Implementation of market based ancillary services in the Indian power system

The Indian power system has undergone a transformative shift in response to the rapid integration of renewable energy (RE), particularly wind and solar generation. With an escalated target of establishing 500 gigawatts (GW) of RE by 2030 to combat climate change, the challenge of variability in net demand and reliance on forecasts has been a focal point. This variability necessitates efficient grid management, leading to the adoption of innovative approaches within the regulatory framework and market design. Reserve Regulation Ancillary Services (RRAS), implemented in India to facilitate tertiary frequency control in the Indian power system was an important step in this direction [1],[2]. RRAS was in force from April 2016 to May 2023. To start with RRAS mechanism allowed participation of only those generators whose tariff was determined or adopted by the Central Electricity Regulatory Commission (CERC). The operational experience paved way for introduction of market based tertiary reserve ancillary services from 1st June 2023 to allow participation of other generators (intra-state, merchant).

This market-based approach, in line with the CERC (Ancillary Services) Regulations, 2022, aims to enhance the availability of tertiary spinning reserves and adapt to evolving needs [3]. The Ancillary Services regulation allows diverse resources, including resources such as demand response and storage, to bid and provide dispatch for tertiary frequency control. Multiple softwares were developed or augmented to implement TRAS - including an in-house market clearing engine, regular and shortfall despatch software, reserve requirement estimation program, open access registry, and web-based scheduling software.

The information flow in TRAS operates within strict timelines for day-ahead markets, real-time markets, and dispatch, ensuring bid clearing and dispatch occur every 15 minutes. Application Program Interfaces (APIs) were integrated for software interfacing, streamlining communication and operations. Automation became a cornerstone for estimating reserve requirements based on historical Area Control Error (ACE) data.

Bid specifications are collected through the three power exchanges and are consolidated at the National Load Dispatch Centre (NLDC) using the National Open Access Registry (NOAR). The system operator facilitates market clearing using an in-house market clearing engine that employs transparent and robust algorithms based on linear programming methods to meeting the demanding timelines. TRAS-Up regulation bids follow a uniform market clearing price, while TRAS-Down bids utilize a pay-as-bid method, aligning with regulatory guidelines. The introduction of price caps, in adherence to regulations, required procedural segregation between the normal ancillary service providers and high-price providers while despatch.

Operations involve web-based energy scheduling software (WBES) used by the system operator, with TRAS Providers responding to despatch instructions for tertiary frequency control. Accounting and settlement of services provided by TRAS Providers occur on a weekly basis, ensuring transparency and reliability.

The paper's coverage of these various facets promises significant insights into the intricacies of this new project in the Indian power system at the central sector level, showcasing adaptability and forward-thinking strategies in the power sector to tackle high RE integration.