India Tells Wind Farms to Forecast Power or Face Fines

July 15, 2013 by  
Filed under Green Energy News

India will fine wind farms that fail
to set accurate day-ahead forecasts for power output, passing on
risks to owners like CLP Holdings Ltd. (2) and Tata Power Co. (TPWR) after
volatile generation led to the world’s biggest blackout.

A directive enforcing the fines began today after industry
opposition led to a two-year delay, said Rajiv Bansal, secretary
of the Central Electricity Regulatory Commission.

Each day wind farms with a capacity of 10 megawatts or more
need to predict their level of generation in 15-minute blocks
for the following day and will be fined for missing estimates by
more than 30 percent, according to the directive. They will use
seasonal records and weather forecasts, while the fines will be
paid to state utilities through a new Renewable Regulatory Fund.

“Forecasting at 15-minute intervals is very challenging,”
and could cost a 100-megawatt farm an estimated 250 million
rupees ($4 million) a year, Tata Power said in an e-mailed
response to questions. “Developers will see this as a further
handicap if penalties are enforced.”

The creaking power grid can’t cope with volatile wind- and
sun-power generation that has doubled in capacity in five years
to almost 20 gigawatts. At the same time, wind developers are
struggling after the government withdrew subsidies and turbine
installations slumped 42 percent last financial year.

“Time and again this date has been deferred at the request
of wind-farm owners,” Bansal said by phone from New Delhi. “We
will initiate action against whoever doesn’t follow it.”

Less Volatile

While solar parks must estimate generation, they won’t be
fined as output is smaller and less volatile, Bansal said.

As much as 70 percent of a wind farm’s annual power output
may be generated in the four-month monsoon season, according to
REConnect Energy Solutions Pvt., which advises companies on the
energy meters and forecasting tools used to meet the new rules.

The task of forecasting wind and solar power is complex and
will impose a financial and operational burden on the renewable
companies, said Vibhav Nuwal, director of REConnect.

“The level of accuracy achieved by various projects that
have done trials leaves a lot to be desired,” Nuwal said.
“Projects may immediately face financial obligations.”

Grid collapses on two straight days in India last year cut
off power to half of the country’s 1.2 billion people. Power is
lost in transmission in the nation because of its dissipation
through wires and theft. Distributors, unable to retrieve costs
through their charges, build up debt and losses and are forced
to cut electricity purchases, leading to the blackouts.

Scheduling Output

CLP’s India unit and turbine suppliers Suzlon Energy Ltd. (SUEL)
and Gamesa Corp Tecnologica SA (GAM) that operate and maintain wind
farms on behalf of owners didn’t respond to e-mailed questions
about the order. P. Krishnakumar, managing director of Orient
Green Power Co. (OGPL)
, India’s third-biggest wind developer, also
declined to comment.

Wind farms in the U.K. and U.S. need to schedule output in
some cases. In the U.K., they have to notify their intention to
generate one hour before delivery, said Brian Potskowski, a
power analyst in London at Bloomberg New Energy Finance. In the
U.S. Mid-Atlantic region, projects that supply power into the
day-ahead market may be penalized if output deviates from their
forecast, said Amy Grace, a New York-based BNEF analyst.

Tata Power fell 1.1 percent to 88.6 rupees in Mumbai, while
CLP Holdings was unchanged at HK$63.90 in Hong Kong trading.

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

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

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