Ancillary Services

POWER SYSTEM OPERATION CORPORATION LIMITED
Ancillary Services in Indian Context

An Approach Paper
June 2010
The objective of this paper is to suggest certain mechanisms and processes which can be introduced and implemented as ancillary services in the Indian Electricity market.
Table of Contents
CHAPTER 1 ......................................................................................................................................................... 1 ANCILLARY SERVICES .................................................................................................................................... 1 1.1. INTRODUCTION ...................................................................................................................................... 1 1.2. NATURE OF THE ELECTRICITY GRID ...................................................................................................... 1 1.3. ELECTRICITY M ARKET ........................................................................................................................... 1 1.4. NEED FOR AN ELECTRICITY M ARKET COMPLEMENTING RELIABILITY .................................................... 2 1.5. TYPES OF SERVICES IN ELECTRICITY INDUSTRY .................................................................................... 2 1.5.1. Basic/System Service .............................................................................................................. 2 1.5.2. Ancillary Service ....................................................................................................................... 3 1.6. RELEVANCE OF ANCILLARY SERVICES .................................................................................................. 4 CHAPTER 2 ......................................................................................................................................................... 6 CLASSIFICATION OF ANCILLARY SERVICES ............................................................................................. 6 2.1. CLASSIFICATION.................................................................................................................................... 6 2.2. FREQUENCY CONTROL SERVICES ......................................................................................................... 7 2.2.1. Levels of Frequency Control .................................................................................................. 8 2.2.2. Frequency Reserves .............................................................................................................. 11 2.3. VOLTAGE CONTROL ANCILLARY SERVICES ........................................................................................ 13 2.3.1. Need for Voltage Control ....................................................................................................... 13 2.3.2. Levels of Voltage Control...................................................................................................... 14 2.3.3. Cost of Voltage Control ......................................................................................................... 15 2.4. BLACK START CAPABILITY ................................................................................................................. 15 CHAPTER 3 ....................................................................................................................................................... 16 PROPOSED ANCILLARY SERVICES IN INDIAN CONTEXT...................................................................... 16 3.1. BACKGROUND ..................................................................................................................................... 16 3.2. PREVALENT SCENARIO IN INDIA .......................................................................................................... 16 3.3. ANCILLARY SERVICES MARKET: PRESENT POSITION .......................................................................... 17 3.4. PROPOSED ANCILLARY SERVICES IN INDIAN ELECTRICITY M ARKETS ................................................. 20 3.5. LOAD GENERATION BALANCING SERVICE (LGBS) ............................................................................. 20 3.6. NETWORK CONTROL ANCILLARY SERVICES (NCAS) ......................................................................... 23 3.6.1. Power Flow Control Ancillary Services (PFCAS).............................................................. 23 3.6.2. Voltage Control Ancillary Service (VCAS) ......................................................................... 24 3.7. SYSTEM RESTART ANCILLARY SERVICE (SRAS) ............................................................................... 25 3.8. ANCILLARY SERVICES FUND ............................................................................................................... 25 CHAPTER 4 ....................................................................................................................................................... 26 FUTURE SCOPE............................................................................................................................................... 26 4.1. PRIMARY FREQUENCY CONTROL ........................................................................................................ 26 4.2. SPINNING RESERVES........................................................................................................................... 26 4.3. REACTIVE ANCILLARY M ARKET .......................................................................................................... 27 4.4. METERING REQUIREMENTS ................................................................................................................. 29 CHAPTER 5 ....................................................................................................................................................... 30 CONCLUSION ................................................................................................................................................... 30 ANNEXURE I: INTERNATIONAL PRACTICES ............................................................................................. 31 ANNEXURE II: PRICING METHODOLOGIES ............................................................................................... 37 REFERENCES .................................................................................................................................................. 43
List of figures
FIGURE 1: DIFFERENCE BETWEEN SYSTEM SERVICES AND ANCILLARY SERVICES [2] .......................................... 2 FIGURE 2: FOUR PILLARS OF M ARKET STRUCTURE [7] ..................................................................................... 4 FIGURE 3: FUNDAMENTAL BEHAVIOR OF A POWER SYSTEM [11] ...................................................................... 7 FIGURE 4: OPERATION AT DIFFERENT FREQUENCY LEVEL [6] ........................................................................... 8 FIGURE 5: UCTES CLASSIFICATION OF FREQUENCY RESERVES ........................................................................ 9 FIGURE 6: THREE FUNCTIONAL FREQUENCY CONTROL OF A GENERATOR [2] .................................................. 11 FIGURE 7: LEVELS OF CONTROL FOR A GENERATING UNIT ............................................................................... 12 FIGURE 8: THREE FUNCTIONAL VOLTAGE CONTROLS CONSIDERING A GENERATING UNIT[2] ........................... 14 FIGURE 9: PROPOSED CURVE FOR PRICING OF REACTIVE POWER V/S VOLTAGE............................................... 28 FIGURE 10: LOAD CURVE SHOWING REGULATION LOAD FOLLOWING ................................................................ 31 FIGURE 11: BREAK UP COST INCURRED IN PROVIDING ANCILLARY SERVICES IN US [20] .................................. 32 FIGURE 12: ANCILLARY SERVICE COST IN NEMMCO IN 1998-99 [20] ........................................................... 35 FIGURE 13: FREQUENCY RANGE AND OPERATOR ACTION IN NORDEL SYSTEM [20] .......................................... 35 FIGURE 14: RESERVE OPPORTUNITY COST FOR LOW COST GENERATING UNIT [6] ........................................... 41 FIGURE 15: RESERVE OPPORTUNITY COT FOR A HIGH COST GENERATING UNIT [6] ......................................... 41
Chapter 1 Ancillary Services

1.1. Introduction
Ancillary Services have always been an integral part of the electricity industry. They were and are always needed when electricity is to be transferred reliably and delivered with satisfactory quality. In India also, ancillary services have grown along with the grid. They have traditionally been a part of grid operation and are mostly mandatory. Reforms in Indian electricity sector along with evolution of electricity markets have led to a paradigm shift and electricity is now seen as a tradable commodity, rather than just an infrastructural requirement. In a market oriented electricity industry, commercial mechanisms need to be in place for procurement of various services and to have prompt response from the entities. As a result ancillary services also should be separated from basic system services and remunerated appropriately. This gains additional strength from the fact that a structured ancillary service market would complement reliability of the power system.
1.2.
Nature of the Electricity Grid
Electrical systems around the world are physically and operationally very similar. The generation of power is done by utilizing different thermal, hydro, nuclear, wind and other non conventional energy sources. Transmission of power takes place through high voltage AC and DC lines and electricity reaches the end consumer through low voltage AC distribution network. The system operator performs the task of operation of the power system in a secure, reliable and efficient manner. Electricity travels with the speed of light and the time period of various electrical phenomenon is very less. Transients in electrical systems have a time period of micro-seconds and operation of protection devices and circuit breakers take a few milliseconds. The response time of humans is much sluggish when compared to that of different electrical phenomenon.
1.3.
Electricity Market
Bulk of energy delivery in Indian market takes place through advance contracts between buyers and sellers. The contracts are further divided into long-term, medium-term and short-term energy contracts. Day-ahead scheduling of both beneficiaries and generators is done by the system operator. Indian power industry follows a decentralized system which means that the both the suppliers and beneficiaries are free to declare their capacity/requirement and their deviation from schedule is treated as per UI mechanism. This Unscheduled Interchange(UI) is dealt commercially on a post-facto basis using a regional pool settlement system. Ancillary Services in Indian Context: An Approach paper Page 1
1.4.
Need for an Electricity Market Complementing Reliability
One of the most fundamental requirements of the electricity market is that its design should be such that it complements the reliability and security of the system. The balancing market keeps supply and demand in balance until the system operator is forced to intervene. Steven Stoft in his book on Power System Economics says The structure of reliability requirements determine not only short-term reliability, but the height and frequency spikes and therefore long run investment in generation and long run reliability. These consequences of market structure are often overlooked, so the design of the reliability structure is often inappropriate, sometimes with serious consequences.
1.5.
Types of Services in Electricity Industry
Services in power systems are categorized into two subdivisions: Basic/ System Services Ancillary Services
Figure 1: Difference between system services and ancillary services [2]
The two services are interdependent on each other. This complicates things because the same supplier can be simultaneously required to produce both system services and ancillary services. 1.5.1. Basic/System Service
Different definitions available in literature for basic/system service are: System services are all services provided by some system function (such as a system operator or a grid/network operator) to users connected to the system.....Ancillary Services -Unbundling Electricity Products an Emerging Market, Eurelectric[3] Basic Services are generation, energy supply and power delivery..Para 30, judgment in appeal no.202 dated 13th December 2006, The Appellate Tribunal for Electricity[4] The frequency and voltage control services are called system services (SS) because they are delivered by the power system to all the users.A Comprehensive Assessment of Markets for Frequency and Voltage Control, Yann Rebours[2] Thus System or Basic services are the services such as generation, transmission and distribution of power which are delivered to all the users connected to the system. Ancillary Services in Indian Context: An Approach paper Page 2
1.5.2.
Ancillary Service
The word ancillary in English language means subordinate, subsidiary or auxiliary. The Oxford English dictionary says that it means providing subsidiary support. Collins describes it as supporting the main work of an organization. As per Longman it means connected with or supporting something else, but less important than it. Etymologically the origin of the word can be traced back to the year 1667 from the Latin word ancillaris, which means relating to maidservants. Although the dictionary meaning of ancillary service is support or subsidiary service but the exact sense differs from industry to industry. In hospital industry ancillary services are those support services other than room, board, and medical and nursing services that are provided to hospital patients in the course of care. They include such services as laboratory, radiology, pharmacy, and physical therapy services. In tourism industry it includes services such as marketing, reservations, and co-ordination among tour agencies. In literature, following definitions of ancillary services are available pertinent to the electricity industry: Ancillary services are services procured by a system functionality (system operator or grid/network operator) from system users in order to be able to provide system services. Ancillary Services -Unbundling Electricity Products an Emerging Market, Eurelectric[3] Ancillary services are those functions performed to support the basic services of generation, transmission, energy supply and power delivery. Ancillary services are required for the reliable operation of the power system. Para 30, judgment in appeal no.202 dated 13th December 2006, The Appellate Tribunal for Electricity[4] Ancillary services are those functions performed by the equipment and people that generate, control, transmit, and distribute electricity to support the basic services of generating capacity, energy supply, and power delivery..Electric Power Ancillary Service, Eric Hirst and Brendan Kirby[5] necessary to support the transmission of electric power from seller to purchaser given the obligations of control areas and transmitting utilities within those control areas to maintain reliable operations of the interconnected transmission system.FERC Ancillary service is an interconnected operation service that is necessary to affect a transfer of electricity between purchasing and selling entities, and which a transmission provider must include in an open access transmission tariff..NERC Ancillary services are those services necessary to support the transmission of electric power from producer to purchaser......Methods and Tools for Costing Ancillary Services, CIGRE[6] Some users of the system, such as generators, contribute to these system services by acting on the frequency of the system or the voltage at the point where they are connected to the system. Because these services provided by users are ancillary to the production or Ancillary Services in Indian Context: An Approach paper Page 3
consumption of energy, they are called ancillary services (AS)... A Comprehensive Assessment of Markets for Frequency and Voltage Control, Yann Rebours[2] It is hence clear from the above quoted definitions that ancillary services are the value added services required to support the system services to facilitate reliable and efficient operation of the power system.
1.6.
Relevance of Ancillary Services
Electricity is one of a kind market. The arrangements for delivery of power are at the fulcrum of this market; as a result, the problems related to delivery of power have to be taken into account. No other product or market has these problems which are both technical and institutional and this is what makes this sector different from all other commodities and requires different arrangements than those which apply to the rest of the economy. The features that make it different are: electricity cannot be stored, flow of power takes place as per the laws of physics and not as per any commercial agreement, production of energy and production of other services are interdependent and it travels at the speed of light. The trading rules that deal with these four unique features are the four pillars of good electricity market design. These are imbalances, congestion management, ancillary services and scheduling and despatch [7]. Imbalances, congestion management and scheduling and despatch have already been implemented in the India. Introduction of ancillary services should thus be certainly the next step to ensure proper market design in place.
Figure 2: Four Pillars of Market Structure [7]
The Appellate Tribunal on Electricity in its judgment on appeal no.202 dated 13th December 2006 emphasizes on the importance of introduction of ancillary services in Indian Electricity market. Para no. 37 of the judgment says because hitherto the entire system, be it independent or interconnected were wholly owned and operated by State undertakings or central undertakings and probably with reciprocal arrangement. Further they were not anxious to provide quality service and outages remained till the very system rectified the outages and Ancillary Services in Indian Context: An Approach paper Page 4
outages were very common and usual. The scenario has now changed by unbundling and private participation and the necessity to provide ancillary services of stand-by for assured and uninterrupted supply and instantaneous management of outages have arisen. It is for the legislature to undertake suitable legislative measures at the earliest in the interest of emerging competitive market by introducing amendments.. In vertically integrated utilities the responsibility of generation, transmission and distribution is with one organization and hence these services are an integral part of electrical supply and not dealt with separately. However, since the liberalization of the electricity supply industry, the resources required to achieve this control have been treated as an ancillary service that the system operator has to obtain from other industry participants. This is essential because in a deregulated power system, the system operator often has no direct control over individual power stations and has to purchase these services from other service providers. In such a scenario, issues pertinent to the pricing and procurement of these services become extremely important for proper functioning of the system.
Ancillary Services in Indian Context: An Approach paper
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Chapter 2 Classification of Ancillary Services

The system operator is expected to ensure the required degree of quality and safety, undertake preventive measures to ward off contingencies and perform several other functions to maintain the integrity and reliability of the system. For realizing the same the operator must be able to control the frequency and voltage of the system within certain bounds, maintain the stability of the system, prevent overloads in the transmission system and restore the system or portions of it when and if required. Implicit in this list is the need for the system operator to maintain system integrity in the presence of events and contingencies. Ancillary services, as already mentioned are essential to ensure that the above mentioned responsibilities are properly met.
2.1.
Classification
Ancillary services are concerned with the despatch, trade and delivery of power. They are usually defined by the benefits they provide to the market participants and not by their method of provision. Different classifications of ancillary services as available in literature are listed below:
Table 1: Definitions of Ancillary Services
S.no 1
Source/ Author Power System Steven Stoft
Services Economics, 1) Real-power balancing (frequency stability) 2) Voltage Stability (for customers) 3) Transmission Security 4) Economic Despatch 5) Financial Trade Enforcement 6) Black Start 1) Reactive Power and Voltage Control 2) Loss Compensation 3) Scheduling and Despatch 4) Load Following 5) System Protection 6) Energy Imbalance 1) Scheduling and Despatch 2) Load-Following Reserve 3) Operating Reserve 4) Energy Imbalance 5) Real-Power Loss Replacement 6) Voltage Control
FERC
Eric Hirst and Brendan Kirby
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Yann G Rebours, Daniel S Kirschen, Marc Trotingnon and Sebastien Rossignol
1) Frequency Control Service 2) Voltage Control Service
CIGRE
1) Reactive Power 2) Frequency Control 3) Black Start 4) Reserve 5) Losses
S.K. Parida, S.N. Singh and S.C. Srivastava
1) Frequency Control Service 2) Network Control Service 3) Black Start Service
The different lists of ancillary services tabulated above differ mainly in how they split and combine the categories of services. Broadly all these services can be grouped under one of the three following major categories: Frequency Control Services Network Control Services System Restart Services
2.2.
Frequency Control Services
Frequency is a measure of the quantum of active power produced and the active power consumed, both of which must remain in a balance for making possible the operation of an AC system. An imbalance between these two results in deviation of frequency from the nominal value. The frequency is thus a useful indicator to be used for regulation of active power production to achieve balance.
Figure 3: Fundamental Behavior of a Power System [11]
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Frequency regulation is of great importance for system security. The frequency deviation should normally be within a specified acceptable range for secure power system operation and ensuring safe and reliable operation of the equipments connected. As the power consumption varies, the active power production must be regulated accordingly. Operation at different frequency levels is shown in the figure below:
Figure 4: Operation at Different Frequency Level [6]
Technical Features of Frequency Control Services Deployment times are the most important technical features for frequency related ancillary services. Deployment start is the maximum amount of time elapsed between the request from the system operator and the beginning of response by the service provider. Full availability is the maximum time that can elapse between the moment when the provider receives the request and the moment at which it delivers its full response. The maximum amount of time during which the service must be provided starting from the time of the request is called deployment end. 2.2.1. Levels of Frequency Control Three levels of Frequency Control are generally used to maintain the balance between generation and load i.e. a) Primary Frequency Control b) Secondary Frequency Control c) Tertiary Frequency Control Three levels differ as per their time of response to a fluctuation and the methodology adopted to realize the fundamental operating philosophy of maintaining reliability and overall economy. Figure 5 shows classification of frequency control services based on their deployment times. Ancillary Services in Indian Context: An Approach paper Page 8
Figure 5: UCTEs classification of frequency reserves
a. Primary Frequency Control Primary control is a local automatic control which adjusts the active power generation of generating units and consumption of controllable loads to check the deviation in frequency. In particular, it is designed to stabilize the frequency following large generation or load outages. It is thus indispensable for the stability of the power system. All the generators that are located in a synchronous zone and are fitted with a speed governor (having droop1 settings) perform this control automatically. The demand side also participates in this control through the self-regulating effect of frequency-sensitive loads such as induction motors or the action of frequency-sensitive relays that disconnect or connect some loads at given frequency thresholds. Procurement/Source of Primary Control Primary frequency reserves must be uniformly distributed across the network to reduce unplanned transits following a large disturbance. Uniform distribution also helps to maintain system stability in case of islanding. Hydro turbines/stations are eminently suited for both primary control (FGMO) and loadfollowing. The unit load in these machines can be varied rapidly and units can be brought in/taken out without causing any substantial stress or efficiency loss. Load-following may have to be limited in some cases from other water release considerations (irrigation, minimum flow, etc.). In case of canal-based hydro stations having no free-board, neither FGMO nor loadfollowing may be possible.
1
Governor Droop is defined as the percentage change in frequency for which a generator changes its output from full-load to no-load.
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Gas turbines stations are suitable for load-following because they can be brought in/taken out in a controlled manner but are not that suitable for primary control because they are to be operated at a fixed firing temperature (balancing between efficiency and life). Increasing the fuel injection to increase the MW would cause firing temperature to go above what can be continuously sustained. Decreasing the fuel injection to decrease the MW lowers the firing temperature, and rapid/frequent firing temperature changes cause thermal over-stressing. The efficiency also falls with lowering of firing temperature. In case of steam turbines, efficiency falls only marginally at part-load, because steam parameters can be maintained at rated levels. They can provide both primary control and loadfollowing. In the short time frame the active power from a steam turbine can be changed by the actions of valves which provide primary response. In the longer range (for load following) it is needed to change the primary input power, for example the flow of fuel. HVDC might also be used as a source of primary control if it is interconnecting two systems, more so in developed power systems where frequency is very tightly regulated and sufficient spinning reserves are available. b. Secondary Frequency Control Secondary frequency control is a centralized automatic control that adjusts the active power production of the generating units to restore the frequency and the interchanges with other systems to their target values following an imbalance. This is achieved by either changing the setpoint or reference point of generators, or by starting and stopping of power plants. Only the generating units located in the control area2 where the imbalance has occurred should participate in secondary control. [8] The goal of secondary frequency control is to minimize the area control error (ACE)3. After an unforeseen load power change, the primary frequency control will adjust generation to achieve active power balance. This will result in a frequency deviation due to the permanent droop of the primary frequency regulation in the power plants. However, this regulation will also result in a deviation of power transfer between control areas from the intended power transfer in the system. The automatic secondary frequency regulation will re-establish the intended power transfer. Secondary frequency control aims to bring the ACE to zero with the help of proportional integral (PI) controller and filters. Within the UCTE, secondary frequency control is also known as load frequency control (LFC) and in North America it is termed as automatic generation control (AGC).
A control area is an electrical system bounded by interconnections (tie lines), metering and telemetry which controls its generation and/or load to maintain its interchange schedule with other control areas whenever required to do so and contributes to frequency regulation of the synchronously operating system. 3 ACE is the instantaneous difference between net actual and scheduled interchange, taking into account the effects of frequency bias.
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c. Tertiary Frequency Control Tertiary frequency control refers to manual changes in the despatching and commitment of generating units. This control is used to restore the primary and secondary frequency control reserves, to manage congestions in the transmission network, and to bring the frequency and the interchanges back to their target value when the secondary control is unable to perform this last task. [8] A figure showing realization of the three levels of frequency control for a generating unit with the help of feedback control loops is show in Figure 6
Figure 6: Three Functional Frequency Control of a Generator [2]
2.2.2. Frequency Reserves Frequency reserves are required to maintain the integrity of the system in case of an imbalance between the active power consumption and generation. These situations may arise due to generation outages or load variations. The amount of reserves required depends on the probability of multiple generation outages and the volatility of load. For example if a system has more arc furnace load then the reserve requirement of the system would go up as an arc furnace load is highly volatile. However if a generator is prone to frequent outages the amount of reserves required would not change but the use of reserves would go up. Three types of frequency controls defined earlier in this chapter would need some reserves in form of spare generation capacity/ load management to respond to deviations in frequency.
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Reserve utilization for different types of frequency control in case of a typical generating unit is shown in figure below Frequency reserves can be split up into the following broad categories: Spinning Reserves/ Reliability Reserves This includes generating units which are capable of being fully available of responding nearly instantaneously. Some very fast acting units or controllable loads make up this category. These reserves are not capable of continuing at increased power output for long durations. They must therefore be eventually replaced by supplementary reserves. This might be provided by synchronized hydro units or Internal Combustion Engines.
Figure 7: Levels of control for a generating unit
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Supplementary Reserves Their response time need not be as quick as spinning reserves but they should be capable of operating at increased power output for longer durations. They often require manual intervention for activation. This reserve might be provided by generating units on hot standby also.
Backup reserves These are reserves that can stay in service for a considerable period after they are called upon (in the range of hours), but that are not expected to come on line for some time (typically, 30 minutes or more).
2.3.
Voltage Control Ancillary Services
System voltage is the other benchmark parameter for power quality. Voltage in power system is controlled by controlling the reactive power injection and drawl. Flows in the network create voltage increases and drops that are the result of interactions between flows and the inductance and capacitance of each line or transformer. 2.3.1. Need for Voltage Control
System voltage control is used to maintain the voltages at different nodes in the system within the specified limit and to compensate for the requirement of reactive power in the system. Because of high inductance of lines and transformers, reactive power does not travel well through the grid, so reactive power support must be provided much closer to reactive loads. Voltage Control is required due to the following reasons: Voltage supply to equipments must be within its design limits for safe operation and good performance. ii. Change in voltages changes the reactive power flow in the system which in turn has an effect on the system losses. iii. Voltages might also limit the transfer capability of the system. iv. Injection and absorption of reactive power is also required to maintain system stability, in particular to protect against contingencies that could lead to voltage collapse. Enough reactive-power capacity must be available to meet expected demands plus a reserve margin for contingencies. Thus, voltage control is analogous to reliability spinning reserve. Local voltage regulation is a customer service intended to meet customer reactive-power needs and to control each customers impact on system voltage and system losses so power-factor problems at one customer site do not affect power quality elsewhere on the system. i.
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2.3.2.
Levels of Voltage Control
The overall task of regulating the voltage can be organized into a three level hierarchy. 1. Primary voltage control is a local automatic control that maintains the voltage at a given bus (at the generating bus) at its set point. Automatic voltage regulator (AVR) fulfills this task. Other controllable devices, such as static voltage compensators (SVC), can also participate in this primary voltage control. 2. Secondary voltage control is a centralized automatic control that coordinates the actions of local regulators in order to manage the injection of reactive power within a regional power system. 3. Tertiary voltage control refers to the manual optimization of reactive power flows across the power system.
Figure 8: Three Functional Voltage Controls Considering a Generating Unit[2]
Voltage is controlled throughout the transmission system through the application and operation of ratio-changing devices (e.g., transformer taps and voltage regulators) and reactive powercontrol devices (e.g., capacitors, reactors, static-VAR compensators, generators, and occasionally synchronous condensers). The system operator must monitor and control these voltages and supply the reactive-power requirements of the grid. At low-load times, VAR absorption is required to keep voltages from getting too high; at high-load times, VAR production is required to keep voltages from getting too low. At certain locations, it may be more economical for the utility to purchase reactive support from a customer or generator than to supply the reactive support directly. The equipment used to provide or absorb VARs can be categorized as dynamic (referring primarily to generating units) or static (referring primarily to transmission-system equipment) depending on its ability to change VAR output or absorption quickly. Per VAR, dynamic equipment is much more expensive than static equipment. Ancillary Services in Indian Context: An Approach paper Page 14
2.3.3.
Cost of Voltage Control
The cost of supplying reactive power is primarily the capital cost of the equipment (e.g., generators and capacitors) needed to meet expected requirements plus a reserve. In addition, the operating cost of over or under excitation of generating units should be assigned to reactive support. The primary cost of voltage support provided by generators is for the losses in the rotor, stator, exciter, and step-up transformer. In some cases, there may also be an opportunity cost associated with the reduction in real-power production capability caused by production or absorption of VARs. In case of reactive power the actual cost of providing the service is likely to consist of mostly fixed cost and it is also generally lumped or discrete. The variable cost components are generally quite low.
2.4.
Black Start Capability
Black start is the ability in respect of a black start station, for at least one of its generating units to start-up from shutdown and to energize a part of the system and to be synchronized to the system under instructions without an external power supply .It can also be termed as a process to recover or reenergize a system from total or partial failure. For black start of an electrical power system we need to have generating units with black start capability. A black start unit is defined as a generating unit that is able to start without an outside electrical supply or the demonstrated ability of a base load unit to remain operating, at reduced levels, when automatically disconnected from the grid. A black start station has one or more black start units. Such generating units or stations form the black start reserve of a system which would be used to energize the power system in case of a blackout and to generate power for local needs if the power system is out of operation. All generating stations except a few small hydro stations need electrical supply to start up. Such stations must have some form of supply which could be used to operate the unit auxiliaries so that the turbo-generator set is prepared for operation. Generally for small diesel generators this supply is provided by batteries, for large diesel generators or gas engines it is done using pressurized air and diesel engines supply the start up supply for gas turbines[12]( startup supply requirement is typically 2% of the installed capacity for gas turbines and 1% for hydro stations). Such a generating unit may then be used to energize a sub-system or other generating stations in its proximity. For a unit to qualify as a black start unit it must satisfy the following performance criteria [13] i. A black start unit must have the capability of closing its circuit breaker to a dead bus upon request. ii. It must have the capability to maintain frequency under varying loads. iii. It must have the capability to maintain voltage under varying loads iv. It must be able to maintain its rated output for a given time (as decided by the system operator)
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Chapter 3 Proposed Ancillary Services in Indian Context

3.1. Background
Ancillary services are activities done for a common good, which benefit all the users and specific identification of beneficiary of these services is not possible. As a result, activities like enhancement of transfer capability should not be termed as ancillary services because the beneficiaries of these are already identified and charges on account of capital expenditure for installation of transmission elements must be paid by those who are benefited. Hence the scope of ancillary services is limited to operational expenditure only. Ancillary Services discussed in international literature are in the context of mature electricity systems of advanced countries which operate with adequate reserves, tight frequency control and effective primary, secondary and tertiary response. Therefore while applying these concepts in Indian context, the features of Indian power system that distinguishes it from other power systems have to be considered.
3.2.
3.2.1.
Prevalent Scenario in India

Frequency Profile
The permissible frequency band as per the Indian Electricity Grid Code (IEGC) is 49.5- 50.2 Hz. While the demand for electricity in India is growing by leaps and bounds, the absence of matching addition in the generation capacity coupled with the ever-increasing pressure to meet demand has resulted in operation beyond the permissible system frequency band. As a consequence of this, the frequency profile of the grid fluctuates widely. Frequency does invariably go out of the permissible band in spite of specifying upper and lower limits in the IEGC and facilitating a balancing market in the form of frequency linked UI mechanism. This clearly brings out the fact that the idea of having a tight frequency profile cannot be realized only with UI mechanism and by specifying a frequency band through regulations. Availability Based tariff (ABT) and regulatory initiatives alone are not sufficient as they involve manual intervention and the response time is much more when compared to the dynamically changing power system. A flat and tight frequency profile (as existent in developed countries) can thus only be there if these manually triggered controls are adequately complemented by automatic controls. However, from past experiences it is evident that giving a commercial signal in form of ABT helped in tightening of the frequency band and utilization of generation resources available with fence sitters which were earlier left untapped (under the previous settlement mechanism). Hence apart from regulatory interventions some commercial mechanisms also need to be in place to tap all the possible generating resources in the country and to have a better frequency profile. Ancillary Services in Indian Context: An Approach paper Page 16
3.2.2.
Voltage Profile
Extreme environmental condition varying from foggy cold winter to extremely hot summer and wide fluctuation in hydro-thermal generation mix reflects in the form of wide fluctuation in system voltage profile. Seasonal variation and agricultural loads causes extremes of voltage profiles in the network. Similarly voltage variations are also there in the system depending on the location of the node. During winter season, generations at most of the hydro stations are at their minimum level. This result into low voltage profile during early peak hours and high voltage during off peak hours because of lightly loaded long hydro stations connecting lines. On the other hand, during summer season large weather beating loads and agricultural loads for paddy crop results into extreme low voltage throughout the regional grid. Maintaining voltage profile within acceptable permissible limits requires meticulous reactive power management in the form of shunt reactor switching, shunt capacitor switching, transformer tap co-ordination, switching of transmission lines and running the generators in the synchronous condenser mode.
3.3.
3.3.1.
Ancillary Services Market: Present Position

Primary Frequency Response: Governor Action
The primary response activates generator governors to react to frequency deviation by opening or closing the turbine steam valve and alter the MW output as per the frequency deviation. As per the clause 5.2 (f) of the IEGC: All thermal generating units of 200 MW and above and all hydro units of 10 MW and above, which are synchronized with the grid, irrespective of their ownership, shall have their governors in operation at all the times .. The above clause mandates all the generators (except nuclear generators) to have their governors functional w.e.f 1st August 2010. However in the present scenario the governing function has been bypassed/ restricted in generators across the country. Absence of this feature results in sharp notches in the frequency of the grid. Trials of Free Governor Mode of Operation (FGMO) have been carried out in different regions but successful implementation of FGMO in all the generators throughout the country is still not there. Cost of equipments required for FGMO/RGMO is included in the total capital cost and is being recovered by the stations in their annual fixed charges. IEGC also emphasizes on the importance of FGMO/RGMO in maintaining grid reliability and reiterates that governors in generating units should become functional. Hence it is expected that in the time to come all generators will operate in FGMO/RGMO.
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3.3.2.
Secondary Frequency Response: AGC
Secondary frequency response refers to a centralized, automatic control which acts to bring back the frequency and interchanges across tie lines to their nominal value. In US and European countries this control is known as Automatic Generation Control (AGC) and Load Frequency Control (LFC) respectively. In India the philosophy of loose power pools is followed, in which there is a special treatment of deviations from the schedule. Secondary Frequency Control is thus absent in India by design. Similar philosophy is followed in Nordic countries and UK where automatic generation control is not exercised. 3.3.3. Tertiary Frequency Response
Tertiary Frequency Response refers to manual changes in load and generation on deviation of the grid frequency from its nominal value. Apart from manual load shedding, the Availability based tariff (ABT) mechanism in vogue today provides frequency linked incentives/penalties to beneficiaries/suppliers. All Inter State supply arrangements are implemented through dayahead despatch and drawl schedules as per IEGC. Real time deviations from the schedules (over-drawl, under-drawl, over-generation and under-generation) are financially settled through UI mechanism. The settlement rate is a function of the grid frequency in a given time block. Thus, at inter-state level, tertiary frequency control ancillary service has been provided to some extent through the balancing market (UI mechanism). 3.3.4. Voltage Control Service
As per the Indian Electricity Grid Code (IEGC) section 6.6.1: Reactive power compensation should ideally be provided locally, by generating reactive power as close to the reactive power consumption as possible. The Regional Entities except Generating Stations are therefore expected to provide local VAr compensation/generation such that they do not draw VArs from the EHV grid, particularly under low-voltage condition. To discourage VAr drawals by Regional Entities except Generating Stations, VAr exchanges with ISTS shall be priced as follows: The Regional Entity except Generating Stations pays for VAr drawal when voltage at the metering point is below 97% The Regional Entity except Generating Stations gets paid for VAr return when voltage is below 97% The Regional Entity except Generating Stations gets paid for VAr drawal when voltage is above103% The Regional Entity except Generating Stations pays for VAr return when voltage is above 103%
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The present rate of reactive power exchange in our country is 10 paise/kVArh and it escalates at a rate of 0.5 paise/kVArh/year. The reactive power requirement must be met locally, however it is clear from the above clause that it is not mandatory and the utilities are allowed to draw reactive power from the grid too. In addition, the reactive power exchange prices mentioned above are not applicable to ISGS and they are mandated to produce/absorb reactive power within their capability curve. 3.3.5. System Restart Ancillary Service
In the current Indian scenario there is no scheme for compensation to the suppliers of black start service. Certain identified units are often asked to provide the black start service in case of islanding of a sub- system and for mock exercises (e.g Bhakra and Tehri Hydro stations in Northern Region). But these units are not reimbursed for the cost they incur while providing this service. A proper compensation mechanism should be in place so that the black start service can be voluntarily procured from generating units.
Table 2: Summary of Present Position w.r.t other international ancillary services market [20#] Svenska Kraftnat# Not Recognized Bilateral Contracts Balance Service
Service Scheduling and Despatch Primary Response Secondary Response Tertiary Response
NGC# Recognized and provided
NEMMCO# Not Recognized
NYISO# Recognized and provided
India System Operator is mandated as per IEGC Mandated as per IEGC Absent by Design Only manual load shedding is done Mandatory for ISGS. Commercial mechanism for states Limited reserves available. Not treated as a service
Frequency Response
Provided through balance service Recognized and provided through Grid Code
Recognized and compensated Recognized and paid to generators and synchronous compensators Recognized and compensated Recognized and compensated
Recognized and price based on market Recognized and paid to generators only Recognized and compensated Recognized and compensated
Voltage Control
Operating Reserve Black Start Capability Service
Provided
No payment scheme Within purview of balance service Provided through bilateral contract
Mandatory as per IEGC
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3.4.
Proposed Ancillary Services in Indian Electricity Markets
The earlier section clearly brought out the fact that presently in India almost all the activities which can be classified as an ancillary service are mandated by regulatory initiatives. Making a service obligatory without any commercial consequences might not always be able to yield tangible deliverables. The providers and users of these services would not be prompted for the same unless a proper commercial mechanism is in place for it. This paper in the coming sections proposes a set of ancillary services as well the costing methodologies which could be used for procurement of these services. Ancillary services can be classified in numerous ways and many methods can be suggested for procurement and remuneration of these services. However considering the present condition and maturity of the Indian Electricity Market, it is prudent to avoid complex definition of these services and refrain from mechanisms which are complicated and difficult to implement. Under the present scenario, ancillary services can be broadly classified into three major categories: (i) (ii) Load Generation Balancing Service (LGBS) Network Control Ancillary Services (NCAS) a) Power Flow Control Ancillary Services (PFCAS) b) Voltage Control Ancillary Services (VCAS) (iii) System Restart Ancillary Services (SRAS)
3.5.
Load Generation Balancing Service (LGBS)
The requirement for this service arises from mis-matches between supply and demand. In India although a commercial signal in form of Unscheduled Interchange (UI) is present, the frequency does deviate beyond its permissible band. This is because of the fact that UI also requires manual intervention which makes its response time slower and it also does not settle the adequacy issue. The power system in India will be even more reliable by attracting more generation, both by getting existing idle generation to operate at opportune times and by increasing the investment in the new generation capacity. As ancillary services, the attention is focused on getting idle generation to operate at opportune times. The various options that might be harnessed under LGBS are: 3.5.1. Un-despatched Surplus
There are a number of gas based combined cycle Inter-state generating stations, which are facing almost perennial fuel (gas) shortage. These power stations can be operated with alternate fuel like HSD, RLNG, Naphtha etc., however cost of operation with these fuels is much higher than that with gas. As per provisions of IEGC, these power stations declare capacity for units and modules on APM gas, RLNG and liquid fuel separately and these are scheduled separately based on different fuels. Due to the high cost of liquid fuel in prevalent market condition, and absence of proper commercial signal, available liquid fuel capacity is not being fully requisitioned by beneficiaries. In spite of scarcity of electricity the distribution utilities of States are not fully harnessing intra-state and inter-state sources of costly generation based on Ancillary Services in Indian Context: An Approach paper Page 20
liquid fuels (diesel, naphtha, HFO etc.). Part of this un-despatched surplus power is sold by the concerned generating stations to other utilities through STOA. However available undespatched capacity and need of load serving entities / buyers is fragmented and, it is at times difficult to utilize through STOA. As a result, part of high cost generating capacity remains unutilized. One of the options available to the generating stations is to sell power through UI to utilize the idle capacity and generate power. This may be feasible if UI rate normally remains higher than variable cost of generation of liquid fuel based capacity. The generating stations avoid taking the risk of UI rate variation (due to frequency variation). Moreover the generating stations would like to avoid frequent start-stop with change in system frequency hence some other methodology of compensating and incentivizing such generators must be devised to harness this un-despatched surplus. As per Regulation 11(1)b of UI Regulations, the surplus funds available in UI pool may be utilized for providing ancillary services including but not limited to load generation balancing during low grid frequency as identified by the Regional Load Despatch Centre, in accordance with the procedure prepared by it, to ensure grid security and safety. 3.5.2. Peaking Gas Stations
In future this mechanism would also facilitate peaking power stations to come up. These stations would be despatched by the system operator to meet the peaking shortage. The monetary recovery and incentive of these stations would be taken care of by this mechanism. Commercial Settlement A scheme can be evolved in which the system operator (SLDC/RLDC) would ask all the sellers who want their surplus power to be scheduled to pool to submit their respective bids. This can be facilitated in Power Exchange platform. At 6 pm after clearance of all the bids and preparation of day ahead schedules at RLDCs, the generators who are interested in providing LGBS can participate. Such generators can bid in any of the Power Exchanges and would have to declare their bid area and bid price. These bids shall then be stacked together as per the respective bid price and would get despatched depending on the system conditions, merit order and deficit in real time as anticipated by the system operator. Prior to despatching a consent from seller would be taken and the generator would be scheduled accordingly within 6 blocks only if he has not already been scheduled in the short term market. A uniform pricing settlement mechanism might be followed in which the price of highest activated bid price becomes the uniform price for all the activated bids. This will mean that all the activated bids will be dispatched at a single uniform price. This method has a distinct advantage over pay-as-bid price system as the probability of participants gaining through price manipulation and gaming would be lesser. Subsequently a detailed procedure for deciding quantum of dispatch and maximum rate of procurement can be developed. Ancillary Services in Indian Context: An Approach paper Page 21
Modifications in the schedule on account of dispatch of generators under LGBS can directly be communicated by the power exchange to concerned SLDC as well as RLDC/NLDC. Payment to all the dispatched sellers can be made directly through the power exchanges. Power exchanges which act as the facilitating agency under this provision can also be paid as per the rates existing for energy trading in collective transactions (1 paisa/unit at present). 3.5.3. Pumped Storage Plants
Hydro power stations with pumping facility can be used to meet the peaking shortage and utilize surplus availability during off peak periods. During off peak periods the system operator might ask such hydro stations to pump some water upstream which would be later used to generate peaking power. A number of pumped storage stations are expected to come in the near future to meet the peaking shortage. This mechanism might be used for the commercial settlement of such plants. Suppose a station is asked to pump water by the system operator during off-peak period and consumes 1 MU of energy from the grid during the operation. Assuming a UI rate of Rs 4/kWh, the plant would have to pay a UI charge of Rs 40 lacs. Considering an overall efficiency of 70% the excess energy on account of pumping that the station can generate would be limited to 0.7 MU. Assuming a rate of Rs 5/kWh during peak, the plant would receive Rs 35 lacs from UI. As can be seen in this case the station incurs a net loss of Rs 5 lacs. The station would be reimbursed the same amount, along with some nominal incentive as decided by the Commission. Benefits of the Proposed Mechanisms The mechanisms proposed are meant to utilize large amount of stranded capacity to schedule/inject power into the grid. It will ensure maximization of generation at optimal cost for grid participants. National Electricity Policy talks about creation of spinning reserves of at least 5% by 2012, which can also be compensated using this mechanism. The advantages are: - Resources optimization - Reducing peaking shortage - Providing a very powerful signal for investment in generation and harnessing of diverse sources of power such as co-generation, captive, wind power etc. It should however not be expected that the frequency profile would become flat and would remain within the permissible band on tapping the idle generation through LGBS. This is because it does not address the adequacy issue prevalent in the system. Adding to that it is also not an automatic control which can arrest sharp notches in the frequency profile.
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3.6.
Network Control Ancillary Services (NCAS)
NCAS are primarily used to control voltages at different points of the network and control the power flow on network elements within the prescribed limits. It is further subdivided into3.6.1. Power Flow Control Ancillary Services (PFCAS)
Power Flow Control ancillary services are used to control the flow on inter-connectors within their limits. Overloading of lines connecting one control area to another can be reduced by Shedding load or increasing generation in the exporting area Generation backing down in the exporting area In the present context, manual load shedding is usually done to relieve congestion in the interconnecting tie lines. In addition to manual load shedding, the option of backing down generators in the exporting area and compensating them in case they incur any financial loss as a result of this backing down operation to relieve congestion can also be introduced under the head of ancillary service. Inadequacy of generating resources in the country limits the alternative of increasing generation in the drawee area to relieve congestion. The option of utilizing untapped generation available is already being explored under Load Generation Balancing Service (LGBS). If there is congestion in the system then the generators in the drawee area would be asked to increase their generation under the head of Power Flow Control Ancillary Service (PFCAS). However if congestion in the network cannot be relieved despite utilizing PFCAS, congestion charge can be applied as per CERCs (Measures to Relieve Congestion in Real-time Operation) Regulation, 2009. Commercial Settlement The commercial settlement for PFCAS would be similar to LGBS with the exception that in LGBS merit order of the generators would be the only criteria for invocation of the service; whereas for PFCAS along with the merit order, location of injecting point would decide whether the service of a generator is availed or not. A situation might occur in which the generators with lesser variable costs would be skipped and the services of higher variable cost generators would be availed, if the condition is such that the lower cost generators are congesting and the higher cost generators are decongesting the network path. As per Chapter 6, clause 6.4.12 of the IEGC However, notwithstanding the above, the RLDC may direct the SLDCs/ISGS/other regional entities to increase/decrease their drawal/generation in case of contingencies e.g. overloading of lines/transformers, abnormal voltages, threat to system security. Such directions shall immediately be acted upon. In case the situation does not call for very urgent action, and RLDC has some time for analysis, it shall be checked whether the situation has arisen due to deviations from schedules, or due to any power flows pursuant to short-term open access. These shall be got terminated first, before an action, which would affect the scheduled supplies from ISGS to the long term customers is initiated. Ancillary Services in Indian Context: An Approach paper Page 23
The mechanism proposed under PFCAS talks about commercial mechanisms to control overloading when the system security is under threat. This does not however dilute above stated clause 6.4.12 of the IEGC which clearly gives system operator the power to reschedule in interest of the power system. Attaching a commercial consequence to the mechanism would only ensure promptness in response by the constituents and would enhance security of the system. 3.6.2. Voltage Control Ancillary Service (VCAS)
The alternative which can be currently exercised for obtaining VCAS is operation of a synchronous machine as synchronous condenser. Many of the hydro units have the capability to operate as synchronous condensers. During condenser mode of operation the real power production of the unit is nil and the unit is required to provide reactive power support (mostly absorb reactive power). Such situations are usually encountered in winter off-peak periods when the water level in the dams is low and active power generation by the unit is not possible. Generating units with this capability are mostly reluctant to operate in synchronous condenser mode because the tariff received by them is only dependant on their real power output. In addition to this they also have to bear the cost of running their generators by drawing the energy from the grid to meet the friction and windage losses. Based on discussions with hydro power stations typical values of these friction and windage losses are known to be of the order of 1.7 MW/machine for a 120 MW machine. In addition to this, some auxiliary consumption in the form of power drawn by the air compressors etc has also to be borne by the generator. In Northern Region, the cost of energy drawn is compensated by making the post facto schedule of the plant as equal to the zero, but there is no real incentive available to generators for performing such an operation. It is therefore proposed there should be provision for sufficient compensation amount and incentives so that generating units voluntarily make themselves available for synchronous condenser operation. Commercial Settlement IEGC specifies a rate of 10 paisa/kVArh for reactive power exchange. However a source like synchronous condenser has many distinct advantages over a static VAr compensator. The reactive power supplied by a synchronous condenser is dynamic, voltage independent, increases the fault level and also enhances the stability. Thus it is proposed that a generator who is operating as synchronous condenser will be reimbursed at a rate approved by the Commission say 25 paisa/kVArh.The compensation rate might further be refined and made variable by making it dependant on the voltage profile of the area. System operator would advise a generating station to run one or more units in synchronous condenser mode. Remuneration to the generator would be based on number of hours of operation and reactive power generated / absorbed. In addition to this, the losses incurred by generator on account of friction and windage losses and copper losses in generating transformer during synchronous mode operation will be made zero by socializing the same as pooled losses. Ancillary Services in Indian Context: An Approach paper Page 24
In future old gas and thermal power stations might also provide voltage control ancillary services by operating in synchronous mode. Moreover as the market for ancillary services grows, entities might also be interested in providing VAR support using mobile reactive installations. Enabling mechanisms to harness this potential might also be proposed in times to come.
3.7.
System Restart Ancillary Service (SRAS)
System restart ancillary services (SRAS) are reserved for contingency situations like partial / total grid disturbances wherein the electrical system must be restarted in line with the regional black start procedure. Black start is a vital but inexpensive service. Its costs are primarily the capital cost of the equipment used to start the unit, the cost of the operators, the routine maintenance and testing of equipment and the cost of fuel when the service is required. The fixed costs associated with these units should not be included in this list because this is recovered from the beneficiaries in the generation tariff. However for all the other costs mentioned above, the service provider should be adequately compensated and reimbursed. Commercial Settlement As per clause 5.8(b) of the IEGC, mock exercises for black start must be conducted twice a year by the identified units on demand by the system operator. The generators should be incentivized for performing each successful mock exercise. Appropriate nominal incentive amount might be decided by the Commission which would be paid to the generator for successfully displaying black start capability in the mock exercise. If black start is treated as an Ancillary service it would help in utilizing the capacity of even the fence-sitters mainly gas turbines, diesel generators who can provide the service with incremental investment.
3.8.
Ancillary Services Fund
Billing and settlement of ancillary services should be done through a separate account and it must not be clubbed into the fees and charges of the system operator. In some countries the system operator gets in advance the amount likely to be spent for procurement of these services and the actual expense incurred is added to the expenditure of system. However in the present scenario accounting and settlement of these services should be done under a separate head and not included in the fees and charges of the system operator. An Ancillary Services Fund account might be opened and all the payment liabilities for procurement of ancillary services would be funded from the Power System development Fund (PSDF) via the Ancillary Services Fund. Based on estimate and subsequent experience gained, some amount would be transferred from PSDF to Ancillary Services Fund on a yearly basis after approval of the Commission. This amount would then be used for procuring ancillary services and this fund account would be maintained by the system operator.
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Chapter 4 Future Scope

Apart from the already proposed ancillary service which could be easily implemented within the present market framework, it is possible to implement gradually other ancillary services which are already being availed worldwide, after examining the response of the market towards provision of ancillary service. System Operator is expected to ensure availability of enough ancillary service for safe and reliable operation of the vast network in India.
4.1.
Primary Frequency Control
Indian Power market is a deficit market and implementation of spinning reserve as an ancillary service which in turn may reduce the availability of generation may not always be very feasible. Commission has recently released a regulation on Medium Term Open Access and Long Term Access where large consumers having more than 100 MW capacity is eligible to get connected to the ISTS. It is possible that an aggregator can design and group its load accordingly to provide emergency reserve through disconnection of total or partial demand as per requirement in case enough commercial signal is given through provision of such ancillary service. All such bulk load providers may be attracted to self declare such service with properly implemented metering. The willing customer should arrange proper telemetry and metering so that the same could be measured to ensure compliance and paid accordingly. The payment may be made to such provider in two parts one fixed part which shall be applicable for the period when such service is made available and may be reimbursed in Rs. / MW / month. Such service should be available at least for a full month to enable payment against fixed part. The price may be determined by the Commission based on the fixed cost of the contemporary generator. The operational philosophy such as testing of availability of such demand may be decided by system operator. The variable part may be paid as and when the service is called for and may be reimbursed in Rs. / kWh.
4.2.
Spinning Reserves
These reserves are available nearly instantaneously, and are able to stabilize system frequency upon the outage of a large generating unit in the system. Their time of response is from a few seconds to about 5 minutes or less and requires no notification. Some very fast starting units (hydro in some cases) and some types of demand management programs (no-notice interruptible load programs) can also serve the function of spinning reserve. It is not necessary for spinning reserves to be able to deliver power for long periods. That is, the energy requirements for spinning reserves are not necessarily large, since spinning reserves are eventually displaced by supplemental reserves. System Operator can contract spinning reserve
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(hydro units kept spinning) from private hydro units and despatch the same when frequency falls (actuated by UF or df/dt signal) at UI prices.
4.3.
i.
Reactive Ancillary Market

Long term Reactive Procurement
The long term Ancillary market is proposed to promote participation by generators (other than ISGS). The market would be bid based and has to be finalized in advance. No zonal method is proposed for this market. The challenge is to allocate the fixed costs of the plant specifically used to procure reactive power. Order 888 of FERC (opinion 440) AEP method is suggested for separating the capital costs sunk for producing reactive power. ARR (Reactive) = ARR total x Mvar2/Mva2 There would be no compensation for the generator between 0.95 lead and lag. Bid zones would be identified in advance and sealed bids could be invited with tentative reactive demand (zonewise) being estimated by the system operator. A Power Exchange like one run algorithm for each zone could be used for deciding the prices. Stiff penalties for non generation of contracted reactive power/gaming (participating generators gaining under advantage due to non-participating generators subdued reactive output) would need to be factored in to make the market meaningful. Nonparticipating generators are also to generate reactive power as mandated by IEGC to prevent perverse incentives. The Regulator could as an alternative decide the ARR (Reactive) and its recovery through tariff as a separate component. The generator would have to be closely monitored by the system operator. All participating generators may have to demonstrate their capability for reactive generation. Optimizing of GT taps would be done by generator & system operator and all generators with capacity more than 50MW can participate in this service. ii. Real time Reactive market This market would be operated by the system operator in real time. The Region could be demarcated into zones keeping in mind that the voltage profile in a zone is coherent. The voltage at a designated EHV bus in the zone would determine the price of reactive power in the zone as per the graph shown below:
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Figure 9: Proposed curve for pricing of Reactive Power v/s Voltage
Different slopes for both quadrants for consumers and generators of Reactive power could be adopted to have a non-zero sum approach and would help in ensuring a non ve pool. The UI price curve like methodology would: Discourage VAr drawls at low voltage & VAr supply at high voltage and help to keep voltages at narrow band. Incentivize optimal reactive power purchase. Encourage new sources.
iii. Dynamic VArs Dynamic VArs are valuable for the grid as they provide support independent of the voltage level. D-VArs cannot be priced the same as VArs from static sources due to the above reason. DVArs are to be procured by the system operator on case to case basis depending on the requirement for such a service in a location. D-VArs could be requisitioned for Voltage stability problems especially in metros & stability challenged areas. The payment could be made at a % over the zonal market price prevailing in real time. Enhance transfer capability especially in areas where further ROW is unavailable and transmission lines are fully loaded. Remuneration could be linked to the transmission charges for the capacity that is enhanced due to the D-Vars. If the transmission capacity Page 28
of a line from Bus A to Bus B is constrained due to voltage stability limits (TTC/ATC would have be declared accordingly) and D-VArs are provided to enhance the stability thus causing say a 10% increase in the capacity, then the D-VArs are to be paid for on the basis of transmission charges for the line pro-rata for the enhanced capacity. This would provide an incentive for providers of D-VArs to enter the market. D-VArs supplied could be in the form of mobile installations (as in NGC, UK). The transmission charge linkage is for pricing only and will not affect the transmission capital cost recovery of the line in any way.
4.4.
Metering Requirements
Successful implementation of all the ancillary services would be dependent on whether the service provided can be judiciously measured by the existing metering infrastructure. The existing meters in our country have a least count of 0.02 Hz for frequency measurement. However with the tightening of frequency band in the country as per the orders of the Commission, the step change in the UI linked prices would be of larger magnitude. Hence the sensitivity or the least count of these meters should be reduced from 0.02 to 0.01 Hz. Similar problem exists with reactive power measurement. As per the current structure the net reactive power drawl or injection of a node below 97% and above 103 % is available for an entire day. But for introduction of voltage control market structure the meters should be able to read all the values of reactive power drawl and injection and voltage for each time block so that the prices could be paid accordingly.
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Chapter 5 Conclusion
This paper tries to suggest certain ancillary services which can be implemented considering present condition of Indian electricity market. The scope of the suggested services has been kept to operational expenditure only and does not take into account capital expenditure. In a nutshell, the recommendations made in the paper talk about: Use of idle generation in the form of un-despatched surplus and utilization of peaking gas stations and pumped hydro stations for providing load generation balancing service as well as Power Flow Control Ancillary Service (PFCAS), tapping in the generation potential available with fence sitters and improvement in frequency profile. Use of hydro stations as synchronous condenser for providing reactive power support Introduction of black start as an ancillary service for hydro, gas and combined cycle stations which have black start capability
The commercial mechanism proposed for these services only talks about reimbursement to the service provider and recovery from users of the service has not been suggested. Although for a sustainable market design we must have both payable and receivable components, but the structure of commercial mechanisms in the paper has been proposed keeping in mind the present state of Indian electricity sector. More refined commercial mechanisms where a user will have to pay for the ancillary services it uses, might be proposed at a later stage as the market for ancillary services develops further in our country. One of the foremost requirements for successful implementation of these services is to ensure that adequate monitoring mechanisms are in place. The monitoring and feedback system would also additionally help in preparing future roadmap for introduction of newer ancillary services as maturity in the market increases. Further a similar arrangement for ancillary services should be replicated by states also so that maximum benefits could be availed in the interest of Indian power system as well as Indian electricity market. The awareness and understanding of the concepts associated with ancillary services is still in a nascent stage in India. Learning from worldwide experience in respect of developing the ancillary service market and designing it such that it complements reliability of the power system is a continuous process. An attempt has been made through this document to initiate a focused discussion in this area. It is important that this subject is taken up further and the next practices identified and implemented to have the fourth pillar of market design ready in our country.
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Annexure I: International Practices

The existence, definition, and pricing of ancillary services is a function of the underlying industry structure. The technical definition of ancillary services and the rules governing their trading vary considerably throughout the world. This is because of the fact that the liberalization process in electricity industry has proceeded independently in different parts and the structure of the underlying power systems is different throughout the world. The classification and definition of various ancillary services differ across systems and markets. There are many lists of ancillary services which differ mainly in how they split and combine the categories of service. The subsequent section describes ancillary services management practices in various countries across the world.
1. The United States

According to NERC Operating Policy 10 the ancillary services required for safe and secure delivery of power to the customer are: Maintaining Generation and Load Balance Regulation Service It is the minute to minute adaptation of a generator output to arrest the deviation in frequency. This is realized by the use of governor droop characteristic or automatic control signal from the control area to correct the Area Control Error. Load Following It is associated with ramping up or down of the generating units to meet the imbalance between load and generation. This may be automatic or manual and track a long term variation of the load. These units are chosen because they respond to controls and will fit into optimal despatch when loaded.
Figure 10: Load curve showing regulation load following
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Contingency Reserve These are required at the time of contingency and are further classified into spinning reserve and supplemental reserve services. These are further classified into spinning reserve service and supplemental reserve service. Transmission System security Reactive Power Supply Voltage control is done by load power factor correction, reactive power compensation through static sources and reactive power support from generators NERCs proposed standards on interconnected operation services have defined that reactive power from generating sources only qualify as ancillary services and get financial compensation from ISO. Frequency Response It is the immediate governor response resulting from a change in interconnection frequency due to any disturbance. Emergency Preparedness System Black Start Capability NERC makes it a responsibility of the system operator to arrange, provide for and deploy system black start capability as and when required to energize the transmission system following a blackout by defining it as an ancillary service.
Figure 11: Break up cost incurred in providing Ancillary Services in US [20]
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2. Great Britain
National Grid Company (NGC) being the ISO in UK is responsible for making arrangements with regards to ancillary services. NGC contracts for ancillary services to enable voltage and frequency control standards to be maintained and also for black start capability. These services can be supplied by Generators, Regional Electricity Companies (RECs), large customers or External Pool Members. The payment of these services is made through the pool as enabled by the Pool and Settlement Agreement (P&SA) between the pool members and parties that govern the operation of the pool. The Grid Code details the technical operational requirements of NGC and defines two major ancillary services as follows: System Ancillary Services All centrally despatched generating plant must be able to provide these services as they are fundamental to the operation of grid. They are listed in the grid code in two parts: Part 1: Those services which all generators are obliged to provide. These are a) Reactive Energy : other than those supplied by synchronous or static voltage compensators b) Operating Margin : capability of a generating unit to provide additional output at short notice Part 2: Those services that need not be provided at every site and are purchased by NGC from specific sites through agreements. It includes a) Operating Margin : capability of GTs or PSPPs to fast start b) Black Start Commercial Ancillary services An entity is not obliged to provide them and hence they are subjected to commercial agreement. These services include Reactive Energy : Supplied by synchronous or static voltage compensators Operating Margin : Provided by PSPPs, Load reduction, Hot Standby etc Ancillary Service Agreements made between NGC and supplier of ancillary services covers the provisions of all services. It specifies the services to be provided from each site and the price to be paid for each service. The details of generator prices remain strictly confidential under the terms of the agreement.
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3. Australia
National Electricity Market Management Company (NEMMCO) is the system operator in Australia and is responsible procurement of various ancillary services in the country under the National Electricity Code (the Code). The Code provides for NEMMCO to purchase these services from market participants, by means of either: Market Ancillary Services Arrangements Ancillary Service Agreements All NEM Ancillary Services can be grouped under one of the following three major categories [11]: Frequency Control Ancillary Services (FCAS) It comprises of Automatic Generation Control, Governor Control, Rapid generator unit loading and load shedding Network Control Ancillary Services(NCAS) NCAS are primarily used to control the voltage at different points of the electrical network and control the power flow on network elements. System Restart Ancillary Services (SRAC) These are required to enable the system to be restarted following a complete or partial system blackout. The payment mechanism in Australian market depends on the type of service provided and a service might call for one or more of the following payment components [16]: Availability Payment It is made to those services that require the providers preparedness for providing the service when called for. It is made to system restart services and reactive power services Enabling Payment It is made if the service has been enabled by the system operator for use. This applies to all the ancillary services except system restart and reactive power from generators. Usage Payment It is based on the actual usage charges and applies to rapid loading and unloading services provided by generators. Compensation Payment It is paid in lieu of providers opportunity cost4. It is applicable to all categories of service except the reactive power support service from synchronous compensators and system restart services.
Opportunity cost is the loss in profit if the output is reduced
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Figure 12: Ancillary Service Cost in NEMMCO in 1998-99 [20]
4. Nordel5 System The nominal frequency in the Nordic system is 50 Hz and it is stipulated that fluctuations during normal system operation should not exceed 0.1 Hz. Unlike other systems each country in the Nordel system is responsible for a part of the reserve margin and gain in relation to the annual energy consumption of the system. The capacity margin required for primary frequency control is provided principally by hydro units. The various operator actions that are initiated when frequency in the Nordel system deviates from its nominal values are shown in the figure below.
Figure 13: Frequency range and operator action in Nordel System [20]
organization of the electricity transmission companies that operate the wide area synchronous grid of the Nordic countries of Finland , Sweden , Norway and Eastern Denmark.
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5. Summary Worldwide ancillary services are being recognized and compensated under different names. Although the basic purpose of these services is more or less the same but the difference in nomenclature and compensation methodology is there because of the inherent difference in their market structures. Following is a comparative table showing various ancillary services under implementation in European markets:
Table 3: Services Considered as Ancillary Service (Y=Yes) [3] Austria Frequency Control Voltage Control Spinning Reserve Standing reserve Black Start Capability AGC Grid Loss Compensation Emergency Control Actions Belgium Denmark Finland France Germany Hungary Ireland Norway Spain Sweden UK
Y Y Y
Y Y Y
Y Y Y Y
Y Y Y Y Y Y
Y Y Y Y Y Y Y Y
Y Y Y Y Y Y Y Y
Y Y Y Y Y Y Y Y Y Y
Y Y Y Y
Y Y Y
Y Y Y Y Y
Y Y
Y Y
Y Y Y Y
Y Y
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Annexure II: Pricing Methodologies

In its Notice of Proposed Rulemaking, the Federal Energy Regulatory Commission (FERC 1999) wrote The Commission believes that, whenever it is economically feasible, it is important for the RTO [Regional Transmission Organization] to provide accurate price signals that reflect the costs of supplying ancillary services to particular customers. Earlier, FERC (1996) wrote in its Order 888 Because customers that take similar amounts of transmission service may require different amounts of some ancillary services, bundling these services with basic transmission service would result in some customers having to take and pay for more or less of an ancillary service than they use. For these reasons, the Commission concludes that the six required ancillary services should not be bundled with transmission service. [14] The manners in which ancillary services can be procured by the operator are [6]: a. By ownership of the equipment necessary to provide the service. This is the practical means of providing the services in many cases, such as for example the ownership of shunt capacitors and other reactive power equipment. b. By contracting with ancillary service providers for long-term provision of these services under specific terms and conditions. c. By creating a market for the supply of services, where parties interested in providing the services bid for the right to provide the service. The bidders often (but not always) will be the same parties that are engaged in the provision of the primary energy services. In competitive electricity markets, the costs for each ancillary service should be charged to those that cause the costs to be incurred and collected in a way that reflects the factors that contribute to these costs. As an example of the first point, operating reserves are required to protect bulk-power systems from potential adverse effects associated with major generator or transmission forced outages. Therefore, in the first instance, the costs of operating reserves should be assigned to generators, and should reflect the frequency and severity of forced outages. Although these costs are ultimately paid by retail electricity consumers, charging them to generators encourages generation owners to maintain equipment to reduce the frequency of forced outages. As an example of the second point, the amount of generating capacity assigned to the regulation service is a function of the short-term volatility of system load. Therefore, the charges for regulation should be related to the volatility of each load, not to its average demand. [14] i. Procurement Methods for Ancillary Services Generally a system operator is responsible for the procurement of all ancillary services. These services can be procured through four procurement methods: compulsory provision, bilateral contracts, tendering and spot market. Table shows a comparison between these methods:
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Compulsory Provision Operating Principle A certain class of network users are required as part of their connecting conditions to provide a certain amount of given ancillary service on request by system operator. Fairness, because all users belonging to a certain class provide the same absolute or relative amount of service. Simplification Demerits Volume of services provided might exceed the requirement. Cost minimization might not be there because low cost providers are treated on the same basis as more expensive ones.
Bilateral
Tendering
Spot Market
System Operator procures the ancillary services using bilateral contracts
A tendering process is developed which involves less standardized products or products with longer duration
A spot market is developed where standardized products with short duration are exchanged.
Merits
Only the amount of ancillary services required are procured Cost minimization by procurement from cheaper providers Bilateral contracts lack transparency. They are long, complex and costly Price and Volume are often fixed for a long time
Enhance Transparency Promotes Competition
Enhance Transparency Promotes Competition
High data management cost Might facilitate the exercise of market power by some participants
High data management cost Might facilitate the exercise of market power by some participants
ii. Remuneration Methods

The remuneration of ancillary services can be done as per its regulated price (RP), a pay as bid price (PBP) or a common clearing price (CCP). If the remuneration is done as per regulated price, the price is set by the regulator and is usually the same for all providers. This form of remuneration is particularly justified when market power is an issue. In general, however, a regulated price is not desirable as it reflects very imperfectly the actual cost of providing an ancillary service, particularly when this cost changes with time or circumstances. In a pay as bid system, the supplier receives the price of its accepted offer. This type of remuneration method is suitable when the quality of the ancillary services offered is highly Ancillary Services in Indian Context: An Approach paper Page 38
differentiated and those offers are thus not easily comparable. However, a pay as bid price does not give providers an incentive to bid their marginal cost, except when market concentration is low [9]. In a common clearing price system, all the successful providers are paid the price of the most expensive accepted or the least expensive rejected offer. This form of pricing gives real incentives to suppliers to offer their marginal cost. But in this system all the offers have to be comparable as it is not adapted to differential products. Primary control is usually provided by compulsory provision as it would lead to a uniform distribution of primary control throughout the system. Zonal prices might be preferred for these services as frequency of a network is not geographically dependant. Basic voltage control service is usually compulsory and no spot markets are in place for voltage control because these services are very local and susceptible to the exercise of market power. Being a localized phenomenon, nodal prices might be favored for voltage control services. [9]
iii. Cost Allocation among service users[6]

Ancillary Services have usually low marginal costs; hence it might happen that if the market prices these services at marginal cost it might not result in sufficient compensation to the service providers. The reliability of the system is compromised in such a case and it becomes necessary to split the payments for the service into market component and a cost allocation component .Cost allocation based on marginal cost is most desirable in order to promote economic efficiency in resource utilization because it is compatible with a competitive economic environment [6]. Any cost allocation method must ensure fairness and revenue adequacy. The allocation methodologies which might be used are: Marginal cost allocation
Charging the users in proportion to their marginal cost induces economic efficiency. The cost allocated to each user is proportional to the marginal use of the service by the user. This method is simple to implement but in some cases this method might lead to over-recovery if the nature of the service cost function6 is convex. Application of a reduction factor in this method to avoid over-recovery may lead to a situation where a user is made to cross-subsidize some other user of the service. Shapley Pricing
Shapley allocation is an improvement over the incremental cost allocation principle which is very sensitive to the entrance order of users to determine their marginal cost. The Shapley scheme tries to eliminate this limitation by calculating all permutations of entrance order. The major drawbacks of this are the computational effort required which increases exponentially as the
The service cost function gives the relation between the amount of transaction and the cost of service.
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number of agents increase. Also users with higher transaction amounts in this are less sensitive to the entrance order rather than those with lower values. Aumann- Shapley Pricing
This method corrects the limitation in Shapley allocation scheme by splitting agents with larger transactions into smaller sub-agents with smaller sizes. The Aumann-Shapley allocation is a limiting process of agent splitting and permutations of entrance orders as the size of each subagent goes to zero. As this method is based on marginal costs, it induces economic efficiency. Also it is considered fairer as it eliminates order of entry as a consideration and has the property of recovering cost. Some other important features of the Ancillary services market are: o Duration of the Contract: A long term contract reduces the competition until it comes up again for renewal. A short term contract increases both the competition and risk involved. Frequency of Review of amount of service required: A system operator can make a more near to real estimation if the amount of ancillary services required is reviewed on a frequent basis. Price Cap: A price cap on the purchase of ancillary services might be put to mitigate the effect of market power. However the consequences of putting a price cap should be considered on other electricity market as they are all dependant on each other. Market Concentration: Market Concentration is usually measured by HerfindalhHirschman Index (HHI)7. Markets for voltage control suffer from high market concentration and markets for primary and secondary frequency control are less concentrated as participants located anywhere can participate as long as transfer capabilities are sufficient.
iv. Reserve Costs

a) Reserve Availability Cost Reserve availability cost is the cost of making reserves available even if they are not actually used. This includes investment cost, operational cost to keep the reserve standby, operational cost when the reserve is activated, cost of non optimal generation despatch and investment cost for power capability which is not getting used for energy production. For those generators which do not usually operate and are used to provide only reserve service, the cost is generally of starting up and shutting down the units. For a cheap unit (whose marginal cost is lesser than the market energy price) that generates below its rated capacity for providing the reserve service, the opportunity cost of providing the reserve is the loss in profit due to reduced level of generation. This case is illustrated in the example figure below
7
It is a measure of the size of firms in relation to the industry and an indicator of the amount of competition among them
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Figure 14: Reserve opportunity cost for Low Cost Generating Unit [6]
For an expensive unit that operates near minimum output levels, the cost of providing reserves equals the amount by which the price of energy fails to compensate the generator for its startup, shut-down, and operating costs. This case is shown in the figure below
Figure 15: Reserve Opportunity Cot for a High Cost generating Unit [6]
b) Reserve Use Cost Reserve use cost is the cost incurred at the time of providing the service. The costs of reserves supplied by generators include the usual fuel and variable operating and maintenance costs, and the cost related to the stresses that accompany changing output levels for the generating units. These stresses are worst for those generators that change output levels most frequently. The marginal costs of energy service for a particular period are the change in production cost per unit change in energy consumption. Ancillary Services in Indian Context: An Approach paper Page 41
The benefits available from reserves are available to all market participants irrespective of who has paid for them. As a result there might be a tendency among the participants to avoid paying for reserves which might in turn lower the reliability of the power system. This problem can be solved by having a mechanism which makes the participants pay for the benefits that they receive. This is done by using one of the following approaches [6]: Quantity Mandate Approach : each participant is required to either provide the system operator with a certain amount of reserve service identified or buy that amount from the system operator Performance Requirement Approach: the participants are free to provide whatever level of service they want to provide but their power s promptly cutoff if they fail to meet their own needs.
As the system reliability is of prime concern, the quantity mandate approach is more effective and is followed by authorities such as NERC. However the performance requirement approach is more consistent with the ideology of competition and free energy market.
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References
[1] [2] [3] [4] [5] [6] [7] [8] Steven Stoft- Power System Economics Designing Markets for Electricity. Yann Rebours- A Comprehensive Assessment of Markets for Frequency and Voltage Control Ancillary Services 2008. Eurelectric Ancillary Services, Unbundling Electricity Products: an Emerging Market February 2004. Appellate Tribunal for Electricity, Appellate Jurisdiction, New Delhi Judgment on Appeal th No. 202 of 2005 13 December 2006. Eric Hirst and Brendon Kirby Electric Power Ancillary Services February 1996. CIGRE Task Force Methods and Tools for Costing Ancillary Services June 2001 Sally Hunt Making Competition Work in Electricity. Yann G. Rebours, Student Member, IEEE, Daniel S. Kirschen, Fellow, IEEE, Marc Trotignon, and Sbastien Rossignol - A Survey of Frequency and Voltage Control Ancillary ServicesPart I: Technical Features February 2007. Yann G. Rebours, Student Member, IEEE, Daniel S. Kirschen, Fellow, IEEE, Marc Trotignon, and Sbastien Rossignol - A Survey of Frequency and Voltage Control Ancillary ServicesPart I: Economic Features February 2007.
[9]
[10] S.K. Parida, S.N. Singh and S.C. Srivastava Ancillary Services Management Policies in India : An Overview and Key Issues [11] National Electricity Market Management Company Limited- Guide to Ancillary Services in the National Electricity Market Version No. 1.0 [12] Asko Vuorinen Planning of Optimal Power Systems 2007 [13] PJM Interconnection Blackstart Service Business Rules Revision 2 [14] Eric Hirst and Brendon Kirby Ancillary Services : A Call For Fair Prices December 1998 [15] CIGRE 39-203 Ancillary Service in Deregulated Electric Power Industry [16] Central Electricity Regulatory Commission Indian Electricity Grid Code Regulation, 2010 April 2010 [17] Central Electricity Regulatory Commission Unscheduled Interchange Charges and Related matters (Amendment) Regulations, 2010 April 2010 [18] Government of India Electricity act, 2003 June 2003 [19] National Grid Corporation Ancillary Services An Introduction [20] Kankar Bhattacharya, Math H. J Bollen and Jaap E. Daalder Operation of Restructured Power Systems [21] Thomas J. Overbye -Re-engineering the Electric Grid, American Scientist, May-June 2000. [22] RLDCs system restoration manuals [23] Nathan Cohn Control of Generation and Powerflow in interconnected Systems Second Edition [24] Federal Electricty regulatory Commission Order No. 888 April 1996 [25] North America Electricity Reliability Council Reference Document: Interconnected operations Service March 2001
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Notes
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POWER SYSTEM OPERATION CORPORATION LIMITED

Ancillary Services in Indian Context

Chapter 1 Ancillary Services

Nature of the Electricity Grid

Need for an Electricity Market Complementing Reliability

Types of Services in Electricity Industry

Figure 1: Difference between system services and ancillary services [2]

Relevance of Ancillary Services

Figure 2: Four Pillars of Market Structure [7]

Ancillary Services in Indian Context: An Approach paper

Chapter 2 Classification of Ancillary Services

Source/ Author Power System Steven Stoft

Eric Hirst and Brendan Kirby

Ancillary Services in Indian Context: An Approach paper

Yann G Rebours, Daniel S Kirschen, Marc Trotingnon and Sebastien Rossignol

1) Frequency Control Service 2) Voltage Control Service

1) Reactive Power 2) Frequency Control 3) Black Start 4) Reserve 5) Losses

S.K. Parida, S.N. Singh and S.C. Srivastava

1) Frequency Control Service 2) Network Control Service 3) Black Start Service

Frequency Control Services

Figure 3: Fundamental Behavior of a Power System [11]

Ancillary Services in Indian Context: An Approach paper

Figure 4: Operation at Different Frequency Level [6]

Figure 5: UCTEs classification of frequency reserves

Ancillary Services in Indian Context: An Approach paper

Ancillary Services in Indian Context: An Approach paper

Figure 6: Three Functional Frequency Control of a Generator [2]

Ancillary Services in Indian Context: An Approach paper

Figure 7: Levels of control for a generating unit

Ancillary Services in Indian Context: An Approach paper

Voltage Control Ancillary Services

Ancillary Services in Indian Context: An Approach paper

Levels of Voltage Control

Figure 8: Three Functional Voltage Controls Considering a Generating Unit[2]

Cost of Voltage Control

Black Start Capability

Ancillary Services in Indian Context: An Approach paper

Chapter 3 Proposed Ancillary Services in Indian Context

Prevalent Scenario in India

Ancillary Services Market: Present Position

Ancillary Services in Indian Context: An Approach paper

Secondary Frequency Response: AGC

Ancillary Services in Indian Context: An Approach paper

NGC# Recognized and provided

NEMMCO# Not Recognized

NYISO# Recognized and provided

Operating Reserve Black Start Capability Service

Mandatory as per IEGC

Ancillary Services in Indian Context: An Approach paper

Proposed Ancillary Services in Indian Electricity Markets

Load Generation Balancing Service (LGBS)

Ancillary Services in Indian Context: An Approach paper

Network Control Ancillary Services (NCAS)

System Restart Ancillary Service (SRAS)

Ancillary Services Fund

Ancillary Services in Indian Context: An Approach paper

Chapter 4 Future Scope

Primary Frequency Control

Ancillary Services in Indian Context: An Approach paper

Reactive Ancillary Market

Ancillary Services in Indian Context: An Approach paper

Figure 9: Proposed curve for pricing of Reactive Power v/s Voltage

Ancillary Services in Indian Context: An Approach paper