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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. 

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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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