1. The Need for Regulatory & Policy Framework for Ancillary Services & Alternative
Energy Options in the Indian Power Sector
Drivers of Ancillary Services
in
India
Sanjoy K. Parida
Assistant Professor
Department of Electrical Engineering
Indian Institute of Technology Patna

2. Presentation Layout
• Introduction
• Ancillary services provision from DERs
• Scope to promote ancillary services in India
• Conclusion

3. Introduction
Gencos
Vertically integrated utility
Wholesale Competition
Generation
Transmission Transco
Distribution Discos
Retail Competition
Consumers Consumers

4. Ancillary Services
• The literal meaning of the word ancillary is providing
support or help.
• Generally, the System Operator (SO) procures ancillary
services for ensuring security, reliability and quality of
the power supply to the consumers.
• Ancillary services can be provided by generators, Load
Serving Entities (LSEs) and transmission operators.
• Ancillary services are classified, procured and remunera -
ted depending upon the operational practices of the
Electricity Supply Industry (ESI).

5. Classification of Ancillary Services
Ancillary Services
FCAS NCAS
Primary FC
VCAS
Secondary FC
Primary VC
Tertiary FC
Secondary VC
Tertiary VC
SRAS
PFCAS
Ref: Guide to ancillary services in the National Electricity Market, National Electricity Market Management Company.

6. Frequency Control Ancillary Services
 A certain amount of active power, called frequency
control reserve, is kept available to perform this task.
 Three levels of control are generally used to achieve
FCAS: (i) Primary frequency control, (ii) Secondary
frequency control and (iii) Tertiary frequency control.
 Primary frequency control requires a response period of
5 to 10sec, secondary frequency control requires a
response period of 10s to 15min and tertiary frequency
control requires a response period of 10 to 30min.
 Frequency control reserves required to perform above
control tasks can be of (i) positive frequency control
reserve and (ii) negative frequency control reserve.

7. Network Control Ancillary Services
 These are the services required to maintain the network parameters
within permissible range.
 VCAS are required for supporting the voltage to be maintained
within the permissible limit. Three levels of control are generally
used to achieve VCAS: (i) Primary voltage control, (ii) Secondary
voltage control and (iii) Tertiary voltage control.
 PFCAS are needed for the purpose of improving Available Transfer
Capability (ATC) and the performance of real time operation
considering network constraints.
System Restart Ancillary Services
 These are the services related to backup capacity of the system and
the capacity that is required to return the system to a normal
operation after a major or partial blackout.

8. Technologies Used for Provision of AS
Ancillary Services Technologies Used
FCAS Governor, AGC, Rapid unit loading, Rapid
unit unloading, Demand side
management, Distributed energy
resources (DERs)
NCAS Generators, Capacitors, Inductors,
Synchronous condensers, FACTS
controllers, Distributed energy resources
(DERs)
SRAS Generators, Distributed energy resources
(DERs)

9. Procurement of Ancillary Services
 Compulsory Provision
• As part of connecting conditions, a fixed amount of ancillary
services is provided.
• Consequences: (i) volume of service provided may exceed
what is actually needed, (ii) potentially low cost providers are
treated on the same basis as more expensive one.
 Market Based Provision
• Bilateral contracts: (i) this form of procurement lacks
transparency, (ii) this type of negotiation can be long-term,
complex and costly, (iii) because of high transaction cost of
contracts, price and volume often remain fixed for a long
time.
• Both tendering process and creation of a spot market enhance
transparency and foster competition.

10. Remuneration of Ancillary Services
 Structures of Remuneration
• Availability cost
• Utilization cost
• Fixed cost
• Variable cost
• Opportunity cost
 Remuneration Methods
• Regulated price
• Pay as Bid price
• Common clearing price

11. RESs in Distribution Network

13. Summary of renewable technology
capabilities to provide AS

14. Summary of non-renewable technology
capabilities to provide AS

15. Economic Analysis
• Cost of Electricity Generation
It consists of three components.
• Capital cost:
Includes the cost of the plant, land acquisition, grid
connection, initial financing cost.
• Operating & Maintenance cost
Includes insurance, rent, cost of labor and materials used for
operation & maintenance.
• Fuel cost

16. • Cost comparison with the conventional power
generation technologies

17. Optimum Economic Dispatch
• The aim is to load generating sets in response to
demand changes so as to minimize the cost of
supply. This is known as optimum economic
dispatch (OED).
C A  K A  K A PA ;
'
for plant A
CB  K B  K B PB ;
'
for plant B
• If plant A is a nuclear plant and plant B is a coal
based thermal plant, then KA’ < KB’
• the minimum cost Cmin occurs when the plant A
takes as much of the load share as possible, i.e. it is
loaded to its maximum level, with plant B brought
in to cover the deficit.

18. • If there are ‘n’ plants available arrange the plants in
order of increasing K′, the so - called merit order.
Starting from the top of the list, the plants are then
loaded (each up to the limit of its capacity) before
the next plant on the list is brought into action.
• Units with low operating costs run preferentially and
therefore attract high load factors; they generate a
disproportionately large share of electricity relative
to their capacity. They are called base load plants ,
or high merit plants.
• Units with high operating costs only run during peak
demand, generate a disproportionately small share of
the total electricity and are known as peaking plant.
• Plants in between these two extremes are called
intermediate plants or middle merit plants.

19. • The total cost of generated energy by a power station, for
example a nuclear power station, may be higher than that
from a coal fired one, the OED requires that the nuclear
station is fully loaded because of its very low incremental
cost.
• The rationale is that the loading priority is independent of
the original capital sum expended in the construction of a
power station. As the station is present and available it
should be utilized fully because of its low running costs.
• It may be concluded that as the energy supplied by RE
sources (except biomass) is characterized almost entirely
by a capital cost component, their incremental cost is
negligible. Therefore the OED method would require them
to provide at all times all the energy they are capable of
delivering.

20. Scope to Promote Ancillary Services in
India

21. Structure of the Indian ESI
Indian ESI
NRG ERG NERG SRG WRG
Delhi
Punjab Bihar Assam Goa
Chandigarh Tripura Kerala
Jharkhand Madhya Pradesh
Rajastan Meghalaya
Karnataka
Jammu & Kashmir Orissa Arunachal Pradesh Chhatisgarh
Andhra Pradesh
Haryana Manipur
Sikkim Maharastra
Himachal Pradesh Mizoram Tamil Nadu
Uttar Pradesh West Bengal Nagaland Gujarat
Uttaranchal

22. Operational Structure of ESI in India
Other
RLDCs ISGSs/ CGSs/ IPPs
Offer Availability Disp. Sch.
NLDC (ISO)
MCV
PXs RLDC (RSO) Traders
&
MCP
Forecast Drawal. Sch.
Traders Bid Bid
SLDCs
State Gen. SEBs/Discos

23. Frequency Regulation Service
• The primary frequency control, which is provided by the
governor action of a generator or automatic regulation
of frequency sensitive load, is also know as frequency
regulation.
• With the transition from vertically integrated utilities to
unbundled one frequency regulation transformed to a
“service” from an “obligation”.
• In India, this service is being provided by generators
under Free Governor Mode of Operation (FGMO)
complied with certain guidelines prescribed by CERC

24. FCAS from Generators
Scheduled Secondary Control Loop
Generation
Nominal
UI + Frequency
Rate
+
Incremental
Cost
- +
Droop Generator Change in
Output Demand
Power
Gain Generator
System Actual
Valve
Frequency
Power
Primary Control Loop Change in
Tie line
Power
Ref: Tyagi et al. “A mathematical framework for frequency linked availability based tariff mechanism in
India” Proc. of the National Power Systems Conference, December 2004, IIT Chennai, India.

25. FCAS from LSEs
Incremental
Cost
Comparison UI Rate
Total
Demand +
Captive
Demand Generation Grid
requirement from - Frequency
CGSs/ISGSs/IPPs
Next

26. EXPLOITATION OF RENEWABLES
Some renewable technologies are small and modular,
they can be sited in or near buildings as distributed
generation (DG) where energy is used.
It can be used as an important component in microgrid,
which is defined as localized grouping of electricity
generation, energy storage, and loads that operates
within the grid or in islanded mode if possible.
Renewables have great potential in providing Ancillary
Services (AS). AS are the system support services
required to maintain security and reliability of the system

27. INTEGRATED SYSTEM
In radial mode transmission there are sources of
generation at one end with a transmission and distribution
system having consumers at the other end.
At the instant of failure of the generating station the
whole system fail. As such there is no flexibility for the
system.
In integrated system all the generating stations are
connected through a reliable mesh transmission network.
Total load connected to the system is shared by all the
generation stations.
Demand of electricity vary place to place. Industrial load
growth generally occurs adjacent to the cities and towns.

28. Continued….
In India because of uneven distribution of natural
resources, generating stations are located in few pockets
far away from load centers.
Also, some regions are surplus in generation and some
regions are shortfall of generation as compared to load
demand.
Surplus generation is need to be transported to energy
deficit regions, which improves the power-supply
reliability and quality.
Liberalization of the electricity market leads to new
management structures for the operation and control of
the electricity grid.

29. INTEGRATION BASED ON
ATTRIBUTES
I. Technical
II. Economical
III. Environmental
IV. Resource availability

30. SUB-ATTRIBUTES
Technical Economical Environmental Resource
availability
Efficiency Investment cost Noise Oil
Power generation O&M cost NOx Gas
Capacity factor Electricity Price SO2 Wind
Life time CO2 Solar
Installation led CO
time
Start up time HC
Forced outage rate PM
Maintenance
Footprint

31. DG TECHNOLOGIES WITH RESPECT TO
THE MAIN ATTRIBUTES
EASTERN WESTERN
REGION REGION

32. Continued….
NORTHERN SOUTHERN
REGION REGION

33. Continued….
NORTH EASTERN
REGION

34. Conclusion
• Indian power sector, Free Governor Mode of Operation (FGMO) is
the sole mechanism to provide FCAS.
• DERs are important resources for various kinds of AS.
• Design of market mechanism with proper policy framework for
provision of ancillary services.
• UI may play very important role in AS provision.