Regulatory support (TA) to FOR

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In FY 2014, India power system turned into ‘One Nation’–‘One Grid’-‘One Frequency’ leading to improved grid reliability and management systems to maintain the grid frequency. This prestigious achievement also led to manifold increase in major transactions of electrical energy across regions/ states. These bulk energy transactions, whether from conventional energy sources, renewable energy or distributed energy resources, needs a more robust and comprehensive accounting and settlement mechanism in place in order to ensure all such transactions at intra-state, inter-state, regional, transnational, in seamless manner.

The National Electricity Policy and Tariff Policy have provided for implementation of Availability Based Tariff (ABT) at the state level which should be in sync with the inter-state ABT system. Further, the Electricity Act, 2003 and the Grid Code entrust the load despatch centers with the responsibility of monitoring grid operations, optimal scheduling and despatch of electricity and maintaining an account of electricity transmitted. Thus, a uniform and robust framework for Scheduling, Accounting, Metering and Settlement of transactions (SAMAST) is required for a well-functioning electricity market and to accurately trace the energy and financial flows in a reliable and dispute free manner.

India’s Forum of Regulators (FOR) had mandated the states to submit a Detailed Project Report (DPR) outlining their plan for the same. As a long-standing partner committed to India’s reform agenda, USAID has been supporting India’s Ministry of Power and its key regulatory bodies adopt innovative, evidence-based solutions to emerging energy-sector needs. In line with this commitment, USAID’s GTG-RISE lent regulatory support to FOR to enhance and support the state regulators capacity on the DPR preparation for SAMAST implementation and other model regulations. The GTG-RISE team has assisted 15 states (Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Haryana, Himachal Pradesh, Karnataka, Manipur, Meghalaya, Mizoram, Nagaland, Punjab, Tripura, Uttar Pradesh, West Bengal) in preparation of their SAMAST DPR. Many of these states are in the implementation stage of the projects. Successful completing of the works outlined under the project will help in timely and accurate energy accounting and settlement.

As large quantum of renewable energy is integrated into the grid, there is a need for a robust and uniform mechanism to address the deviations by market participants to ensure system security. The Central Electricity Regulatory Commission (CERC), in 2014, had put in place a mechanism for commercial settlement of such deviations to discourage buyers and sellers from leaning on to the grid to meet their demand-supply gap. Subsequently, the FOR had notified model regulation for Deviation Settlement Mechanism (DSM) at state level and the states were mandated to prepare a similar framework in line with the framework at the center.

However, until a few years ago, most of the states did not have a DSM in place which was aligned with the framework at the center. The GTG-RISE team assisted the respective state electricity regulators in drafting and finalizing the DSM Regulations and Forecasting, Scheduling and Deviation Settlement Mechanism for wind and solar generators (F&S). The team has successfully assisted 11 states (Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Maharashtra, Meghalaya, Punjab, Tamil Nadu Telangana and Uttar Pradesh) in preparation of their DSM and F&S regulations.

Through the enactment of these regulations, which supports and reinforces the deviation settlement framework at the center, the states will now be able to maintain discipline in the grid and improve grid reliability.
The GTG-RISE team further undertook an analysis for all the solar and wind pooling substations in the states of Gujarat and Maharashtra to understand the level and distribution of deviations in the states.

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