CERC's new code by April to tighten grid discipline

In a bid to tighten grid discipline, the Central Electricity Regulatory Commission (CERC) plans to introduce a new grid code on April 1. According to a draft regulation, the objective of the code is to maintain grid frequency within a range of 49.5-50.3 Hz and send out warning signals at 49.7 Hz. CERC, which has imposed penalty on various state utilities for overdrawal of power endangering grid security, is keen to curb overdrawals by distribution companies, too. Besides, the new grid code regulation aims to avert blackouts by tightening frequency discipline among utilities.

Industry sources told Business Standard: “CERC is trying to bring overall discipline in the power market.” The grid code proposed in the draft regulation will phase out the existing code, effective since 2006. “There will be a public hearing on the draft regulation on March 8,” the sources added.

The new grid code will also put in place a scheduling mechanism for renewable energy like solar and wind. It will enable the power plants to operate on “must-run” principles, instead of ‘merit scheduling’, and also sell power to inter-state regions. The code will further introduce new concepts such as controlled area and increase of reactive charges to deter distribution companies from overdrawing from grid. Recently, CERC introduced regulations on congestion management, connectivity and trading margins.

Jayant Deo, managing director and chief executive of Indian Energy Exchange (IEX) said: “Globalisation demands power quality of global standards. World over frequency is maintained either at 50 cycles or 60 cycles per second. In India, we had allowed a float, which we are now narrowing down to reach global practices and protect the grid from cascading blackouts arising out of frequency falling below the safe trigger point.” He added that along with improvement in frequency, commercial working of unscheduled interchange (UI) charges is also being tightened.

“Now, each entity will have to give a letter of credit based on its past years’ maximum weekly billing on account of UI. The entities will have to plan buying and selling of short-term power on the exchanges, where the facility is available a few hours in advance,” Deo said. IEX’s daily transaction is about 25 million units.