The Need for Regulatory & Policy Framework for Ancillary Services & Alternative

Energy Options in the Indian Power Sector

Drivers of Ancillary Services

in

India

Sanjoy K. Parida

Assistant Professor

Department of Electrical Engineering

Indian Institute of Technology Patna

Presentation Layout

• Introduction

• Ancillary services provision from DERs

• Scope to promote ancillary services in India

• Conclusion

Introduction

Generation

Transmission

Distribution

Consumers

Ver

tica

lly i

nte

gra

ted u

tili

ty Gencos

Wholesale Competition

Transco

Discos

Retail Competition

Consumers

Ancillary Services

• The literal meaning of the word ancillary is providing

support or help.

• Generally, the System Operator (SO) procures ancillary

services for ensuring security, reliability and quality of

the power supply to the consumers.

• Ancillary services can be provided by generators, Load

Serving Entities (LSEs) and transmission operators.

• Ancillary services are classified, procured and remunera -

ted depending upon the operational practices of the

Electricity Supply Industry (ESI).

Classification of Ancillary Services

SRAS

Secondary FC

Primary FC

Tertiary FC

Ancillary Services

PFCAS

NCAS FCAS

VCAS

Primary VC

Secondary VC

Tertiary VC

Ref: Guide to ancillary services in the National Electricity Market, National Electricity Market Management Company.

Frequency Control Ancillary Services

A certain amount of active power, called frequency control reserve, is kept available to perform this task.

Three levels of control are generally used to achieve FCAS: (i) Primary frequency control, (ii) Secondary frequency control and (iii) Tertiary frequency control.

Primary frequency control requires a response period of 5 to 10sec, secondary frequency control requires a response period of 10s to 15min and tertiary frequency control requires a response period of 10 to 30min.

Frequency control reserves required to perform above control tasks can be of (i) positive frequency control reserve and (ii) negative frequency control reserve.

Network Control Ancillary Services

These are the services required to maintain the network parameters within permissible range.

VCAS are required for supporting the voltage to be maintained within the permissible limit. Three levels of control are generally used to achieve VCAS: (i) Primary voltage control, (ii) Secondary voltage control and (iii) Tertiary voltage control.

PFCAS are needed for the purpose of improving Available Transfer Capability (ATC) and the performance of real time operation considering network constraints.

System Restart Ancillary Services

These are the services related to backup capacity of the system and the capacity that is required to return the system to a normal operation after a major or partial blackout.

Technologies Used for Provision of AS

Ancillary Services Technologies Used

FCAS Governor, AGC, Rapid unit loading, Rapid

unit unloading, Demand side

management, Distributed energy

resources (DERs)

NCAS Generators, Capacitors, Inductors,

Synchronous condensers, FACTS

controllers, Distributed energy resources

(DERs)

SRAS Generators, Distributed energy resources

(DERs)

Procurement of Ancillary Services

Compulsory Provision

• As part of connecting conditions, a fixed amount of ancillary

services is provided.

• Consequences: (i) volume of service provided may exceed

what is actually needed, (ii) potentially low cost providers are

treated on the same basis as more expensive one.

Market Based Provision

• Bilateral contracts: (i) this form of procurement lacks

transparency, (ii) this type of negotiation can be long-term,

complex and costly, (iii) because of high transaction cost of

contracts, price and volume often remain fixed for a long

time.

• Both tendering process and creation of a spot market enhance

transparency and foster competition.

Remuneration of Ancillary Services

Structures of Remuneration

• Availability cost

• Utilization cost

• Fixed cost

• Variable cost

• Opportunity cost

Remuneration Methods

• Regulated price

• Pay as Bid price

• Common clearing price

RESs in Distribution Network

Summary of renewable technology

capabilities to provide AS

Summary of non-renewable technology

capabilities to provide AS

Economic Analysis • Cost of Electricity Generation

It consists of three components.

• Capital cost:

Includes the cost of the plant, land acquisition, grid

connection, initial financing cost.

• Operating & Maintenance cost Includes insurance, rent, cost of labor and materials used for

operation & maintenance.

• Fuel cost

• Cost comparison with the conventional power

generation technologies

Optimum Economic Dispatch

• The aim is to load generating sets in response to demand changes so as to minimize the cost of supply. This is known as optimum economic dispatch (OED).

• If plant A is a nuclear plant and plant B is a coal based thermal plant, then KA

’ < KB’

• the minimum cost Cmin occurs when the plant A takes as much of the load share as possible, i.e. it is loaded to its maximum level, with plant B brought in to cover the deficit.

BplantforPKKC

AplantforPKKC

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• If there are ‘n’ plants available arrange the plants in order of increasing K′, the so - called merit order. Starting from the top of the list, the plants are then loaded (each up to the limit of its capacity) before the next plant on the list is brought into action.

• Units with low operating costs run preferentially and therefore attract high load factors; they generate a disproportionately large share of electricity relative to their capacity. They are called base load plants , or high merit plants.

• Units with high operating costs only run during peak demand, generate a disproportionately small share of the total electricity and are known as peaking plant.

• Plants in between these two extremes are called intermediate plants or middle merit plants.

• The total cost of generated energy by a power station, for example a nuclear power station, may be higher than that from a coal fired one, the OED requires that the nuclear station is fully loaded because of its very low incremental cost.

• The rationale is that the loading priority is independent of the original capital sum expended in the construction of a power station. As the station is present and available it should be utilized fully because of its low running costs.

• It may be concluded that as the energy supplied by RE sources (except biomass) is characterized almost entirely by a capital cost component, their incremental cost is negligible. Therefore the OED method would require them to provide at all times all the energy they are capable of delivering.

Scope to Promote Ancillary Services in

India

Structure of the Indian ESI

Delhi

Punjab

Chandigarh

Rajastan

Jammu & Kashmir

Haryana

Himachal Pradesh

Uttar Pradesh

Uttaranchal

Bihar

Jharkhand

Orissa

Sikkim

West Bengal

Assam

Tripura

Meghalaya

Arunachal Pradesh

Manipur

Mizoram

Nagaland

Kerala

Karnataka

Andhra Pradesh

Tamil Nadu

Goa

Madhya Pradesh

Chhatisgarh

Maharastra

Gujarat

Indian ESI

NRG ERG NERG SRG WRG

Operational Structure of ESI in India

Offer

RLDC (RSO)

ISGSs/ CGSs/ IPPs

Forecast Drawal. Sch.

SLDCs

State Gen.

SEBs/Discos

Availability Disp. Sch.

Traders

Traders

PXs

Bid Bid

MCV

&

MCP

NLDC (ISO)

Other

RLDCs

Frequency Regulation Service

• The primary frequency control, which is provided by the

governor action of a generator or automatic regulation

of frequency sensitive load, is also know as frequency

regulation.

• With the transition from vertically integrated utilities to

unbundled one frequency regulation transformed to a

“service” from an “obligation”.

• In India, this service is being provided by generators

under Free Governor Mode of Operation (FGMO)

complied with certain guidelines prescribed by CERC

FCAS from Generators

Valve

Power

- +

Incremental

Cost

Scheduled

Generation

Gain

Nominal

Frequency +

+

UI

Rate

Secondary Control Loop

Generator

Output

Actual

Frequency

Generator Power

System

Droop

Change in

Tie line

Power

Change in

Demand

Primary Control Loop

Ref: Tyagi et al. “A mathematical framework for frequency linked availability based tariff mechanism in

India” Proc. of the National Power Systems Conference, December 2004, IIT Chennai, India.

FCAS from LSEs

UI Rate Comparison

Incremental

Cost

Captive

Generation

+

-

Demand

requirement from

CGSs/ISGSs/IPPs

Total

Demand

Grid

Frequency

Next

Some renewable technologies are small and modular,

they can be sited in or near buildings as distributed

generation (DG) where energy is used.

It can be used as an important component in microgrid,

which is defined as localized grouping of electricity

generation, energy storage, and loads that operates

within the grid or in islanded mode if possible.

Renewables have great potential in providing Ancillary

Services (AS). AS are the system support services

required to maintain security and reliability of the system

EXPLOITATION OF RENEWABLES

In radial mode transmission there are sources of generation at one end with a transmission and distribution system having consumers at the other end.

At the instant of failure of the generating station the whole system fail. As such there is no flexibility for the system.

In integrated system all the generating stations are connected through a reliable mesh transmission network.

Total load connected to the system is shared by all the generation stations.

Demand of electricity vary place to place. Industrial load growth generally occurs adjacent to the cities and towns.

INTEGRATED SYSTEM

Continued….

In India because of uneven distribution of natural resources, generating stations are located in few pockets far away from load centers.

Also, some regions are surplus in generation and some regions are shortfall of generation as compared to load demand.

Surplus generation is need to be transported to energy deficit regions, which improves the power-supply reliability and quality.

Liberalization of the electricity market leads to new

management structures for the operation and control of

the electricity grid.

I. Technical

II. Economical

III. Environmental

IV. Resource availability

INTEGRATION BASED ON

ATTRIBUTES

Technical Economical Environmental Resource

availability

Efficiency Investment cost Noise Oil

Power generation O&M cost NOx Gas

Capacity factor Electricity Price SO2 Wind

Life time CO2 Solar

Installation led

time

CO

Start up time HC

Forced outage rate PM

Maintenance

Footprint

SUB-ATTRIBUTES

EASTERN

REGION

DG TECHNOLOGIES WITH RESPECT TO

THE MAIN ATTRIBUTES

WESTERN

REGION

SOUTHERN

REGION

NORTHERN

REGION

Continued….

NORTH EASTERN

REGION

Continued….

Conclusion

• Indian power sector, Free Governor Mode of Operation (FGMO) is the sole mechanism to provide FCAS.

• DERs are important resources for various kinds of AS.

• Design of market mechanism with proper policy framework for provision of ancillary services.

• UI may play very important role in AS provision.