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CERC Implements New Deviation Settlement Mechanism Regulations 2024 To Enhance Grid Stability
Source：solarquarter
The Central Electricity Regulatory Commission (CERC) has issued new regulations called the Central Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) Regulations, 2024. These regulations, set to take effect from September 16, 2024, aim to maintain grid stability by ensuring that grid users adhere to their scheduled electricity drawal and injection.
The regulations will apply to all grid-connected regional entities and those involved in inter-State electricity transactions. The rules emphasize that each grid-connected entity must follow its schedule to ensure a secure and stable grid. Any deviations from the schedule will be managed through Ancillary Services, and specific provisions for calculating and charging these deviations are included in the regulations.
Deviation for general sellers will be calculated based on the difference between actual injection and scheduled generation in megawatt-hours (MWh). Similarly, deviations for wind and solar (WS) sellers and buyers are defined, with specific formulas provided for different periods. From April 1, 2026, the formula for WS sellers will be based on a combination of available capacity and scheduled generation.
The regulations also outline the method for calculating deviation charges. The normal rate of deviation charges will be the highest of three specified rates, derived from the weighted average prices of the Integrated Day-Ahead Market, the Real-Time Market, and Ancillary Services. These charges will apply without any linkage to grid frequency for certain types of generators, such as run-of-river hydro plants and municipal solid waste-based generators.
Standalone Energy Storage Systems (ESS) will face the same deviation charges as general sellers, with specific provisions for calculating deviations in charging mode. The regulations also cover the treatment of deviations for WS sellers with ESS at the same interconnection point and set rules for dealing with infirm power and start-up power.
To ensure transparency and accountability, the regulations require the Regional Load Despatch Centres to provide deviation data weekly to the Regional Power Committees, which will then issue statements of charges. A Deviation and Ancillary Service Pool Account will be maintained by each Regional Load Despatch Centre, with credits and charges flowing through this account as per the regulations.
If there is a deficit in the pool account, surplus amounts from other regions’ accounts will be used to settle payments. In case of further shortfalls, additional funds will be recovered from the Distribution Companies (DICs) based on a specified ratio. Detailed procedures for managing these funds and recovering shortfalls will be developed by the National Load Despatch Centre (NLDC).
Payment of deviation charges is prioritized, with a 10-day payment window from the issue of the statement of charges. Late payments will incur a surcharge, and entities with a history of late payments will be required to open a Letter of Credit to cover potential future liabilities. Failure to pay can result in the encashment of this Letter of Credit by the Regional Load Despatch Centre.
The Commission retains the authority to relax any provision of these regulations if necessary, following due process, and may issue practice directions to address any difficulties in implementing the regulations. Finally, the 2024 regulations will replace the previous Deviation Settlement Mechanism Regulations of 2022, with any actions taken under the old regulations deemed valid under the new rules.