According to reports, 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.
“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.”
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.
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.
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 renewables 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. Distributers, unable to retrieve costs through their charges, build up debt and losses and are forced to cut electricity purchases, leading to the blackouts.
Tata Power, 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 (OGPL) Co., 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.