The Wide-Angle View

CSERC DSM Draft 2024: Implications and Opportunities for Stakeholders in Chhattisgarh's Power Sector

By  Ravi Shekhar
1 min read

Insight and Implications for Stakeholders: CSERC Draft Regulations on Intra-State Deviation Settlement Mechanism (DSM)

Key Provisions of CSERC DSM Draft Regulations & Observations:

  1. Objective & Scope:
    • These regulations aim to ensure grid stability and security by enforcing strict adherence to scheduled electricity injection and drawl.
    • They are applicable to all inter/intra-state entities connected to the State Transmission Utility (STU) in Chhattisgarh.
  2. Deviation Settlement Mechanism:
    • Emphasizes penalties and charges based on deviations from scheduled energy transactions.
    • Introduces various categories of sellers (e.g., wind, solar, biomass, and hydro), buyers, and mechanisms for calculating deviations.
  3. Frequency-Linked Penalty Structure:
    • The deviation charges are dynamically linked to grid frequency, incentivizing entities to maintain balance and stability in operations.
  4. Energy & Account Billing:
    • Proposes detailed methodologies for energy settlement at drawl points, categorizing consumers as Single Supply Consumers (SSC) or Multiple Supply Consumers (MSC).
    • Billing cycles are clearly defined, with provisions for managing defaults and disputes.
  5. Special Considerations for Renewable Energy:
    • Provides exceptions and adjustments for wind, solar, and hybrid sources, particularly those commissioned after specific dates.
  6. Role of the SLDC and CSPDCL:
    • SLDC is pivotal in schedule validation, energy accounting, and issuing DSM statements.
    • CSPDCL manages the State Deviation Pool Account, ensuring timely payment and settlement.

Implications for Stakeholders:

  1. Generating Companies:

    Challenges

    • Increased operational complexity due to stringent scheduling and deviation norms.
    • Financial implications from penalties for unscheduled deviations, especially for intermittent renewable sources like wind and solar.

    Opportunities

    • Clear guidelines for deviation management allow for better operational forecasting.
    • Special provisions for renewable energy promote cleaner energy investments.
  2. Distribution Licensees:

    Challenges

    • Need to improve forecasting accuracy and manage deviations to avoid financial penalties.
    • Enhanced coordination with generating stations and SLDC for schedule adherence.

    Opportunities

    • Transparent deviation charges enable better cost allocation in tariff setting.
    • Promotes modernization of energy forecasting tools and infrastructure.
  3. Open Access Consumers:

    Challenges

    • Complex compliance requirements and risk of penalties for scheduling mismatches.

    Opportunities

    • Flexibility in sourcing power under open access provides cost optimization opportunities.
    • Potential for leveraging banking mechanisms for surplus energy settlement.

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