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Penalties collected from discoms to help promote wind energy

NEW DELHI: The government will create a corpus out of penalties paid by state-run power distribution utilities to promote wind energy projects of 10 MW or more capacity. The Central Electricity Regulatory Commission (CERC) has approved the fund, its chairman Pramod Deo said.

The renewable regulatory fund would bear charges imposed on states hosting wind projects that fail to comply with their energy supply commitments to the electricity grid, he said.

At presently, wind projects without power sale arrangements with states are required to give declarations forecasting their generation to state load despatch centres. CERC allows 30% deviation in the energy supply commitments beyond which penalties are levied or incentives offered.

Implications of deviation beyond 30% are proposed to be shared among all state distribution companies in ratio of their peak demand met in the previous month.

The states would be compensated for these charges out of the renewable regulatory fund.

“Someone has to bear all these penalties,” Deo said. “The fund has been mooted for the same purpose. We introduced this relaxation to wind projects in order to increase share of renewable energy generation projects in the country. Host states will start agitating if they are made to bear all the expenses.”

The fund would be in place by January next year, Deo said.

The National Load Despatch Centre has been designated as the nodal agency and has been mandated to carry mock exercises from July this year.

A similar procedure will apply to the grid-connected solar power plants of more than 5MW capacity after 2015. As of now, solar energy producers are not penalised even if they do not supply the promised power to the grid.

These dispensations to solar and wind projects were offered by CERC under the new Indian grid electricity code as it was felt that solar irradiation and wind flow is uncertain.

India has about 13,000 MW wind and 18 MW solar power projects.

Power Grid Corporation of India, the central transmission utility, will install special energy meters to check energy supply out of these wind projects.