1. Ancillary Services in the Indian
Context
IPPAI Conference on Ancillary Services and
Alternate Energy Options
April 10, 2013
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2. Current Installed Capacity and Power Supply Position:
Persistent Deficits In A Changing Supply Mix
All India Installed Capacity (as of 31st
March 2012): Technology Break Up
(Deficit %)
(MUs)
Installed Capacity
(MW)
Thermal Hydro Renewable Nuclear
(Deficit %)
• The current capacity stands at around 210 GW
(MW)
• Generation mix continues to be following a flat
trend for the past four years with coal being the
dominant source
• Coal accounts for about 56%,Hydro around
20%, and Gas around 9% of the total installed
capacity
• Share of renewables have increased over the
past, from 2% in 2003-04 to 6% in 2006-07 • The country is in an overall deficit.
and now to 12% in 2011-12 • North Eastern, Western, and Southern region
experience larger regional imbalances.
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3. Installed Capacity and Ownership Pattern:
Increasing Private Play
• The best thermal : hydro mix
achieved in the Indian power system
was about 54: 46 at the end of the
Vth Plan period (year 1980).
• Subsequently the mix has
deteriorated sharply. At present hydro
power comprises only 19 percent of
the installed capacity mix.
Source: CEA Evolution of Ownership Pattern
• The contribution of the private
sector has grown over the last 5 Installed Capacity (MW)
200000
176990
180000
years. 160000 143061 147965
159398
• Most of the private sector capacity 140000
132329
is also located at or near fuel sources 120000
100000
since the cost of delivered power is 80000
lower and the chances of dispatch are 60000
higher. 40000
20000
•No systemic signal for flexible 0
capacity to ensure system security 2006-07 2007-08 2008-09 2009-10 2010-11
Installed... State Private Centre
Source: CEA
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4. Understanding the Ramp Rates based on Demand
Profiles
Source: Task Force on Peaking and Reserve Power
The Ancillary Services Market is anticipated to serve the dynamic requirements of the Grid.
This is a significant departure from the regulation oriented approach followed in the past
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5. In the Overall Product Market Continuum, AS
Markets Operate Close to Time
AS Mkt. Proposed
schedules
and exercised
adjustment adjustments
Final
Long term Day ahead adjustments schedules
ISO bids
Short- Intra-
contracts term market day balancing
contracts market market
Imbalance
s cashed
Feasible schedules
out
Capacity Margin
Current
discussions Operating
reserve
largely around
Frequency
Frequency support
Support,
Reactive
Reactive energy
Energy and
Black Start
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6. Product homogeneity is an important criteria for
market design
Time Product Market organisation Product homogeneity
Long-term physical forwards Bilateral Mixed
Financial forwards NA High
Short-term physical forwards Exchange/Auction High
Transmission Access Bilateral/Auction Mixed
Ancillary Services Auction/Bilateral Mixed/Low
Constraint management Auction/Bilateral Low
Balancing (UI) Frequency linked High
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7. Approach to Implementation Will Have Bearing on
Market Viability (e.g. Frequency Support)
1. Local Frequency Support Actions in Control
Area
2. RLDC level restrictions to limit deviations
3. Frequency Support AS Markets
If the Frequency Support AS market acts purely as a residual market,
then the volumes on the market will be very limited and the market is
unlikely to be viable
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8. Issues in Ancillary Service Market Design
•Regulations on market design and procurement
mechanisms.
Policy and Regulatory
•Regulations on tariffs for power procurement
Aspects
and on retail tariffs.
•Competitive procurement guidelines/SBD design
•Availability of designated plants for Ancillary
Services
Supply Side Barriers
•Fixed and variable costs
•Minimum dispatch
• Absence of capacity statements
Demand Side Issues • Some of the issues (e.g. voltage management) are
very local. How would the markets serve them
• Lack of product homogeneity reduces market options
• Limited AS market volumes could restrict of suppliers
Market Design Barriers • Key to effective AS markets is the willingness of
LSEs to serve load and willingness of regulators
to penalize non-service
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9. Thank You
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