Impact of Forecasting & Scheduling (F&S) regulations on RE generators

So far, 15 states have come up with their final Forecasting & Scheduling (F&S) regulations for RE generators. Most of the states have made it mandatory, for plants above 5 MW size, to have a forecasting mechanism in place. Some states like Tamil Nadu, Andhra Pradesh, Haryana, and Gujarat have made it mandatory for plant sizes above 1 MW.

In most of these states, there are no penalty charges for deviations in the range of +-15% except for Gujarat, Haryana, Uttar Pradesh and Tamil Nadu where the range is less than 10%. So far, five states including Chhattisgarh, Madhya Pradesh, Andhra Pradesh, Karnataka, and Rajasthan have started to impose penalties on generators.

Summary of Forecasting & Scheduling regulations across key states (as of July 31, 2019)

State name Applicability Deviation threshholdAggregation level* No. of revisions allowed
Andhra Pradesh >1 MW +/- 15% for all State level 9
Chhattisgarh >= 5 MW +/- 10% for all Individual plant level 8
Gujarat >1 MW Wind: +/- 12% Solar: +/- 7% Pooling substation level 9
Haryana >1 MW +/- 10% for all Pooling substation level 16
Jharkhand >=5MW +/- 15% for all State level 16
Karnataka Wind: >=10 MW Solar: >=5MW +/- 15% for all State level 16
Madhya Pradesh >=10MW Wind >=5MW Solar +/- 15% for all Pooling substation level 16
Maharashtra >5 MW +/- 15% for all Pooling substation level 16
Punjab >= 5 MW +/- 15% for all Pooling substation level 16
Rajasthan >=5 MW +/- 15% for all Pooling substation level 16
Tamil Nadu >1 MW +/- 10% for all Pooling substation level 16
Telangana >5 MW +/- 15% for all Pooling substation level 9
Uttar Pradesh >=5MW +/- 15% for all Pooling substation level 16- Wind
8- Solar

Source: SERC’s website, JMK Research 

*Note: States follow one of the three levels of scheduling and/or aggregation – plant-level, pooling station-level, and state-level. Penalties are lowest for aggregation at the state level. 

With current tariff rates, as low as INR 2.44-2.5 per unit, there is no scope of accommodating additional financial burden on generators. Apart from the penalties, the generators have to pay Qualified Coordinating Agency (QCA) fees as well (QCA is an agency that coordinates metering, data collection, communication, etc. between DISCOM, generator, and SLDC).

Because of these regulations, the estimated impact on current revenue of the generators is in the range of 0.5-1% for solar and 1-2% for wind.  Therefore, generators are of the view that these regulations should be treated under “change in law” provision for RE plants for which the PPAs were signed after 2016 and PPA price be adjusted/ escalated accordingly.

As per the generators, another important factor that policy makers should reconsider is the number of revisions allowed in a day. Presently, after the notice is given, the revisions are effective from 4th time block. To allow more flexibility to RE generators, this can be changed to 3rd time block. 

With time, the share of renewables in the power generation mix would grow, which would eventually lead to tighter regulations. Although these regulations are an additional operational and financial burden for RE generators, they are still critical for maintaining grid stability and balancing. Therefore, the generators need to have a robust F&S mechanism in place to minimize the deviation limits and increase forecasting accuracy.