Need for regulatory and policy framework for ancillary services in Indian power sector
Student name: Mr Lavkesh Saraswat
Guide: Mr M V Shiju
Year of completion: 2013
Host Organisation: IPPAI, New Delhi
Supervisor (Host Organisation): Mr Raghav Upadhyay
Abstract: Indian Power Sector is going through a transition phase. It is transitioning from a monopoly to
competitive market, although the transition is not complete and it lies somewhere in between
monopoly and competitive markets. Ancillary Services in India is a new concept. Although in
many developed countries like USA and European Countries, these services constitute an
integral part of power systems. Ancillary services are services which support the smooth running
of power systems of a nation through maintenance of frequency of grid which in turn takes care
of stability of the same. This improves the reliability of Grid in terms of availability of power
24/7 round the year and avoids major Grid collapses and eventually blackout like the one
happened in India in July 2012. This project studies the need of regulatory and policy framework
for establishing Ancillary Services in India. This includes
• Need assessment for ancillary services
• Challenges in implementation and regulatory enforcement
• Possible models of regulation
• Drivers of ancillary services in India
• Issues to integrate unutilized, fragmented and stranded generation capacities including
renewable resources across the country
• Pricing of Ancillary Services in India
• International experience vis-à -vis Indian experience in ancillary services
• Market design for ancillary services in India
• Role of agencies like NLDC, RLDCs and SLDCs as well as power exchanges in
implementation of ancillary services in India.
Ancillary services are the future of Indian Power Grid. This will ensure reliability of National
Power Grid and integration of all the stranded generation capacities across India including
renewable power resources. The need of hour is to device a robust policy and regulatory
framework for these services so that these could be implemented without any obstacles. In
response to the emerging needs for ancillary services and already successful ancillary services
market in developed countries, Power System Operation Corporation (POSOCO) which is the
national and regional level system operator, has proposed introduction of Ancillary Services in
India. In its approach paper, POSOCO has conducted detailed research on the scope of Ancillary
Services in India. POSOCO has already submitted a petition with Central Electricity Regulatory
Commission (CERC) proposing introduction of Frequency Support Ancillary Services (FSAS).
CERC in response has issued a staff paper in this regard with suggestion of Ancillary Services in
two phases. Phase 1 will be implemented with only one product, Frequency Support Ancillary
Services (FSAS) limited to generation side only. Phase 2 will be having implementation of other
products like Frequency Control Ancillary Services (FCAS) for both generation and load sides,
and Network Control Ancillary Services (NCAS) which constitute Voltage Control Ancillary
Services (VCAS) and Power Flow Control Ancillary Services (PFCAS) and also System Restart
Ancillary Services (SRAS).
