The amendment to the Central Electricity Regulatory Commission (Deviation Settlement Mechanism and Related Matters) Regulations, 2024, introduces notable changes with implications for the industry, particularly for Commercial and Industrial (C&I) consumers. Eninrac analyses the impact of the amendments as below:
Key Amendments and Their Implications
- Quantum of Connectivity Limitation
- Change: The generation capacity considered for deviation settlement is now explicitly limited to the quantum of connectivity granted.
- Impact: This ensures that only the granted connectivity is used for deviation calculations, benefiting C&I consumers who rely on precise connectivity allocations to optimize their operations. It prevents overutilization charges outside granted limits, potentially reducing penalties.
- Inclusion of Sellers Using Open Access
- Change: New provisions include WS (waste-to-energy) and MSW (municipal solid waste) sellers and general sellers supplying through open access for deviation settlement.
- Impact: C&I consumers sourcing power from renewable or other sources via open access may face revised settlement frameworks. This could make open-access transactions more structured and transparent, encouraging sustainable sourcing.
- Zero Charges for Injection of Infirm Power
- Change: Infirm power injection charges are zero, but deviations post-trial runs are charged as per the seller type. Over-injection during high-frequency scenarios (f > 50.05Hz) also attracts zero charges.
- Impact: C&I consumers with embedded generation units gain flexibility during commissioning phases. The exemption during high-frequency periods prevents additional financial burdens while promoting grid stability.
- Alignment with Renewable and Non-renewable Captive Consumption
- Change: Captive power plants selling via open access or consuming renewable/non-renewable energy are explicitly addressed.
- Impact: Greater clarity benefits C&I consumers who operate captive power plants or rely on such arrangements. It enhances compliance and minimizes disputes in deviation charges.
- Broader Industry Impacts
- Enhanced Predictability: By tying deviations to connectivity limits and scheduled infirm power, the amendment reduces unpredictability in settlement charges for energy-intensive industries.
- Support for Renewable Integration: The focus on renewable and waste-to-energy sellers aligns with national sustainability goals, potentially reducing costs for C&I consumers prioritizing green energy.
- Improved Grid Discipline: By structuring penalties and exemptions, the regulation incentivizes adherence to schedules, benefiting overall grid reliability.
- Recommendations for C&I Consumers
- Review Connectivity Agreements: Ensure that the granted connectivity is optimized and aligns with operational needs.
- Leverage Open Access Opportunities: Evaluate the feasibility of sourcing power from renewable or alternative sellers under the revised framework.
- Monitor Grid Frequency: Align operations to minimize deviation charges, particularly in periods of high system frequency.
This amendment represents a step toward more robust grid management and fairness in deviation settlement, fostering a balanced energy ecosystem.
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