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

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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











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))











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 [email protected].

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 = 𝑥𝑎− 𝑥𝑓

𝐴𝑣𝐶 , here AvC =

RE

energy

Scenario m 𝑷𝟎(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%












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 𝜎𝑒2 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 [𝜎𝑒2 − 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 [𝜎𝑒2 −

𝑚2

4𝑃0(𝑚)]

Where











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

𝜎𝑒2 ≈

𝑚2

4𝑃0(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...

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