CERC Annual Report 16-17

1 Central electricity Regulatory CommissionAnnual Report2016-2017 Annual REPORT2016-17 Central electricity Regulatory Commission (CERC)3rd & 4th Floor, Chanderlok Building,36, Janpath, New Delhi - I10 001 Phone : +91 11 23353503 +91 II Report2016-17 Chairperson's StatementIn 2016-17, the Central electricity Regulatory Commission (CERC) took important decisions to facilitate power sector reforms in Commission has always been proactive in facilitating growth of renewable energy sector and its effective integration into the grid. As an effective measure towards this direction, an amendment to the Indian electricity Grid Code has been notified, providing for a technical minimum schedule at 55% for operation of the Central Generating Station and inter-State Generating Stations.

2 This also takes care of the interest of the generating stations, as the amendment provides for compensation for degradation in Station Heat Rate, Auxiliary Energy consumption and start up fuel cost in case of flexing of unit(s) upto technical Services are support services to maintain power system reliability and support its primary function of delivering energy to customers. These are deployed by the system operator over various time frames to maintain the required instantaneous and continuous balance between aggregate generation and load. CERC has notified the regulations with the objective to restore the frequency level at desired level and to relieve congestion in the transmission network.

3 Specifically, these Regulations are the first step towards introducing Ancillary Services in the country that will enable the grid operator to ensure reliability and stability in the grid. The Ancillary Services were operationalized in April, 2016 and by 15 March, 2017, 58 service providers were registered for providing ancillary services. Use of Energy and Conservation of Energy have always been considered critical to ensure energy security. Towards this end, the Bureau of Energy Efficiency (BEE) introduced the Perform, Achieve and Trade (PAT) Scheme. During this year, CERC, as the market regulator, took a major initiative for development of market of ESCerts and facilitate its trading / exchange on Power Exchanges and facilitated operationalizing the mechanism to enhance the cost effectiveness of improvements in energy efficiency in energy intensive large Commission considered it necessary to align the open access to inter-State Transmission System with the power procurement trend by the State Utilities and current philosophy in competitive bidding.

4 The Commission amended the relevant Regulations to address the critical issues pertaining to the dedicated transmission lines and relinquishment charges for shifting from Medium Term Open Access to Long Term Access by making appropriate provisions in the Connectivity that the variable cost of RE generation is zero, it is treated as must run. Coupled with this we have the issues of variability and uncertainty to address. Therefore, India needs to plan ahead more so in the context of the ambitious target of 175 GW of RE capacity. These challenges warrant a specific energy Storage solution to cater to peak demand as well as to address the variability of intermittent generation.

5 CERC, underlining the importance of this emerging technology, brought out a Staff Paper on Introduction of electricity Storage System in India . CERC initiated brainstorming on the subject by placing the paper in public domain inviting comments from stakeholders. After collating the views, the Commission will decide Central electricity Regulatory Commission4the future course of action in terms of desirable policy and regulatory challenges being faced by transmission projects under tariff based competitive bidding route are critical to the transmission sector. Taking specific reference to the standard bidding guidelines for transmission services notified by the Ministry of Power, Government of India, the Commission tendered its advice for facilitating smooth and rapid development of transmission capacity in an efficient and economical Ministry of Power has notified the Guidelines on Cross Border Trade of electricity , with the objective of facilitating cross border trade of electricity between India and neighbouring countries.

6 The Commission, in pursuance of facilitating establishment of transmission link to cater to the cross border trade of electricity , advised the Ministry of Power, Government of India on the transmission links between the pooling substations upto the Indian border, which is sensitive in nature and of strategic importance for the Commission also supported the activities of Forum of Regulators (FOR), the Forum of Indian Regulators (FOIR) and the South Asia Forum for Infrastructure Regulation (SAFIR) by providing its resources. The Commission provides secretariat services to Forum of Regulators (FOR), Forum of Indian Regulators (FOIR) and the South Asia Forum for Infrastructure Regulation (SAFIR).

7 The Forum of Regulators (FOR) is a body incorporated under the electricity Act, 2003 under the Chairmanship of Chairperson, CERC. Chairpersons of SERCs/JERCs are the members of FOR. The Forum met five times during the year and evolved consensus on many critical issues. The Forum also carried out a study on Best Practices and Strategies for Distribution Loss Reduction and Review of Functioning of CGRF & Ombudsman .The Technical Committee of Forum of Regulators (FOR) was formed under the Chairmanship of Member CERC, Shri Bakshi, comprising of Technical Members of State Commissions of renewable rich States to facilitate roll-out of Framework on Forecasting, Scheduling and Deviation Settlement of wind & solar generators in RE rich States.

8 Over the period, the Committee found that basic building blocks for effective RE integration are relevant to all States and in that context, the Committee identified the need for implementation of Scheduling, Accounting, Metering and Settlement of Transactions in electricity (SAMAST) framework across all States. To facilitate the States, a model DPR for implementation of SAMAST was also prepared to seek funds from Power System Development Fund (PSDF). Model Regulations were brought out for facilitating implementation of State Level Forecasting & Scheduling Framework. Model Regulations were also brought out for facilitating implementation of State-level Deviation Settlement Mechanism (DSM).

9 The Committee scaled up RPO Web-Tool to develop generic tool to facilitate reporting and compliance monitoring of State obligated Commission looks forward to continued support from all stakeholders in discharging its B. Pradhan5 Annual of the Chairperson and Members of the Year in Procedures and during of regulatory processes in terms of benefits to consumers and89development of the issued during for Statement of Resources of the Commission105 Annexures109 Central electricity Regulatory Commission6 List of AbbreviationsAbbreviation Full FormABTA vailability Based TariffADMSA utomatic Demand Management SchemeAERAA irport Economic Regulatory AuthorityAPPCA verage Pooled Purchase CostAPTEL/ATE Appellate Tribunal for ElectricityBEEB ureau of Energy EfficiencyBPTABulk Power Transmission

10 AgreementBUBillion UnitsCACC entral Advisory CommitteeCCGTC ombined Cycle Gas TurbineCCIC ompetition Commission of IndiaCERCC entral electricity Regulatory CommissionCGPC aptive Generation PlantCILCoal India LimitedCODDate of Commercial OperationCPRIC entral Power Research InstituteCPSUC entral Public Sector UndertakingCTUC entral Transmission UtilityDAMDay Ahead MarketDISCOMD istribution CompanyDVCD amodar Valley CorporationEAElectricity ActEREastern RegionERCE lectricity Regulatory Commission(s)ERLDCE astern Regional Load Dispatch CentreERPCE astern Regional Power CommitteeFGMOFree Governor Mode OperationFlFinancial InstitutionFOIRF orum of Indian RegulatorsFORF orum of Regulators7 Annual Report2016-17 FSAFuel Supply AgreementGCVG ross Calorific ValueGFAG ross Fixed AssetsGISG eographic Information SystemGOIG overnment of IndiaGPSGas Power StationGSESGrid Security Expert SystemGWGiga WattHEPH ydro Electric ProjectHPSH ydro Power StationICInstalled CapacityIDCI nterest During ConstructionIEGCI ndian electricity Grid CodeI EXIndian Energy ExchangeIPPI ndependent Power ProducerISGSI nter State Generation