Jharkhand State Electricity Regulatory Commission Introduces Draft Framework For Resource Adequacy Regulations, 2024

Posted On - 30 May, 2024 • By - King Stubb & Kasiva

Introduction

The Jharkhand State Electricity Regulatory Commission (JSERC) has taken a significant step towards ensuring the reliability and sustainability of power supply in the state by introduResource Adequacy Regulationscing the Draft Framework for Resource Adequacy Regulations, 2024.[1] This comprehensive regulatory framework aims to enhance the planning, procurement, and management of electricity resources, ensuring that Jharkhand’s growing energy demands are met efficiently and cost-effectively. The draft regulations address critical aspects such as capacity credit factors, planning reserve margins, and power procurement planning, with a strong emphasis on integrating renewable energy sources.

Key Points of the Draft Framework

Capacity Credit (CC) Factor Determination

  • Distribution licensees are required to share the Capacity Credit (CC) factors for their contracted resources, along with justifications for their computations, with the State Load Dispatch Centre (SLDC).
  • The SLDC will calculate state-specific CC factors considering the aggregate State Demand, State Net Load, and available contracted renewable energy generation resources. This information will be periodically submitted to the Central Electricity Authority (CEA), National Load Dispatch Centre (NLDC), and Regional Load Dispatch Centre (RLDC).

Assessment of Planning Reserve Margin (PRM)

  • The Planning Reserve Margin (PRM) is expressed as a percentage of peak load and represents the excess generation capacity required for reliable resource planning.
  • The PRM factor is based on reliability indices, such as Loss of Load Probability (LOLP) and Normalized Energy Not Served (NENS), which will be specified by the Authority or computed by the distribution licensee and the State Transmission Utility (STU)/SLDC at the state level.
  • Capacity planning by distribution licensees and state-level resource adequacy planning by STU/SLDC will incorporate the PRM to develop an Integrated Resource Plan.

Resource Adequacy Requirement and Allocation for Control Areas

  • Distribution licensees will use the CC factors to adjust the capacity of their contracted generation resources and develop a resource map based on a time axis of at least one hour or 15-minute intervals.
  • The resource map will be compared with the demand forecast to identify any resource gaps. Sensitivity and probability analyses will be conducted to determine the most probable resource gap.
  • Distribution licensees will develop Medium-term Distribution Resource Adequacy Plans (MT-DRAP) and Short-term Distribution Resource Adequacy Plans (ST-DRAP) by 31st August each year to meet Resource Adequacy (RA) targets.

National and State-Level Resource Adequacy Planning

  • The Central Electricity Authority (CEA) will release the Long-term National Resource Adequacy Plan (LT-NRAP) to establish optimal PRM and outline the most effective generation mix for the next decade.
  • The NLDC will issue a Short-term National Resource Adequacy Plan (ST-NRAP) with a one-year look-ahead, considering demand forecasts, resource availability, and planned maintenance.
  • Based on national and state-level allocations, distribution licensees will plan to contract capacities to meet their RA requirements, ensuring their peak demand plus the planning reserve margin is met.

Power Procurement Planning

  • Distribution licensees will determine the optimal power procurement resource mix, modalities of procurement type and tenure, and engage in capacity trading or sharing to minimize the risk of resource shortfall and avoid stranded capacity.
  • The procurement strategy will focus on integrating renewable energy sources and employing least-cost modeling and optimization techniques to avoid asset stranding.
  • Power capacity procurement from renewable sources will be in line with the JSERC Renewable Energy Purchase Obligation (RPO) regulations and guidelines for tariff-based competitive bidding processes.

Approval and Monitoring

  • New capacity arrangements or amendments to existing Power Purchase Agreements (PPAs) will require prior approval from the Commission to ensure necessity, cost reasonableness, and efficiency.
  • Distribution licensees must submit MT-DRAP and ST-DRAP exercises annually, with state-level aggregated plans submitted to RLDC and NLDC.
  • Monitoring and compliance mechanisms will include non-compliance charges for shortfalls in RA compliance, ensuring accountability and adherence to the regulations.

Conclusion

The Draft Framework for Resource Adequacy Regulations, 2024, introduced by the Jharkhand State Electricity Regulatory Commission, marks a pivotal advancement in the state’s electricity sector. By emphasizing comprehensive planning, robust monitoring, and strategic procurement, the framework aims to bolster the reliability and sustainability of Jharkhand’s power supply. The integration of renewable energy sources, coupled with stringent compliance mechanisms, will not only meet the growing energy demands but also align with national and global sustainability goals. As stakeholders engage with these draft regulations, their collective efforts will pave the way for a more resilient and efficient electricity network in Jharkhand.

[1] https://www.jserc.org/fra2024.pdf