1) and ending on Sunday 24.00 Hrs, RLDC by following Tues-day (Day 9) noon shall provide pooling sub-station wise implications due to RRF. CA to validate the data and con-firm the acceptance and coordinate with RLDC if any cor-rections required.
• Day 16: Regional Power committee to provide state-ment of energy account by Tuesday
• Day 17-Day 24: Constituents to settle statement of accounts as per the obligation arising out of RRF mecha-nism.
• Delay in settlement beyond 12 days to attract 0.04% simple interest per day.

What is RRF?

The Renewable Regulatory Fund (RRF) regulations require wind and solar projects that meet certain criteria to forecast and schedule their power on a day-ahead basis. This requirement will have significant operational and financial implications for the projects – the task of forecasting wind and solar power which are essentially variable in nature and dependent on many site-specific weather factors is complex in nature. At the same time, the scheduling, reconciliation and financial settlement requirements will also require on-ground coordination and liaisoning.

For basics on RRF mechanism, see our past newsletter – Newsletter Vol. XIV October 2011

What are the challenges faced by projects in implementing forecasting and scheduling?

As per order from CERC of Jan 2013, projects were required to start forecasting and scheduling their power from July 1, 2013. However, certain challenges remain that need to be ironed out (see last section).

There are several approaches and models for forecasting generation. It will be very important for projects to choose the appropriate one keeping in mind the accuracy required and operational costs (that can go up significantly depending on the level of real-time data needed). Solar projects in general should opt for correlation based models with basic weather data inputs considering the relative stability in day-to-day generation and no financial implications for deviations. Wind projects must choose carefully between very sophisticated real-time forecasts (which are expensive to run) and models that balance past data with periodic generation inputs.

Once fully functional, projects will need to ensure that they forecast and schedule their power, and also have a ‘Coordinating Agency’ appointed to manage the logistical requirements for scheduling, reporting and settlement.

The scheduling and forecasting has to be done on a pooling substation basis, which will often have turbines with multiple owners. The task of ‘de-pooling’ so that the settlement of charges can be done appropriately amongst all the owners within the wind farm will also be a challenging one.  The data flow diagram for a typical forecasting mechanism can be explained below:

 

What is the status of implementing RRF?  

The most recent pronouncement from CERC required RRF to be operational from July 1, 2013. However, based on our on-ground experience several challenges remain:

Project level – the level of accuracy achieved by various projects that have done trials leaves a lot to be desired. In such a scenario, projects may immediately face financial obligations

Infrastructure level – challenges remain in preparedness at all levels – at the coordinating agency and at some SLDCs in terms of preparedness. Various wind farms also have multiple owners, and de-pooling and the relevant reporting and contractual requirements are not yet in place in the majority of cases.

Clarity in regulations – CERC order of Jan 2013 stated as follows:“

We direct the staff of thee Commission to initiate the process for necessary amendments to the Grid Code in the light our decisions given in this Order. We direct NLDC to align the “Procedures for implementation of the mechanism of Renewable Regulatory Fund”” in accordance with our above directions and put up thee revised Procedures for approval of the Commission expeditiously. All concerned agencies are directed to gear up for implementation of the RRF mechanism w.e.f. 1.7.2013.

Pooling stations are to be regarded as “building blocks” as per recent order. Applicability of RRF is on pooling stations commissioned after May 3rd 2010. In case a pooling station was commissioned (say) 20 years back and two new feeders have been connected to the same after May 3rd 2010. Will the new feeders be eligible for participating in RRF mechanism?

At present, there is nothing strongly mentioned to address his particular issue as per current orders and same needs clarity as far as the operationability is concerned.

For full details of requirements under RRF and services offered in RRF management by REConnect, please contact us at info@reconnectenergy.com.