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CERC New DSM Regulations: No Settlement For Wind and Solar Power Over Injection

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The new Central Electricity Regulatory Commission’s (CERC) Deviation Settlement Mechanism and Related Matters Regulations, 2022 have been released. 


In September 2021, CERC announced draft regulations that were open for comments and recommendations. The Commission will inform the effective date separately.

These restrictions will apply to all grid-connected regional entities as well as other entities engaging in interstate power acquisition and sale where state-level regulations do not exist.

In the event of over-injection by wind and solar power suppliers of more than 5% and up to 10%, the tariff is decreased by 10%. Wind and solar power dealers will not be reimbursed for over injection in excess of 10%.

Wind and solar power sellers will not have to incur any costs for under injection deviations up to 10%. If the variation exceeds 10%, the seller must pay deviation costs at 10% of the regular rate.

According to the new regulations, there will be no charges for deviation up to 2% for over injection for a general seller of electricity (other than a run-of-river producing system or a generating approach based on municipal solid waste). 

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For deviations more than 2%, the company must pay deviation costs equal to 10% of the regular rate. The company will have to pay deviation costs for up to 2% deviation at the regular rate for under injection. 

The generator will be required to pay deviation charges at the rate of 120% of the regular rate for deviations more than 2% and up to 10%; for deviations greater than 10%, the penalties will be 150% of the normal rate.

Power procurers (with a schedule of more than 400 MW in renewable energy-rich states) will not be required to pay under drawal deviation costs. For over-drawal, the company will pay deviation costs at the standard rate for deviations up to 10%. 

The buyer will be charged division charges at 120% of the standard rate for deviations more than 10% and up to 15%. If the over-drawal exceeds 15%, the entity must pay deviation costs at 150% of the regular rate.

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Buyers (with a schedule of up to 400 MW) are not compelled to pay any under drawal costs. For over-drawal, the entity must pay deviation charges at the usual rate for deviations up to 20%, and deviation charges at 120% of the normal rate for deviations more than 20%.

Payment of division charges will be prioritized, and the concerned regional body must pay the due amount within 7 days of the regional power committee issuing the statement of charges for deviation; otherwise, a late payment premium of 0.04% will be imposed for each day of delay.

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