Advance Procurement of Reserves in Indian Electricity Market –Policy & Regulatory Intervention and Implementation Experience

All India demand has been increasing on trend from past few years with high economic growth rate. On some days it is observed that due to imbalance in load and generation, all India grid frequency goes beyond IEGC (Indian Electricity Grid Code) stipulated band of 49.90 Hz to 50.05 Hz.

States generally keep their generating units on bar based upon the likely demand scenario and try to maintain drawal as per their schedule. But deviation in real time is inevitable due to various reasons at both demand and generation side. By system operator, ancillary services are despatched as per the Grid requirement as proactive actions. Further Gas based Interstate Generating Stations (ISGS) are kept on bar to keep frequency within the IEGC band especially during high demand and less reserves scenarios.

The demand is expected to accelerate in coming years. For the first time, a need of planning for keeping advance reserves was felt in the grid so that demand can be met all the time during the period from April-23 to June-23 (crunch period). Govt of India (GoI) reviewed the power supply situation in the country and its preparation to meet the future demand. It was decided to gear up generation from thermal (coal and gas) for meeting the demand in crunch period due to decline in wind and hydro generation. National Load Despatch Centre (NLDC), Grid-India has prepared the likely scenario where additional resources are required.

Further, Ministry of Power (MoP) devised a mechanism for generation of power from gas based power stations for meeting high demand during crunch period (April-23 to June-23). This is the first instance when procurement of reserve has been done in advance.

In this context, 1556 MW during off-peak hours (16 hrs) and about 4241 MW during peak hours (8 hrs) of gas based generation capacity has been identified to be made available from central sector generating stations during the crunch period. For arrangement of fuel for generation during crunch period, only identified gas based power stations have been given direction by MoP to procure gas in advance. Grid-India has been given responsibility of scheduling and dispatch of these gas based generating stations in coordination with stakeholders to keep some reserve capacity within the total identified capacity during crunch period at system operators’ disposal. This reserve would be dispatched under ancillary services as and when need arises in real-time. Further, 1010 MW in addition to the 4241 MW (central sector generating stations) of gas based generating stations have been identified through competitive bidding process for utilization during the crunch days. These stations include both interstate and intrastate generating stations. It is the first time when National Load Despatch Centre (NLDC) has been given the responsibility for dispatch of intrastate generator under ancillary services.

Around 1270 GWhr of energy has been generated from the gas power station during high demand period.