The Central Electricity Regulatory Commission (CERC) issued draft (Deviation Settlement Mechanism and Related Matters) Regulations, 2021 regulations on 7th September, 2021 along with an Explanatory Memorandum and invited public comments on the same.

These draft DSM regulations mandate an important element of the framework which ensures reliability, security and stability of the grid in the country. The important points in our submission are

1. Provide certainty on Normal Rate of Charges for Deviations by keeping the existing DSM price (ACP of DAM) as the ceiling for one year.
2. Remove incentive to over-schedule and under-inject for Wind and Solar generators by either tightening the under-injection band or providing a graded payment for over-injection.
3. In the absence of a contract rate (for OA/CPP sellers), the payment into the pool by wind-solar generators for under-injection could be at the Green DAM ACP rather than the ACP of the DAM.
4. The Commission should set a definitive timeline or a sunset clause (say March, 2023/24) by which all W-S generators will have to align their deviation accounting to their scheduled generation rather than their available capacity.
5. Reconsider the definition of ‘Renewable Rich State’ or ‘RE-rich State’ from an absolute number of 1000 MW to a percentage (say 10/20%) of total installed capacity.

Prayas (Energy Group)’s comments and suggestions are detailed in this submission.