Regulating Renewables

Need for uniform forecasting, scheduling and DSM regulations

As the share of grid-connected re­newable energy projects is increasing, it is essential to put in place fo­re­casting, scheduling and deviation settlement mechanism (DSM) regulations for renewables such as wind and solar. Over the past decade, the Central Electricity Regulatory Commission (CERC) and several state electricity regulatory commissions have issued forecasting guidelines for the industry. These regulations help in regulating the quantum of electricity being injected into the grid and provide a mechanism to penalise plants for deviation fr­om the scheduled generation beyond a permissible limit.

Power producers have to forecast their generation and submit a schedule to their re­spective load despatch centres. The sc­he­dule can be revised when needed. Forecasting and scheduling wind energy is important to ensure grid stability, especially in states that have a high share of wind power and experience intense monsoon winds or other extreme weather conditions. Over- or under-generation can le­ad to the imposition of penalties or curtailment by grid operators. As per a report by CEEW, such risks are particularly concer­ning in states such as Tamil Nadu and Ra­jasthan, which have experienced wind en­ergy curtailment of up to 50 per cent and 45 per cent respectively.


Srikant Sharma, deputy director, Odisha Electricity Regulatory Commission, covers the background of the forecasting, scheduling and DSM regulations in an article titled “Forecasting and Scheduling of Renewable Energy in India: A Demanding Challenge for 2030” for the Indian Institute of Corporate Affairs. The CERC introdu­c­ed the provisions for forecasting of solar and wind power under the Indian Elec­tri­city Grid Code (IEGC) in May 2010 to solve ma­na­gement issues emerging from intermittent solar and wind power. The IEGC, 2010, envisaged a plan for improv­ed grid discipline and accountability by mandating fo­re­casting and scheduling of these rene­w­able energy sources. Due to inherent gaps in forecasting and scheduling technologies and their likely financial impact on wind and solar power developers, these provisions could not be operationalised.

The CERC DSM Regulations, 2014, defin­ed a market mechanism for holding generation companies accountable for their power supply commitments. The regulations were implemented to maintain grid discipline and security, in line with the EGC. The CERC has introduced several amendments to these regulations.

The procedure for the implementation of the framework for forecasting, scheduling and imbalance handling of renewable en­ergy generating stations including power parks based on wind and solar power at the interstate level was released by the CERC in March 2017. It provided incentives for generators to accurately forecast and schedule (decentralised forecasting), and enabled forecasting and scheduling at the national as well as regional load despatch centre level.

The framework provided flexibility in the revision of the schedule (every 1.5 hours in four time blocks), having buyer obligations limited to the schedule, a tolerance band of ±15 per cent in socialisation, deviation charges linked to PPA rates, symmetrical penalties for over-injection and under-injection, and stipulating that any shortfall be met through renewable energy certificates.

In October 2015, the Forum of Regulators (FoR) published model regulations regarding the DSM to be adopted by states for renewable energy plants. The regulations recommend that all renewable energy generators forecast and submit their generation schedule on a day-ahead basis, either independently or through a qualified coordinating agency (QCA), which will form the basis for commercial settlement. Any commercial impact on account of deviation from the schedule based on the forecast will be borne by the wind and solar generator directly or transacted via the representing QCA. Based on these regulations, many states have come out with their own regulations in the past few years.


A single-part tariff structure and the must-run status of renewable energy gave little incentive to industry players for investing in generation forecasting and scheduling. This led to difficulties in maintaining grid stability for power operators and load despatch centres. To this end, steps taken by the CERC and the FoR to draft regulations for deviation settlement were helpful. These guidelines have helped increase awareness among the states regarding grid balancing challenges due to renewables integration.

For central-level projects that are connected to the interstate transmission system, the implementation of forecasting, scheduling and DSM mechanisms has been quite smooth as they follow the CERC re­gulations. However, the projects that are co­nnected to the state network have fac­ed some problems. Stakeholders compl­a­in that while the regulations aim to maintain grid stability, they also tend to pe­na­lise renewable energy developers on things beyond their control.

State-level initiatives

States that already have significant wind installations, such as Tamil Nadu, Gujarat, Karnataka, Andhra Pradesh, Maharash-tra, Rajasthan and Madhya Pradesh, have released DSM regulations. Other states with increasing renewable energy proje­c­ts, such as Assam, Bihar, Haryana, Jhar­­­kh­­and, Meghalaya, Punjab, Tripura and Ut­­tar Pradesh, have also rolled out their regulations. Some states have prepared draft regulations for deviation settlement and related matters for solar and wind. They largely follow the CERC guidelines with some minor changes.

Errors in forecasting and scheduling can occur due to changing weather conditions as well as ambiguity in the DSM regulations across states. The permissible error bands for deviation also differ from state to state, although most states have a permissible error band of ±15 per cent, within which penalties for deviating do not apply. In states such as Haryana, Madhya Pradesh and Tamil Nadu, the range for error is only ±10 per cent, which is difficult to achieve even with the latest technologies. However, Madhya Pradesh also has a separate range of ±15 per cent for stations that were commissioned before the notification of the regulations.

Renewable energy management centres

The objective of setting up renewable en­ergy management centres (REMCs) is to address the variability, intermittency and ramping aspects of renewable energy in­tegration through the deployment of state-of-the-art monitoring, forecasting and scheduling systems. REMCs are equipp­ed with artificial intelligence-based renewable energy forecasting and scheduling tools, and provide greater visualisation and enhanced situational awareness to grid operators.

On March 31, 2022, while answering a question in the Lok Sabha, the power and new and renewable energy minister stated that the Ministry of Power (MoP) has sanctioned 13 REMCs, namely the natio­nal load despatch centre (Delhi), northern re­gional load despatch centre (Delhi), we­stern regional load despatch centre (Mumbai), southern regional load despat­ch centre (Bengaluru), and the state load despatch centres of Rajasthan, Gujarat, Madhya Pra­desh, Maharashtra, Tamil Na­du, Andhra Pradesh, Karnataka, Telan­ga­na and the Andaman & Nicobar Islands (en­ergy management centre). All 13 REMCs have been commissioned, with Powergrid as the implementing agency. The REMCs have been sanctioned at a cost of Rs 4.09 billion.

The way forward

Accurate forecasting and scheduling have an increasingly important role to play in ensuring grid stability in a growing re­ne­wable energy sector. For reducing the re­quirement of reserves, improving price discovery and increasing flexibility in electricity generation and transmission, ad­va­n­ced methods are required for forecasting and scheduling of renewables.

Going forward, there is a strong need for uniformity across states in terms of penalty slabs under forecasting, scheduling and DSM regulations. Forecasting may be difficult due to the lack of historic weather and generation data for new projects. To this end, a six-month trial could be undertaken to focus on providing schedules on a day-ahead basis. Across all renewab­les-rich states, there is a need to allow the aggregation of forecasts and deviation settlement at boundary to improve the ac­curacy of day-ahead forecasts and help with planning at the discom end.

Going forward, to ease the pressure on renewable power generators, there is also a need to reduce the cost burden of DSM charges. To prevent curtailment during co­­n­gestion and lower DSM charges, grid-scale battery energy storage systems co­uld be deployed in wind-rich states. The falling costs of energy storage should in­centivise developers to take this option for­ward. There is a need to evaluate the use of mechanical, hydro and electroche­mical storage technologies in this space. The use of new technologies for better forecasting and scheduling of renewables will also encourage the adoption of new, innovative business models.


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