SOP for Approved List of Models and Manufacturers – Wind and Approved List of Models and Manufacturers – Wind Turbine Components – EQ
Summary:
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## 🏛️ **1. Overview and Context**
The **Karnataka Electricity Regulatory Commission (KERC)**, through this draft notification dated **13 October 2025**, seeks public comments and objections before **14 November 2025** on a new regulatory framework — the **KERC (Framework for Demand Flexibility (DF) / Demand Side Management (DSM)) Regulations, 2025.**
These regulations aim to create a **comprehensive, modern, and measurable framework** for:
* Enhancing **energy efficiency** (EE) and **demand-side management** (DSM) across Karnataka.
* Introducing **Demand Flexibility (DF)** — enabling real-time adjustments in consumer electricity usage to balance supply and demand efficiently.
* Supporting **resource adequacy**, **grid stability**, and **renewable energy integration**.
The regulations are proposed under the powers conferred by **Sections 61, 62, 66, 86(1)(e), and 181** of the **Electricity Act, 2003**.
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## ⚙️ **2. Objectives**
The main objectives of these regulations are to:
1. Encourage **efficient use of electricity** and **optimization of energy consumption** by consumers.
2. Create mechanisms for **Demand Flexibility (DF)** to respond to real-time system needs.
3. Integrate **renewable energy** more effectively by managing variable generation.
4. Reduce **peak demand**, thereby minimizing investment in additional infrastructure.
5. Enable **Distribution Licensees (DISCOMs)** to design and execute DF/DSM programs with measurable outcomes.
6. Protect consumer interests while ensuring **cost-effectiveness** and **transparency**.
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## ⚡ **3. Applicability and Scope**
* Applicable to **all Distribution Licensees** operating within Karnataka.
* Extends to **aggregators**, **Independent Verification Agencies (IVAs)**, and other entities engaged in DF/DSM activities.
* Programs may be implemented directly by licensees or through **third-party service providers** under regulatory supervision.
* All programs must align with the **Resource Adequacy (FRA) Regulations, 2024**, ensuring optimal energy availability and capacity utilization.
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## 📚 **4. Key Definitions**
The regulation introduces key terminologies:
* **Aggregator:** Entity registered with the distribution licensee to provide aggregated DF services such as demand response, distributed generation, or storage.
* **Demand Flexibility (DF):** Capability of consumers or systems to alter consumption patterns in response to supply conditions or price signals.
* **Demand Flexibility Portfolio Obligation (DFPO):** Mandatory flexible demand capacity targets for each distribution licensee.
* **DF/DSM Cell:** Specialized unit within each distribution licensee responsible for planning, execution, monitoring, and reporting DF/DSM programs.
* **Independent Verification Agency (IVA):** Accredited third-party responsible for verifying savings and outcomes under DF/DSM programs.
* **Load Research:** Analysis of consumer energy use patterns to design targeted DF/DSM initiatives.
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## 🧩 **5. Structure and Implementation**
### a. **DF/DSM Cell Formation**
Each Distribution Licensee must establish a **dedicated DF/DSM Cell** staffed with qualified professionals to:
* Conduct **load research and demand studies**.
* Identify potential for flexibility or efficiency.
* Design and monitor DF/DSM programs.
* Liaise with aggregators, vendors, and IVAs.
### b. **Integration with Operations**
* DF/DSM shall be integrated into **daily load management** and **resource planning**.
* All initiatives must be **quantifiable**, **cost-effective**, and **verified** independently.
### c. **Cost Recovery**
* Costs related to DF/DSM (research, design, implementation, and verification) are recoverable under the **Capital Investment Plan** within the **Multi-Year Tariff (MYT)** framework.
* These expenses are subject to **prudence checks** by KERC.
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## 📊 **6. DF Portfolio Obligations (DFPO)**
To ensure measurable progress, every Distribution Licensee must achieve the following **DFPO targets**, expressed as a percentage of the previous year’s peak demand:
| **Financial Year** | **DFPO Target (%)** |
| —————— | ——————- |
| 2026–27 | 0.5% |
| 2027–28 | 1.0% |
| 2028–29 | 1.5% |
| 2029–30 | 2.0% |
KERC may **revise these targets** periodically based on performance and evolving grid requirements.
**Incentives and Penalties:**
* **Incentive:** ₹0.20 crore per MW achieved above the target.
* **Penalty:** ₹0.20 crore per MW of shortfall.
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## 🏗️ **7. DF/DSM Programs and Activities**
Programs must be **technology-neutral**, **sector-specific**, and **data-driven**, focusing on:
1. **Smart & Time-based pumping** for irrigation and municipal water systems.
2. **Smart charging for EVs** – two-wheelers, fleets, buses, and freight.
3. **Behind-the-meter energy storage** solutions.
4. **Heat pumps and thermal storage** for residential and industrial use.
5. **Efficient refrigeration and cold storage** systems.
6. **Energy-efficient appliances and retrofits**.
7. **Behavioural programs** promoting voluntary energy conservation.
Programs can be implemented **directly or via Aggregators**, ensuring that **Aggregators and IVAs remain independent entities** to maintain transparency.
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## 💰 **8. Funding and Cost-Effectiveness Assessment**
### a. **Funding**
* DF/DSM initiatives are funded through **MYT filings**.
* KERC may later establish a **DF/DSM Fund** sourced from a dedicated **tariff component**.
### b. **Cost-Effectiveness Tests**
To ensure optimal resource utilization, each program must pass the following tests:
| **Test** | **Purpose** | **Criterion** |
| ———————————- | ——————————————————- | —————- |
| **Total Resource Cost (TRC)** | Primary test; compares total benefits vs. total costs | Benefit/Cost > 1 |
| **Ratepayer Impact Measure (RIM)** | Ensures tariff stability | Benefit/Cost ≥ 1 |
| **Participant Cost Test (PCT)** | Optional; measures consumer-level benefits | Benefit/Cost ≥ 1 |
| **Societal Cost Test (SCT)** | Optional; assesses broader social/environmental impacts | Benefit/Cost ≥ 1 |
**Parameters:**
* Avoided power cost: Average of top 10% marginal costs.
* Benefit escalation: 5% per annum.
* Discount rate: Weighted Average Cost of Capital (WACC).
* Life span: Warranty-based operational life of installed systems.
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## 📏 **9. Evaluation, Measurement & Verification (EMV)**
To ensure accountability and performance, the regulations define an **EMV framework** involving:
### a. **Evaluation Types**
1. **Impact Evaluation:** Quantifies actual savings in energy and demand.
2. **Process Evaluation:** Examines design and implementation efficiency.
3. **Market Effects Evaluation:** Studies long-term market transformation and consumer behavior.
### b. **Measurement Methods**
* **IPMVP Protocols (Options A–D)** for precision-based measurement.
* **Deemed Savings Approach** for standard, repetitive measures.
* **Large-scale Data Analytics** for programs with uniform participants.
### c. **Independent Verification**
* Conducted by **IVAs** accredited with **BEE/CMVP** certification.
* IVAs must be independent of both licensees and program implementers.
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## 📜 **10. Reporting, Documentation, and Transparency**
Each Distribution Licensee must:
* Publish **annual DF/DSM performance reports** on their website.
* Submit **load research results**, **program plans**, and **cost-effectiveness reports** to KERC.
* Include detailed EMV outcomes and program summaries in **MYT filings**.
**Annexures** attached provide templates for:
* DF/DSM Project Reports.
* Cost-Benefit Analysis Sheets.
* EMV Methodologies.
* Reporting and Monitoring Formats.
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## ⚖️ **11. Legal and Miscellaneous Provisions**
1. **Power to Amend or Relax:** KERC may modify or relax provisions in the public interest.
2. **Repeal:** The earlier **KERC DSM Regulations, 2015** stand repealed.
3. **Savings Clause:** Actions under repealed regulations remain valid.
4. **Final Authority:** KERC’s interpretation is final in all disputes or ambiguities.
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