Cost of Penalties for deviation of Variable Renewable Power Forecasting considering Tamil Nadu Draft Regulation 2016

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Dipak Kumar Mukherjee, Director
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Abhik Kumar Das, Director
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Kolkata | Delhi | Bangalore
“ACCURATE WIND & SOLAR POWER FORECASTING IS NO MORE EXPENSIVE”
Cost of Penalties for deviation of Variable Renewable Power
Forecasting considering draft Tamil Nadu Electricity
Regulatory Commission (Forecasting, Scheduling, Deviation
Settlement and Related Matters of Wind and Solar
Generation Sources) Regulations 2016.
The reliability of the grid is the most critical priority with increasing penetration of
wind and solar power having unscheduled fluctuations. System operators face
massive difficulties in maintaining grid reliability as it drives up the cost of renewable
integration. Though the scheduling is mandatory with effect from January 1, 2012,
earlier this year, the Central Electricity Regulatory Commission (CERC) introduced a
robust framework to strengthen forecasting in the renewable sector in India. The
CERC also issued the Indian Electricity Grid Code (Third Amendment)
Regulations, 2015 and Deviation Settlement Mechanism and related matters (Second
Amendment), Regulations 2015. Based on comments from all stakeholders during a
public hearing at New Delhi, the CERC recently published a Statement of Reasons
document detailing the importance of wind/solar energy forecasting. The regulation
laid down the detailed aspects of wind/solar energy forecasting to be done by
generators in India. The mechanism is applicable from November 1, 2015.
Tamil Nadu producing total 7.6 GW wind energy as well as solar energy has come out
with a stricter norms to comply with the rules of scheduling & forecasting on this
13th January 2016, namely draft Tamil Nadu Electricity Regulatory Commission
(Forecasting, Scheduling, Deviation Settlement and Related Matters of Wind and
Solar Generation Sources) Regulations 2016. This new state law has the following
essential features:

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a) Forecasting and scheduling will be required by all wind and solar
project, regardless of the date of commissioning and capacity connected to State
grid
b) Deviations will be calculated on the basis of total available capacity
c) No penalty error band becomes 5% in case of solar energy projects, 10% in case
of wind energy projects
In our previously circulated open report we have already shown that (for further
calculation please see the appendix section and our previous openly circulated report),
the average cost of penalty per available variable RE power capacity can be
represented as
𝐶 ≈
𝑘
4
(1 − 𝑚)2
(1 − 𝑃0(𝑚))
Here 𝑃0(𝑚) represents the probability that the absolute error |e| lies in [0, m] and the
proportionality constant k depends on the no-penalty band and deviation charge. The
above equation holds the approximation that the no penalty band is [-m,+m], and the
deviation charge follows a simple approximate linear relation as
𝑐(𝑒) = 𝑘(|𝑒| − 𝑚) if |𝑒| > 𝑚
= 0 , otherwise

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According to Tamil Nadu Electricity Regulatory Commission, for wind power
generation the no penalty band is [-10%,10%] and the deviation charges are as follows
Abs Error (%of AvC) |e| Deviation Charge per kw-Hr(Rs)
10%-20% 0.10-0.20 0.50
20%-30% 0.20-0.30 1.00
>30% >0.30 1.50
And for solar power generation, the no-penalty band is [-5%,5%] and the deviation
charges are as follows:
Abs Error (%of AvC) |e| Deviation Charge per kw-Hr (Rs)
5%-15% 0.05-0.15 0.50
15%-25% 0.15-0.25 1.00
>25% >0.25 1.50
Here in both cases, the proportionality constant k can be approximated as the constant
value of 5 as it is not depended on the PPA rate unlikely to the previously CERC
regulation. Hence the average cost of penalty per available capacity in Rs / kW-Hr
can be represented as
𝐶(𝑚) = 1.25 (1 − 𝑚)2
(1 − 𝑃0(𝑚))

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Using the last equation, the average cost of penalty for different scenarios are as
follows (for simplification the PPA rate is considered as Rs. 5 per kW-Hr in the last
column)
The above analysis is basic statistical approximation on the cost of penalties due to
deviation charge of wind and solar power forecasting. For detail calculations, plant
specific analysis and forecasting issues please contact us at contact@del2infinity.xyz.
Appendix
Consider C = average cost of penalty per available capacity and c(e) = cost of penalty
due to error e where error in new regulation is defined as 𝑒 =
𝑥 𝑎− 𝑥 𝑓
𝐴𝑣𝐶
, here AvC =
RE
energy
Scenario m 𝑷 𝟎(𝒎) C
(Rs / kW-Hr)
C
(% of PPA
rate)
Wind
Weak forecast 0.10 0.25 0.7594 15.19%
Del2infinity (Worst case) 0.10 0.76 0.2430 4.86%
Del2infinity (Average
case)
0.10 0.87 0.1316 2.63%
Solar
Weak forecast 0.05 0.40 0.6769 13.54%
Del2infinity (Worst case) 0.05 0.82 0.2031 4.06%
Del2infinity (Average
case)
0.05 0.93 0.0790 1.58%

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available capacity, xa = actual power and xf = forecast power. If h(e) represents the
probability distribution of error e, it is easy to show that the cost per available capacity
can be represented as,
𝐶 = ∫ 𝑒𝑐(𝑒)ℎ(𝑒)𝑑𝑒
For a good forecasting with maximum permissible revision, we can consider that the
mean of distribution h(e) is approximately 0, variance is 𝜎𝑒
2
and h(- e) = h(e).
Considering the no penalty band as [-m,+m], we can consider the deviation charge
follows an linear relation as
𝑐(𝑒) = 𝑘(|𝑒| − 𝑚) if |𝑒| > 𝑚
= 0 , otherwise
Using some algebraic manipulation we can show that
𝐶 = 𝑘 [𝜎𝑒
2
− 2 ∫(𝑚 − 𝑒)𝑒ℎ(𝑒)𝑑𝑒
𝑚
0
]
The integral part of the right hand side of the previous equation can be approximated
and with some basic approximation we can state that
𝐶 ≈ 𝑘 [𝜎𝑒
2
−
𝑚2
4
𝑃0(𝑚)]
Where

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𝑃0(𝑚) = 2 ∫ ℎ(𝑒)𝑑𝑒
𝑚
0
Here 𝑃0(𝑚) represents the probability that the absolute error |e| lies in [0, m]. If we
approximate the variance as
𝜎𝑒
2
≈
𝑚2
4
𝑃0(𝑚) +
(1 − 𝑚)2
4
(1 − 𝑃0(𝑚))
The average cost per available capacity can be represented as
𝐶 ≈
𝑘
4
(1 − 𝑚)2
(1 − 𝑃0(𝑚))

Cost of Penalties for deviation of Variable Renewable Power Forecasting considering Tamil Nadu Draft Regulation 2016

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Cost of Penalties for deviation of Variable Renewable Power Forecasting considering Tamil Nadu Draft Regulation 2016