The Renewable Regulatory Fund mechanism that has come into effect from July 15th, 2013, through a Central Electricity Regulatory Commission order is likely to place financial as well as operational burden on the country’s wind energy sector.

The draft procedure for implementation of the RRF mechanism was submitted by the National Load Despatch Centre for approval of the CERC on June 12th, 2013. The CERC accorded approval through its order dated July 9th, 2013.

Initially, the CERC had directed implementation of the RRF mechanism from July 1st, 2013. The date was extended to July 15th, 2013, to enable stakeholders get acquainted with the procedure.

The procedure for implementation of the RRF mechanism is applicable to all wind generators which are connected to pooling stations with collective capacity of 10 MW and above at connection point of 33 kV level and above, either to the transmission or distribution system of the state or to the inter-state transmission system, on or after May 3rd, 2010, the date the Grid Code came into force.

Pooling stations of solar generating plants with capacity of 5 MW and above connected at connection point of 33 kV level and above either to the transmission or distribution system of the state or to the inter-state transmission system, on or after the date of the Grid Code becoming effective, are also covered by the procedure.

The procedure applies to coordinating agencies appointed by the wind and solar generators, state agencies responsible for Unscheduled Interchange settlements, regional agencies such as Regional Power Committees and Regional Load Despatch Centres and the National Load Despatch Centre as well.

It is not applicable to solar or wind generating plants selling power through collective transactions at power exchanges.

As per the procedure laid down for implementation of the RRF mechanism, the coordinating agency appointed by wind and solar generators connected to the pooling station is responsible for providing schedules with periodic revisions as per Grid Code, metering, data collection and transmission, communication, coordination with DISCOMS, RLDC, SLDC, RPC and other agencies, undertaking commercial settlement of all charges on behalf of generators including payments to regional/state UI pool accounts through concerned SLDC, de-pooling of payments received on behalf of generators from regional/state UI pool accounts and settling them with individual generators and undertaking commercial settlement of any other charges on behalf of generators as may be mandated from time to time.

All payments on account of Renewable Regulatory Charges levied under the regulations, and interest, if any, received for late payment would be credited to the RRF, operated by NLDC at a national level on the lines of UI pool account at the regional level.

Under the procedure for scheduling and settlement of accounts in case of wind farms, the coordinating agency is responsible for scheduling generation on behalf of wind generators connected to the concerned pooling station, with a minimum accuracy of 70 percent. If actual generation goes beyond +/- 30 percent of the schedule, UI charges would be payable to/receivable by the coordinating agency for the concerned pooling station. For actual generation within +/- 30 percent of the schedule, no UI charges are payable to/receivable by the concerned coordinating agency. The UI charges for schedules within the +/- 30 percent variation would be applicable to the host State. The implication of these UI charges, however, is to be shared among all states/UTs/Damodar Valley Corporation in ratio of their peak demand met in the previous month based on data published by the Central Electricity Authority, in the form of RRC operated through the RRF.

A maximum generation of 150 percent of the schedule is allowed in a time block for injection by pooling station from the grid security point of view. For any generation above 150 percent of the schedule, if grid security does not get affected, the only charge payable to the coordinating agency for the concerned pooling station would be the UI charge applicable corresponding to 50- 50.02 Hz.

In case of both wind and solar pooling stations, the procedure for implementation of the RRF mechanism requires that the coordinating agency, through their respective SLDCs/Control Centres/DVC provide 15-minute block-wise data of scheduled and actual generation at the connection point of the pooling station as recorded in the special energy meters to the concerned RLDC on a weekly basis.

In case of solar generation, no UI charge is payable to the coordinating agency.

Wind farm developers point out that the procedure for implementation of the RRF mechanism could pose several challenges for the sector.

To begin with, there is likely to be a considerable difference in scheduled and actual generation for the specified 15-minute block because of inevitable inaccuracies in forecasting of wind energy. Besides, the cost of forecasting places an additional burden. Also, the UI charges payable if actual generation goes beyond +/- 30 percent of the schedule could turn many wind power projects unviable.


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