Union Power Minister, R K Singh is set to meet representatives of the renewable energy industry on December 1 to sort out issues relating to the sore issue of ‘deviation settlement mechanism’ (DSM). 

Recently, the Central Electricity Regulatory Commission (CERC) brought in changes in the DSM rules, which are meant to enforce discipline on both electricity generators and consumers, by imposing a financial penalty for any deviation from what has been scheduled -- on generators for injecting more or less electricity into the grid, and on consumers for drawing more or less electricity from the grid . 

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Under the earlier rules, if a generator injected more than 100 per cent of what he had scheduled, he would not be paid for the extra; if he injected 15 per cent less, he would face penalties.  

The new rules tighten the screws. Now, a generator would not be paid for anything more than 10 per cent, and would face penalties for under-injection of more than 10 per cent. 

This hits the renewable energy producers hard because it is almost impossible to predict the exact generation for wind and solar plants. Schedules will have to be given to the grid operator, the state or regional load dispatch centre, each day for every 15-minute period of the following day. 

While the government’s argument is that better forecasting technologies have made it possible to make accurate predictions, the industry says, that is not so.  

One industry insider, who requested not to be named, observed that the government perhaps believes renewable energy generation to be more stable than coal-based power —which is preposterous. Can you predict when a cloud would pass over the sun tomorrow, asks one industry insider. 

The Wind Independent Power Producers’ Association (WIPPA) and a couple of wind energy companies have taken the matter to the Delhi High Court; the solar industry is expected to implead itself. 

The industry’s apprehension is that the Minister may use the meeting, presumably called to negotiate the matter, to ask the industry to withdraw its petition. While it would be awkward to say ‘no’ to the minister, on the other hand, if there are negotiations, the outcome would certainly be worse than the status quo.