Prof. S. N. Singh - 4 - Ancillary Services in Electricity Market

Department of Electrical Engineering, IIT Kanpur (INDIA)
Ancillary Services in Electricity

Markets
S.N. Singh, Professor
Department of Electrical Engineering

Indian Institute of Technology Kanpur
Email: snsingh@iitk.ac.in
02-03-2016 Side 1
Ancillary Services
• The literal meaning of the word ancillary is providing
support or help.
• Generally, the System Operator (SO) manages 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).
02-03-2016 Side 2
• 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)
Ancillary services cost may be about 10% of total generation and
transmission cost. Most of it are required for power balancing/frequency
regulation, loss make-up and voltage/reactive power support.
02-03-2016 Side 3
Classification of Ancillary Services

Ancillary Services
FCAS NCAS
Primary FC
VCAS
Secondary FC
Primary VC
Tertiary FC
Secondary VC
Tertiary VC
SRAS
PFCAS
02-03-2016 Side 4
Ref: Guide to ancillary services in the National Electricity Market, National Electricity Market Management Company.
Frequency Control Ancillary Services

 A certain amount of active power, called frequency
control reserve, is kept available to perform this task.
 Three levels of control are generally used to achieve
FCAS:
 Primary frequency control (a response period of 5 to10s),
 Secondary frequency control (10s to 15min ) and
 Tertiary frequency control (10 to 30min).
 Frequency control reserves required to perform above
control tasks can be of
 positive frequency control reserve and
 negative frequency control reserve.
02-03-2016 Side 5
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:
 Primary voltage control,
 Secondary voltage control and
 Tertiary voltage control.
 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.
02-03-2016 Side 6
MVAr
Field current limit
F
Qg E
C
Qgop
SgQg Armature current limit

O A B
Pg G Pgmax MW
Qgmin D
Under excitation limit
02-03-2016 Side 7
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.
02-03-2016 Side 8
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
02-03-2016 Side 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.
02-03-2016 Side 10
Remuneration of Ancillary Services

 The remuneration for an ancillary service may combine
several components to reflect the various costs of
ancillary service provider such as
• Availability price
• Utilization price
• Fixed cost
• Variable cost
• Opportunity cost
02-03-2016 Side 11
Remuneration of Ancillary Services

 Remuneration Methods
• Regulated price (set by regulator or SO and usually same for
all providers): it is justified when market power is issue but it
reflects imperfect cost as cost changes with time and condition.
• Pay as Bid price (the supplier receives the price of its
accepted offer): It is good when the quality of the ancillary
services offered is highly differentiated. However, it does not give
providers an incentive to bid their marginal cost, except when
market concentration is low.
• Common clearing price (all the successful providers are paid
the price of the most expensive accepted or the least expensive
rejected offer)
02-03-2016 Side 12
• 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)
02-03-2016 Side 13
International Practices
02-03-2016 Side 14
England & Wales Electricity

Market
02-03-2016 Side 15
• The restructuring process of the electric supply

industry (ESI) began in 1989 in order to reduce
the government intervention in the economy, and
total liberalization was reached in 1991.
• It was known as UK Pool. New Grid Company
(NGC) was responsible Market clearing, providing
the transmission system and ancillary services
02-03-2016 Side 16
Competing Generators
Ancillary Services
Bid Dispatch
NGC Power Exchange (PX) System Operator

(SO)
Sell Forecast Monitor Control
Distributors Transmission Facilities
02-03-2016 Side 17
New Electricity Trading Arrangement (NETA) in UK

• Before the March 2001, any generator
exporting more than 50 MW on to the system is
required to hold a generation licence and to
trade its output via an open commodity market,
the Electricity Pool.
• CfDs were essentially financial instruments, the
main purpose of which is to hedge risk
• After March 2001, New wholesale electricity
trading arrangements (NETA) was introduced .
02-03-2016 Side 18
• In the NETA design the old day- ahead pool based

on a coordinated - spot market with a market-
clearing price was replaced by a three- and- a half-
hour ahead balancing system with a complex pricing
scheme that features pay- as- bid mechanism with
rules intended to penalise imbalances.
• The governance arrangements that supported
NETA include the establishment of a Balancing and
Settlement Code (BSC) Panel, to oversee the Code
and to to provide or procure a range of operational
and administrative services, both directly and
through contracts with service providers.
02-03-2016 Side 19
The new arrangements include:

• Forward and futures markets
• a Balancing Mechanism in which the NGC, as system
operator, accepts offers of and bids for electricity
close to real time to enable it to balance the system;
• a Settlement Process for charging participants whose
contracted positions do not match their metered
volumes of electricity, for the settlement of accepted
Balancing Mechanism offers and bids and for clearing
costs of balancing the system.
• Ancillary service is managed by NGC and the cost
associated with the provision of AS are transferred
to the Consumers through transmission payment.
02-03-2016 Side 20
Two major Ancillary Services

• Frequency Controlled
o Primary frequency regulation
o Secondary frequency regulation
o Tertiary frequency regulation
• Voltage Control
• Replacement or supplementary reserve
02-03-2016 Side 21
Frequency Control
Required to keep the frequency between 49.5 and 50.5 Hz.
During contingency, frequency is allowed to drop under 49.5 Hz, but
for not more than 1 minute.
Primary frequency regulation is mandatory for all generators with
installed capacity of over 50MW.Generators are set for a droop of 3–5%.
Secondary frequency regulation is considered as a commercial service
and it is not considered as a mandatory provision.
Generators provide it using AGC.
The consumers pay through an increase in their electricity tariff
which includes capacity, operation and compensation.
02-03-2016 Side 22
•NGC responsible for managing ancillary services.

•The costs associated recovered from the consumers through uplift in
transmission payment mechanism.
Voltage Control:
Provision: all the generation units with a capacity over 30 MW.

Voltage must be kept within the range of Vnom+- 10% for 400, 275
and 132 kV networks and the power factor (PF) between 0.85
capacitive and 0.95 inductive.
The ratio of capacity price to operation price is approximately 1:2.
02-03-2016 Side 23
Technical aspects of ancillary services provision in England and Wales
Primary FCAS Secondary FCAS VCAS

Response time 10s 30s Instantaneous
Duration 20s 30min Not specified
Provider Generators and large Generators with Generators with capacities over
customers with load AGC and load 30MW
shedding shedding
Monitoring Continuous, Daily monitoring Voltage range must be kept
frequency must always be between Vnom + 10% for 400,
between 49.5 Hz to 50.5 Hz 275 and 132 kV transmission
system
Necessary Generation droop between Annually Based on historical levels,
amount 3% to 5% sensibility to determined by assigned in MVAr for every
frequency changes smaller system operator hour
than + 15 mHz
Commitment Mandatory for generators Optional Mandatory to keep the power
with capacities over 50 MW factor between 0.85 (capacitive)
and 0.95 (inductive)
02-03-2016 Side 24
Economic aspects of ancillary services provision in England and Wales

Main costs Insignificant and Low costs, difficult capacity and operation
identified difficult to to determine
determine
Transaction Annual bilateral Annual bilateral an auction and offer
mechanism contracts contracts, and mechanism operated on a
competitive auctions semester basis
Payment to For capacity, For capacity, For capacity, usage
providers usage (spot price) operation (spot
and compensation price) and
if applied compensation
Customer’s Through an uplift Through an uplift Through an uplift charge
payments charge charge
Price US $3.9/MWh US $4.3/MWh Capacity between
discovery $0/MWArh and 0.58/MVArh,
usage $1.31/MVArh
02-03-2016 Side 25
California Deregulation
Process
02-03-2016 Side 26
• On March 31, 1998 California became the first

sate to offer all customers a choice of electric
service providers. There are three significant
characteristics in California Model.
- A Zonal approach is applied to simplify the
transmission pricing scheme, including nodal and
congestion charge assessing.
- Multiple separate energy forward markets, each
with a supply and demand portfolio managed by a
Scheduling coordinator (SC) or PX, have been
introduced.
02-03-2016 Side 27
Competing Generators
Ancillary Services
Bid Dispatch
Scheduling
Co-ordinators California PX California ISO
(SC)
Brokers
Sell Forecast System Operators
(SO)
Distributors Monitor Control
Transmission systems
02-03-2016 28 Side 28
CALIFORNIA ASM
Four types:
1. regulation up,
2. regulation down,
3. spinning reserve
4. non-spinning reserve.
♦ Ancillary Services: RT and DA

♦ Co-optimized with energy in both RT and DA
♦ Spinning and non-spinning reserves with scarcity
pricing
♦ Regulation
02-03-2016 Side 29
After the power market crisis of 2001, the Californian ISO (CAISO)
redesigned its electric energy market. It then introduced the concept of
available capacity (ACAP), whose objective is to allow the ISO to verify
in advance the availability of enough resources to satisfy the customer
load as well as reserves. In the new market structure, the energy market,
the ancillary service market and the congestion management market are
jointly optimized.
Voltage Control
The ISO procures reactive power support services on long-term
contracts from reliable must-run generating units. The actual short-term
requirement is determined on a day-ahead basis, after the real power
market is settled and the energy demand and schedules are known.
The generators are mandated to provide reactive power within the
power factor range of 0.90 lag to 0.95 lead.
02-03-2016 Side 30
Frequency Control
 Primary frequency regulation and secondary frequency regulation
are not mandatory services.
 There exists up and down service regulation.
 The costs associated with this service correspond to capital,
operation, fuel, and reduced efficiency costs, etc.
 For secondary frequency regulation, the service must be available
in 10 min and should be supported for at least 2 hours.
 The system operator calculates the quantity required of the service
according to a criteria that takes care of demand and contingency.
 The quantity required generally comes close to 3% of the
maximum demand of the system.
02-03-2016 Side 31
Technical aspects of ancillary services provision in California

Response Instantaneous 10min 1min
time
Duration Not limited 2h Without limit
Provider Generators Generators Generation, transmission
and distribution
companies
Monitoring Through Area In charge of system operator Transmission lines must
Control Error operate according to the
(ACE) limits established by SO
Necessary According to the According to CAISO: more Determined by the SO
amount system’s than 5% of hydraulic according to voltage and
demand, generation +7% of the other reactive power levels
between 5% and generation sources.
12% demand, up Considering main
and down contingencies
Commitment Optional Optional Mandatory to keep the
pf between 0.9
capacitive and 0.95
inductive
02-03-2016 Side 32
Economic aspects of ancillary services provision in California

Main costs Capital, fuel, Capacity, Capacity and operation
identified equipment lifetime operation and
reduction, opportunity costs
maintenance and use
Transaction Competitive auctions Competitive Annual bilateral contracts
mechanism auctions
Payment to For capacity, usage Capacity payment According to capacity and
providers (spot price) and operation use, only if its provision is
payment for real out of the requested PF
time dispatch
Customer’s According to project According to According to CAISO
payments demand project demand project demand
Price discovery For capacity, up: US For capacity US Not specified
$16/MW, and down: $2.3/MW
US $20/MW
02-03-2016 Side 33
ASTRALIA ANCILARY SERVICE

MARKET(AEMO)
02-03-2016 Side 34
 In order to best meet these challenges a new organisational

structure was developed:
Stakeholders
ParticipantsJurisdictions End Users
System Operations
Power Exchange Market Systems
Services
ExchangeOperations Bidding
Market Development PASA
Power System Operation
Metering Optimisation (SPD)
Power System Dispatch
Settlements Communications
Power System Planning
Settlement Residue Real time monitoring
Ancillary Services
Registration Market Administration
Reserve Trader
Prudentials Systems
Management and Support Services

Board and Executive
Corporate Services
Business Systems
• AEMO operates 8 separate markets for the delivery of frequency

control ancillary services (FCAS)
• purchases network control ancillary services (NCAS) and
system restart ancillary services (SRAS) under agreements with
service providers
02-03-2016 Side 35
Australian Deregulation Process

• In Australia, the deregulation of the electrical system began in
1998. As part of this process, the National Electricity Market
(NEM) was created, in order to increase competition at every
stage of the electricity production and distribution.
• The National Electricity Market Management Company Limited
(NEMMCO) is the system operator and the ancillary services
market administrator .
• Initially, ancillary services were traded through long-term bilateral
contracts between NEMMCO and the services suppliers.
• Since 2001, frequency control ancillary services are traded in
competitive spot markets
• The payments are collected from customers only or from
customers and generators on a 50% to 50% shared basis
02-03-2016 Side 36
FCAS market Department of Electrical Engineering, IIT Kanpur (INDIA)
• Through competitive bidding
• Payments include payments for availability and for the delivery of the
services
• normal operating band of frequency: 49.9 Hertz to 50.1 Hertz.
• Frequency control divided into two reasonably distinct subsets:
• Regulation:
• correction of the generation / demand balance in response to
minor deviations in load or generation.
• controlled centrally from one of AEMO’s two National Dispatch
and Security Centers.
• Provided through AGC action.
• Contingency:
• correction of the generation / demand balance following a major
contingent event such as the loss of a generating unit or a large
transmission element
• It’s a locally controlled action like, Generator Governor
Response, Load shedding, Rapid Generation.
02-03-2016 Side 37
• Dispatch- based on merit order of cost.(i.e., The highest cost offer

to be enabled will set the marginal price for the FCAS category.)
• During period of high demand:
co-optimization algorithm is followed
(as it may be necessary for Dispatch center
to move the energy target of a scheduled
generator or load in order to minimize
the total [(of energy plus FCAS] cost)
02-03-2016 Side 38
The FCAS offers and bids must comply with similar bidding rules
that apply to the energy market:
• Offers / Bids can consist of up to 10 bands with non-zero MW
availabilities;
• Band prices must be monotonically increasing;
• Band prices must be set by 12:30 on the day prior to the trading day
for which the offer/bid applies;
• Band availabilities, enablement limits and breakpoints can be rebid
under rules similar to those applying to the energy market.
• Ancillary service plant dispatched between an enablement limit and a
corresponding breakpoint can be moved in the energy market in order
to obtain more FCAS.
• For example, if a generator was dispatched between the upper
enablement limit and the upper break point, SPD may “constrain” the
unit in the energy market in order to obtain more FCAS, provided
this led to the lowest overall cost.
02-03-2016 Side 39
NCAS
• Voltage Control
• Synchronous Compensator: a generating unit that can generate
or absorb reactive power while not generating energy in the
market;
• Generation Mode: a generating unit that can generate or absorb
reactive power while generating energy in the market.
• Network Loading Control
• to control the flow on interconnectors to within short term
limits
• can be controlled through the use of Automatic Generation
Control or Load Shedding.
02-03-2016 Side 40
System Restart (SRAS)
• Provided by two separate technology

1. General Restart Source: a generator that can start and supply
energy to the transmission grid without any external source of
supply.
2. Trip to House Load: a generator that can, on sensing a system
failure, fold back onto its own internal load and continue to
generate until AEMO is able to use it to restart the system.
02-03-2016 Side 41
Payments
• Both are long term contract ancillary services
• paid for through a mixture of:
• Enabling Payments – made only when the service is specifically
enabled
• Availability Payments – made for every trading interval that the
service is available.
02-03-2016 Side 42
Technical aspects of ancillary services provision in Australia

Response time Between 6s and 60s 5min Instantaneous
Duration 90s Not specified Not specified
Provider Generators with AGC Rapid generation Generators and syn.
and load shedding condensers
Monitoring Frequency Performance testing Permanent
monitoring. A range and monitoring monitoring of
of 50+0.1 Hz is generators and
allowed reactive plants
Necessary Determined by Determined by According to
amount NEMMCO according NEMMCO reactive power
to operational according to demand and energy
procedures operational consumption
procedures
Commitment Minimum is Optional Mandatory to keep
mandatory, optional the pf between 0.9
provision is paid capacitive and 0.93
inductive
02-03-2016 Side 43
Economic aspects of ancillary services provision in Australia
Main costs Capital and opportunity Capital and opportunity Investments and
identified operation
Transaction Competitive offers Competitive offers Annual bilateral
mechanism mechanism managed mechanism managed by contracts
by NEMMCO NEMMCO
Payment to According to the Enabling and Payments for
providers measured quantity compensation availability,
provided multiplied by enabling and
clearing price compensation
Customer’s According to ‘causer Recovery is prorated over Payments by
payments pays’ methodology, all participants. All customers according
based on the payments for contingency to their load on pro
contribution towards raise and lower services rata basis
frequency deviation are recovered from
generators and customers
Price discovery The clearing price as The clearing price as US $0.2/MVArh
determined by SPD. Bid determined by SPD. Bid
cap US $20/MWh cap US $30/MWh
02-03-2016 Side 44
Conclusions
• Primary frequency regulation and voltage control services are
mandatory in all the studied markets, except for primary frequency
regulation in California.
• The response time demanded from the suppliers is directly related
with the price that the consumers pay for the service (faster response
is at higher price).
• The mechanisms used to manage the provision of the AS are bilateral
contracts or competitive offers
• The most important costs associated to frequency regulation
correspond to investments, operation, and reduced efficiency and
opportunity costs.
• Voltage control costs are mainly associated to investment, operation,
maintenance and opportunity costs.
02-03-2016 Side 45
02-03-2016 Side 46
Ancillary Service
Market in India
02-03-2016 Side 47
Proposed Ancillary Services in India

•Frequency Control Ancillary Services (FCAS)
•Network Control Ancillary Services (NCAS)
•Power Flow Control Ancillary Services (PFCAS)
•Voltage Control Ancillary Services (VCAS)
•System Restart Ancillary Services (SRAS)
02-03-2016 Side 48
Frequency control ancillary Service

•IEGC band – 49.2 to 50.3 Hz
•Primary Response : FGMO
•Secondary Response :LFC/AGC (Absent by Design)
•Tertiary Response
•Availability Based Tariff (ABT)
•Use of Un-Requisitioned Surplus
•Scheduled to the ‘POOL’
•Merit order
•Peaking Gas Stations
•Pumped Storage Plants
02-03-2016 Side 49
Network Control Ancillary Services (NCAS)

 Power Flow Control Ancillary Services (PFCAS)
• To maintain the power flow through an interface within the physical limit.
[FACTS controllers]
 Voltage Control Ancillary Services (VCAS)

• Primary voltage control: Automatic local control [AVR, SVC]
• Secondary voltage control: coordinates the actions of local
regulators in order to manage the injection of reactive power within a
regional voltage zone
• Tertiary Voltage Control: manual optimization of reactive power flows
across the power system
System restart ancillary services (SRAS)
• Activated under contingency situation
02-03-2016 Side 50
Execution of frequency support ancillary services

1. Eligibility Criteria
• All sellers and regional entities which are part of scheduling and
deviation settlement mechanism for real and reactive power.
• NOC issued by concern SLDC/RLDC to take part in power
exchange for participation in the ancillary service market.
2. Market Platform
• Through competitive bidding
3. Bidding and price discovery
• Window for bid in FSAS to be open after closure of DAM.
• Bids to be invited in a day ahead basis (time block wise bid with
quantum and price quote).
• Bid to be placed for standard time blocks of 2 hrs.
• Payment: pay as bid
02-03-2016 Side 51
Time Line for Frequency Support ancillary service Market
• Bid call session
• Closed Double Sided Bidding
1800 hrs-
2000hrs • Members can Submit, edit, modify, delete buy & sell bids
• PX to provide information to the nodal agency

• Combined stack bid to be prepared by the nodal agency based on bids
2000hrs -
21.00hrs received from PXs.
• Scheduling
• Once dispatch decision is taken, PXs to calculate area clearing price
2200hrs based on transmission network available.(Pays IN)
• Accounting and settlement

• PX makes payment to bidders in proportion of the quantum of
D+1 overdrawal. (Pays OUT)
02-03-2016 Side 52
Dispatch of FSAS bids in real time

•If the frequency remains 0.05 Hz below the lower operating frequency
range as specified in the IEGC for two consecutive time-blocks, the
nodal agency to give instructions to the FSAS provider to despatch in the
third time block for despatching generation from the fifth time block.
• If the frequency remains at 50.0 Hz for two consecutive time blocks,
after kicking-in of the FSAS, the nodal agency to give instructions for
withdrawal of FSAS.
• The generation despatched under FSAS would be given a despatch
certainty for 8 time blocks (i.e. 2 hours).
• In case withdrawal instructions are given by the nodal agency before
the completion of 2 hours, 50% of the bid price to be paid to the seller
for the period falling short of 2 hours.
• Further, in case a seller, whose power has been scheduled, fails to
provide the committed generation in real-time then the seller would be
liable to pay 1.5 times the bid price or the applicable UI rate whichever
02-03-2016 Side 53
is higher.
•No commitment charges payable to the bidders for making itself

available in the FSAS market.
•Upper limit of UI rate to be the ceiling price for the scheduled bid.
•The energy despatched under FSAS would be deemed to be delivered at

the Regional periphery.
•Any over injection by the FSAS provider shall not be paid for.
NODAL AGENCY: NLDC
02-03-2016 Side 54
Voltage Control Ancillary Services (VCAS) Execution

•To be through PX.
•Payment to be made on pay-as-bid subject to maximum ceiling rate of
reactive energy.
•Payment to be as per regulation 6.6 of CERC (IEGC) Regulation, 2010.
NODAL AGENCY: NLDC
Execution of Black Start Ancillary Services (BSAS)
•The generators to be paid for one day capacity charges on the day of
providing the BSS, as determined by the Commission.
•The energy charges to be paid at twice the energy charges determined
by the Commission for the volume of energy supplied during the
restoration process.
•Other flexible generators providing BSAS to be paid fixed and energy
charges on the normative figure to be specified separately.
NODAL AGENCY: NLDC
02-03-2016 Side 55
Issues
• Need for ancillary Service
• Payment Risk
• Linkage to the UI ceiling Rate
• Possible Breach of PPAs
• Load Management by Utilities
• Market Design
• Commitment Charge
• Forecasting
02-03-2016 Side 56
Points of concern
• How would FSAS be incentive compatible?
• Will FSAS act as a cheaper alternative than UI for grid indiscipline?
• Pay as Bid Vs Uniform Price Auction?
• Since, bids for FSAS market would open after the DAM closes, the
‘owners’ of capacity would prefer to sell electricity in the DAM first
and offer unsold capacity in for FSAS market. Clearly, supply side
would have less flexibility to address the needs of FSAS market. It is
important to make demand side bidding an integral part of the FSAS
mechanism.
• FSAS as a Substitute for UI Mechanism?
• Can be used as a option market along with UI mechanism.
• Develop it further to augment/replace UI mechanism in future
• Sharing of Revenue from FSAS
02-03-2016 Side 57
• Criteria for deployment and withdrawal of FSAS
• Reduce Bid Span Granularity
• Need for Effective Market Monitoring
• Uncertainty of Despatch and Commitment Charges
• Payment to plants "identified to be despatched" or

"despatched"
02-03-2016 Side 58
02-03-2016 Side 59

Prof. S. N. Singh - 4 - Ancillary Services in Electricity Market

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Prof. S. N. Singh - 4 - Ancillary Services in Electricity Market

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Department of Electrical Engineering, IIT Kanpur (INDIA)

Ancillary Services in Electricity

S.N. Singh, Professor

Department of Electrical Engineering

• NERC defines Ancillary Services as

• Ancillary services consist of services required for

Classification of Ancillary Services

Frequency Control Ancillary Services

Network Control Ancillary Services

SgQg Armature current limit

System Restart Ancillary Services

Technologies Used for Provision of AS

Ancillary Services Technologies Used

NCAS Generators, Capacitors, Inductors,

Procurement of Ancillary Services

Remuneration of Ancillary Services

Remuneration of Ancillary Services

• While designing an ancillary services

England & Wales Electricity

• The restructuring process of the electric supply

NGC Power Exchange (PX) System Operator

Sell Forecast Monitor Control

Distributors Transmission Facilities

New Electricity Trading Arrangement (NETA) in UK

• In the NETA design the old day- ahead pool based

The new arrangements include:

Two major Ancillary Services

•NGC responsible for managing ancillary services.

Provision: all the generation units with a capacity over 30 MW.

Technical aspects of ancillary services provision in England and Wales

Primary FCAS Secondary FCAS VCAS

Economic aspects of ancillary services provision in England and Wales

• On March 31, 1998 California became the first

Distributors Monitor Control

♦ Ancillary Services: RT and DA

Technical aspects of ancillary services provision in California

Economic aspects of ancillary services provision in California

ASTRALIA ANCILARY SERVICE

 In order to best meet these challenges a new organisational

Management and Support Services

• AEMO operates 8 separate markets for the delivery of frequency

Australian Deregulation Process

• Dispatch- based on merit order of cost.(i.e., The highest cost offer

System Restart (SRAS)

• Provided by two separate technology

Technical aspects of ancillary services provision in Australia

Proposed Ancillary Services in India

Frequency control ancillary Service

Network Control Ancillary Services (NCAS)

 Voltage Control Ancillary Services (VCAS)

Execution of frequency support ancillary services

• PX to provide information to the nodal agency

• Accounting and settlement

Dispatch of FSAS bids in real time

•No commitment charges payable to the bidders for making itself

•The energy despatched under FSAS would be deemed to be delivered at

NODAL AGENCY: NLDC

Voltage Control Ancillary Services (VCAS) Execution

• Criteria for deployment and withdrawal of FSAS

• Reduce Bid Span Granularity

• Need for Effective Market Monitoring

• Uncertainty of Despatch and Commitment Charges

• Payment to plants "identified to be despatched" or

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