DSM Strategy

Presented By-

POG –I
Khaperkheda 4x210 MW
Basic Definitions Related to DSM

1
 Suo Motto Order of MERC - 6th May 2021
Amendments:

• Revised Frequency Band – 49.85 Hz to 50.10 Hz.

• Additional DSM Charges for Under-injection when frequency < 49.85 Hz specified
Formula : Add. DSM = Deviation (MW) x Cap Rate (394.3 Ps/KWh) x 2.5

• Additional DSM Charges for Over-injection when frequency > 50.10 Hz specified
Formula : Add. DSM = 2.5 x Deviation (MW) x ACP Rate (DSM Charges for 50.0 Hz

-50.01 Hz)

• Drawl from Grid to be Net off during normal operation.

During RSD/SD, Drawl will be net off with other units.
No deviation to be considered for drawl, even if all units are off bar.

• Approved Volume Limit during mock trial & Stabilization Period increased to 50
MW.
 DSM Charge matrix – Over-injection

Over injection (Positive deviation)

Frequency band Within volume limit (12% of

Above volume limit (12% of schedule or
schedule or 50 MW whichever is
50 MW whichever is lower)
lower)

Normal DSM charge for Deviation upto

Normal DSM charge , No
49.85 Hz > Actual frequency volume limit , zero charge for
Additional DSM charge
overinjection above volume limit

Normal DSM charge for Deviation upto

49.85 Hz=< Actual freq.< 50.05 Normal DSM charge , No
volume limit , zero charge for
Hz Additional DSM charge
overinjection above volume limit

50.05 Hz =< Actual freq. < 50.1 Zero DSM charge, No Additional Zero DSM charge, No Additional DSM
Hz DSM charge charge

Zero DSM charge but Additional DSM charge on all over-injection at rate
50.1 Hz =< Actual frequency
equal to ACP rate for the day.
 DSM Charge matrix – Under-injection

Under -injection (Negative Deviation)

Frequency band Within volume limit (12% of schedule Above volume limit (12% of schedule
or 50 MW whichever is lower) or 50 MW whichever is lower)

Normal DSM charge @ Cap Rate+ Normal DSM charge @ Cap Rate +
49.85 Hz > Actual frequency Additional DSM charge on all under- Additional DSM charge on all under-
injection @100% rate injection @100% rate

Normal DSM charge + Additional

DSM charge on deviation exceeding
49.85 Hz=< Actual freq.< Normal DSM charge , No Additional volume limit (@20% rate for deviation
50.05 Hz DSM charge between 50 MW to 60 MW, @40% for
deviation between 60 MW to 70 MW,
@100% for deviation above 70 MW)

50.05 Hz =< Actual freq. < Zero DSM charge , No Additional DSM Zero DSM charge , No Additional
50.1 Hz charge DSM charge

50.1 Hz =< Actual frequency Zero DSM charge , No Additional DSM charge
 DSM Price Vector

Area Clearing Price

Rs. 8.00 / kWh

50.10 Hz 50.05 Hz 49.85 Hz

50.00 Hz

Area Clearing Price :

Indian Energy Exchange is discovering area clearing price based on sell and
purchase bids for each time block for particular bid area. ACP is average of
clearing price for the day and is declared by NLDC every day by 18:00 hrs
applicable for next day which applicable as DSM rate in that bid area.
 Points to Note

• Day ahead OLC in MSLDC Scheduling Module to be declared latest by 9.00 AM.

• Stabilization Period of 6 Months after DSM Go Live

• Frequency band for Stabilization Period will be 49.85 Hz – 50.10 Hz

• Volume limit for Stabilization Period will be 12% of SG or 50 MW, whichever is

lower.

• Day wise deviation of 1% not enforced in Stabilization period.

• Sign Change after every 6 Blocks, not enforced in Stabilization period.

Modalities in Cases of Over-injection of Power with
Respect to Grid Frequency
CASE (I) (a) - Over-injection

When F < 49.85 Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

Regulation : DSM charges receivable subject to CAP Rate (3.943 Rs/KWh)

Strategy:

• When ADSM rate is > MOD Rate

Consider Over-injection up to a maximum of 12 % of SG or 30 MW whichever is lower.

No under-injection allowed

Reasoning : Receivable on Applicable DSM will be more than VC/MOD for that time block

• When ADSM rate is < MOD Rate

Maintain Actual Generation = Scheduled Generation. No under-injection allowed

Reasoning : Receivable on Applicable DSM will be less than VC/MOD for that time block.
Hence more loss on Fuel Charges.
CASE (I) (a) - Over-injection

When F < 49.85 Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

Formula : Dev (MW) x ADSM (Paise) x 2.5 Here ADSM = CAP Rate

Example:

Conclusion : Over-Injection to be done within Volume Limits when frequency is below 49.85 Hz
provided DSM Rate > MOD rate.
CASE (I) (b) - Over-injection

When F < 49.85 Hz & VL is > 12% of SG or 30 MW which ever is Lower

Regulation : DSM charges receivable subject to CAP Rate (3.943 Rs/KWh) +

Zero for injection above Volume Limits

Strategy:

• Avoid over-injection above Volume Limit in above case.

Reasoning: Any injection above the Volume Limit will not provide any benefit in DSM Charges
since as per regulation there is zero receivable DSM Charge for over-injection above
Volume Limit. If over-injection is done above Volume limit then we will incur losses
in terms of Fuel cost.
CASE (I) (b) - Over-injection

When F < 49.85 Hz & VL is > 12% of SG or 30 MW which ever is Lower

Formula : C. Dev (30 MW) x ADSM (Paise) x 2.5 Here ADSM = CAP Rate

Example:

Conclusion : Over-injection is strictly prohibited above Volume Limit when frequency < 49.85 Hz
Case (I) (c) - Over-injection

When F ≥ 49.85 & < 50.05Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

Regulation : DSM charges receivable subject to Price Vector Slope

Strategy:

• When ADSM rate is > MOD Rate

Consider Over-injection upto a maximum of 12 % of SG or 30 MW whichever is

lower. No under-injection allowed

Reasoning : Receivable on Applicable DSM will be more than VC/MOD for that time block

• When ADSM rate is < MOD Rate

Maintain Actual Generation = Scheduled Generation. No under-injection allowed

Reasoning : Receivable on Applicable DSM will be less than VC/MOD for that time block.
Hence more loss on Fuel Charges.
 Case (I) (c) - Over-injection

When F ≥ 49.85 & < 50.05Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

Formula : Dev (MW) x ADSM (Paise) x 2.5

Example:

Conclusion : Over-Injection to be done within Volume Limits when frequency is ≥ 49.85 Hz & <
50.05 Hz, provided DSM Rate > MOD rate.
 Case (I) (d) - Over-injection

When F ≥ 49.85 & < 50.05Hz & VL is > 12% of SG or 30 MW which ever is Lower

Regulation : DSM charges receivable subject to Price Vector Slope + Zero for injection above
Volume Limits

Strategy :

• Avoid over-injection above Volume Limit in above case.

Reasoning : Any injection above the Volume Limit will not provide any benefit in DSM Charges
since as per regulation there is zero receivable DSM Charge for over-injection above Volume
Limit. If over-injection is done above Volume limit then we will incur losses in terms of Fuel cost.

• If over-injection above Volume Limits cannot be controlled due certain operational issues or
system emergency then revise the OLC in MSLDC Scheduling Module (Software).
Case (I) (d) - Over-injection

When F ≥ 49.85 & < 50.05Hz & VL is > 12% of SG or 30 MW which ever is Lower

Formula : C. Dev (30 MW) x ADSM (Paise) x 2.5

Example:

Conclusion : Avoid Over-injection above Volume Limit when frequency is ≥ 49.85 & < 50.05Hz
Case (I) (e) - Over-injection

When F > 50.05Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

When F > 50.05Hz & VL is > 12% of SG or 30 MW which ever is Lower

Regulation : No Over-Injection is permitted

Normal DSM will be Zero + Additional DSM charge payable at Area Clearing
Price for the day (ACP)

Strategy:

• Over-injection above Scheduled Generation should be avoided strictly.

• Opportunity to reduce Actual Generation with respect to Scheduled Generation up to a

maximum Volume Limit of 12% of Scheduled generation or 30 MW which ever is lower. The
above method will help to maximize savings on Fuel Cost because there is no penalty for
under-injection when grid frequency is > 50.05 Hz.

• If over-injection cannot be controlled due certain operational issues or system emergency

then revise the OLC in MSLDC Scheduling Module (Software).
Case (I) (e) - Over-injection

When F > 50.05Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

When F > 50.05Hz & VL is > 12% of SG or 30 MW which ever is Lower

Formula : Dev (MW) x ACP (Paise) x 2.5

Example:

Conclusion : No Over-Injection to be done when frequency is above 50.05 Hz

Modalities in Cases of Under-injection of Power with
Respect to Grid Frequency
Case (II) (a) – Under -injection

When F < 49.85 Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

Regulation : No Under-injection is permitted.

DSM Charges payable by Generator at CAP Rate (3.943 Rs/KWh)

Strategy:

• Under-injection below Scheduled Generation should be avoided strictly.

• If under-injection cannot be controlled due certain operational issues or system emergency

then revise the OLC in MSLDC Scheduling Module (Software).

• Opportunity to increase Actual Generation with respect to Scheduled Generation upto a

maximum Volume Limit of 12% of Scheduled generation or 30 MW which ever is lower
provided the Applicable DSM Charge is > MOD Rate

• If the Normal DSM Charge is < MOD Rate then maintain Actual Generation = Scheduled
Generation.
Case (II) (a) – Under -injection

When F < 49.85 Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

Formula : 2 x {Dev (MW) x ADSM (Paise) x 2.5} Here, ADSM = Cap Rate

Example:

Suppose if we had Over-injected 14.52 MW instead of Under-injection, profits would have been

Total DSM Receivable (Rs.) = 14313.09

Conclusion : No Under-Injection to be done when frequency is below 49.85 Hz.

Attempt to Over-inject energy when F < 49.85 Hz. Doing so will generate profit.
CASE (II) (b) – Under -injection

When F < 49.85 Hz & VL is > 12% of SG or 30 MW which ever is Lower

Regulation : No Under-injection is permitted.

DSM Charges payable by Seller at CAP Rate + Additional DSM Payable @ 100 %

of Normal DSM subject to CAP Rate (3.943 Rs/KWh)

Strategy:

• Under-injection below Scheduled Generation should be avoided strictly.

• If under-injection cannot be controlled due certain operational issues or system emergency

then revise the OLC in MSLDC Scheduling Module (Software).

• Opportunity to increase Actual Generation with respect to Scheduled Generation upto a

maximum Volume Limit of 12% of Scheduled generation or 30 MW which ever is lower
provided the Applicable DSM Charge is > MOD Rate

• If the Applicable DSM Charge is < MOD Rate then maintain Actual Generation = Scheduled
Generation.
CASE (II) (b) - Over-injection

When F < 49.85 Hz & VL is > 12% of SG or 30 MW which ever is Lower

Formula : 2 x {Dev (MW) x Cap Rate (Paise) x 2.5}

Example:

Suppose if we had Over-injected instead of Under-injection in above cases, profits would have been

Total DSM Receivable (Rs.) = Dev (MW) x Cap Rate (Paise) x 2.5

Conclusion : No Under-Injection to be done when frequency is below 49.85 Hz

Attempt to Over-inject energy when F < 49.85 Hz. Doing so will generate profit.
Case (II) (c) - Under-injection

When F ≥ 49.85 & < 50.05Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

Regulation : DSM Charges payable by Seller at DSM rate

Strategy :

• Under-injection below Scheduled Generation should be avoided strictly.

• If under-injection cannot be controlled due certain operational issues or system emergency

then revise the OLC in MSLDC Scheduling Module (Software).

• Opportunity to increase Actual Generation with respect to Scheduled Generation upto a

maximum Volume Limit of 12% of Scheduled generation or 30 MW which ever is lower
provided the Applicable DSM Charge is > MOD Rate

• If the Applicable DSM Charge is < MOD Rate then maintain Actual Generation =
Scheduled Generation.
 Case (II) (c) - Under-injection

When F ≥ 49.85 & < 50.05Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

Formula : Dev (MW) x ADSM (Paise) x 2.5

Example:

Suppose if we had Over-injected instead of Under-injection in above cases, profits would have been

Total DSM Receivable (Rs.) = Dev (MW) x ADSM (Paise) x 2.5

Conclusion : No Under-Injection to be done when frequency is ≥ 49.85 & < 50.05Hz

Attempt to Over-inject energy when F ≥ 49.85 & < 50.05Hz Hz.
Doing so will generate profit
 Case (II) (d) - Over-injection

When F ≥ 49.85 & < 50.05Hz & VL is > 12% of SG or 30 MW which ever is Lower

Regulation :

 DSM Charges payable by Seller at DSM rate + 20% of DSM when VL > 12% & ≤ 15 % or 30
to 40 MW whichever is lower
 DSM Charges payable by Seller at DSM rate + 20% of DSM when +40% DSM when VL >
15% & ≤ 20 % or 40 to 50 MW whichever is lower
 DSM Charges payable by Seller at DSM rate + 20% of DSM when +40% DSM + 100% DSM
when VL > 20 % or >50 MW whichever is lower

Strategy:

• Under-injection below Scheduled Generation should be avoided strictly.

• If under-injection cannot be controlled due certain operational issues or system emergency

then revise the OLC in MSLDC Scheduling Module (Software).

• Opportunity to increase Actual Generation with respect to Scheduled Generation upto a

maximum Volume Limit of 12% of Scheduled generation or 30 MW which ever is lower
provided the Applicable DSM Charge is > MOD Rate

• If the Applicable DSM Charge is < MOD Rate then maintain Actual Generation =
Scheduled Generation.
 Case (II) (d) - Over-injection

When F ≥ 49.85 & < 50.05Hz & VL is > 12% of SG or 30 MW which ever is Lower
Formula :
 DSM Charges payable by Seller at DSM rate + 20% of DSM when VL > 12% & ≤ 15 % or 30 to 40 MW whichever is lower
 DSM Charges payable by Seller at DSM rate + 20% of DSM when +40% DSM when VL > 15% & ≤ 20 % or 40 to 50 MW whichever is lower
 DSM Charges payable by Seller at DSM rate + 20% of DSM when +40% DSM + 100% DSM when VL > 20 % or >50 MW whichever is lower

Example:

Suppose if we had Over-injected instead of Under-injection in above cases, profits would have been

Total DSM Receivable (Rs.) = Dev (MW) x ADSM (Paise) x 2.5

Conclusion : No Under-Injection to be done when frequency is ≥ 49.85 & < 50.05Hz

Attempt to Over-inject energy when F ≥ 49.85 & < 50.05Hz Hz.
Case (II) (e) – Under -injection

When F > 50.05Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

When F > 50.05Hz & VL is > 12% of SG or 30 MW which ever is Lower

Regulation : Zero charges payable or receivable

Strategy :

• Opportunity to decrease Actual Generation with respect to Scheduled Generation upto a

maximum Volume Limit of 12% of Scheduled generation or 30 MW which ever is lower

• Savings in fuel cost can be realised if Under-Injection is done within Volume Limit.
 Case (II) (e) – Under -injection

When F > 50.05Hz & VL is ≤ 12% of SG or 30 MW which ever is Lower

When F > 50.05Hz & VL is > 12% of SG or 30 MW which ever is Lower

Formula : Dev (MW) x ADSM (Paise) x 2.5

Example:

Conclusion : Under-Injection can be done when frequency is > 50.05Hz as it may help to realize
savings in Fuel Cost
Do not Over inject at any cost otherwise penalty will be incurred at ACP rate.
 Summary of DSM

AG > SG
49.85 Hz 50.05 Hz AG > SG

OVERINJECT OVERINJECT
UP TO UP TO DO NOT OVER
VOLUME VOLUME INJECT
LIMIT LIMIT

AG = SG AG = SG

UNDER INJECT
UP TO
DO NOT DO NOT VOLUME
UNDER INJECT UNDER INJECT LIMIT TO
REALIZE FUEL
SAVINGS
AG < SG
AG < SG
49.85 Hz 50.05 Hz

Do Not Over-inject above 50.05 Hz

Do Not Under–inject below 50.05 Hz
 Coping up situations affecting Load
• Mill Trip/NCF/Shear Pin failure :
Convey Message to Other Units to make-up load at station SG. Cut-in Standby Mill, if
available. Assess Time needed to rectify the problem. If other units can maintain Station
SG, don’t go for DC Revision, else, Revise DC immediately keeping in mind that DC
revision comes in effect only after the 3rd Block.

• Unit Trip :
Revise DC immediately. Shift In-charge to convey the time of Unit synchronization to
Nodal PCR/ DSM Engineers at least 45 minutes ahead.

• Backing Down Enforce :

Maintain Average Ramp Down Rate as per Block wise SG given by SLDC. If Frequency is
above 50.05 Hz, ensure there is No over-injection. Don’t Revise DC.

• Backing Down Withdrawal :

Maintain Average Ramp up Rate as per Block wise SG given by SLDC. If Frequency is
below 49.85 Hz, ensure there is No under-injection. Revise DC, if Load cannot be
maintained as per Station SG.

• Permit for Maintenance Jobs :

If planned activity requires withdrawal of Auxiliary that can affect load, Revise DC
accordingly, else Plan activity during anticipated Backing Down Hours.
Thank You
Circular By C.E. (Works)

Implementation of DSM
Dated 09.06.2020
Circular By Hon. Director (Operations)

Implementation of DSM in Maharashtra

Dated 04.10.2021
 Deviation & Additional Deviation Charges as per DSM Regulation, 2019

Volume Limit Applicable DSM , Additional Charge for DSM

Particulars
%
MW < 49.85 Hz ≥ 49.85 Hz to < 50.05 Hz ≥ 50.05 Hz
Schedule

Receivable @ Cap
≤ 12 % ≤ 30 Receivable @ DSM Rate as per Price Vector Slope
Rate

Over - Receivable @ Cap Receivable @ DSM Rate as per Price Vector Slope Payable @
Injection Rate + ACP Rate
> 12 % > 30 +
Zero for Over Zero for Over injection > VL
injection > VL

≤ 12 % ≤ 30 Payable @ DSM Rate as per Price Vector Slope

30 Payable @ DSM Rate as per Price Vector Slope

> 12 % to
to +
≤ 15 %
40 20 % of DSM Rate as per Price Vector Slope

Payable @ DSM Rate as per Price Vector Slope

40 + Zero
> 12 % to Payable @ 2 X
Under - to 20 % of DSM Rate as per Price Vector Slope Charges
≤ 15 % DSM Charges at
Injection 50 + Payable or
Cap Rate 40 % of DSM Rate as per Price Vector Slope Receivable

Payable @ DSM Rate as per Price Vector Slope

+
20 % of DSM Rate as per Price Vector Slope
> 20 % > 50 +
40 % of DSM Rate as per Price Vector Slope
+
100 % of DSM rate as per Price Vector Slope