India Regulator Halts Fines on Wind Farm for Bad Forecasts (1)

March 7, 2014 by  
Filed under Green Energy News

An Indian rule requiring wind farms
to predict output or face fines has been temporarily suspended
as the regulator reconsiders the best way to ensure stability of
the grid, which suffered the world’s biggest outage in 2012.

“The mechanism has been put on hold,” said Sunil Jain,
chief executive officer at Hero Future Energies Pvt. and
president of the Wind Independent Power Producers Association.

The Central Electricity Regulatory Commission last year
said it would penalize wind farms that failed to predict their
day-ahead generation within a 30 percent band. Developers
including Tata Power (TPWR) Co. and Goldman Sachs Group Inc.’s ReNew
Wind Power Pvt. protested the directive, saying it was
impossible to comply with and that fines would wipe out profits
in an industry that has drawn about $10 billion of investment
since 2011.

“Not a single project has been able to produce data within
the margins,” Jain said in an interview in New Delhi this week.
“It defeats the purpose. It’s too inaccurate.”

Regulator’s Position

Based on feedback from the industry, the Central
Electricity Regulatory Commision decided the mechanism needed
review and suspended the commercial portion, the commission said
in an e-mailed response to questions today. Wind farms still
have to submit estimates, it said.

Forecasting of wind generation, an intermittent energy
source, is carried out to help stabilize the grid in some parts
of the U.S. and Europe, where surging wind output has driven
wholesale electricity prices below zero and forced utilities to
pay consumers to take power as supply exceeded demand. In India,
scheduling would allow wind power to be sold across states and
help authorities prepare network upgrades to accept more clean
energy in the future.

The industry is asking for the rules to be modified so that
a centralized, state-level load dispatcher can compile more
accurate, region-wide predictions, which is how scheduling is
done in Europe, Jain said.

In 2012, grid collapses caused by a mismanagement of power
sales left nearly 360 million people in the dark for days.

Hero Future Energies, a unit of Hero Group which owns
India’s biggest motorcycle maker, plans to build 1,000 megawatts
of renewable energy capacity by 2017. It will complete 111
megawatts of wind farms by March and won licenses to build 30
megawatts of solar plants in a national auction last month.

To contact the reporter on this story:
Natalie Obiko Pearson in New Delhi at
npearson7@bloomberg.net

To contact the editors responsible for this story:
Reed Landberg at
landberg@bloomberg.net
Abhay Singh

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