What is Deviation Settlement Mechanism (DSM) ?
The Deviation Settlement Mechanism (DSM) regulations in India for solar and wind power have evolved significantly over the years to address the unique variability and intermittency of renewable energy sources.
Here is a timeline of key updates and releases by the Central Electricity Regulatory Commission (CERC) and State Electricity Regulatory Commissions (SERCs):
2014: CERC introduced its first DSM regulations specifically aimed at maintaining grid discipline, establishing charges for frequency deviations. Initially, these regulations focused broadly on the energy sector without specific provisions for renewable energy.
2015: Recognizing the need for renewable-specific regulations, CERC revised the DSM to include differentiated charges and relaxed penalties for deviations in wind and solar generation. These rules allowed a deviation margin of up to 15% without heavy penalties for renewable generators, acknowledging the variability of these sources.
2022: CERC introduced updated DSM regulations mandating tighter control and forecasting for renewable energy plants, with charges now tied to over-injections beyond the 10% threshold. The regulations imposed stricter charges for deviations to encourage more accurate forecasting and balancing by renewable generators.
2024: CERC published the latest DSM regulations, which now enforce penalties specifically for the injection of infirm power, applicable to solar and wind producers. The rules came into effect in September 2024, and further adjustments on specific provisions are set for November 2024. These changes focus on reinforcing grid security and reliability by managing renewable energy deviations more rigorously.
Overall, the DSM framework has evolved to strike a balance between grid stability and the inherent challenges of renewable generation. The recent 2024 update, in particular, marks a step towards more stringent management of renewables in the grid, promoting improved forecasting and balancing mechanisms to integrate higher shares of renewable energy effectively.
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