The proposed renewable regulatory fund (RRF) programme is due to begin on 1 January. It will waive penalties on windand solar-power generators who feed between 30% more and 30% less power into the grid than scheduled. They will only have to pay a penalty if the deviation exceeds 30%.
For deviations up to 30%, the charge will be shared across all Indian states and calculated based on each state's share of peak electricity demand met in the previous month. This charge, called the renewable regulatory charge, will be administered through the RRF, which will be operated by the National Load Despatch Centre, the body responible for ensuring integrated electricity transmission across the country.
Wind-power producers' and state utilities' risk will thereby be partially offset. The programme aims to make renewable energy more lucrative and market friendly, and encourage states that have fulfilled the mandatory renewable-energy production or purchase obligations to invest in more production.
The electricity regulator, the Central Electricity Regulatory Commission (CERC), is holding training sessions in large cities in the run-up to the programme.
At a session in Mumbai, officials pointed out that India has almost no long-term reliable wind-energy data for forecasting. They admitted that the grid requires modernisation in order to spur the growth of wind and other renewable-energy sources.
TF Jayasurya, communications manager at the Indian Wind Turbine Manufacturers' Association, said that issues to be resolved included the collection of wind-power data for reliable forecasting and the installation of information-technology and supervisory control and data acquisition systems (Scada) to monitor production.
The association and companies including Enercon, Gamesa, Suzlon and Vestas have conducted forecasting studies in the leading wind-power states of Gujarat, Maharashtra, Karnataka and Tamil Nadu.
The probability of forecasting within a 30% error margin was found to be no more than 65% during the high wind period of June to September. At most times, the probability is 30-50% and during the low-wind period from October to March it reduces to just 10-15%.
The Power Systems Operation Corporation (Posoco) of the state-run Power Grid Corporation of India agreed that better forecasting and a sector-wide application of Scada and telemetering facilities is imperative.
The proposed RRF procedure states that only companies who have signed power purchase agreements after 3 May 2010 will be eligible. Posoco pointed out that with this cut-off date, only 3.18GW or 20% of India's installed capacity would qualify. It suggested that all wind generators be brought under the programme.
Jayasurya said investors are uncertain about the details of the programme, such as how they could include the UI penalty implications in their cash-flow models while seeking financing, and how UI implications would be apportioned among individual customers within the same wind farm.
He said until these issues are clarified, the levy of UI charges should be delayed until 1 January 2013. "One year of scheduling across India will give the necessary information or data to establish a base for the financial modelling of the impact of scheduling, to give confidence to investors," he said.
Pankaj Batra, a senior engineer at CERC, said the recommendations would be considered, but the wind-energy sector must begin forecasting immediately.
10-15% - Probability of forecasting wind within a 30% error margin between October and March