1. The Need for Regulatory & Policy Framework for
Ancillary Services & Alternative Energy Options
in the Indian Power Sector

2. Ancillary Services for the Power Sector – I
Definition of Ancillary Services
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.”
Harry Dhaul - Director General, IPPAI

3. Ancillary Services for the Power Sector – II
General classification 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
Provision of Ancillary services can contribute to grid stability and security
Harry Dhaul - Director General, IPPAI

4. 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
Harry Dhaul - Director General, IPPAI

5. 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.
Harry Dhaul - Director General, IPPAI

6. Issues – II : Variability of Renewable Power in
the Grid
Harry Dhaul - Director General, IPPAI

7. Issues – III : Peaking Power Requirements
The provision of Ancillary Services can help resolve these issues
Harry Dhaul - Director General, IPPAI

8. 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
Harry Dhaul - Director General, IPPAI

9. 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
Harry Dhaul - Director General, IPPAI

10. Suggestions–I: Price Pooling for affordability
Sl. Grid UI Rate % of Ancillary Weighted
No. Frequency (Rs/unit) overall Service Cost (in
(Hz) (Rs/unit ) 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
Harry Dhaul - Director General, IPPAI

11. Suggestions–II a: Promote Energy Storage
Solutions
Inward drawl from the Outward injection into the
Grid when power is grid or to tail end
consumer when power is
cheap through:
expensive to:
 Power Exchanges
 Power Exchanges
 Bilateral Agreements  DISCOMs
 UI  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.
Harry Dhaul - Director General, IPPAI

12. 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
Harry Dhaul - Director General, IPPAI

13. Suggestions–II c: Regulatory & Policy Framework
Required to Incentivise Energy Storage
 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
Harry Dhaul - Director General, IPPAI

14. 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
Harry Dhaul - Director General, IPPAI

15. The Proposed National Power Beltway – I :
24x7 Plug & Play Grid
Harry Dhaul - Director General, IPPAI

16. The Proposed National Power Beltway – II :
State Sub systems
National Power
Beltway, 765 KV
Inter-connectivity
Ancillary
Load
Energy Storage
Load
The State
Generation Point Sub System,
Load
Load < 220 KV networks
Ancillary
Load Generation Point
Harry Dhaul - Director General, IPPAI

17. Let the deliberations
begin!
Harry Dhaul - Director General, IPPAI