The Need for Regulatory & Policy Framework for Ancillary Services & Alternative Energy Options in...

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

in the Indian Power Sector

Harry Dhaul - Director General, IPPAI

Ancillary Services for the Power Sector – I

Ancillary Services are support services in the power system or grid operation, which facilitate the basic function of Generation, Transmission & Distribution of electricity by ensuring reliable delivery of power at stable frequency and voltage, along with security of the grid. As also mentioned in Indian Electricity Grid Code, Ancillary Services are “The 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 power etc.”

Definition of Ancillary Services


1. Frequency Control Ancillary Services

(FCAS): Used to maintain the frequency within the

desired range by balancing the load and generation in real time

General classification of Ancillary Services:

Provision of Ancillary services can contribute to grid stability and security

Ancillary Services for the Power Sector – II


Ancillary Services for the Power Sector - III

2. Network Control Ancillary Services (NCAS): Power Flow Control Ancillary

Services (PFCAS): Used to control the flow on interconnectors within specified limits

Voltage Control Ancillary Services

(VCAS): Used to maintain the system voltage within in the desired range

System Restart Ancillary Services

(SRAS): Help restart the system post blackout situations


Issues – I : Stranded Generation Capacity

Some of the possible reasons why generation capacity gets stranded:

Inadequate evacuation infrastructure

Change of Loading Methodology from

thermal to surge impedance

Inability of DISCOMs to buy expensive power

Absence of funding to purchase capacities in need

All possible generation capacities should be mainstreamed in order to reduce power cuts in the country.


Issues – II : Variability of Renewable Power in the Grid


Issues – III : Peaking Power Requirements

The provision of Ancillary Services can help resolve these issues


Issues – IV: Issues to be resolved

1. Determining which ancillary services are needed

2. To what extent are ancillary services required to maintain system reliability

3. Whether or not these services can be provided competitively or if they can only be provided under regulation

4. Whether the supplier’s services can be metered and billed cost-effectively

5. If yes then who will pay for the ancillary services, to whom; and how will it be paid


Suggestions: Regulatory & Policy Framework

Examine the role of RLDCs and SLDCs and empower them to take financial decisions to meet grid stability requirements, such as dispatching more expensive power to meet higher demand for electricity

Put in place robust protocols for operational procedures, payment guarantees and timely commercial settlement between generators, host discoms, utilities, power traders, power exchanges and consumers. This includes an effective financial settlement mechanism for power from ancillary services: peaking power stations, spinning reserves and reactive power suppliers etc.

Harmonise central and state policies, regulations and their implementation


Suggestions–I: Price Pooling for affordability

Sl. No.

Grid Frequency

(Hz)

UI Rate (Rs/unit)

% of overall

Ancillary Service

(Rs/unit )

Weighted Cost (in

Paise)

1 50 3 60 180

2 49.8 5 30 150

3 49.65 7 6 16 96

4 49.55 9 4 *18 72

24 498

Pooled Price (ie UI + Ancillary) per unit 4.98

of which UI Billing is 2.40

and Ancillary charges are 2.58

* e.g. power from liquid fuelled stations


Suggestions–II a: Promote Energy Storage Solutions

Inward drawl from the Grid when power is cheap through:

Power Exchanges

Bilateral Agreements

UI

Outward injection into the grid or to tail end consumer when power is expensive to:

Power Exchanges

DISCOMs

HT Consumer sales

UI

Power produced during off peak hours can be stored and released during peak hours. e.g. Wind Power Generation in Tamil Nadu is high during monsoon nights when power demand is lowest. Power generated and stored at night can be injected into the grid to meet peaking requirements.


Suggestions – II b: Regulatory & Policy Framework

Required to Incentivise Energy Storage

Provide incentives for stored energy similar to benefits for RE such as:

Stored Energy Purchase Obligations (similar to RPOs)

Stored Energy Certificates (similar to RECs)

Preferential Tariff for Stored Energy equal to Solar Tariff


Allow Dual Classification to storage

provider as consumer and also as a generator

Allow such battery banks connectivity to higher voltage voltages for effective, efficient & timely commercial settlement e.g. at STU/CTU level

At Lower Levels e.g. 11 KV, Transmission losses, for both inward and outward flow of power should be exempted as every unit at tail end equals 2.5 units at generation end

Suggestions–II c: Regulatory & Policy Framework

Required to Incentivise Energy Storage


Suggestions–III: The Way Ahead

Harnessing all possible renewable energy sources coupled with energy storage to provide firm power when it is required most can help reduce:

the need for high cost liquid fuelled power on Supply Side

power cuts on the Demand Side

variability of RE power in the grid, thereby promoting grid stability

To power the needs of a rapidly developing economy with uncontrolled growth of load and unplanned generation which often happens outside the dedicated transmission corridor, what we also need is a grid of the future


The Proposed National Power Beltway – I : 24x7 Plug & Play Grid


The Proposed National Power Beltway – II : State Sub systems

Generation Point

Generation Point

Load

Load

Ancillary

Load

Load

Load

Ancillary

Energy Storage

National Power Beltway, 765 KV

The State Sub System, < 220 KV networks

Inter-connectivity


Let the deliberations begin!

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