ANCILLARY SERVICES

OPERATIONS

SC Saxena
DGM, National Load Despatch Centre, Delhi
Power System Operation Corporation Ltd. (POSOCO)
Outline
Ancillary Services Introduction
Reserve Regulation Ancillary Services (RRAS)
Improved Frequency Profile
Harnessing Undespatched Surplus
Statistics of RRAS Implementation
RRAS Providers
Analysis of RRAS Despatch Instructions
SCADA Visualization and Situational Awareness
In-House developed Software Application
RRAS Accounting & Settlement
Key Learnings
Challenges
Way Forward
Future road map
Pillars of Market Design

Sally Hunt Making Competition Work in Electricity

What does Ancillary Services mean?
The literal meaning of the word ancillary is providing
support or help.
Generally, the System Operator (SO) procures ancillary
services for ensuring security, reliability, stability 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
remunerated depending upon the operational practices of
the Electricity Supply Industry (ESI).
Types of Ancillary Services
NERC defines Ancillary Services as
An Interconnected operation services necessary to
effect transfer of electricity between purchasing and
selling entities, and which a transmission provider
must include in an open access transmission tariff.

Ancillary services consist of services required for

Maintaining generation and load balance (frequency control)
Maintaining Voltage and reactive power support
Maintaining generation and transmission reserves
Emergency preparedness (system restart & stability control)
Services in the Electricity Supply Chain

Source: Ancillary Services, Eric Herst & Brendan Kirby

 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:
Primary frequency control (a response period of 5 to10s),
Secondary frequency control (10s to 15min ) and
Tertiary frequency control (10 to 30min).
 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.
Primary AVR, SVC
Secondary Centralized automatic control over a region
Tertiary manual

Power flow control AS (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 blackout.
Technologies Used for Provision of AS
Ancillary Services Technologies Used
FCAS Governor, AGC, Rapid unit loading,
Rapid unit unloading, Demand side load
shedding

NCAS Generators, Capacitors, Inductors,

Synchronous condensers, FACTS
controllers
SRAS Generators
Different
Methods for
Procurement of
Ancillary
Services
 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
 While designing an ancillary services
market, a number of aspects have to be
considered,
Time frame of the market,
Type of the market (bilateral or competitive bid
based),
Type of procurement (sequential or simultaneous),
Settlement rules (price based or bid type, price based
on usage type, marginal price or pay as bid),
Recovery (charging) scheme (uplift in energy charge,
use of system charge or other methods)
 Evolution of Electricity Market in India

2016: Ancillary Services

2015: 24 x 7 Market
2015: RE Framework
2014: Deviation Settlement
2012: Sub-Hourly Market
2011: Transmission Pricing (POC)
2010: Power Market, REC

2009: Grant of Connectivity, LTA and MTOA

2009: Trading License

2009: Congestion Management

Future
2009: Imbalance (UI) Futures & Forward Market
Capacity Market
2008: Power Exchange
Flexibility, Ramping
2004: Open Access Products
 Drivers for Ancillary Services in India
Activities done for a common good
o Cannot be coupled with basic energy
services
Distinguishing features of Indian Power
System
o Increasing Maturity of Electricity Market
o Introduction of Adequacy & Reserves
o Tightened Frequency Control
o Introduction of Primary and Secondary
Response
o 175 GW renewables by 2022
Restructured Power Systems
o Unbundling, Private Sector Participation
Reliability and Security
o ~ 160 GW Demand
Changing nature of demand
o Ramp of ~ 500 600 MW/min in
Morning/Evening peaks
o Penetration of renewables
Portfolio/ Risk management of
Utilities
Congestion Management
Services Embedded through
regulatory provisions
Charges for Reactive Power
10 paise/kVArh , increment @
0.5 paise / kVArh/year.
POSOCOs Approach Paper(1)

n NLDC/RLDCs to identify ancillary services

q Clause 11.1 of the amended CERC UI Regulations, 2009
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:

n Approach paper on Ancillary Services in Indian

Context published by POSOCO in June10
q Submitted to the Commission
q Comments sought from stakeholders

NLDC 17
POSOCOs Approach Paper(2)

n Proposed services in the approach paper

q Load Generation Balancing Service (LGBS)
Use of un-despatched surplus, peaking and pumping stations
q Network Control Ancillary Service (NCAS)
Power Flow Control Ancillary Service (PFCAS)
Voltage Control Ancillary Service (VCAS)
use of synchronous condensers
q System Restart Ancillary Service (SRAS)

NLDC 18
Load Generation Balancing Service (LGBS)

n Mis-matches between supply and demand

n IEGC band 49.5 to 50.2 Hz
n Wide fluctuations in frequency
n Primary Response : FGMO
n Secondary Response : Absent by Design
n Tertiary Response
q Availability Based Tariff (ABT)
q Use of Un-Harnessed Surplus
High Cost Generation
CPPs/IPPs/Merchant Plants
q Peaking Gas Stations
q Pumped Storage Plants

NLDC 19
Network Control Ancillary Services (NCAS)

n Power Flow Control Ancillary Services (PFCAS)

q Control power-flow on interconnectors
q Utilizing un-harnessed surplus
Schedule to POOL
Based on both location and merit order

n Voltage Control Ancillary Services (VCAS)

q Provision in IEGC for VAr drawl
q Synchronous condenser operation
Friction and windage losses
Auxiliary consumption

NLDC 20
System Restart Ancillary Services (SRAS)

n Black Start of Power Stations

n Provision for mock exercises

n Might be linked to a fraction of fixed cost recovery

NLDC 21
Petition on Ancillary Services
n Petition by NLDC
q 29th November 2010
n Service identified for immediate implementation
q Roadmap and mechanisms for introducing Frequency
Support Ancillary Service (FSAS)
LGBS renamed as FSAS
n Harness un-despatched generation
q Liquid fuel based
q Diesel based
q Merchant/ IPPs/ CPPs
n Increase overall efficiency
n Maximization of generation at optimal cost

NLDC 22
 Reserve Regulation Ancillary Services (RRAS)
Reserve Regulation Ancillary Services
Value Added Services
Keeping frequency within specified
limits
Maintaining the voltage profile
Load Following
Ramp Management
Reliability and Security of All India
Grid
Utilization of Un-despatched
Surplus
Congestion Management
Optimization at Regional &
National Level
Grid Integration of Renewables
Ancillary Services Definition
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.
- Eric Hirst and Brendon Kirby
As per IEGC, 2010
Ancillary services in power system
(or grid) operation means services
necessary to support the power
system (or grid) operation in
maintaining power quality, reliability
and security of the grid, e.g active
power support for load following,
reactive power support, black start
etc
 Ancillary Services Operations

CERC
Detailed 3 month CERC
CERC Procedure feedback revised
Regulation s submitte Detailed
s notified approved d to Procedur
on on CERC on es
13th 08th 01st 21st
Aug15 Mar16 Aug16 Nov16

CERC RRAS Half yearly

order on implementatio feedback
Mark Up- n review by submitted
dtd. Honble to CERC on
29th Feb Commission 17th
16 on Nov16
27th July at
NLDC
Key to Ancillary Services - Undespatched Surplus in ISGS

URS ~
12,000
MW

URS ~
2,000
MW
 Role of Nodal Agency
Separate Stack Extreme weather forecasts
Merit Order Stack

Events
Regulation Up and/or special day;
Regulation Down Generating unit or transmission
line outages;
URS capacities of ISGS
Trend of load met;
Variable cost of
generation Trends of frequency;
Time-block wise Abnormal event such as outage
of hydro generating; units due to
Region-wise silt, coal supply blockade etc.;
Factoring ramp up/down Excessive loop flows leading to
rate, response time, congestion; and
ttransmission constraints
both inter-regional and Such other events
intra-regional
 Role of RRAS Provider and RPCs
Fixed charge, Variable charge
and any other statutory charges
for merit order dispatch
Monthly basis
Preparation of RRAS Providers
Energy/ Deviation Accounts
RPC
Despatch & Withdrawal
Instructions through RLDCs
by Nodal Agency
Nodal Incorporation of instructions
Agency in the Schedules of RRAS
Providers and respective
VAE by RLDCs
RRAS
Provider
Fixed charge, Variable charge and any
other statutory charges
Scheduling, Despatch & Withdrawal of RRAS
Scheduling Despatch Withdrawal

Quantum of RRAS Generation Nodal Agency direct

generation directly scheduled to the VAE the RRAS Provider to
incorporated in the in any one or more withdraw from the time
schedule of RRAS Regional Grids block
providers through RRAS deemed to be Satisfied that the
RLDCs. triggered for Time circumstances
Regulation Up Service period specified by the leading to triggering
Power scheduled Nodal Agency of RRAS Services
from the generating Schedules of the no longer exist
station to the VAE RRAS Provider
Regulation Down revised by the
Service quantum scheduled by
Power scheduled to the Nodal Agency
the generating Deviation in schedule
station from the VAE of RRAS Providers
Energy despatched beyond the revised
under RRAS shall be schedule as per
deemed as delivered CERC DSM
ex-bus. Regulations
RRAS Energy Accounting & Settlement
RRAS Energy Accounting
Done by RPC on weekly basis along with DSM Account
Based on interface meters data and schedule of RRAS Providers
Separate statement maintained along with Regional Deviation
Settlement Account for RRAS
RRAS Energy Settlement
Under separate account head of RRAS from Regional DSM Pool
Account
Regulation Up
RRAS provider paid at their fixed & variable charges with markup
Regulation Down
RRAS provider shall pay 75 % of variable charges to Pool Fund
No retrospective settlement
Any deviation settled as per CERC DSM Regulations, 2014
Penalties for sustained failure to provide RRAS and violation of
directions of RLDC
Interchange: Possible Combinations
Scheduled-Scheduled

SI Unscheduled-Unscheduled
SI

UI
Scheduled-Unscheduled
UI

UI
SI

NLDC 30
Cues for System OperatorWeather Forecast (1)
NOWCAST
Forecast Report
http://imd.gov.in/p
Weblink:
ages/nowcast.ph
http://imd.gov.in/pa
p
ges/allindiawxfcbull
etin.php
Cues for System OperatorPower Exchange Prices (2)
Cues for System OperatorFrequency Profile (3)
Frequency profile for 23.09.16 Frequency profile for 29.09.16
(Friday) (Thursday)
Cues for System OperatorLoad Forecast (4)
Cues for System OperatorReserves Monitoring (5)
 Key Statistics of RRAS Implementation
Highest Variable Charge Lowest Variable Charge
RRAS Providers:
Capacity under RRAS: ~ Rs. 8.12 / Unit ~ Rs. 1.25 / Unit
48 Nos. 51 GW (Anta LF NR) (Korba WR)

Maximum Up Energy Despatched: Average Cost for Regulation

Regulation : Up 6 MU / day Up Despatch: 4.34/ Unit
3746 MW (0.2% of Energy met)

Average variable Charge

Maximum Down Energy Despatched:
refunded to DSM Pool for
Regulation :
Down 1 MU / day
Regulation Down
1946 MW (0.03% of Energy met)
: 1.53/ Unit

Average Variable
Average
Avg. Daily Number of charges retained by
Mark Up paid to RRAS
RRAS Instructions : 06 to RRAS providers- 50
provider- 50 Paise/Unit
07 Nos. Paise/Unit
Pattern of Variable Cost
RRAS Despatch
RRAS Despatch
RRAS Despatch
RRAS Despatch Duration Curve
Trend of Load Met
Load Crash on a Festival Day
Trend of Frequency (23rd May 2017
Transmission Line Outage
 Generation Outage
Force Majeure Condition (High Silt): 06th Aug-16
Real Time Congestion Management
 RRAS Providers following RRAS Schedule
Ramagundam Kahalgaon-II
Dadri
Up Up
Up

Dadri Vindhyachal III Vindhyachal II

Down Down Down
Ancillary Services Available for Despatch

Possible UP
Regulation

Applied UP
Regulation

Applied DOWN
Regulation Possible DOWN
Regulation
SAMPLE MESSAGE SEND FROM NLDC TO RLDC FOR RRAS TRIGGER INFORMATION

From: NLDC
TO: ERLDC, NERLDC, NRLDC, SRLDC, WRLDC
Msg No: AD-20160701-001

RRAS Triggering Instructions

Period of despatch : Date 01-07-2016 From Time Block 50(12:15 hrs) To Time Block 55(13:45
hrs)

Type of despatch: Regulation UP

Quantum of despatch 1000 MW

Reason for Triggering of RRAS: Trend of load met.

(Shift Charge Engineer)

NLDC

SNO Region Generator VC 12:15 12:30 12:45 13:00 13:15 13:30 13:45
1 ER KHSTPP-II 219.6 0.00 106.00 212.00 318.00 254.00 106.00 0.00
2 ER FSTPP I & II 225.8 0.00 10.00 10.00 10.00 15.00 10.00 0.00
3 ER FSTPP-III 228.4 0.00 33.00 33.00 33.00 33.00 33.00 0.00
4 ER KHSTPP-I 229.8 0.00 23.00 23.00 23.00 37.00 23.00 0.00
5 ER BARH 272.6 0.00 83.00 166.00 249.00 166.00 83.00 0.00
6 NR RIHAND2 142.6 0.00 94.00 143.00 143.00 143.00 141.00 0.00
7 NR UNCHAHAR2 291.5 0.00 13.00 13.00 13.00 13.00 13.00 0.00
8 NR DADRT2 302.4 0.00 0.00 0.00 65.00 45.00 0.00 0.00
9 NR DADRIT 322.5 0.00 51.00 51.00 51.00 51.00 51.00 0.00
TOTAL 0 413 651 905 757 460 0

Information Dissemination
Information on Nodal Agency (NLDC) Website
1.RRAS Instruction summary-
http://103.7.128.238:8080/ancl/viewregweb.php?sd=01-Jan-2017&ed=19-Jan-2017
2.Monthly report- https://posoco.in/reports/ancillary-services-monthly-
reports/ancillary-services-monthly-reports-2016-17/
3. RRAS Providers details- https://posoco.in/reports/as3-details/
4.Half year Feedback report- https://posoco.in/reports/half-year-feedback-to-cerc/

ERPC- http://www.erpc.gov.in/home/commercial_p/anciliary_services
NRPC- http://www.nrpc.gov.in/comm/ancillaryservices.html
NERPC- http://www.nerpc.nic.in/Ancillary%20Service.php
SRPC- http://www.srpc.kar.nic.in/html/all_uploads.html
WRPC- http://www.wrpc.gov.in/Commercial_rras_dat.asp
RRAS Accounts uploaded by RPCs
ERPC- http://www.erpc.gov.in/home/commercial_p/ui_and_deviation_accts
NRPC- http://www.nrpc.gov.in/comm/rras.html
NERPC- http://www.nerpc.nic.in/devreport.php
SRPC - http://www.srpc.kar.nic.in/html/all_uploads.html
WRPC- http://www.wrpc.gov.in/Commercial_rras_chrg.asp
In-house developed Ancillary Services Software Application

RRAS Providers
as per merit
order Variable
cost Option for Regions Time Block &
wise Ancillary quantum available
despatch for despatch

Option for Area wise Ancillary

despatch
Setting option helps in modifying
the RRAS Provider details
 Quantum of Regulation
UP(+)/Down(-)
For applying Regulation
UP/Down

Block wise
quantum available
for despatch
RRAS Provider
selected on merit
order
Option to chose
the criteria for
triggring RRAS

Button for applying

regulation (UP/Down)
 Option to view
summary of RRAS
instruction issued

By clicking the
message number we
can view the details of Details of RRAS
the RRAS instruction instruction
SCADA Visualization
SCADA Visualization
Frequency Profile
Maximum
Frequency

Average Frequency ~ 50 Hz.

FVI consistently hovering around

0.03 to 0.05

Minimum
Frequency
Frequency Profile
 Key Learnings from Indian Experience
Layer of Centralized Ancillary Despatch over Decentralized Layer
of Scheduling Process
Improved Frequency Profile.
Ramp Management - Evening Peak / Morning Peak
Real Time Congestion Management
Grid Resilience Handling Low Probability High Impact Events
Availability of Variable charges for first time in public domain
Better Despatch Decisions
Changing Merit Order month on month
Handling impact of extreme weather conditions on the grid
Reliability Support
Information Dissemination
Benefits to stakeholders Generators & State Utilities
Freedom and Choice available to states retained
 Reactive Ancillary Market.
n Real Time Reactive Market

CERC proposed Voltage Control Ancillary Services (VCAS)

in Staff paper 2013.

Existing provisions in the Grid Code:

10 paisa/kVArh with increment of 0.5 paisa/kVArh per year
Limits : 97% to 103%
Presently only applicable to States and not to ISGS/Regional
Entity Generators

NLDC 61
Challenges
Addressed by the Honble Commission
(Revised approved Procedure dt 21st Nov16)

Minimum threshold raised to 10 MW(NER-5MW).

Instructions to RRAS Providers via RLDCs
Refund of Fixed Charges to the beneficiaries
proportionate to surrender.
Periodicity of Refund of fixed charges changed from
weekly to monthly.
Previous month RRAS provider details applicable if not
submitted timely.
 Further Challenges (1)
Regulated power of RRAS provider

Treatment of fixed charges/other charges are

different in provisions of Reserve
Regulatory Ancillary Services regulation and
Regulation of Power Supply regulation. Since
any one of two different regulations can be
applied for this situation, this may lead to
further disputes.
 Further Challenges (2)
Reserves Quantum Available for despatch under
Ancillary-
The primary resource under ancillary services is the
undespatched surplus in generating stations which are
regulated by CERC. Out of this reserve, only the reserves
available in running machines are available for dispatch at short
notice.
To ensure sufficient reserves 5% reserves to be maintained by
all RRAS Providers may be considered.
CERC may also notify the procedure of technical minimum to
go up to 55% of installed capacity.
Further Challenges (3)
Hydro Scheduling under Ancillary Services
Hardly any un-despatched surplus available in the hydro
stations.

limitations/constraints in terms of water inflows.

Quantum of water to be released based on reasons other than

power generation requirements.

Present formulation needs to be reviewed for hydro stations as

the segregation of fixed and variable charges is only notional
and the amount of incentive (50 paise per unit) is apparently on
the higher side.
Further Challenges (4)
Gate Closure for Scheduling Process for ISGS:
A decentralized scheduling process is in place in the country
where all participating entities have the liberty to change
schedules, i.e., revise drawal schedules / injection schedules
based on their requirement.
no restrictions on the number of revisions.
ancillary dispatch has added another dimension of complexity.
There is a need for introduction of a concept of gate closure in
the scheduling process to avoid simultaneous changes.
 Further Challenges (5)
Pool Accounts Deficit and Need for Inter-pool Transfers
Funds are being transferred for regions where surplus is
available to the deficit pool.

cumbersome process as the amount to be transferred has to

be worked out for each pool and involves multiple physical
money transfer.

Ancillary Services are applied at National level, whereas

accounts are to be settled at regional level. At the same time,
pool deficit/surplus in one region shall be adjusted with other
regions pool account. This brings out the need for expeditious
implementation of National Pool Account.
Further Challenges (6)
Fixed Charge Refund
As per present mechanism 100% fixed charge paid to RRAS
provider through DSM pool A/c who in turn pays it to the
original beneficiaries in the ratio of surrendered power.
Inclusion of the fixed charges in the payments is indirectly
distorting merit order also.
Market design has created a perverse incentive for State Utility
to take a passive approach and avoid keeping reserves on bar.
Provision regarding refund of fixed charges needs to be
reviewed.
Further Challenges (7)
Automation, IT Infrastructure and Manpower
An in-house application has been developed for
implementation of ancillary services.
Considering the short time frame for implementation on
ancillary instructions, a much higher degree of automation is
required.
In the near future, with the implementation of reserves,
secondary control, data exchange and communication
requirements would increase.
Strengthening in terms of manpower is also required at all
levels.
Way Forward (1)
Sustained Availability of Spinning Reserves
High demand period , hardly any spinning reserve in the form
of unrequisitioned surplus.
low demand period, most beneficiaries already surrender
their shares leading to reduction in the generation to almost
technical minimum levels.
frequency is remaining within the 49.90 50.05 Hz band only
around 75 % of time and the FVI is hovering around 0.03-0.04
level.
CERC may notify the procedure of technical minimum to go up
to 55% of installed capacity in each running machine.
Way Forward (2)
CERC Roadmap for Reserves
Report of the Committee on Spinning Reserves
17th September 2015
Roadmap to operationalise Reserves in the country
13th October 2015
Primary Reserves Secondary Reserves Tertiary Reserves
(distributed ) (centralized approach) (decentralized)
4000 MW North : 800 MW All India level : 5218 MW
considering Ultra East : 660 MW North : 1658 MW
Mega Power Plant out West : 800 MW East : 857 MW
South :1000 MW West : 1353 MW
North East : 363 MW South : 1343 MW
Total : 3623 MW North East : 65 MW
Reserves to be maintained
at intra state level
Way Forward (3)
AGC Pilot Project
First AGC Pilot project at NTPDC Dadri Stg-II
Project progress
A team from POSOCO, POWERGRID and M/s Siemens
visited NTPC Dadri on 6th May 2016
to explore the ground level requirement
Discussed with NTPC team

Execution of AGC pilot project as per technical specifications through limited

tender
Invited bids on 21st October 2016 from the four SCADA vendors
M/s ALSTOM ,M/s OSI,M/s Siemens,M/s ABB

Bids opened on 30th November 2016

Letter of Award (LOA) issued to M/S Siemens on 18th Jan17 and accepted by
Siemens on 25th Jan 17
 Way Forward (4)
Hydro Stations Participation as RRAS Provider

Reservoir based hydro power plants such as Tehri, Chamera-I, Bhakra,

Pong and other such stations can also provide Ancillary Services.

1. In energy terms each Regulation Up would be squared off by the end of the
day with Regulation Down so that the water releases from the reservoir on a
daily basis remains the same and the minimum/maximum MW generation
limits are honoured.

2. The markup to be paid for such services for UP as well as DOWN regulation
could be lowered to.

3. Fixed charge payment in case of hydro could be reviewed as there is an

administered hybrid tariff formulation by CERC.

4. Over a period of time, when more experience is gained, the squaring off
could be extended to a week.
 Way Forward (5)
DSM Rate Vector Revision
Average frequency profile is better and close to 50 Hz, the present average DSM rate
is 2 and below.

Prices prevailing in the Day Ahead Market (DAM) are also mostly in the range of 2-3
per unit.

Variable charges of many of the new generating stations are higher than these
prevailing prices.

Volume limits for RE rich states have been relaxed to 250 MW w.e.f 06th May, 2016

market design has created a perverse incentive for State Utility to take a passive
approach and avoid keeping reserves on bar.

Consequence of low DSM rates & low surcharges/additional charges, the accrual in
Pool has become negative leading to difficulties in meeting the payment obligations
for despatch of Ancillary Services for some weeks

Operational aspect, if DSM rates remain on the lower side, there may be a possibility
of RRAS providers defaulting on delivery after ancillary dispatch instructions have
been issued.
Urgent need to review the DSM price vector to bring in systemic correction in the market design
Way Forward (6)
National Pool Account Operationalization
Ancillary Services are applied at National level, whereas
accounts are to be settled at regional level.

pool deficit/surplus in one region shall be adjusted with other

regions pool account.

inter-regional DSM payments are settled directly between

regions in pairs which implies tandem payments and multiple
transactions The circular flow of money adds to complexity
besides delay by design.

This brings out the need for expeditious implementation of

National Pool.
Way Forward (7)
Utilization of Funds in other Regulatory Pool Accounts
for Ancillary
Deficit in some of the Regional DSM Pools has occurred in the
recent past.
surplus funds from other DSM pools are transferred to the
deficit regional pool.
Some weeks, DSM pools was inadequate to meet the total
payment liability .
Ancillary services Regulations may be amended to permit
usage of surplus funds in other Regulatory accounts (Reactive,
Congestion etc.)
Way Forward (8)
Replication at State level

CERC Ancillary Services Operations Regulations have provided for

replication of the framework at state level

All the states especially the RE-rich states must introduce and
replicate this regulated framework before introduction of market
in the Ancillary Services.

Essential to bring more generators so as to create a critical mass in

the ambit of Ancillary before bringing market based procurement of
Ancillary services.
Way Forward (9)
Review of Refund of Fixed Charges
Present mechanism 100% fixed charge component is also paid
to RRAS provider through DSM pool A/c who in turn pays it to
the original beneficiaries.

Inclusion of the fixed charges in the payments is indirectly

distorting merit order.

This market design has created a perverse incentive for State

Utility despite a passive approach.

the provision regarding refund of fixed charges needs to be

reviewed.
Way Forward (10)
Five Minute Scheduling and Despatch
Report of Expert Group on 175 GW RE by 2022 (31st Dec 2015)
by Niti Aayog mentions the five-minute scheduling and
dispatch.

Internationally also, there is a trend for moving towards 5-

minute scheduling and despatch, especially, in view of the large
scale integration of renewables.

(SAMAST) by the Forum of Regulators (FOR) also recommends

moving to 5-minute settlement.

Need to move to 5-minute scheduling, despatch, metering and

accounting.
 Future road map of Ancillary Services-
Energy Limited Resource (Hydro)
Harnessing Pumped Storage Plants (PSP)
Tehri (Regional entity)
State embedded plant (Purulia, Ghatghar, Kadamparai,
Srisailam)
Participation of Merchant/IPP
Reactive Power & Voltage Control Ancillary Services
Black Start Ancillary Services (BSAS)
National Pool Account Operationalization