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Maharashtra Introduces Draft Demand Flexibility Regulations Framework 2024 To Enhance Grid Efficiency And Support Renewable Energy

Source：solarquarter

The Maharashtra Commission has led the way in India by introducing innovative regulations focused on grid stability and efficiency. This move is part of a broader push to enhance environmentally friendly generation, transmission, and distribution of electricity. Maharashtra was also a pioneer in setting renewable energy portfolio obligations and feed-in tariffs to boost renewable energy penetration. Recently, both the Central Ministry of Power and the state of Maharashtra have been working to increase renewable energy integration into the power grid, notably through the Panchamrit scheme. This initiative aims for 500 GW of renewable energy capacity by 2030 and to have 50% of electricity consumption come from renewable sources by the same year.

To support this transition, the Commission is revising its regulations to improve efficiency and support new renewable energy capacity. The original Deviation Settlement Mechanism (DSM) regulations from April 2010 were designed to encourage energy conservation, efficiency, and load management among various consumers. The four distribution companies involved implemented several DSM programs, including energy-efficient lighting, improved air conditioning systems, appliance replacements, energy audits, and load shifting. These efforts resulted in around 50 MW of energy savings and 25 MW of demand response initiatives over the past decade.

With changes in generation profiles, particularly due to renewable energy sources, the Commission now sees the need for a new approach. The focus is shifting towards demand flexibility, which means adjusting energy use based on the availability of renewable energy. This adjustment is crucial for meeting the renewable portfolio obligations. Distribution utilities in Maharashtra are moving forward with contracts for solar and wind projects, and new bids are incorporating energy storage solutions like batteries and pumped hydro storage. For instance, Maharashtra State Electricity Distribution Company Ltd plans to add 9,000 MW of solar energy to the agricultural sector, requiring additional loads during peak solar generation times.

The proposed new regulations will be called the Demand Flexibility and Demand Side Management Implementation Framework Cost Effectiveness Assessment and Evaluation Measurement and Verification Regulations 2024. They will include an implementation framework, cost-effectiveness assessments, and evaluation measures that were not part of the previous 2010 regulations. The new regulations will set targets for demand flexibility, aiming to meet about 10% of peak demand through flexible demand solutions. This could be achieved with various technologies, including electric vehicles, thermal energy storage, and heat pumps.

The regulations propose a demand flexibility portfolio obligation (DFPO) for distribution licensees, with incentives for exceeding targets and penalties for underachievement. Additionally, a DF/DSM consultation committee will be set up to review and provide recommendations on DSM programs. New technologies like electric vehicles and flexible loads such as water pumping systems will be included in the regulations to enhance demand flexibility.

Cost-effectiveness assessments in the new regulations will focus on ancillary services, including primary, secondary, and tertiary resources. These services could bring additional revenue to distribution licensees. The regulations also propose three types of evaluations: process evaluation, impact evaluation, and market effectiveness evaluation. Independent verification agencies will be used to ensure accurate assessment and compliance.

The Commission is now seeking feedback from distribution licensees and stakeholders on the proposed regulations to ensure a thorough consultation process before finalizing them.

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