CERC proposes buying balancing power from spot markets

Reserves for frequency support are of three types – primary, secondary and tertiary.

The Central Electricity Regulatory Commission (CERC) has proposed a mechanism which allows load dispatch centres to procure a part of power to be used for ‘ancillary services’ from the spot market through electricity exchanges. Ancillary services are used by power systems operators to enhance the reliability and security of the electricity grid and they also work towards restoring the grid frequency and relieving congestion in transmission networks

In its latest draft ancillary services regulations, CERC said that for tertiary reserve ancillary service, the national load dispatch centre will have to notify power exchanges the quantum of electricity requirement on a day-ahead basis before commencement of the day-ahead-market or the real-time-market. According to experts, the demand for tertiary ancillary services from the spot market will range between 1,500 mega-watt (MW) and 2,000 MW, and in extreme cases, it can rise to around 5,000 MW.

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In the day-ahead-market mechanism, buyers bid for power supply for the next day while real-time-market provides 48 auction windows throughout the day on the power exchange platforms. Payment for the ancillary services will be made from the ‘deviation pool account’ where penalties are collected from power generators for supplying higher or lower than promised quantum of electricity.

The ancillary services will be used for maintaining the grid frequency at close to 50 hertz in the event of sudden loss of power supply scheduled from a generator. Reserves for frequency support are of three types – primary, secondary and tertiary. While primary reserve responds almost immediately, secondary reserves are deployed to the system operator to relieve the primary response. Tertiary reserve, which typically respond in 15 minutes, has the task of relieving the secondary reserves and provides significant insurance against wide spread outages.

Based on review of initial operations, CERC may later direct procurement of secondary ancillary services through the market-based bidding mechanism as well. The introduction of such services is also seen to augur well for the uptake of renewable energy. In order to manage the infirm nature of renewable power, discoms have to make alternative arrangements to procure balancing electricity for stabilising the grid. The cost of balancing renewables has been estimated to be in the range of Rs 1.10/unit by the Central Electricity Authority.

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