Renewable energy is as much a boon as a curse. It is great to have green energy flowing through the economy, but high RE proportion is a grid operator’s nightmare.
The combined capacity of wind and solar energy (188 GW) accounts for 38 per cent of the total power installed capacity (490 GW). As much as 50 per cent of renewable energy generation in July (54.5 billion kWhr) was from conventional sources (112.16 b kWhr).
RE generation rises and falls and is a lot less predictable than, say, coal — while the demand stays steady at the other end. One of the ways the authorities have tried to address this issue is by forcing RE generators to forecast what they will supply over 15-minute periods the following day and penalise them if they don’t stick to it.
This ‘deviation settlement mechanism’ (DSM) has been a sore point between developers and grid operators, even though each understands the other’s problems. The grid operator knows that predicting generation — especially in case of wind — is not easy. Conversely, the developers sympathise with the issues faced by the grid operator, who has the onerous task of maintaining grid stability. Yet, while the developers ask why they should be penalised for variations in sunshine or wind blows, the regulator’s refrain is, “too bad, what can I do?”
To make matters worse, the Central Electricity Regulatory Commission (CERC) proposes to tighten the ‘tolerance band’ for determining deviation, from 10 per cent to 5 per cent for solar and wind-solar hybrid, and 15 per cent to 10 per cent for wind, from April 1, 2026. As expected, the developers are not happy.
Telling data
Data from a Grid-India Ltd’s study of deviations over 41 weeks between September 16, 2024, and June 29, 2025, shows that staying with the no-penalty tolerance band is tough — as shown in the following table.
Breezy affair?
And now, the CERC has come up with proposals that just might make things a little better for developers. In a draft notification issued on September 10, the CERC has suggested a tweak in the formula for calculating deviation. It has also proposed station-level aggregating of forecasts, instead of individual generating units.
The change in the formula involves gradual tapering-off of the ‘available capacity’ component of the formula. What this means is this: deviation, in concept, is the extent of deviation from the scheduled (forecast) injection of power, as a percentage of the scheduled injection of power. However, today, the denominator has a ‘available capacity’ component. So, the formula today is: ‘scheduled generation minus actual’ divided by the sum of ‘x’ percentage of available capacity and scheduled generation’. The CERC stipulates the value of ‘x’ through separate orders.
Now, the idea is to reduce ‘actual generation’ in the denominator to zero by April 1, 2031. Basically, this addresses developers’ question: ‘Why are you worried about what capacity I have? You just concern yourself with how much I deviate from my own schedule’.
The other suggestion is to do with aggregating schedules at the pooling station level. The CERC’s draft notification observes: “One effective strategy to manage the DSM for wind and solar (WS) sellers is the implementation of aggregation at the pooling station level through a qualified coordinating agency (QCA). By combining the schedules and actual injections of multiple RE generators, aggregation helps offset individual generation fluctuations and reduces overall deviation.”
The tone and tenor of the draft notification seem to indicate that the regulator is telling the developers: “Well, I heard you and I have done my bit — now you do yours”. The Commission believes that it is now up to the wind and solar generators to make sure that they predict their next-day generation properly and stick to it.
The notification states, “The Commission also believes that in the future, the intermittency of wind and solar needs to be addressed by way of improved forecasting, scheduling, and operational experience. The new WS projects are now expected to demonstrate the same level of discipline and compliance as conventional generators.”
Furthermore, regardless of the tolerance band, if wind and solar developers inject more power into the grid than they said they would, they would be paid nothing for their power during periods when the grid frequency is at or above 50.05 Hz. “This measure is necessitated as renewable capacity is being rapidly commissioned into the grid, and challenges in real-time grid operations are becoming more prominent,” states the Commission.
Published on September 15, 2025