In The Matter of Determination of value of “X” for computation of the deviation (in %) for Wind and Solar Sellers of the CERC (Deviation Settlement Mechanism and Related Matters) Regulations, 2024-Regarding – EQ

Summary:

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### 1. Background and Context
– **Regulatory Framework:** The order operates under the CERC (Deviation Settlement Mechanism and Related Matters) Regulations, 2024.
– **The Issue:** The DSM Regulations introduced a formula to calculate deviation percentage for WS Sellers: `Dws% = (Actual Generation – Scheduled Generation) / [ (X% of Available Capacity) + ((100-X)% of Scheduled Generation) ] * 100`.
– **The Task:** The regulation mandated that the value of “X” in this formula be determined by the Commission through a separate order after public consultation. This order finalizes that value for the period starting April 1, 2026.

### 2. Key Changes and Decisions on “X”
The Commission decided to move from a denominator based primarily on **Available Capacity (AvC)** to a mix of **AvC and Scheduled Generation (SG)** , with the goal of eventually using only SG. This is aimed at improving forecasting discipline and grid stability.

The final trajectory for the value of “X” is as follows:

#### A. For Solar and Wind-Solar Hybrid Projects
| Period | Value of “X” |
| :— | :— |
| 01.04.2026 – 31.03.2027 | 100% |
| 01.04.2027 – 31.03.2028 | 90% |
| 01.04.2028 – 31.03.2029 | 75% |
| 01.04.2029 – 31.03.2030 | 55% |
| 01.04.2030 – 31.03.2031 | 30% |
| 01.04.2031 onwards | 0% |

#### B. For Wind Projects
| Period | Value of “X” |
| :— | :— |
| 01.04.2026 – 31.03.2027 | 100% |
| 01.04.2027 – 31.03.2028 | 95% |
| 01.04.2028 – 31.03.2029 | 85% |
| 01.04.2029 – 31.03.2030 | 65% |
| 01.04.2030 – 31.03.2031 | 35% |
| 01.04.2031 onwards | 0% |

### 3. Rationale and Key Observations
– **Differentiated Approach:** The Commission accepted stakeholder suggestions to have different trajectories for wind and solar, recognizing that solar generation is more predictable than wind.
– **Phased Implementation:** The reduction is gradual, with “X” starting at 100% for the first year to allow developers time to adapt, particularly by using aggregation at pooling stations through a Qualified Coordinating Agency (QCA).
– **Grid Stability:** The primary driver for stricter norms is the increasing penetration of renewable energy. The order cites data showing high-frequency events and large deviations from schedules, which pose a risk to grid security.
– **Stakeholder Concerns Addressed:** The Commission acknowledged but ultimately rejected many requests to delay the implementation or retain the old system. It noted that forecasting obligations have been in place since 2015 and that the framework provides sufficient transition time.

### 4. Pending Litigation and Caveat
– **Legal Challenge:** The DSM Regulations, 2024, are being challenged in the Delhi High Court (Writ Petitions by SPDA, WIPPA, etc.).
– **Interim Order:** The High Court has directed that no coercive steps be taken against the petitioners.
– **Conditional Enforcement:** The CERC explicitly states that the directions in this order are **subject to the outcome of the pending writ petitions**. No coercive action shall be taken under this order while the High Court’s interim orders remain in effect.

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