With the large-scale integration of wind-and solar-based generating stations, managing the national and regional grids could be a daunting task for the state load despatch centres (SLDCs). Unless steps for managing variable renewable integration into the grid are initiated, issues such as poor grid management, inefficient load generation balancing, lack of grid security and instability are likely to persist across all renewable-rich states.
Effective management of renewable energy is only possible when grid operators have visibility into the amount of renewable energy expected to be injected into the grid on a day-to-day basis. To this end, the forecasting and scheduling of renewable energy is critical to anticipate the balancing requirements and procure adequate reserves for maintaining grid reliability. Special provisions also need to be in place to ensure that renewable energy generators are not unduly penalised for an unexpected loss in generation due to fluctuating weather conditions. To this end, most states have acknowledged the need to frame regulations on forecasting, scheduling and deviation settlement for grid-connected solar and wind power projects.
Since renewable energy power purchase agreements (PPAs) have a single-part tariff structure, there is no incentive for generators to invest in forecasting and scheduling. Moreover, renewable energy has a “must-run” status, which prevents discoms from curtailing energy generated from renewable sources. This is why solar and wind project developers have not been forthcoming in adopting accurate forecasting technologies. As a result, SLDCs continue to face problems in scheduling power and accordingly, balancing the generation with load.
To resolve this issue, in October 2015, the Forum of Regulators (FoR) published model regulations regarding the deviation settlement mechanism (DSM) to be adopted by states for renewable energy plants. The regulations recommend that all renewable energy generators should forecast and submit their generation schedule on a day-ahead basis, either independently or through a qualified coordinating agency, which will form the basis for commercial settlement.
As per the FoR, the fixed deviation rates should be based on error percentages. The DSM regulations define “absolute error” as the difference between the actual injection of wind and solar energy with reference to the scheduled generation and the available capacity. This error is calculated over a 15-minute time block. Different tolerance bands for errors or deviations have been provided in the model regulations for existing and new renewable energy generators.
For interstate transmission system-connected projects, the Central Electricity Regulatory Commission (CERC) has allowed a 15 per cent tolerance band (positive and negative) wherein no charges will be levied for renewable energy developers. The deviation charges would be 10 per cent, 20 per cent and 30 per cent of the PPA rate for absolute errors of 15-25 per cent, 25-35 per cent, and more than 35 per cent respectively.
The guidelines and regulations issued by the CERC have helped increase awareness among the states on the grid balancing challenges arising from renewables’ integration, and played a major role in guiding state agencies to introduce their own regulations. The first DSM regulation announced by the CERC in 2014 was instrumental in defining a market mechanism to hold generation companies accountable for their power supply commitments. Since then, the CERC has brought in three amendments and a fourth draft amendment.
States that already have significant wind and solar installations, such as Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Rajasthan, Gujarat and Madhya Pradesh, have released DSM regulations. Emerging solar states such as Uttar Pradesh, Punjab, Haryana, Assam, Chhattisgarh, Jharkhand, Uttarakhand, Odisha and Manipur have also rolled out their regulations. These largely follow the CERC guidelines, with some minor changes. The primary objective of all the regulations remains the same – mandating the forecasting of renewable energy by generators and penalising them for any deviations from the promised schedules.
The objective of the DSM is to facilitate large-scale grid integration of solar and wind generating stations while maintaining grid stability and security through strict forecasting and scheduling, with minimum deviation. With renewables becoming a mainstream source of generation, the central and state governments are making concerted efforts to ensure parity between conventional and renewable energy generators in terms of accountability. This is supported by the CERC’s fourth amendment (draft) for DSM regulations, which suggests significant changes to the current penalty mechanism. The operational frequency band for all generators has been narrowed to 49.85-50.05 Hz from the earlier band of 49.70-50.10 Hz. The CERC has also linked the deviation penalties to the day-ahead market prices. Further, in January 2018, the FoR suggested implementing a shorter despatch and settlement period of five minutes instead of the current time block of 15 minutes.
Going forward, advanced methods of forecasting and scheduling of renewables will become essential for reducing the requirement of reserves, improving price discovery and increasing flexibility in electricity generation and transmission.