1. Session 2
Drivers of Ancillary Services in India
10th April, 2013
V.K.Agrawal
Executive Director, NLDC
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2. Outline
• Regulatory Provisions
• Existing Framework
• Drivers for Ancillary Services in India
• Implementing AS : Role of Power Exchanges
• FSAS : Issues under discussions
• Concluding Remarks
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3. Regulatory Provisions
• Section 28 (3) of Electricity Act, 2003
“The Regional Load Despatch Centre shall…
be responsible for optimum scheduling and despatch of electricity
within the region…..”
• NLDC Rules, 2005
“Coordination with Regional Load Despatch Centres for achieving
maximum economy and efficiency in the operation of National
Grid.”
• NLDC/RLDCs to identify ancillary services
Clause 11(1) (b) 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:”

4. Definition of Ancillary Services
• 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”
• The Appellate Tribunal for Electricity, judgment in
appeal no.202 (13th December 2006)
“Ancillary services are those functions performed to support the
basic services of generation, transmission, energy supply and
power delivery. Ancillary services are required for the reliable
operation of the power system.”
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5. Existing Framework
• Available Avenues for procurement of Power
– Long Term Contracts
– Medium Term Contracts
– Short Term Open Access (STOA)
• Bilateral (OTC)
• Collective Transactions through Power
Exchange(s)
– Real time imbalances (UI)

6. Existing Framework (contd.)
• Indian Electricity Market : Distinguished features
– Multiple buyers and sellers
– Market under development
– Lack of Adequate Reserves
– Loose Power Pools
– Absence of Tight Frequency Control
– Lack of adequate Primary, Secondary and
Tertiary Response
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7. Drivers for introduction of Ancillary Services in India
• Reliability and Security
• Restructured Power Systems
• Fragmented unutilized generation
• Consistent shortages during peak hours
• Frequent unplanned load shedding
• Voluntary service to meet varied needs
• Mitigating the variability of RES
• Product available for a common good
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8. Implementation of Ancillary Services in India
• Approach paper on ‘Ancillary Services in Indian Context’
published by POSOCO
• Service identified for immediate implementation
– Frequency Support Ancillary Service (FSAS)
• Harness un-despatched generation
• Liquid fuel based / Diesel based
• Merchant/ IPPs/ CPPs
• CERC Order issued 20.07.2012
– Formulation of draft Regulations for Ancillary Services in
progress
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9. Implementing AS : Role of Power Exchanges
• New product in the name of FSAS
• Separate category of user group
• Standing clearance from concerned SLDC/RLDC
• Competitive Bidding
• Price Discovery
• Merit Order Despatch
• Anonymity of Bidders
• Home Grown Solution
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10. FSAS : Issues under Discussions
• Can it work in shortage scenario….
• Can it go along with UI….
• At what point to Trigger and Withdraw….
• Operational Requirements….
• Monitoring of actual delivery….
• How deviation would be accounted for….
• How to charge the beneficiaries….
• Whether Habitual OD states abdicating grid
discipline look to Ancillary as their rescue….
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11. Concluding Remarks
• Opportunity for Generators towards
– Helping consumers in meeting higher demand
– Monetary Incentive to them
• Utilization of fragmented stranded capacity
– Harnessing un-despatched generation & Optimization
• Helping hand towards higher Renewables penetration
– Complementing Intermittency
• Confidence to the peakers
– Towards better utilisation of their capacity
• Cannot be looked upon as license to overdraw
• Leads towards better and stable system
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12. Thank You
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