The Central Electricity Regulatory Commission (CERC) has identified inconsistencies in the implementation of the DSM Regulations (Deviation Settlement Mechanism) for 2022, which has led it to cap the usual rate of charges for deviation in order to stabilize the high DSM rates.
The DSM Regulations, 2022 seek to guarantee that all grid-connected companies adhere to schedules. It further states that any deviations, which should only be accidental, are to be controlled by the system operator through the provision of auxiliary services.
According to the regulatory agency, grid-connected firms have a tendency to over-schedule in order to avoid paying a deviation fee for over-withdrawal or under-injection. As a result, the system frequency has stayed high for an extended length of time, with generators over-injecting and DISCOMs under-drawing.
CERC has issued a warning regarding the wide frequency variations that have been seen in recent weeks. Grid-India, the system operator, has also said that maintaining system frequency is difficult in the absence of significant support from grid-connected companies.
To remedy this, the Commission will intervene in the interest of grid security to incentivize grid participants to stabilize grid frequency.
It has advised that the system operator estimate the demand and get enough reserves, while carefully deploying them to minimize frequency variations.
In periods of high frequency, the Secondary Reserve Ancillary Services (SRAS) down and RRAS down (until TRAS is implemented) must be used to improve frequency. The appropriate DSM rate has likewise peaked since the system frequency has remained high for extended periods of time.
Moreover, in order to resolve the issue raised by Grid-India, CERC has used its authority under Regulation 12 of the DSM Regulations, 2022. The said Regulation states that the regulatory body is authorized to issue practice directions when difficulty with enforcing regulations arises.
As a result, the Commission has decided that, up till further orders, the regular rate of charges for deviations for a time block as stipulated under the DSM Regulations, 2022, shall be subject to a maximum of Rs 12 per kWh.
CERC noted that “The general seller other than a ROR generating station or a generating station based on municipal solid waste shall be paid back from the Deviation and Ancillary Service Pool Account at 150% of reference charge rate for deviation by means over injection in such time block.”, in case the system frequency is 49.90 Hz or lower in a time block.
Furthermore, the CERC has recommended that generators and DISCOMs increase regular plant maintenance while also offering mandated primary response (for generators) and engaging in scientific demand forecasts for DISCOMs.
