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Submitted by
Kanupriya Sethi
SAP ID: 500043065
Enrollment Number: R130215014
MBA Power Management
2015-17
College of Management & Economics Studies, UPES
Study of Forecasting,Scheduling and Imbalance Handling
for RE Generating Stations
STUDENT DECLARATION
I hereby declare that this submission is on my own work and that, to the best of my knowledge
and belief, it contains no material previously published or written by another person nor material
which has been accepted for the award of any other degree or diploma of the university or other
institute of higher learning, except where due acknowledgement has been made in the text.
Kanupriya Sethi
SAP ID:500043065
Enrollment Number: R130215014
MBA Power Management 2015-17
College of Management & Economic Studies, UPES
EXECUTIVE SUMMARY
Renewable energy (RE) has become an important agenda of India’s energy planning process
especially since climate change has taken center stage in the domestic and international policy
arena. To demonstrate its commitment to renewable energy, the government has set
aggressive targets for renewables and several incentives and policy initiatives at the Central and
State levels. The targets of 1.75 Lakh MW of renewable energy capacity by end of the year
2022. The focus is on both, grid connected and off grid generation. It is evident that the
development of renewable energy sector hinges on the combination of legislative frameworks,
funding mechanisms, institutional arrangements, and co-ordination mechanisms, which work
together to support the implementation of RE strategies, policies and programmes. It is seen
that despite the growing momentum of activity in this sector, there are certain issues which
highlight the gaps in the governance of renewable energy in India. This report discusses some
of the key technical and regulatory issues which have a bearing on RE sector. These pertain to
technical capacity, planning and budgetary allocations, scheduling and balancing of the power,
inculcating green power in the grid, variability of the renewable generation, and regulatory
compliance. The report highlights these issues with specific examples and sums up the way
forward for addressing some of these gaps. Examples from various countries like Germany,
USA, NORDIC Pool are studied, understood and inferences are drawn looking at their physical
features, regulatory framework and other factors which govern the dynamics of the green
electricity. The process of renewable energy balancing is studied along with the framework of
scheduling is studied in detail, so that this concept can be used to derive on to a completely
new scheduling and deviation settlement mechanism so as to have the generation within the
stipulated limits. Hence the grid can become more flexible in absorbing the variations from the
renewable energy sources. In short, generator deviating from its stipulated band will be fined
depending upon the extent to its deviation. The same rules apply to over production, after
certain limit no extra inventive will be given to the generator. This will help in reducing the
malpractice/gaming in scheduling. As the country goes deep and deep into the generation of
renewable energy, the quantum of load variation increases which will require a separate
mechanism to maintain the output of the system and its stability. The effect of high variability is
studied in detail and its negative effects are enlisted in the report. These points are taken as
reference point and a model to eradicate these negative points is made, so as to have a
completely stable system.
The problem of balancing is a mammoth problem, which will keep on increasing down the line
with capacity addition. Current regulatory and technical framework is not sufficient to cope up
with the capacity advancement. No clear instructions are present on how to have the balancing
when the renewables will produce variable power. In order to have a deeper knowledge on the
topic, the study of the deviation settlement mechanism along with balancing mechanism of
various countries is done. Major renewable energy integrated countries are Germany, Spain,
NORDIC countries, USA etc. Analysis of Germany, NORD pool and USA is done and the
significant points and major moves on the integration of renewable power are incorporated in
the report. Denmark created history on 9th July 2015, by producing 140 % of their demand
electricity by renewable sources, majorly wind. Hence this proved world that complete
integration of renewable energy into the grid is possible. The focus should be on the physical
and regulatory framework. India is focusing on the transmission corridors, which aims to
connect high renewable energy producing states to other states, so that renewable power can
flow continuously and can be fed into the conventional energy grid. One important lesson
learnt from Denmark is that electricity should be made a byproduct of the variable producing
system Another major improvement is development of ancillary markets, such that more
regulations and improvement in the ancillary markets in the country. Generators should be
allowed to participate in the balancing markets which shall be capable to balance the variability
of the renewable sources. Three different types of balancing is required, first being the most
urgent balancing when sudden dip in the power happens from the RE generators. The balancing
energy should come in around 10-15 seconds and this has to be automatic mechanism, as
manual mechanism cannot be so quick to provide the required amount of energy. Thus the
generators must run synchronous with the RE generators. Now second type of balancing is that
this Primary balancing load can only run for few minutes hence, there needs to be a backup
which needs to be activated by the system operator. Thus the generators which are selected for
the secondary balancing, are now activated by the system operators and primary generators
are backed down. These generators are capable to produce power for longer periods and
generally are the spinning reserves of the power plants. After secondary balancing, if the fault is
long enough to consume secondary balance power, then system operator orders tertiary power
to engage in and this is completely manual process. These generators are non-spinning reserves
and needs to be started by the operators. Now regulations needs to be set for this balancing
mechanism along with the payment settlement mechanism, thus the payment will be done
under two different categories, Capacity charge and Energy charge.
Hence the system remains balanced all day, thus allowing the share of renewable to increase in
the grid without effecting the grid operation and thus also providing more stability to the
electricity grid.
Analysis of different countries has helped in looking at the various kinds of problems and
different solutions to them, thus helping in the development a best fit mechanism, which suits
Indian needs and can be made easily to merge in the current system.
Additional incentives should be given to the generators producing electricity close to the
scheduled energy, hence in short forecasting techniques accuracy should be awarded properly,
thus allowing the forecasting techniques to develop upon itself and indirectly helping the
system to less utilize the balancing mechanism and will lay a path for development of
conventional and non-conventional resources side by side.
TABLE OF CONTENTS
LIST OF TABLES
LIST OF FIGURES
Chapter -1
INTRODUCTION
1.1 Introduction
“The whole world is moving towards renewable energy. Renewable energy (RE) has become an
important agenda of India’s energy planning process especially since climate change has taken
center stage in the domestic and international policy arena. To demonstrate its commitment to
renewable energy, the government has set aggressive targets for renewables and several
incentives and policy initiatives at the Central and State levels. The targets of 1.75 Lakh MW of
renewable energy capacity by end of the year 2022. The focus is on both, grid connected and
off grid generation. It is evident that the development of renewable energy sector hinges on
the combination of legislative frameworks, funding mechanisms, institutional arrangements,
and co-ordination mechanisms, which work together to support the implementation of RE
strategies, policies and programs. It is seen that despite the growing momentum of activity in
this sector, there are certain issues which highlight the gaps in the governance of renewable
energy in India. This project discusses some of the key technical and regulatory issues which
have a bearing on RE sector. These pertain to technical capacity, planning and budgetary
allocations, scheduling and balancing of the power, inculcating green power in the grid,
variability of the renewable generation, and regulatory compliance. The project highlights these
issues with specific examples and sums up the way forward for addressing some of these gaps.
The process of scheduling is studied in detail, so that this concept can be used to derive on to a
completely new scheduling and deviation settlement mechanism so as to have the generation
within the stipulated limits. Any generator under producing the energy will be penalized and
over production will be rewarded up to a certain limit, so as to avoid any malpractice in the
system. As the country goes deep and deep into the generation of renewable energy, the
quantum of load variation increases which will require a separate mechanism to maintain the
output of the system and its stability. The effect of high variability is studied in detail and its
negative effects are enlisted in the report. These points are taken as reference point and a
model to eradicate these negative points is made, so as to have a completely stable system.”
“The problem of balancing is a mammoth problem, which will keep on increasing down the line
with capacity addition. Current regulatory and technical framework is not sufficient to cope up
with the capacity advancement. No clear instructions are present on how to have the balancing
when the renewables will produce variable power. In order to have a deeper knowledge on the
topic, the study of the balancing mechanism of various countries is done. Major renewable
energy integrated countries are Germany, Spain, NORDIC countries, USA etc. Analysis of
Germany, NORD pool and USA is done and the significant points and major moves on the
integration of renewable power are incorporated in the report. Denmark created history on 9 th
July 2015, by producing 140 % of their demand electricity by renewable sources, majorly wind.
Hence this proved world that complete integration of renewable energy into the grid is
possible. The focus should be on the physical and regulatory framework. India is focusing on the
transmission corridors, which aims to connect high renewable energy producing states to other
states, so that renewable power can flow continuously and can be fed into the conventional
energy grid. One important lesson learnt from Denmark is that electricity should be made a
byproduct of the variable producing system. The renewable sources produce electricity which
in turn heats the water in a large tank, which can be compared to the system of storing energy
in the water tank. Now this water tank is used to produce heat as well as electricity and the
production is constant. This tank acts as buffer to the variability and hence the electricity and
heat produced are constant in nature and can be included in the firm power category. Another
major improvement is that more regulations and improvement in the ancillary markets in the
country. Generators should be allowed to participate in the balancing markets which shall be
capable to balance the variability of the renewable sources. Three different types of balancing
is required, first being the most urgent balancing when sudden dip in the power happens from
the RE generators. The balancing energy should come in around 10-15 seconds and this has to
be automatic mechanism, as manual mechanism cannot be so quick to provide the required
amount of energy. Thus the generators must run synchronous with the RE generators. Now
second type of balancing is that this Primary balancing load can only run for few minutes hence,
there needs to be a backup which needs to be activated by the system operator. Thus the
generators which are selected for the secondary balancing, are now activated by the system
operators and primary generators are backed down. These generators are capable to produce
power for longer periods and generally are the spinning reserves of the power plants. After
secondary balancing, if the fault is long enough to consume secondary balance power, then
system operator orders tertiary power to engage in and this is completely manual process.
These generators are non-spinning reserves and needs to be started by the operators. Now
regulations needs to be set for this balancing mechanism along with the payment settlement
mechanism, thus the payment will be done under two different categories, Capacity charge and
Energy charge.”
“Hence the renewable energy integration can be properly done only by setting the regulations
alright and then integrating it in the rigid Indian power market, so as to have an enriched
growth.”
“The National Electricity Policy (NEP) envisages implementation of the Availability Based Tariff
(ABT) at State level to establish a credible settlement mechanism for Intra-day power transfers
among Intra-State Entities. As per the Tariff Policy, this framework should be extended to
Generating Stations (including Grid connected Captive Plants of capacities as determined by the
State Electricity Regulatory Commission). This Code has been specified to give effect to the
intentions of Section 5.7.1(b) and (d) of the National Electricity Policy as well as section 6.2(1)
and 6.3 of the Tariff Policy. Central Electricity Regulatory Commission has notified Deviation
Settlement Mechanism and Related Matters Regulations, 2014 and Central Electricity
Regulatory Commission (UL charges and related matters), Regulations, 2009 have been
repealed.”
1.2.1 Scope
“The Indian power market is undergoing a major shift in its nature and it is done by the focus
shifting on the renewables.Under the scope of the project, it covers
Study of the Renewable Power Sector
Study of the Regulations for Renewable Power
Study of the Scheduling of RE Generators
Deviation Settlement Mechanism
Balancing Mechanism
Study of balancing Mechanism of Various Countries”
1.2.2 Objective
“With the development of renewable energy and larger renewable energy targets in Indian
energy sector, the major problem of integrating it with the old, rigid and sturdy grid of India, is
the major challenge. Now the variability of the renewables is the major challenge which needs
to be overcome so that it can be integrated in the grid without disrupting the balance of the
system.”
“This can be done by having proper regulations guiding the generators and consumers to
generate and consume in an orderly fashion. For this, the availability based tariff needs to be
removed from the system to impart more stability to the grid and to derive a new mechanism
which guides both generators and consumers to allow more penetration of the renewable
energy force.”
“To understand the situation in a better way, the study on mechanisms of various countries is
done and the outcomes are to be implemented in India.”
“The major objectives of the project can be enumerated-
How to integrate the renewable energy in the grid
How to have a balanced system with the increasing share of variable energy
Financial benefits so as to include renewable energy
Study of international patterns, how they have handled the increasing percentage of
renewable in their system.
Deriving a mechanism for Indian Power Sector”
“With these as the major objectives of the research study, the project research will be done”
“Today’s scenarios can be bifurcated into two major parts. First is the development of the
renewable energy sources which include the technical parts, importing technologies into the
country and then producing the energy from it with a proper framework for the financing of the
projects. Second problem is that the incentives and regulations that needs to be given to the
generators so that they can produce ample amount of energy and supply it to the grid. Now this
energy produced is within the limits and can be tackled properly by the grid and consumers that
needs to be handled differently. There should be separate mechanism that provides a
framework for financial activities after the energy generation takes place. Now the energy
generated, is as per schedule or not that needs to be checked first. Before that, there should be
the demand realization and the renewable generators should be given preference over the
conventional generators, so that the investors can see it as opportunity for investing their
money with a confirmed profit.”
“Now demand is realized and based on that each generator is given a schedule for next 24
hours, such that it has to produce particular amount of units per block (15 mins). After this,
those generators which are not able to generate as per schedule are need to be identified and
then they need to be penalized accordingly so that this will not happen in the future. For the
penalizing and incentivizing the generators, a proper mechanism needs to be derived. This can
be done by the study of various countries where this problem has occurred and take their
solutions and then tailor them to Indian needs.”
“The research on the topic is a very vast area and certainly has few gaps between the two ends.
The topic of the deriving the deviation settlement mechanism from the study of various
countries which are similar to India, is to be done which needs detailed data from the countries.
This is the major research gap in the research process. This has been overcome y assuming the
certain data trends of the countries and then extrapolating the data to match our countries
generation and consumption pattern for the renewable energy sources.”
“Another area where there was research gap was the regulations for the renewable energy
generation. As this is the new area and has started growing with the onset of the new
government thus the regulations are not properly written and most of them are under
discussion or in the draft phase. Major part of these regulations, are assumed during derivation
of the settlement mechanism. As without actual clarity of them, no step forth can be taken to
derive an effective mechanism.”
“Another problem occurs in the implementing the mechanism of the foreign country in India, as
each country is different as no country has similar governmental, financial and regulatory
atmosphere as India has, and the mechanism has to be tailored as per the counties needs and
demands.”
“The research problem cannot be defined in one line as it an outcome of chain activities which
are happening currently and which will lead to a problem in the future. As the renewable
integration is increasing rapidly, thus this will lead to the problem of balancing in the grid which
is the technical part. Another part is the financial part, where people need to be wooed into the
renewable energy. As the mindset of the Indian people is of very conservative type, thus by
simply giving them an option of moving forward, majority of the country won’t take it, until and
unless some incentive is provided with it. Thus to carve a plan of incentivizing the generators so
that new and more generation can occur and thus any deviation from it also needs to be
managed, in order to have a stable grid.”
“The whole process of research begins with a simple thought in the mind and then having a
deep thinking or discussing and its effects on the macro and micro environment. The steps
taken by the Indian government about increasing the share of renewable energy in the Indian
energy mix”
“The positive attributes of generating electricity from renewable energy sources are widely
accepted, although some of these technologies may not be currently competitive commercially
with conventional fuels. Renewable energy technologies can help solve energy issues related to
electricity generation, namely, environmental concern, energy security, rural electrification and
applications in niche markets where conventional electricity supply is not feasible. In case of
India, all the above mentioned issues are important, however, the most critical issue is that of
energy shortages. Almost all the states in India are facing energy shortages in the range of 3%
to 21% with national average energy shortage of about 10%.”
Figure 1 Energy Availability and Requirement of Energy
“Renewable energy sources can supplement the present power generation and at the same
time address the environmental and energy security issues. Renewable energy technologies
have a good potential in India and considerable progress has been achieved.”
The table below shows the potential for major renewable energy technologies for power
generation and the installed capacity.
Source-CEA
The trend in the Indian power sector for last 10 years is shown in the figure.
Figure 2 India’s Energy Mix in last 10 years
“Renewable energy is one of the cleanest sources of energy options with almost no pollution or
carbon emissions and has the potential to significantly reduce reliance on coal and other fossil
fuels. By expanding renewable energy, world can improve air quality, reduce global warming
emissions, create new industries and jobs, and move world towards a cleaner, safer, and
affordable energy future. The quest for energy independence, economic growth, and
environmental sustainability increasingly suggests the importance of renewable energy sources
across the globe. Renewables are seen not only as sources of energy, but also as tools to
address many other pressing needs, including: improving energy security and access; reducing
the health and environmental impacts associated with fossil and nuclear energy and mitigating
greenhouse gas emissions. In 2013, renewables accounted for 10 percent of the world’s global
energy consumption and around 19 percent of global electricity needs were satisfied by
renewable sources. India’s substantial and sustained growth has placed enormous demand on
the country’s natural resources. Today, India imports substantial quantities of gas, oil and coal
in order to meet its growing energy demand. The increasing dependence on imported fuels may
create a serious threat to the future fuel security of the country. In addition, the country’s 276
GW of power generation capacity based mainly on conventional sources has further strained
the natural resources. Around 70% of India’s current power generation capacity is based on
coal which is expected to remain the dominant power source in the future. However, the coal
sector is facing many challenges and India is increasingly relying on coal & oil imports to meet
its requirements of energy, thereby exhibiting a lot of pressure on Indian economy from these
high import factors.”
Biomass Waste to
12% Energy
0%
Solar
11%
Small Hydro
11%
Wind
66%
“Wind is the most widely used source of renewable energy production in India, with share as
high as 60 % of the total renewable generation, followed by Biomass, Small Hydro and Solar.
Solar is in the developing phase, and with the government focusing on the solar will give it a
very large exposure and platform, making it the most widely used form of renewable energy in
India.””
Solar 50MWp/km2
“Indian government setting very highly ambitious targets for the renewables in India. The total
energy addition for the renewable energy sources is 1, 75,000 MW by the year 2022.”
“This includes 1,00,000 MW of solar energy, 60,000 MW of Wind Energy, 10,000 MW of
Biomass and 5,000 MW of small Hydro Power Plants.”
“This 1, 00,000 MW of solar is again bifurcated into 60,000 MW grid connected and 40,000 off
grid capacity.”
“The Renewable Energy source based power generation capacity was 18 MW in 1990 with a
slow rate of growth till 2008, however, 2008 onwards the progress in the made in the sector
has been considerable. This can be attributed to numerous factors which have led to this
impressive growth. The driving factors for the renewable energy projects in India include
demand/supply (low per capita consumption, large unelectrified areas; technology
improvements and cost reduction in renewable technologies, entry of large number of players),
policy (targets set under the NAPCC, JNNSM, fiscal and other incentives) and other issues (fuel
challenges, and significant potential for renewable energy capacity addition) affecting
conventional power generation. Against this backdrop the renewable technologies are
maturing in India and their growth in India in the last decade has been commendable.”
“The Indian growth story can be seen from the fact in the period from FY07 onwards the
capacity addition from Renewable Energy based sources in India has seen a CAGR of 18.41%.”
Chapter 3
3.1 INTRODUCTION
“According to India Electricity Grid Code (IEGC) energy scheduling is a daily sequence of time
bound activities commencing with submission of availability by the generators at 08:00 AM
each day for the fourth coming day. RLDCs have overall responsibility for optimum scheduling
and dispatch of electricity within the region involving ISGS / IR / IPP / Beneficiaries. Further
RLDCs have to undertake real time schedule revisions on the day of operation for the respective
constituents. The present practice of energy scheduling for day ahead and day of operation is
carried out in different RLDC using different approaches and platforms (for instance in NRLDC,
SRLDC and WRLDC scheduling is done through web-enabled, database – Oracle/Foxpro
oriented VB/.NET utility developed in house while in NERLDC and ERLDC scheduling is done
through MS-Excel). The existing scheduling utility available at all RLDCs broadly involves the
following functional modules”:
i. Data input from Users – Declared capacity, Requisition, STOA, etc.
ii. Data output – Injection, Drawal, Inter-Regional Schedule and URS available at ISGS
iii. Open Access Input – C-DAC OA s/w (CSV file); manual entry
iv. Power Exchange Input – Through NLDC (CSV file); FTP
v. Scheduling Preparation – In line with IEGC
vi. Data output for SCADA – SCADA display in Control Room; Text file
vii. Data output for RPC – Offline text file
viii. Data output for PSP – CSV file
ix. Schedule publishing – Dynamic ASP pages on RLDC web-site
x. Other reports – CSV /DOCX file for MIS/meetings
“The national scheduling and despatch of power is done through the nodal agency of NLDC
which is the apex body. It is supported by various regional and state agencies which help in the
scheduling and despatch activities along with the regional and state bodies.”
“The pyramid shows the hierarchy level in the scheduling process in the Indian Power Sector.”
“The National Load Despatch Center is the top nodal agency for the scheduling framework of
India, and the Regional Load Despatch Center will give the final schedule to the State Load
Despatch Centers which in turn will pass on the schedule to the Generators.”
“On 25 February 2009 the National Load Despatch Centre (NLDC) was inaugurated by
Sh.Sushilkumar Shinde (Union Minister of Power) and Smt.Shiela Dixit(Chief Minister, Delhi).
National Load Despatch Centre (NLDC) has been constituted as per Ministry of Power (MOP)
notification, New Delhi dated 2 March 2005 and is the apex body to ensure integrated
operation of the national power system. There is one NLDC located in the New Delhi with a
backup at its center in Kolkata.”
“Each state has a load despatch centre which coordinates with the RLDC of its region and thus
further coordinates with the power plants so as to have a proper scheduling mechanism
Responsibilities of State Load Despatch Centre
o Demand Estimation for operational purpose.
o Scheduling for Merit Order Despatch.
o Regulating Generation Load Balance.
o Schedule for Central Sector Drawl & Regulate it.
o Monitor bilateral power supply agreement.
o The Regional Load Despatch Centre shall be the apex body to ensure integrated
operation of the power system in the concerned region.
o The Regional Load Despatch Centre shall comply with such principles, guidelines and
methodologies in respect of the wheeling and optimum scheduling and despatch of
electricity as the Central Commission may specify in the Grid Code.
o The Regional Load Despatch Centre may levy and collect such fee and charges from
the generating companies or licensees engaged in inter-State transmission of
electricity as may be specified by the Central Commission.”
3.3 SCHEDULING
Figure 6 Flow of information through each agency
“Scheduling as the term suggests is the process of declaring the available capacity by the Power
Plant before the actual generation day. Thus by scheduling we understands that each power
plant will declare their capacity of production a day before and then they adhere to that
schedule. Scheduling of energy within and across the region is one of the prime functions of
load despatchers in RLDC/NLDC which is to be achieved through a series of timeline activity &
data flow between RLDCs /NLDC/Power Exchanges/ beneficiaries / generators as stipulated in
IEGC and relevant Orders / Regulation of the Hon’ble Commission (CERC). Scheduling of power
essentially involves collecting availability data from generating stations and allocating
corresponding shares to constituents/beneficiaries from respective generating stations based
on allocations decided by Ministry of Power from time to time. Other collateral subjects that
needs to be taken into account while scheduling are Open Access transactions, ATC declaration,
Real time revision of schedules by RLDC system operators subject to Power regulations,
statutory changes in force and as amended from time to time.”
“Scheduling is a day-ahead activity and real time revision of schedules is done on the day of
operation as per provisions of IEGC and relevant orders and regulations of Hon’ble Commission
issued from time to time.
For clarity, it is useful to simplify the scheduling and dispatch processes across an annual
timeline; however, it is important not to draw a sharp line of distinction between these
separate but interrelated stages”: ·
Long -Term Operational Planning and Scheduling (from one year to one month/week
ahead)
Short -Term Operational Planning and Scheduling (from one week to one day ahead)
Near to Real -Time Systems Operation (from hours ahead to real-time)
“For purpose of scheduling, each day (24 Hours) is divided into 96 blocks of 15 minutes duration
each”. Eg:-
Block01 0000-0015
Block02 0015-0030
..
Block96 2345-2400
Chronology of day ahead scheduling activity in time line format is shown below to represent
the interaction of various users.
Source- IEGC
“Process of scheduling for any power plant starts in the morning 800 hours when each ISGS
(Inter State Generating Station) submit their availability to the RLDC. This is called as the
Declared Capacity (DC).Now after declaring the capacity to the RLDC which sends this to the
NLDC and then a country’s energy schedule demand and generation schedules is prepared
which is sent to the RLDC’s.. RLDC in consultation with the SLDC decides the schedule and send
it to the stations for confirmation after looking at the transmission congestions and other
parameters.”
“This is then confirmed by the RLDC at 1700 hours. Now RLDC issues the R0 schedule at 1800
hours. If any changes is to be done by any ISGS or IPP then this is to be done now, else RLDC
issues R1 schedule at 2300 hours. Any revision in the day is sent to the RLDC which takes
approval from NLDC and then revises the schedule again for the blocks.”
“The net drawal schedule of a state would be the sum of following after application of Point of
Connection (PoC) transmission losses –
“Accordingly, each ISGS will be given a dispatch schedule drawn after summating the following
and subject to technical constraints” –
(i) requisitions by each beneficiary, restricted to their on-bar entitlements and
subjected to system operation restrictions on applicable time blocks, such as,
ramp up/ ramp down requirements, technical minimum requirements, power
regulations, curtailment on any other account, etc.
(ii) requisition of un requisitioned surplus capacity (if any),
(iii) bilateral exchange through Open access procedure in force and
(iv) any other transaction.
“Dispatch aims to match demand with generation on a second by second basis, whilst
maintaining tie-line flow schedules and adequate levels of operating reserve. The dispatch
process also manages real-time fluctuations in system demand and the output of generators
and system disturbances such as generation trips or transmission contingencies.”
“The Load Despatch Department is the nerve centre for the operation, planning, monitoring
and control of the power system. Electricity cannot be stored and has to be produced when it is
needed. It is therefore essential that power system is planned and operated optimally &
economically. This is the main objective of Load Despatch Centre. The objective of Load
Despatch Department are”:
Matching the power demand with system integrity , reliability and security of
generation and transmission facilities
Regulating the system frequency.
Optimum utilization of resources.
Quick restoration of normalcy after system disturbances.
“The scheduling process in the present regime generally called ABT (Availability Based Tariff)
regime is in accordance to Indian Electricity Grid Code Regulations 2010 issued by CERC. All
input / output like generation availability, requisition from beneficiaries, drawl and despatch
schedules and other associated data and calculations would be done for 15min time block (one
day consists of 96 time blocks). All interactions shall require appropriate login by the users. The
output shall be despatch schedules for generating stations, Inter-state drawl schedules for
beneficiaries, Inter-regional tie-line schedules and URS available at ISGS. The output shall
clearly indicate Long Term Access (LTA), Medium Term Open Access (MTOA), Short Term Open
Access (STOA) including Bilateral Transactions and Collective Transactions along with all
relevant transaction details. Bilateral transactions shall require data integration with existing
web-enabled STOA software while details regarding Collective transactions presently channeled
through NLDC as an offline sequence of activities shall be automated. All schedules for
implementation shall be affected through appropriate approval by authenticated users at
RLDC/NLDC level. The proposed software shall be capable to affect day ahead scheduling and
subsequent schedule revisions as per the provisions of IEGC 2010 within stipulated time line.
Revisions can be on account of generators (revised availability, unit tripping, etc), beneficiaries
(revised requisitions, load crash, surrender of power, etc) or suo moto by RLDCs/NLDC
(optimum scheduling, contingency, etc). Once request for schedule revision is received from
any user, the program shall recalculate the schedules and the revised schedule shall be updated
at all interfaces with a new revision number sequentially generated by system along with the
reason for revision. Number of blocks for which the schedules to be revised shall be
configurable and indicated in the revision request by users/administrator.”
“Renewable sources of energy are also subjected to the scheduling and despatch activities as
per the Electricity Act 2003 and Indian Electric Grid Code.”
“There are following regulations in the IEGC 2010 for their scheduling.
Regulation 6.5 (para 23):
Special dispensation for scheduling of wind and solar generation:
(i) With effect from 1.1.2011 Scheduling of wind power generation plants would have to be done
for the purpose of UI where the sum of generation capacity of such plants connected at the
connection point to the transmission or distribution system is 10 MW and above and connection
point is 33 KV and above, and where PPA has not yet been signed. For capacity and voltage level
below this, as well as for old wind farms (A wind farm is collection of wind turbine generators
that are connected to a common connection point) it could be mutually decided between the
Wind Generator and the transmission or distribution utility, as the case may be, if there is no
existing contractual agreement to the contrary. The schedule by wind power generating stations
may be revised by giving advance notice to SLDC/RLDC, as the case may be. Such revisions by
wind power generating stations shall be effective from 6th time-block, the first being the time–
block in which notice was given. There may be maximum of 8 revisions for each 3 hour time slot
starting from 00:00 hours during the day and above and connection point is 33 KV and above,
and where PPA has not yet been signed. For capacity and voltage level below this, as well as for
old wind farms (A wind farm is collection of wind turbine generators that are connected to a
common connection point) it could be mutually decided between the Wind Generator and the
transmission or distribution utility, as the case may be, if there is no existing contractual
agreement to the contrary. The schedule by wind power generating stations may be revised by
giving advance notice to SLDC/RLDC, as the case may be. Such revisions by wind power
generating stations shall be effective from 6th time-block, the first being the time–block in
which notice was given. There may be maximum of 8 revisions for each 3 hour time slot starting
from 00:00 hours during the day.
(ii). The schedule of solar generation shall be given by the generator based on availability of the
generator, weather forecasting, solar insolation, season and normal solar generation curve and
shall be vetted by the RLDC in which the generator is located and incorporated in the inter-state
schedule. If RLDC is of the opinion that the schedule is not realistic, it may ask the solar
generator to modify the schedule.
(iii) Concerned RLDC and SLDC shall maintain the record of schedule from renewable power
generating stations based on type of renewable energy sources i.e wind or solar from the point
of view of grid security. While scheduling generating stations in a region, system operator shall
aim at utilizing available wind and solar energy fully.
iv) The wind generators shall be responsible for forecasting their generation upto an accuracy of
70%. Therefore, if the actual generation is beyond +/- 30% of the schedule, wind generator
would have to bear the UI charges. For actual generation within +/- 30% of the schedule, no UI
would be payable/receivable by Generator, The host state, shall bear the UI charges for this
variation, i.e. within +/- 30%. However, the UI charges borne by the host State due to the wind
generation, shall be shared among all the States of the country in the ratio of their peak
demands in the previous month based on the data published by CEA, in the form of a regulatory
charge known as the Renewable Regulatory Charge operated through the Renewable
Regulatory Fund (RRF). This provision shall be applicable with effect from 1.1.2011, for new
wind farms with collective capacity of 10 MW and above connected at connection point of 33 KV
level and above, and who have not signed any PPA with states or others as on the date of
coming into force of this IEGC. Illustrative calculations in respect of above mechanism
v) A maximum generation of 150% of the schedule only, would be allowed in a time block, for
injection by wind, from the grid security point of view. For any generation above 150% of
schedule, if grid security is not affected by the generation above 150%,, the only charge payable
to the wind energy generator would be the UI charge applicable corresponding to 50- 50.02 Hz
vi) In case of solar generation no UI shall be payable/receivable by Generator. The host state,
shall bear the UI charges for any deviation in actual generation from the schedule. However, the
net UI charges borne by the host State due to the solar generation, shall be shared among all
the States of the country in the ratio of their peak demands in the previous month based on the
data published by CEA , in the form of regulatory charge known as the Renewable Regulatory
Charge operated through the Renewable Regulatory Fund as referred to in clause 5 above. This
provision shall be applicable ,with effect from 1.1.2011, for new solar generating plants with
capacity of 5 MW and above connected at connection point of 33 KV level and above and , who
have not signed any PPA with states or others as on the date of coming into force of this IEGC. 1
“The wind/solar generators at the inter-state level whose scheduling is done by the RLDCs,
would be scheduled like any other generator and would be paid as per scheduled generation
and not on actual generation. Considering the fact that wind/solar generation is intermittent
and variable in nature and also taking into account the fact that accuracy of forecast improves
as we move closer in time, the wind/solar energy generator would be allowed more
opportunities to revise the schedule. There may be a maximum of 16 revisions for each fixed
one and half hour time slot starting from 00:00 hours during the day (as against 8 revisions
currently allowed as per IEGC 2010). The wind/solar energy generators may transact power
through long-term, medium term and short-term trades. Some of the wind/solar energy
generators may also transact power through short term trades. Revisions are allowed for
bilateral transactions but no revision of trades discovered through collective transactions in the
Power Exchange(s) is possible. Transmission charges (POC charges) and losses would be
applicable, unless exempted by the Commission through a Regulation or an Order, for the
wind/solar energy generator just like any other generator. Further, reactive energy charges
would also be applicable”
1
www.cerc.gov.in
The penalty is levied on the number of units which are generated below the scheduled
level.
Also, the generator has to buy the REC’s and transfer them to the buyer so that the
buyer can fulfill his Renewable Purchase Obligation (RPO)”
No penalty is levied on the generator for under production of the units, but it has to
fulfill the RPO obligation of the buyer, Hence has to buy REC’s and transfer them to the
buyer.
State has to bear this under production charges and divide this into the purchasing
states in their ration of last year RPO
When generation is in 100-112%
Incentive per unit will be transferred to the account of the generator. Also the
additional incentive will be the REC’s generated, which can be sold in the market
When generation is more than 112 %
When generation is more than 112%, no additional benefit is given on the units
generated. Only benefit will be the REC’s generated from the over production
“If the tariffs for wind and solar generation are assumed to be in the range of Rs. 5/kWh and Rs.
7/kWh respectively, it would imply that wind/solar energy generator would receive payment at
these rates approximately for the energy scheduled. Further, the buyer would be paying these
rates for the energy scheduled to the wind/solar energy generators and demonstrating RPO
compliance based on schedule When the wind/solar energy generator under-injects, he still
receives payment for the energy injected as per schedule @ wind/solar Tariff. However,
because of deviation he would be liable to pay a pre-defined charge to the DSM Pool and also
buy REC for the energy equivalent to deviation. The total payout for the wind/solar energy
generator should be such that it modulates its behavior to remain within the desired operating
band as far as possible. The same philosophy should apply for over-injection as well. If the
actual generation is in the range 88% to 100% of schedule, the wind/solar generator would pay
for the shortfall energy @ Rs. 3/kWh (may be reviewed periodically by the Commission through
an Order) to the DSM Pool. In addition, the wind/solar energy generator would buy RECs
(equivalent to the shortfall energy) and transfer them to the buyer to enable it to fulfill its RPO
obligation. Assuming the current market rate of REC at Rs. 1.50/- per unit for non-solar and Rs
3.50 per unit, the outgo for a wind/solar energy generator [Rs 3 plus Rs 1.50 per unit (assumed
REC price) for wind energy generator and Rs 3 plus Rs 3.50 per unit assumed REC price for solar
energy generator] would be less than what it earns based on scheduled generation [Rs 5 per
unit for wind energy generator and Rs 7 per unit for solar energy generator (assumed wind and
solar tariffs respectively)], if it operates within 12% deviation. This is being consciously allowed
to motivate the Wind/Solar energy generator to remain within the desirable band of 12%
deviation. This can be treated as an incentive for better forecasting. If the actual generation is
below 88%, the wind/solar energy generator would pay @ Rs. 4/kWh for the shortfall energy to
the DSM Pool (may be reviewed periodically by the Commission through an Order). In addition,
the wind/solar energy generator would buy RECs (equivalent to the shortfall energy) and
transfer them to the buyer to enable it to fulfill its renewable purchase obligation. In this case
(that is, in the event of deviation beyond 12%), there is a clear disincentive as the outgo for the
wind/solar energy generator would be more than what it earns based on scheduled generation
If the wind/solar energy generator over-injects, ideally it should not be paid for as the variable
cost is zero. However, in order to encourage wind/solar energy generation, when the actual
generation is in the range of 100% to 112% of schedule, the wind/solar energy generator would
be paid @ Rs. 4/kWh for the excess generation (may be reviewed periodically by the
Commission through an Order). In addition, the wind/solar energy generator would also be
issued RECs for such excess generation. Here again, there is an incentive for the wind/solar
energy generator for remaining within the band of positive 12%. Beyond 12% on the positive
side, the wind/solar generator would be issued only RECs for the excess generation. No
Page 35 Report by Kanupriya Sethi
Study of Forecasting,Scheduling and Imbalance Handling
for RE Generating Stations
payment would be made to such generators from the DSM Pool for generation above 112% of
the schedule. In the above process, the charges for deviation from schedule for wind/solar
energy generator would be delinked from the frequency based charges as applicable under the
DSM mechanism. It is also possible to argue that RE generation is to be treated as must run and
hence, charges for deviation should not be linked to frequency. The mechanism also provides a
payment cap for the charges payable by the wind/solar energy generator in different scenarios
reducing the uncertainty. The 12% volume limits would provide an incentive to the wind/solar
energy generator to make efforts to improve the forecast accuracy, minimize deviations from
schedule and maximize his payoff. Another advantage achieved is that it provides enough
signals so that the wind/solar energy generator does not game the system. Some of the
wind/solar generators, especially the embedded small wind/solar energy generators, may argue
that it is difficult for them to adhere to the schedule within the specified limits of 12% on
account of variability of the wind/solar energy generation. It has been noted, however, that the
special provisions/dispensations given for these wind/solar energy generators in the IEGC are
not being utilized by the wind/solar energy generators to revise the schedules periodically. The
scheme proposed in this paper is for the wind/solar energy generators whose scheduling is
done by the RLDCs, and such wind/solar energy generators should make all efforts &
investment for proper forecasting and scheduling of the generation. Further, as such generating
stations are yet to come up, the necessary tools/techniques for forecasting may be made part
of the capital investment. This is also essential from the perspective of secure & reliable grid
operation”
“While forecasting accuracy increases over time with improved models and more reliable data,
100% accuracy is not possible to achieve given the uncertain nature of solar and wind sources.
However, to incentivize investment in better forecasting methodologies and reliable data,
deviation charges shall be levied outside a tolerance band. Within this tolerance band, there
will be no revenue impact on the generator. However, outside this band, a graded deviation
charge can be applied. This will provide incentive to forecast as accurately as possible utilizing
the schedule revisions, and communicate them accordingly to SLDC.”
Tolerance limits and Deviation Bands
“A tolerance band equivalent to 15% of the available capacity, AvC, is proposed which is based
on simulations got conducted by CERC. Commission considers tolerance band of <=15% for all
wind and solar power plants as a reasonable limit to start with. This mechanism on one hand
would be simple to implement and at the same time would also ensure minimal financial
impact on existing PPAs.”
“In case of over and under injection, wind and solar generators covered under these
Regulations shall pay to DSM pool account at the rates indicated in the table given below”:
“SLDC shall maintain the State DSM pool account. It is proposed that amount available in the
DSM pool on the last day of the Financial Year shall be transferred to a separate Fund
maintained and operated by SLDC in the manner as approved by the Commission based on the
proposals to be submitted by SLDC or as directed on Suo-Motu basis by the Commission.”
“The charges payable for deviation from schedule by the wind and solar generators which are
supplying power outside the State, i.e., which are regional entities, shall be accounted for and
settled in accordance with the provisions of the CERC(Deviation Settlement Mechanism and
Related Matters) Regulations,2014 as amended from time to time.”
The balancing of the power has to be done by three major actions. These are
Table 3 Types of Balancing control
“These are divided on the basis of the response time for providing the balance to the surplus or
slack power”.
“Primary control power (PC) can be fully deployed within 30 seconds. Being a shared resource
within the UCTE, it is not activated by TSOs but by locally measured frequency deviation. At the
power plant level, activation is implemented as turbine-governor control. PC is activated
proportionally to the frequency deviation from 50 Hz up to full activation at deviations of 200
mHz. It is calibrated such that imbalances are replaced and frequency drops are contained (but
not restored). Small deviations below 10 mHz do not lead to activation (dead band). PC can be
classified as a fast, automatic, symmetric spinning reserve that is used to balance the
synchronous system. It is sized as a contingency reserve (3.3), but also used for operational
imbalances.”
“Secondary control power (SC) has to be available within five minutes after activation. It is
activated automatically and centrally by TSOs via an automatic generation control (AGC) signal
that is updated every few seconds. SC is used to restore nominal frequency, and to re-balance
the respective balancing area, such that at steady-state, imbalances are replaced by SC from
the same balancing area. SC can be supplied by some stand-by hydro plants, but is mostly
provided by synchronized thermal generators. Hence, it is an automatic reserve with direct
activation that balances both the synchronous system and the balancing area up and down; to a
large extent, it is a spinning reserve. “
“Tertiary control power (TC), or minute reserve, is used to replace SC over time. It is either
directly activated or supplied in schedules of 15 minutes. Activation is a decision taken by TSO
staff based on current and expected deployment of SC. TC is mostly supplied by stand-by
generators.”
Source : neon-energy.de
“The price of Primary control are higher than the secondary control which are higher than the
tertiary control. Primary response time is around 30 seconds hence it is of very high priority and
hence high risk is involved with it, thus the prices are also high.”
“Germany has 7 GW of capacity always ready for balancing the renewables”
“Another important factor in the apt balancing is the grid extension to the neighbouring
countries. Germany is well connected with many neighbouring countries in terms of power
sharing.”
Source : https://www.energy-charts.de/power.htm
Positive values shows the net import while the negative values shows that excess power is
being exported.
“Another important feature of Germany is that they are continuously working on the variability
of the coal plant output and the loading cycles. This has helped them in reducing the time of
loading their generators in a very short span of time, thus in a way helping the balancing
mechanism of the country.”
Source : http://www.nordicenergyregulators.org/
“The major point in integrating the renewables with the grid system in these countries is the
interconnectivity of the grids with the system. The major part of the renewables is wind power
followed by the biomass which does not have very high variability or can be predicted with fair
accuracy. While the Indian subcontinent is majorly focusing on the solar power which needs
very high balancing”.
Following are the major points for counterbalancing the effects of variability of the renewables
sources of energy.
Heating
Varying Heating of
Renewable the water
Power
Electricity
Generation
actual consented projects. Thus transmission strengthening occurs in parallel with new
generation, not afterwards. And Energinet has a comprehensive plan for upgrading the entire
transmission grid in the future, consistent with the increasing shares of renewable energy.
Balancing
Automatic Manual
Balancing Balancing
Denmark’s power control and market operations, have also evolved an advanced system for
balance management and grid reliability. The power control center every 5 minutes makes an
updated forecast of the coming period, and also requires all generators (greater than 10 MW)
to submit updates of their output every 5 minutes. This allows the power control and market
operation to quickly respond to changes in renewable output. And the ISO has greatly
improved its daily “N-1” reliability calculations, to make sure the lights stay on in the event of
unexpected events or outages, even with variable renewables, in cooperation with neighboring
countries and EU-wide under the EU “ENTSO-E” reliability framework.
Demand Response
This is a relatively newer technology which is being developed in these countries.
This is the process of varying the level of electricity demand in real-time, using smart-grid
technologies and pre-designed operating regimes for what end-use equipment can be turned
off, when, and for how long. These operating regimes are specified in contracts with electricity
consumers, and allow for reducing demand, or “time-shifting” demand, without infringing on
the needed energy services of those consumers. So-called “demand-response aggregators”
may simultaneously control the demand of hundreds or even thousands of consumers, under
specific contractual and technical parameters. These aggregators can thus vary large amounts
of demand in response to signals from the power system operator for balancing power. In this
way, demand response functions exactly the same as a balancing power plant, except instead of
generating more power, demand response reduces consumption to provide balancing. In
Denmark, there is a large potential for demand response, but Denmark has yet to made use of
this potential. (In the future, some see a large potential for demand response integrated with
the charging of future electric vehicle fleets.)
Following are the leanings from the study of NORDIC countries analysis of power system-
1) Development of the demand response with the integration of the Smart Grid in India.
2) Transmission network planning for integrating the solar energy into the grid at different
voltage levels.
3) Integration of the forecasting methods with the daily scheduling and despatch activities
4) Must run obligation to be given to few plants so that they can participate in the balancing
activities.
5) Capacity charge and energy should be fixed for the plants which participate in the balancing
of the power.
6) Better ramping up and down should be learned with the new technology
7) Development of the ancillary markets for balancing with both manual and automatic
balancing mechanism.
Following are the reasons for not copying the framework directly in India-
1) Strong interconnection with the neighboring countries.
Indian grid is connected with the Nepal grid and Bhutan grid but the quantum of energy
transmitted is so low that it rarely can be termed as interconnection, as the energy cannot be
balanced using these grids in real time.
2) Higher share of wind in NORDIC Countries
India has aim of higher solar and less wind, this is opposite of the NORDIC countries as they
have fairly large share of the wind power which produces power for a larger span in the day as
compared to approx. 5 hours of energy production in the day.
3) Use of CHP and Heat Balance
India is not a freezing country where one need constant heating load. Thus India cannot
integrate the heating load with the electricity as done by them.
4) Advanced market coupled with other countries
The market is still in the development phase in India and no other country can trade for the
electricity in the Indian market.
Thus these are the basic reasons why this balancing mechanism cannot be directly copied in
India.
4.5 USA
4.5.1 REASON FOR SELECTION
“Due to different grid composition, rules and wind power penetration, the various regional
grids of the USA have developed widely varying wind power scheduling, dispatch and
operational mechanism. USA being the leader in the development of the renewable energy
sources and capacity addition for a very long time. The reforms in the USA date back to 1970’s,
which led to advancement of the system integration of the renewables in the country.
There were three different and distinct phases in the USA renewable development scenario.
Initial phase started with the development of the PURPA (Public Utilities Regulatory Policies
Act) in 1978. Prior to 1978, electric utilities had no obligation to purchase power from third
parties and were not interested in investing in non-hydro renewable energy themselves.
(Geothermal in California was a notable exception, developed commercially by a utility during
the 1960s and 1970s.) That situation changed with the introduction of the Public Utilities”
Regulatory Policy Act (PURPA) of 1978, which required utilities to purchase power from
qualifying third parties at the utility’s “avoided cost.”
“The second phase following the PURPA era was not so favorable, however. Several factors
caused renewable energy markets to stagnate, including a long period of electric power sector
restructuring, repeal of federal and state incentives, and sharply lower natural gas prices. Very
little capacity was added. This “stagnation era” lasted until around 1997.”
The third phase, starting around 1997, represented a new era for renewable energy in the
United States.
“Public benefit funds” (PBF) were enacted in 14 states. These funds typically collect a small
surcharge on electricity sales. The funds were expected to collect more than $4 billion for
renewable energy through 2017 and were investing over $300 million annually on
renewable energy in 2004.
“Net metering” policies were enacted in 33 states between 1996 and 2004, bringing the
total number of states with net metering to 39. These policies allow two-way power
exchange between a utility and individual homes and businesses with their own renewable
power sources.
Programs to subsidize rooftop solar photovoltaic systems for households and businesses in
California, supported by the state’s public benefit fund, resulted in 15,000 homes and
government and commercial installations of grid-connected solar photovoltaics, totaling
more than 90 MW by 2004.
Voluntary “green power” purchases began through a variety of state and utility programs.
Between 1999 and 2004, more than 500 utilities in 34 states began to offer their retail
customers the option to buy green power. Mandates that required utilities to offer green
power products were enacted in 5 states between 2001 and 2003.
Tax credits, rebates, low-interest loans, and many other financial incentives came into force
at the state and local levels.
During this third phase, federal policies also contributed to renewable energy development.
These policies included a favorable production tax credit (PTC) for wind and other
renewable resources, initially set at 1.5 cents/kWh. Indexed to inflation, the tax credit rose
to 1.8 cents/kWh by 2004.
There was also a 10% investment tax credit for solar and geothermal, favorable tax
depreciation schedules, and new biofuels policies.
Table 5 Renewable Policies Milestones in USA
The most important tool in managing the integration of renewables in the US electricity grid the
ancillary services market. Power suppliers offer special energy products that “stand by” and are
ready to act in case of sudden loss of a power plant or transmission line.
2) Regulation down
3) Spinning reserve
4) Non-spinning reserve.
Regulation energy is used to control system frequency that can vary as generators access the
system and must be maintained very narrowly around 60 hertz. Units and system resources
providing regulation are certified by the ISO and must respond to “automatic generation
control” signals to increase or decrease their operating levels depending upon the service being
provided, regulation up or regulation down.
Spinning reserve is the portion of unloaded capacity from units already connected or
synchronized to the grid and that can deliver their energy in 10 minutes and run for at least two
hours.
Non-spinning reserve is capacity that can be synchronized and ramping to a specified load
within 10 minutes.
Defining all these capacities in the system will allow the system to manage the variability of
these renewable resources
Regulation Regulation
up Down
Non
Spinning
Spinning
Reserve
Reserve
Following are the important points in the USA renewable variability balancing-
1) Change in the scheduling of the winds and renewables. The portfolio based scheduling and
dispatch to resource-specific scheduling and dispatch, which facilitated better wind integration
even though not undertaken explicitly for that purpose. This led to the shorter term forecasting
and scheduling making it the more efficient and accurate mechanism.
2) Another important method was the construction of significant additional transmission
capacity to areas with high wind potential and low transmission capacity. The lines were
intended to expedite construction in areas where renewable generators were committed to
building, and were designed to accommodate a total wind capacity of 18,500 MW.
3) Improved Ancillary Services-In order to have a better balanced grid operation, ancillary
services are redesigned with the introduction of Firm Frequency Response (FFR).
4) Managing the Demand Response (DR)for counteracting the variability of the renewable
resources has become a very bright and big topic these days, as it is the easiest way to counter
balance the varying nature of the renewables. While DR is primarily used as a capacity resource,
i.e. as a way of ensuring that the combination of supply resources and DR are sufficient to
maintain a stable supply of electricity, particularly during the periods of highest demand, it is
also used for emergency situations, such as when generation outages lead to relatively short
term supply shortages. Many DR programs limit the number of times, and define lengths of
time for such calls, each year and do not require advanced technology
5) Deployment of smart meters also has led to the balancing of the load by helping the DR.
6) Five-minute dispatch is currently the norm in ISOs throughout the country, serving over 2/3
of the national load. Five minute scheduling was adopted because it reduces power system
operating costs, not to enable renewable generation integration. Five minute scheduling has
helped reduce regulation requirements to below 1% of peak daily load in many ISO/RTOs.
Studies have shown that integration costs are lower in areas with faster dispatch.
7) Implementation of Energy Implementation Market (EIM) with 5 minute schedule.
8) In 2011 it adopted a 30-minute Wind Reserve Guideline to ensure that enough standby
generation capability can be brought on-line within 30- minutes to cover the needed flexibility.
The flexible capacity need was calculated to be a MW for MW match against wind generation
for the first 290 MW. For wind generation levels above the 290 MW threshold, additional 30-
minute capable standby generation is held based on the aggregate wind energy being produced
from wind facilities
At present, renewable variability is handled almost exclusively by ramping conventional
reserves up or down on the basis of forecasts. However, as renewable penetration grows,
storage and transmission will likely become more cost effective and necessary. Greater
uncertainty and variability can be dealt with by switching in fast-acting conventional reserves as
needed on the basis of weather forecasts on a minute-by-minute and hourly basis; by installing
large scale storage on the grid or; by long distance transmission of renewable electricity
enabling access to larger pools of resources in order to balance regional and local excesses or
deficits.
Forecasting
The high variability of renewable generation, up to 100% of capacity, makes forecasting critical
for maintaining the reliability of the grid. Improving the accuracy and the confidence level of
forecasts is critical to the goal of reducing the conventional reserve capacity, and will result in
substantial savings in capital and operating costs. The variability of renewable energy is easily
accommodated when demand and renewable supply are matched—both rising and falling
together. However when demand and renewable supply move in opposite directions, the cost
of accommodation can rise significantly. For example, if the wind blows strongly overnight
when demand is low (as is often the case), the renewable generation can be used only if
conventional base-load generation such as coal or nuclear is curtailed, an expensive and
inefficient option that may cause significant reliability issues. Alternatively, on calm days when
there is no wind power, the late-afternoon peak demand must be met entirely by conventional
generation resources, requiring reserves that effectively duplicate the renewable capacity.
Reducing the cost of dealing with these two cases is a major challenge facing renewable
integration.
Develop, standardize and codify the criteria for contingencies, the response to up- and
down-ramps in generation, and the response to large weather disturbances. Develop
response other than maintaining conventional reserve, including electricity storage and
transmission to distant load centers.
Energy Storage
As renewable generation grows it will ultimately overwhelm the ability of conventional
resources to compensate renewable variability, and require the capture of electricity generated
by wind, solar and other renewables for later use. Transmission level energy storage options
include pumped hydroelectric, compressed air electric storage, and flywheels. Distribution level
options include: conventional batteries, electrochemical flow batteries, and superconducting
magnetic energy storage (SMES). Batteries also might be integrated with individual or small
clusters of wind turbines and solar panels in generation farms to mitigate fluctuations and
power quality issues. Although grid storage requires high capacity and long lifetimes, it often
allows a stationary location and housing in a controlled environment, very different from the
conditions for portable or automotive storage. Currently, energy storage for grid applications
lacks sufficient regulatory history. Energy storage on a utility-scale basis is very uncommon and,
except for pumped hydroelectric storage, is relegated to pilot projects or site-specific projects.
Some states such as New York categorize storage as “generation,” and hence forbid
transmission utilities from owning it. In addition, utilities do not know how investment in
energy storage technologies will be treated, how costs will be recovered, or whether energy
storage technologies will be allowed in a particular regulatory environment.
schedule deviations. With faster dispatch, load and generation levels can be more closely
matched, reducing the need for more expensive regulating reserves. This enables more efficient
balancing and utilization of the most economical resources within the system. Five-minute
dispatch is currently the norm in ISOs throughout the country, serving over 2/3 of the national
load. Five minute scheduling was adopted because it reduces power system operating costs,
not to enable renewable generation integration. Five minute scheduling has helped reduce
regulation requirements to below 1% of peak daily load in many ISO/RTOs. Studies have shown
that integration costs are lower in areas with faster dispatch.
Reserves Management
Reserve management practices can be modified to help address the variability of wind and
solar power. Practices that reduce overall reserve requirements can lead to substantial cost
savings. Potential tools for managing variability include placing limits on wind energy ramps to
reduce the need for reserves and enable variable renewables to provide reserves or other
ancillary services. Limiting up ramps is another potential tool for managing variability. Because
reserve levels are set to address relatively low-probability, large changes in wind output,
modest limits on wind generation can significantly reduce the need for balancing reserves,
yielding cost savings. Ramp events that affect plants across a balancing authority area result
from large-scale weather events that can be more easily predicted than local weather events.
By imposing ramping limits on wind generators when large-scale weather events are
forecasted, balancing reserve requirements may be significantly reduced. Ramp rate controls
are a relatively low-cost tool for minimizing system impacts; the primary costs are associated
with the curtailed generation and the communications and control equipment.
Flexibility Markets
Wind and solar energy have near-zero marginal cost. Therefore, when they are part of a market
dispatch, overall energy prices will decline. Although this may be an advantage for consumers,
there are questions about the sustainability of this type of market because some generators
may earn insufficient revenue to cover both their variable and fixed costs. This has led to
significant interest in capacity markets. For example, the FERC is convened a technical
conference on this topic in September 2013. Another concern is whether energy markets, even
with fast economic dispatch at 5-minute time steps, provides sufficient incentives to generators
to perform in a flexible manner. This issue is not settled, but the CAISO has developed a
ramping product called “flexi-ramp” that is intended to supplement the energy market. The
objective is to ensure sufficient ramping capability, and this may require changing the dispatch
set points of some generators to ensure this flexibility is available in real-time if it is needed.
Midcontinent Independent System Operator (MISO) has developed a program called “dispatch
able intermittent resources,” or DIR, which utilizes a multi period look-ahead process that helps
to anticipate the load and wind (and solar) power levels on a longer time horizon to help
optimize the way generation is dispatched. However, the need for a new ancillary service is not
universally recognized.
Demand Response
Demand-side flexibility can also aide in the integration of variable renewable generation,
particularly in cases of fast ramps or extreme events. Demand response can be used to supply
reserves and ancillary services as well as peak reduction. ERCOT, for example, obtains half of its
spinning reserves from demand response. The use of demand response to balance the system
during infrequent events in which there is substantial under- or oversupply of renewable
generation can lead to cost savings compared to continually maintaining additional reserves.
For example, the Western Wind and Solar Integration Study estimated cost savings of $310,000
to $450,000 per MW annually for the high wind penetration case when using demand response
to balance the system for the small number of hours that extreme events occurred during the
course of the year rather than maintaining increased spinning reserves for the entire year (GE
2010). Demand response could be considered part of a portfolio of measures that can
complement deployment of higher penetrations of variable renewable energy.
levels of approximately 35%. Combined-cycle natural gas plants are generally able to ramp
faster than coal plants, but are not as nimble as combustion turbines. Many older combined-
cycle units were often designed to optimize efficiency, not for flexibility, but newer units
generally have increased flexibility and minimum generation levels of approximately 35%. In
general, the flexibility of natural gas–fired thermal units is constrained by time needed to warm
up and for the heat-recovery steam generator to meet required conditions, as well as limits on
pressure and temperature (WGA, 2012; Puga 2010). Utility scale internal combustion engine
driven generators are now often designed for very quick start (one minute to synchronization
and five minutes to full load) with zero cycling cost. Flexibility in the generation fleet can be
achieved through modifications to existing units or through the addition of new flexible units.
Some existing generators can be modified to increase flexibility by increasing ramp rates,
lowering minimum generation levels, speeding up start-up, or lowering wear-and-tear costs to
enable them to better perform load following. Wear-and-tear costs can be reduced through
preventative or corrective maintenance, changing operating procedures, and upgrading
equipment.
Chapter 5
IMBALANCE HANDLING
5.1 Introduction
Let us assume that the generator has committed to supply 1000 KWh during a particular time period of
a day. Now due to improper forecasting or some other errors he is not able to produce 1000 KWh and
only produces 750 KWh, thus in this case he has to pay certain penalties to the buyer.
Penalty 1
As he is on the shortfall of 250 KWH, this seriously leads to the higher variation in the frequency and
hence it should be penalized more. Thus let’s assume the penalty is Rs 4.0/ KWh.
This amount is to be submitted to the DSM account which is managed by the SLDC/RLDC.
Also the buyer which is buying the renewable energy for completion of his Renewable Purchase
Obligation (RPO) will not be able to fulfill its obligation and thus the buyer will also be penalized without
him being at the fault. Thus this penalty should also be transferred to the generator and he has to buy
the REC and transfer them to the buyer so that he does not fall short on his renewable obligation.
REC Penalty
No of Units = 250
= Rs 1000 + Rs 875
= Rs 1875
Now the payment the generator will get will be on 1000 KWh and not on the actual generation
= 1000 X Rs 7
= Rs 7000
= Rs 7000 - Rs 1875
= Rs 5125
= 26.78 %
Thus deviating 25 percent from the target will lead to the 26.78 % from the revenue generation
% change in Generation
= 26.78
25
= 1.07
This means with the change in generation the revenue changes less proportionately.
The shortfall penalty thus makes the generator to improve the forecasting techniques.
In this case, assuming the scheduled generation is 1000 KWh and actual generation is 900 KWh
Penalty 1
As this deviation is between the CERC approved deviation band thus there will be no extra penalty on
the generator, as this band has been decided to overlook the forecasting errors.
The buyer which is buying the renewable energy for completion of his Renewable Purchase Obligation
(RPO) will not be able to fulfill its obligation and thus the buyer will also be penalized without him being
at the fault. Thus this penalty should also be transferred to the generator and he has to buy the REC and
transfer them to the buyer so that he does not fall short on his renewable obligation.
REC Penalty
No of Units = 100
= Rs 0 + Rs 350
= Rs 350
Now the payment the generator will get will be on 1000 KWh and not on the actual generation
= 1000 X Rs 7
= Rs 7000
= Rs 7000 - Rs 350
= Rs 6650
= 5.00 %
Thus deviating 25 percent from the target will lead to the 5.00 % from the revenue generation
% change in Generation
= 05
10
= 0.5
This means with the change in generation the revenue changes in half proportion.
In this case the station is producing the exact same amount as it is obligated to produce.
Thus in this case there will be no penalty and no REC will be generated or transferred as it has fulfilled its
commitment.
= Rs 7000
Now let us assume that the generator is scheduled to produce 1000KWh but due to good weather
conditions he is able to produce 1100 KWh. In this case, as the generation is well within the CESC
approved band, thus there will be no penalty on this extra generation. The amount calculated will be on
the scheduled generation and the extra generation will be paid on the pre fixed amount, let’s say at Rs
4/KWh. Also the generator will be entitled for the REC’s for the extra amount generated.
= Rs 7000
= Rs 400
Extra REC generated that can be sold in the market = 100 Units
= Rs 350
= Rs 7750
= 750/7000 X 100
= 10.71 %
= 10.71
10
= 1.071
Now let us assume that the generator is scheduled to produce 1000KWh but due to good weather
conditions he is able to produce 1300 KWh. In this case, as the generation is well within the CESC
approved band, thus there will be no penalty on this extra generation. The amount calculated will be on
the scheduled generation and the extra generation will be paid on the pre fixed amount, let’s say at Rs
2/KWh. Also the generator will be entitled for the REC’s for the extra amount generated.
Here we are using less tariff per kW as to discourage the wrong practices in the availability declaration
by the generators, as they may declare less and produce more so as to generate more number of REC’s
and higher revenues.
= Rs 7000
= Rs 200
Extra REC generated that can be sold in the market = 300 Units
= Rs 1050
= Rs 8250
= 1250/7000 X 100
= 17.81 %
= 17.81
30
= 0.593
Thus with the increases in the generation the revenue increases but not linearly, thus after one point
the revenue curve starts getting flat.
To reduce the gaming in the scheduling and generation process, the penalty and reward tariff should be
such that it penalizes and rewards accordingly and as the deviation increases it should directly affect the
revenue generation of the generators.
One such table of tariff is being proposed here so that it suits the DSM mechanism
> 50 425
50-60 400
60-70 350
75-88 300
88-100 0
100 0
110-112 200
112-130 150
130-140 100
140-150 50
>150 0
All the Penalties are to be sent to the DSM account which is to be maintained by the RLDC.
Suppose generator has not generated the scheduled amount of energy then he is liable to pay the
penalty which is to be calculated by the RLDC. The meter readings are sent to the RLDC on the weekly
basis which are then calculated and the penalty amount notice is sent to the generators.
Now generators have to submit the amount and those who have produced extra also needs to be
settled. Thus this whole mechanism of settlement is done at the end of the month.
Forecasting
Scheduling
Generation
Metering
information
RLDC
Calculation
of Deviation
Devaition
Settlement
Penalties/Incen
tives
disbursement
If the LDC/Company involves in the Primary Balancing, using Gas Based power Plant
Per Unit cost of Power from Gas- Rs 6.5/unit
Total units to be balanced- 15.36 MU’s
Assuming 25 % of this is to be balanced by Primary Balancing
Units to be balanced by Primary Balancing- .25 X 15.36= 3.84 MU’s
Amount from Gas based plant- 3.84 X 6.5
- Rs 24.96 Millions
Assuming rest 11.52 MU’s are bought from the coal based power plants, with unit average of Rs
3
Thus total revenue to be paid for balancing will be = Rs 59.52 Millions
Total penalty is Rs 61.44 Million and if amount bought from Gas based & Coal plant is 59.52
Hence this balancing is feasible till the gas prices rises as high as Rs 7/unit
Even if the company buys power from the market, it will break even if the power purchasing
cost for primary source is Rs 7 and beyond that this mechanism needs financial support from
government to sustain itself
CHAPTER-6
By “the larger the number of generators” we mean the number of wind farms and solar farms
rather than wind turbines and solar panels. In this case, we agree that the average forecast
error relative to the installed capacity being forecast reduces with the larger the geographic
area being covered. However, the absolute size of the forecast error in megawatts will increase
the higher the capacity that is included no matter how geographically diverse they are. The
largest forecast errors experienced will also increase.
The variation in wind speeds across multiple wind turbines in a single wind farm is low during
the high wind season when the geostrophic wind stays steady (as shown in the figure to the
right). During the low wind season, the turbines across the wind farm can have a very high
variability in wind speed (this difference in wind speed between the two opposite/farthest
turbines could be 2-3 m/s).
Wind and solar energy generation are being brought under the requirement of forecasting and
scheduling.
Increasing the number of opportunities for forecast resubmission
Wind/solar generation is intermittent and variable in nature and also taking into account the
fact that accuracy of forecast improves as we move closer in time, the wind/solar energy
generator would be allowed more opportunities to revise the schedule.
The shorter the lead time, the more accurate the forecasts being submitted will be. Ultimately,
we believe the lead time required for the forecasts should be based on what the electricity
market requires to adequately manage dispatch and power system security.
͞One of major concerns raised by the wind/solar energy generators is the variability of charges
payable for deviation as these are variable and linked to the system frequency.
The linking of deviation charges to the system frequency was a major issue with the IEGC 2010
framework. This IEGC 2010 rules provided different charges for under-injection and over-
injection and this encourages generators to game the system rather than provide the most
accurate forecast possible.
This will encourage and motivate the schedulers to employ the best analytical
hardware/software tools to derive at an ensemble forecast with lowest deviation results. Figure
1 below shows a diagram of how multiple forecasts combined together can create a very
accurate forecast.
Figure: Diagram of how multiple forecasts, even from different forecasters can be combined
together to achieve a more accurate forecast
However,Defining the desired operating band as a percentage of the schedule achieves all the
desired outcomes of the desired operating band. We believe the objectives of a desired
operating band are:
To provide extra incentive for a wind/solar farm to achieve a forecast error within that band as
often as they can.
To provide wind/solar farms with reduced penalties for near-accurate forecasts so that they can
transition to providing good quality forecasts (if such a transition is required). The penalty rate
can then be increased at a later date.
To represent the operating band that is desired from the perspective of power system
operating and managing power system security.
“A desired operating band for managing the power system would be a threshold in megawatts
of forecast error, regardless of how much intermittent generation is being injected into the
grid. However, by defining the desired operating band as a percentage of the schedule, this
band in megawatts changes depending on the schedule. Furthermore, when the schedule is
very low, as can often happen for wind/solar farms, the percentage error is also very low. For
example, when the schedule is 1 MW, the desired operating band is a very small +/-0.12 MW.
Moreover, the deviation becomes undefined when the schedule is 0 MW. For very large
schedules for large power stations, such as a 450 MW wind farm, when the schedule is 400
MW, the desired operating band is +/-48 MW.”
To meet all the objectives of a desired operating band, it is recommend that it be defined as
10% of installed capacity, or
10 MW (or equivalent), whichever is smaller. This way, the operating band is never larger than
10 MW (or equivalent) for large power stations, and it is always the same amount in MW for
each power station, no matter what their schedule is. The desired operating band then remains
consistent for managing the power system.
The ideal market payment for over-injection
If the wind/solar energy generator over-injects, ideally it should not be paid for as the variable
cost is zero.
Ultimately, a wind/solar energy generator will over-inject in a particular period when its
forecast is too low. The most accurate forecasts will have an equal occurrence of over-injecting
and under-injecting (negative and positive forecast errors).
Additionally, generators are not paid as per their variable cost in the market, they are paid
based on the cost of the marginal generator. The variable cost of a generator that over-injects
should have nothing to do with how much it should be paid for that.
As stated elsewhere,Also recommend that the penalties are equal for the same volume of over-
and under-injection, and dependent on the volume so that the total penalty increases the
larger the forecast error.
Proposed framework does not provide incentives for the most accurate forecasting or prevent
gaming
T͞ he 12% volume limits would provide an incentive to the wind/solar energy generator to make
efforts to improve the forecast accuracy, minimize deviations from schedule and maximize his
payoff. Another advantage achieved is that it provides enough signals so that the wind/solar
energy generator does not game the system.
12% volume limits have any influence on wind/solar energy generators to improve their
forecast accuracy. This is because the penalties for inaccurate forecasts increase the larger the
forecast error, regardless of the 12% volume limits.
Additionally, the signals from the proposed framework will NOT be enough to ensure the
wind/solar energy generators do not game the system. This is because the penalties for positive
and negative forecast errors are not equal.
Chapter 7
RECOMMENDATIONS
The most important problem with the renewable sources of energy is grid integration. The
variability of these sources make it difficult to integrate them with the stable grid, as they
hinder the stability of the system. One of the important factor in overcoming the shortcomings
of variability of RE sources is the development of the RE Balancing. A detailed study was done
on this topic and the key recommendations are-
Augmenting the Grid
The development of the renewable transmission corridor will help in the better
integration of them into the grid. The renewable generators are specific to some locations,
hence they need to have a separate transmission network which connects them with the
current electricity grid.
Development of REMC at state levels
Renewable Energy Management Centres should be developed in each state which
coordinates with the regional centers. These centers should work parallel with the RLDC and
have similar power of scheduling and despatch for the renewable sources of energy
generation. They should help the generators in the forecasting of the energy for day ahead
and week ahead.
Emphasis on Forecasting Techniques
Forecasting is a very important part in the RE energy generation as per the schedule. By
looking at the trends of the previous days and years and using the use of various technical
components, we can forecast the energy. Minimum two methods are to be used for
forecasting the energy, to reduce the error.
Incentives for accurate Forecasting
Forecasting can get a boost if there are forecasting incentives which are provided to the
generators on the daily average forecasting errors. The band of min 5 % can be fixed and if
the generators abides by this band, then he gets the additional incentives. This will act as
platform for the development of the forecasting technology in India
Real time scheduling and Forecasting
Integrating the scheduling and forecasting process can be the future of a more balanced
system. Enabling the real time changes in the schedules after looking at the errors of the
forecasted and actual generation of the energy, can lead to the cancellation of the errors of
the forecasting, leading to a very smooth and constant power
Improving the Technology
Current existing power plants can be technologically upgraded so as to have a better
ramping dynamics. This will help in the better loading and unloading of the older machines,
which in turn can be used for the tertiary balancing of the system by the system operators.
Classification of Generators as Primary, Secondary and Tertiary
Generators should be labelled as primary, secondary and tertiary controllers in the
balancing process and separate bidding should be done for these separate generators.
Bidders should be prequalified with the minimum technical qualifications present wrt to the
availability time and number of block for which generator can provide power.
Development of the Balancing Market
Balancing market is a necessity with the quantum of renewables increasing. It is a
platform on which the generators come and bid, and hence take part in the balancing
activities of the grid. This is the major source of balancing in other countries where
renewables have a very high percentage of energy production.
Payment of Capacity Charge
It is a sort of incentive for the generators which take part in the balancing market. There
can be situation in which the generator services are not required during the day, in that
condition, to avoid the loss for the generators, they should be paid a capacity payment,
sufficient to maintain their interest in the balancing market, so that they can keep on
participating in the future also.
More strict DSM
Deviation settlement mechanism should be made more stringent by reducing the
deviation band so that the system can remain more stable. If anybody deviates from the
zone, then that generators should be penalized heavily. This will help them in having a
better forecasting. Also to avoid the gaming in the scheduling, over production of energy
should also be penalized, such that generators does not always under-schedule and over
produce.
Development of Energy Storage Units
Energy storage is also a good option for maintaining the grid stability as this can be
utilized anytime. Pumped storage units are most widely used options in the world. Also
distributed batteries can also be a good option for storing the energy. Other sources of
energy storage can be converting the renewable energy into hydrogen or natural gas, which
then can be used for the electricity production.
transferred to and fro the international boundaries. This helps in reducing the effect of the
variability of the renewable sources as the variation in the forecasted does not occur at the
same time. Thus this helps in eliminating the effect of variability with the geography.
Chapter -8
CONCLUSION
The research process is started with the selection of the countries with the similar energy mix
which India intends to achieve viz USA, Germany and NORDIC countries as these have major
focus on the renewable energy generation.
Large scale integration of RE into the power system requires amendments to the current EA
2003 as a preparatory measure. These amendments need to be a part of the EA 2003 as they
relate to the existing generation, transmission and distribution systems.
The first step to ensure that in the future all power is traded on the PXs is to prevent the signing
of new PPAs and migration of generators and consumers to the PXs as their PPAs expire. This
provision would not terminate any existing PPAs. As a result during the initiation of transition,
there will be PPAs with duration of up-to 25 years. New conventional power plants would not
be allowed to sign PPA and will have to sell all their power via the PXs. This is aimed at creating
a liquid and deep power market. The phasing out of PPAs would reduce the bankability of
power projects and the investors would not have the financial security provided by a PPA. This
can be addressed by the introduction of long term power products on the PXs during the
transition which provide assurances similar to a PPA. Owing to the sensitive nature of the
problem, as a temporary extraordinary measure the government will have to assure minimum
returns to a plant commissioned as-per norms under the new regulations. These measures
would cease to operate at the discretion of the appropriate regulatory bodies.
To enable sale of all power on the PXs and the returns of new generators the products on the
exchanges would need to be introduced as below. The long duration products would be phased
out in later phases of the transition
Open Access
A single window clearance system should be set up for open access applications to avoid delays
on account of lack of knowledge amongst both the approving authority (at various levels) and
the project developers. Leverage technology solutions and automated processes should be
introduced for NOC issuance, energy scheduling, energy settlement and clearances. IEX has
already introduced SLDC interface to help manage NOCs of customers in the state of Punjab
and Tamil Nadu. The same can be adopted for other states. Open Access Registry will bring in
transparency and facilitate faster transactions using automatic rule based open access
clearance while removing manual discretions Amendment to EA 2003 should remove the
ambiguity and clarifying the scope in the following sections and therefore facilitate OA.
Sec 37: State governments can direct LDC to restrict power sale outside state in lieu of
maintaining smooth and stable supply
Sec 108: Directions of state government will prevail where public interest is involved
In case of any disputes in matters related to OA, the Appellate Tribunal should be approached.
The following provisions need to be strictly reviewed and enforced.
EA 2003, Sec 42 (2):“….Provided also that such surcharge and cross subsidies shall be
progressively reduced in the manner as may be specified by the State Commission…”
NEP, 2005 Sec 5.8.3: “…..the amount of surcharge and additional surcharge levied from
consumers who are permitted open access should not become so onerous that it eliminates
competition…….”
Presently, transmission planning is done taking into account the transmission capacity required
for long term PPAs. To encourage open access, transmission planning should inherently include
margins for medium and short-term open access also. A competitive market mechanism should
be developed for the booking of transmission capacity by open access consumers.
The drawl of OA consumer from the DISCOMs during the time blocks when no power is
scheduled under OA should not be more than the time-blocks when power is scheduled from
any source under open access. Need for clarity on Over-drawl and Under-drawl charges that
should be levied on OA consumers. These charges should be in line with UI charges the DISCOM
has to pay to balance the power in grid when OA consumers deviate from their schedule. Intra-
state ABT mechanism needs to be implemented in all the states.
Every BRP would be responsible for the deviations in their schedule. In case of imbalance due to
under generation, the BRP will bear the cost for alternative energy sourced to net the
imbalance. In case of imbalance due to over generation, BRP would receive reduced payment
for the energy generated after adjusting for the penalties. The financial settlement for the
imbalance would happen as below
a) Between BRP and SLDC Here the BRP will pay the responsible SLDC or vice versa
based on the type (+/-) of deviation from schedule and the situation of the grid at the
given time. All contracts between BRPs and SLDCs will be standardized across the
complete system. The contracts will be regulated. For more details refer section 7.2.6 of
Market Design for RE Integration in India.
b) Between BRP and Group Member Here the penalties/incentives will be shared
between the BRP and the members as agreed upon between the parties at the time of
group formation. These contracts will not be regulated. For more details refer section
7.2.6 of Market Design for RE Integration in India.
Deviation settlement would be done at both the intrastate and interstate levels; however the
entities participating in DSM would be balancing groups at various hierarchical levels
(National/State/Intrastate). Intrastate deviation settlement mechanism is currently operational
in six states only.
The balancing groups which are formed within the jurisdiction of a single SLDC would enable
the operation of a DSM like mechanism within the state, where generators and consumers
provide a composite schedule for every 15 minutes of the next day and are financially liable for
the deviations. The introduction of this mechanism is expected to improve grid discipline within
a state and resulting in an overall improved frequency profile of the national grid. Participation
of consumers in balancing groups via load forecasting and scheduling (flexible loads) is
expected to improve frequency profiles of the national grid. This would prepare for the
stakeholders for the introduction of consumers in balancing groups in Phase 2. The introduction
of balancing groups within a state would also allow the BRPs of the various groups formed to
leverage the effect of imbalance netting and reduce the overall penalty payable due to
deviation from schedule.
Regional Restrictions
It will be mandatory for all generators to form balancing groups within 6 months of notification
of the Act. Any generator defaulting would not be allowed to dispatch power unless it can
justify the delay under which circumstance it would be allowed a temporary extension on
deadlines. These exemptions will be solely at the discretion of the regulatory commissions.
Congestion Management
Congestion Management and transmission planning will need to be modified to cater to the
following:
Flexible Generation
Standards for all generators commissioned post notification will need to be upgraded to cater
to the flexibility required by a grid with large proportions of RE generation. These standards
would need to be at par with international best practices and will have to be revised
periodically to ensure continuous adoption of flexible and efficient generation.
To ensure safe, secure and reliable operation of the power system with large scale RE
integration ancillary and reserve products would need to be introduced. The products would be
procured from prequalified providers on the PXs by the LDCs as below.
This hierarchical placement of reserves will ensure that conflicting activation of reserves does
not take place and to avoid operational inefficiencies. Over compensation to frequency
correction would also destabilise the system.
The contracting of reserves will have to be done keeping in mind that no single provider should
be allowed to bid for more than a small fraction of the reserves required in the time block. This
is to ensure that the failure of the provider affects only a small fraction of the available reserve
and reduces the risk of the reserve failing altogether due to the failure of a large provider. This
will also incentivise a larger number of players to upgrade and participate in the market for
these reserves.
Distribution of reserves
To prevent inter regional power flows due to reserve activation, The NLDC, RLDC and SLDC
would need to ensure that the contracted reserves are distributed all over the control regions
and activation does not lead to large inter control region power flows, in a case of grid
congestion the reserve might be rendered ineffective and further deteriorate the frequency
condition. The estimation of the quantum of reserves required in every control region would
need to be done based on the reserve dimensioning and the scheduled power flows. The
scheduling of availability of reserves will be done for each of the 96 time blocks; however
dispatch is function of need based on contingencies as they arise. The activation of reserves
should be a seamless process. The activation of primary reserves is to arrest the change in
frequency and is required to react immediately, Secondary control is activated within 30
seconds and reaches full load within 5 minutes, and the tertiary reserve is activated in 5
minutes and reaches full load in 15 minutes, tertiary reserve sustains the secondary reserve till
needed. This ensures that primary reserves are freed up by the activation of secondary reserves
and the activation of tertiary reserves frees up the secondary reserves.
Chapter -8
LIMITATIONS OF STUDY
The study is a new concept which has to come in India and thus is based on many assumptions
and data extrapolated for the better results. This study is limited to the renewable sources of
energy and has some tailored parts in the mechanism, which are only for them and differs from
the conventional sources of energy. As each country is different in nature and energy mix, thus
study of various countries was not very helpful as each of them has different problems and
different solutions. Thus this is the major limitation of the research process. This study is limited
to the renewable sources of energy and has some tailored parts in the mechanism, which are
only for them and differs from the conventional sources of energy. It does not include the
commercial angle as this is limited to the generators.
Chapter -9
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