Some New Developments in

Power Sector
 Compliance of MoEF Norms (by 2022)
 MoP vide Circular dtd 30.05.2018, has issued directions to CERC to allow additional cost
implications under “Change in Law”

 CERC vide order dtd 20.07.2018 had held that additional capital expenditure on implementation of
the Emission Control System (ECS) in terms of the Notification dated 7.12.2015 shall be
admissible after due prudence check, under Regulation 14 (3) (ii) of the 2014 Tariff Regulations

 CERC has directed CEA to devise a mechanism for addressing the issues like identification of
suitable technology for each plant for implementation of ECS, its impact on operational parameters
and on tariff, and the recovery of additional capital and operational cost.

 Status of FGD implementation in NTPC units:

 Installed 500 MW (VSTPS Stage-V)
 FGD Awarded: 7.23 GW
 Under Tendering: 31.61 GW
Installation Period of power SPM Norms SO2 NOx Mercury
plants (mg/Nm3) (mg/Nm3) (mg/Nm3) (mg/Nm3)
< 500 MW ≥ 500 MW

Installed before 100 600 200 600 0.03

December 31, 2003
Installed after 2003 and 50 600 200 300 0.03
up to 31 Dec, 2016
 Flexible Operation with Solar
(Replacement of thermal power with RE Power)
Minisry of Power has notified the scheme for “Flexibility in
Generation and Scheduling of Thermal Power Stations to
reduce emissions” (Notified in April 2018)
Salient features of the Scheme:
 Discoms are given flexibility to procure RE power from the Generating Stations within
their existing PPAs. Therefore, there will be no additional financial burden on
Discoms to meet RPO targets.
 Generating companies, under Section 62 of the Act, would be allowed to supply
power from RE capacities under the existing thermal PPAs. Therefore, there is no
need to sign fresh PPAs for RE capacity.
 Such RE power is eligible for waiver of ISTS transmission charges & losses.
 The scheme is not applicable to RE projects, already having concluded PPAs.
 Gains shall be shared in the ratio of 50 : 50.
 CERC Order on 5 min Scheduling
CERC order dated 16th July, 2018 in respect of Pilot Project on
5 Minute Scheduling & Hydro as Fast Response Ancillary
Services (FRAS)
Salient features
 The pilot project for FRAS would cover all the central sector hydro generating stations.

 The pilot project for 05-Minute metering would cover hydro stations in NR, ER and NER
as well as thermal stations in all five regions (identified for AGC installation too).

 The cost of the 05-Minute Pilot Metering (Tendering to Commissioning) to be borne by

CTU. The cost may be recovered through filing of tariff petition before CERC.

 As a pilot, 5-minute metering can be in parallel with 15-minute metering. The Scheduling
and Dispatch has to be aligned with Settlement process in 5-minutes too and the
accounts of both 5-minute and 15-minute shall be kept parallel.

 At present, AGC is implemented only in Dadri. Hence, pilot project will include NTPC Dadri
initially, though the project cost includes five stations of NTPC. For NTPC Mouda &
Simhadri, orders have been placed for AGC implementation. For NTPC Bongaigaon & Barh
AGC implementation is yet to be initiated. Therefore, for NTPC Mouda & Simhadri,
Bongaigaon and Barh, the pilot study will be done along with AGC implementation
subsequently. The above pilot studies may be completed by POSOCO within 6
months of issue of this Order
 Automatic Generation Control at NTPC Dadri
St-II
Various types of reserves, viz., primary, secondary and tertiary reserves
are required to balance variable RE generation.
 Primary Control: Require the generating stations to keep reserves for system security, by not
scheduling beyond their installed capacity.
 Secondary Control: Automatic Generation Control (AGC).
 Tertiary control: Reserves Regulation Ancillary Services (RRAS)

CERC vide order dtd 06.12.2017 in the matter of pilot project on Automatic
Generation Control (AGC) approved that only the URS, subject to
technical minimum, shall be utilized for the purpose of AGC.
 Dadri-II was considered for implementation of the first AGC pilot project keeping in view its location,
ease in monitoring the field level implementation process and higher variable cost leading to greater
possibility of URS.
 AGC shall composed of energy charges and mark-up or incentive.
 For Up service, energy charges shall be paid to the generator along with Rs.0.50/kWh mark-up,
from the DSM Pool.
 For the energy under AGC down service, the generator shall refund the energy charges to the
DSM Pool. However, the mark-up of Rs. 0.50/kWh shall be paid to the generator from DSM
pool.
 AGC quantum shall be excluded for computing deviation MWh, which shall be settled as per DSM
Regulations: i.e. MWh deviation = (Actual MWh)-(Scheduled MWh)-(AGC MWh).
 Existing DSM Regulations
Salient Features
 Frequency band tightened 50.05Hz to 49.70Hz. Rates for deviation: From 0 p/kwh at 50.05Hz to
824.04 p/kwh at 49.70 Hz. (Charges for deviation for each 0.01 Hz step is equivalent to 35.60
Paise/kWh in the frequency range of 50.05- 50.00 Hz and 20.84 Paise/kWh in frequency range 'below
50 Hz' to 'below 49.70 Hz')

 Cap rate for deviation for coal or lignite or gas supplied under Administered Price Mechanism (APM):
303.04 p/kwh.

 No cap rate shall be applicable with effect from 1.4.2014 on the charges for the  Deviation for the
generating stations regulated by consumer using gas supplied under Administered Price Mechanism
(APM) as the fuel.

 Charges for the Deviation for the under drawals by the buyer in a time block in excess of 12% of the
schedule or 150 MW, whichever is less, shall be zero.

 The charges for Deviation for the over-injection by the seller in a time block in excess of 12% of the
schedule or 150 MW, whichever is less, shall be zero (except in case of injection of infirm power)

 Under drawal/Over Generation by entity shall require to pay additional deviation  charges when grid
frequency is 50.10 Hz or above @ rate of deviation corresponding to 50 Hz i.e. 178 p/kwh.

 Additional deviation charges for over drawal and under injection modified and made frequency
independent. At frequency 49.7 Hz and above, Graded Additional Charges for the Deviation above
deviation volume limits is payable by the regional entity.
 DSM Regulations
Salient Features
 Day-ahead market price of the Power Exchange having a market share
of 80% or more in energy terms on a daily basis shall be linked to the
DSM price.

 If there is no single Power Exchange having a market share 80% or

more, then, the weighted average day-ahead price shall be used for
linking to the DSM price.

 Daily average area clearing prices (ACP) in the day-ahead market

should be used as the basis for market linked DSM price at 50 Hz.

 Frequency band for the purposes of the DSM price vector - 49.85-
50.05 Hz.

 The DSM rate vector will be dynamic and slope determined by joining
the identified price points at 50 Hz. (daily average ACP), low frequency
of 49.85 Hz (Rs. 8 per unit) and 50.05 Hz (zero) on a daily basis.
 DSM Regulations
 To continue with the present methodology of DSM rates for the
renewables.

 All the volume limits along with associated surcharge/additional

surcharge to be retained in the new market linked DSM price mechanism.

 The cap rates for applicable generators to be linked to the variable

charges for that generator as billed for the previous month.

 Sign of the deviation must change once every 6 time blocks. Violation of
the requirement under this clause shall attract an additional surcharge of
20% on the daily base DSM payable / receivable.

 Total deviation from schedule in energy terms during a day shall not be in
excess of 3% of the total schedule for the drawee entities and 1% for the
generators and additional charge of 20% of the daily base DSM payable /
receivable shall be applicable in case of violation.
DSM Regulations
DSM Regulations
 Draft Amendment in Tariff Policy
MoP has notified the draft Amendment in Tariff Policy 2016 (May 2018)
Salient features and objective
 Distribution Licensees can procure power from Company owned or
controlled by Central Government like NTPC, NHPC etc whose tariff is
determined under Section 62.

 24 hours supply of adequate and uninterrupted power may be ensured

to all categories of consumers by March, 2019 or earlier.

 Mandatory for the Distribution Company to show to the respective

Commission that they have tied up long term/ medium term PPAs to
meet the annual average power requirement, failing which their license
shall be liable to be suspended.

 In a time frame of three years Electricity Supply shall shift from a post
paid basis to pre-paid basis with the meters being designed to
automatically cut off supply when the amount credited is exhausted.
 Draft Concept Note – Merit Order Scheduling
MoP has notified the draft concept note on National Merit Order Operation
(July 2018)
Salient features and objective
 This scheme shall be implemented by Central Generating Stations.

 Flexibility to the generating company to supply requisitioned power through

Merit Order Operation of its Stations on National Level.
 Cheaper Station shall be dispatched up to its maximum capabilities before
scheduling costlier stations.
 Reduces the overall average cost of generation at National Level.

 Optimum Utilization of the Railway infrastructure for transportation of coal.

 RLDC/ NLDC shall complete such Merit Order operation based scheduling
subject to any constraint arising due to transmission/ other grid security.

 The net benefits realized due to National Merit Order operation of Stations shall
be shared with the beneficiaries in the ratio of 50:50.