Design of load balancing mechanism for Indian electricity markets

The Indian electricity market is undergoing a major transformation to combat the issues of steadily rising demand, increasing energy shortfalls, and growing renewable energy penetration. Consequently, the Central Electricity Regulatory Commission (CERC) in India has proposed the introduction of ancillary services. Among the services, frequency support ancillary service is expected to have a significant impact on the grid operation. This ancillary service would ensure that the demand and supply are balanced at all times. However, the service proposed by CERC is designed as a contingency service and not a balancing service. In this paper, an alternative load balancing mechanism that serves the balancing needs of the Indian grid is proposed and analyzed. The main contribution of this study is the estimation of the costs and impacts of this mechanism using simulations based on data from the Indian state of Karnataka. The study is intended to foster effective ancillary services policies in India. The results show that the mechanism would reduce the number of real-time emergency events, which are used to avoid grid collapse, by around 55 % at an energy purchase cost increase of 3.5 %. This work illustrates the availability of cost-effective mechanisms for load balancing in the Indian power system, and also highlights the need for alignment of system stakeholder incentives.

[1]  Ian A. Hiskens,et al.  Achieving Controllability of Electric Loads , 2011, Proceedings of the IEEE.

[2]  Yonghong Chen,et al.  The security-constrained commitment and dispatch for Midwest ISO day-ahead co-optimized energy and ancillary service market , 2009, 2009 IEEE Power & Energy Society General Meeting.

[3]  E. Ela,et al.  Methodologies to determine operating reserves due to increased wind power , 2013, 2013 IEEE Power & Energy Society General Meeting.

[4]  Benjamin F. Hobbs,et al.  A flexible ramping product: Can it help real-time dispatch markets approach the stochastic dispatch ideal? , 2014 .

[5]  S. C. Srivastava,et al.  An integrated approach for optimal frequency regulation service procurement in India , 2009 .

[6]  Benjamin F. Hobbs,et al.  The Design of US Wholesale Energy and Ancillary Service Auction Markets: Theory and Practice , 2008 .

[7]  Goran Strbac,et al.  Demand side management: Benefits and challenges ☆ , 2008 .

[8]  M. Carrion,et al.  A computationally efficient mixed-integer linear formulation for the thermal unit commitment problem , 2006, IEEE Transactions on Power Systems.

[9]  Christoph Weber,et al.  Adequate intraday market design to enable the integration of wind energy into the European power systems , 2010 .

[10]  A. Conejo,et al.  Economic Valuation of Reserves in Power Systems With High Penetration of Wind Power , 2009 .

[11]  Nivad Navid,et al.  Market Solutions for Managing Ramp Flexibility With High Penetration of Renewable Resource , 2012, IEEE Transactions on Sustainable Energy.

[12]  William W. Hogan,et al.  Market-Clearing Electricity Prices and Energy Uplift , 2008 .

[13]  J. Rosellón,et al.  Financial transmission rights: Analysis, experiences and prospects , 2013 .

[14]  A. Papalexopoulos,et al.  Pricing energy and ancillary services in integrated market systems by an optimal power flow , 2004, IEEE Transactions on Power Systems.

[15]  R. Walawalkar,et al.  Evolution and current status of demand response (DR) in electricity markets: Insights from PJM and NYISO , 2010 .

[16]  Frieder Borggrefe,et al.  Balancing and Intraday Market Design: Options for Wind Integration , 2011 .

[17]  J. Torriti,et al.  Demand response experience in Europe: Policies, programmes and implementation , 2010 .

[18]  Jin-ho Kim,et al.  Common failures of demand response , 2011 .

[19]  V. Sarkar,et al.  A Comprehensive Assessment of the Evolution of Financial Transmission Rights , 2008, IEEE Transactions on Power Systems.

[20]  Alex D. Papalexopoulos,et al.  Performance-Based Pricing of Frequency Regulation in Electricity Markets , 2014, IEEE Transactions on Power Systems.

[21]  Seema Singh,et al.  Ancillary Services Management Policies in India: An Overview and Key Issues , 2009 .

[22]  M. Rothleder,et al.  Enhanced system reliability using flexible ramp constraint in CAISO market , 2012, 2012 IEEE Power and Energy Society General Meeting.

[23]  P. Pentayya,et al.  The Indian medicine , 2004, IEEE Power Engineering Society General Meeting, 2004..

[24]  S.K. Parida,et al.  Pros and Cons of Existing Frequency Regulation Mechanism in Indian Power Industry , 2008, 2008 Joint International Conference on Power System Technology and IEEE Power India Conference.

[25]  M A Matos,et al.  Setting the Operating Reserve Using Probabilistic Wind Power Forecasts , 2011, IEEE Transactions on Power Systems.

[26]  P. Luh,et al.  On reducing uplift payment in electricity markets , 2009, 2009 IEEE/PES Power Systems Conference and Exposition.

[27]  Allen J. Wood,et al.  Power Generation, Operation, and Control , 1984 .

[28]  Mohammad Shahidehpour,et al.  The IEEE Reliability Test System-1996. A report prepared by the Reliability Test System Task Force of the Application of Probability Methods Subcommittee , 1999 .

[29]  Karen Lyons,et al.  An Introduction to Financial Transmission Rights , 2000 .

[30]  F. H. Fenton.  Survey of Cyclic Load Capabilities of Fossil-Steam Generating Units , 1982, IEEE Power Engineering Review.

[31]  M. Santosh,et al.  Locational bias to frequency linked Unscheduled Interchange (UI) pricing in India , 2011, 2011 IEEE Power and Energy Society General Meeting.

[32]  S. Stoft.  Power System Economics: Designing Markets for Electricity , 2002 .

[33]  R. Raineri,et al.  Technical and economic aspects of ancillary services markets in the electric power industry: an international comparison , 2006 .

[34]  Kathleen L. Spees,et al.  Capacity Markets - Lessons Learned from the First Decade , 2013 .

[35]  Goran Strbac,et al.  Fundamentals of Power System Economics: Kirschen/Power System Economics , 2005 .

[36]  Allen. J. Wood and Bruce F. Wollenberg.  ‘Power Generation, Operation and Control’, John Wiley & Sons, Inc., 2003. , 2015 .

[37]  Kathleen L. Spees,et al.  Demand Response and Electricity Market Efficiency , 2007 .

[38]  D. Kirschen,et al.  A Survey of Frequency and Voltage Control Ancillary Services—Part I: Technical Features , 2007, IEEE Transactions on Power Systems.

[39]  M. Ortega-Vazquez,et al.  Optimizing the Spinning Reserve Requirements Using a Cost/Benefit Analysis , 2007, IEEE Transactions on Power Systems.

[40]  Saurabh Chanana,et al.  A price based automatic generation control using unscheduled interchange price signals in Indian electricity system , 2010 .

[41]  Gintaras V. Reklaitis,et al.  Operating reserve policies with high wind power penetration , 2011, Comput. Chem. Eng..