Haryana Electricity Regulatory Commission (HERC) Proposes 2025 Draft for Deviation Settlement Mechanism and Renewable Energy Integration

Posted On - 10 February, 2025 • By - King Stubb & Kasiva

Introduction

The Haryana Electricity Regulatory Commission (HERC) has introduced a revised draft of its Deviation Settlement Mechanism (DSM) Regulations, 2025.[1] This move is aimed at enhancing grid discipline, integrating renewable energy, and aligning with the latest Central Electricity Regulatory Commission (CERC) DSM Regulations, 2024. The draft, published for stakeholder feedback, merges prior regulations and emphasizes renewable energy forecasting, scheduling, and deviation settlement, marking a critical step toward modernizing Haryana’s energy framework.

Explanation

Key Objectives and Applicability

The primary objective of the proposed DSM regulations is to maintain grid stability and ensure energy transactions align with scheduled plans. These regulations are applicable to all entities involved in electricity conveyance through short, medium, and long-term open access, covering:

  • General sellers, including open access and captive generators with capacities above 10 MW.
  • Buyers such as distribution licensees, deemed licensees, and open access consumers.

Special provisions govern wind and solar energy to facilitate forecasting and scheduling while maintaining grid security.

Integration with CERC DSM Regulations

The draft adopts the framework of the CERC DSM Regulations, 2024, incorporating parameters like:

  • Scheduling based on time blocks.
  • Deviation computations for sellers and buyers.
  • A settlement period coinciding with regional energy accounts.
  • Deviation charge mechanisms linked to market-based rates and grid frequency.

Renewable Energy Integration

The regulations mandate state entities to utilize the flexibility of conventional generating units and inter-grid tie-lines to accommodate wind and solar generation. Forecasting and scheduling are emphasized to reduce deviations and maximize renewable energy integration into the grid.

Deviation Settlement Mechanism

Key design principles of the DSM include:

  1. Deviation Charges: Buyers and sellers are subject to charges for deviations from scheduled energy based on specific frequency ranges and market rates.
  2. Settlement and Energy Accounting: Weekly settlement and preparation of state energy accounts are handled by the State Load Despatch Centre (SLDC), ensuring transparent reconciliation.
  3. State Deviation Pool Account: A central account managed by the SLDC handles payments and charges related to deviations. Surplus funds are allocated to enhance grid reliability and safety.

Governance and Compliance

The draft regulations outline the duties of the SLDC and state entities to ensure compliance with grid codes. A State Power Committee will be established to monitor compliance, resolve implementation challenges, and advise the commission on necessary amendments.

Gaming Prevention and Penal Provisions

The regulations include provisions to address gaming and impose penalties for non-compliance. For instance:

  • Late payment of deviation charges incurs a 0.04% daily surcharge.
  • State entities with repeated payment defaults must open letters of credit as security.

Repeal of Earlier Regulations

The draft repeals the HERC DSM Regulations, 2019, consolidating all provisions under a unified framework.

Conclusion

The 2025 DSM draft represents a forward-thinking initiative by HERC to modernize Haryana’s energy sector. By aligning with national standards, it addresses critical challenges in renewable energy integration and grid stability while promoting transparency and accountability. The focus on stakeholder engagement ensures that the regulations are comprehensive and practical, paving the way for a sustainable energy future in the state.

[1] https://herc.gov.in/WriteReadData/Pdf/DP2050108(1).pdf