TECHNICAL CHALLENGES IN DEREGULATED ELECTRICITY MARKET PartI: ANCILLARY SERVICES

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TECHNICAL CHALLENGES IN DEREGULATED ELECTRICITY
MARKET Part-I ANCILLARY SERVICES
Dept. of IME, IIT Kanpur Short-term course
Challenges and Implementation Issues Post
Electricity Act 2003 Regulatory, Policy
Technical Solutions April 10 -14,
2004 This document can be downloaded
from www.iitk.ac.in/ime/anoops
S.C.Srivastava Department of Electrical
Engineering Indian Institute of Technology,
Kanpur-208016
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Challenges in Modern Power System Operation

• Present day power systems have large
  interconnected networks.
• Maintaining system security, reliability,
  quality, stability and ensuring economic
  operation are the major operating concerns.
• The success of the recently evolving electricity
  market structure will heavily depend on modern
  information systems and on line decision tools.
• On line monitoring, operation and control of the
  modern day power systems have become impossible
  without computer aided monitoring dispatching
  systems.
• Such systems at transmission Generation level
  are called as Supervisory Control Data
  Acquisition (SCADA) or Energy Management System
  (EMS) and those for distribution systems are
  called as Distribution Automation (DA) systems.

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• Power System Controls
• Generation Controls
• - Real Power-Frequency ( P-f) control
• - Reactive Power- Voltage (Q-V) Control
• Network Controls
• - Breaker, Transformer taps Controls,
  Series/Shunt
• Compensators FACTS Controllers
• Load Controls
• System Wide/Dispatching Controls
• - Energy Management System (EMS)
• - Distribution Automation System (DAS)

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A Typical Architecture of an Energy Management
System
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Advance Functions of Energy Management System

• Supervisory Control Data Acquisition (SCADA)
  functions
• System Monitoring and Alarm Functions
• State Estimation
• On line Load Flow
• Economic Load Dispatch
• Optimal Power Flow ( including Optimal Reactive
  Power Dispatch)
• Security Monitoring and Control
• Automatic Generation Control
• Unit Commitment
• Load Forecasting
• Log Report Generation ( Periodic Event logs),
  etc.
• A program scheduler may invoke various
  Application programs at fixed intervals.

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System Operation in India

• At regional level Five RLDCs viz. NRLDC, SRLDC,
  ERLDC, WRLDC and NERLDC.
• SRLDCs in each state.
• RLDCs have been modernized with modern Energy
  Management System tools (A hierarchical structure
  is shown)
• SLDCs carry out the optimum scheduling of the
  state generating units and the RLDCs are
  responsible for scheduling of the Central Sector
  Generating Units only.
• SLDCs send the requisition to the RLDCs against
  their entitlements out of available power from
  Central Sector Generation and the RLDCs allocate
  total available power to various states in the
  ratio of their entitlements.

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Frequency Linked Availability Based Tariff (ABT)

• ABT comprises of three main components
• (a) Capacity Charge, towards reimbursement of
  the fixed cost of the plant, linked to the
  plant's capacity to supply MWs,
• (b) Energy Charge, to reimburse the fuel cost
  for scheduled generation, and
• (c) Payment for deviations from schedule, at a
  rate dependent on system conditions.
• The last component would be negative in case
  the power plant is delivering less power than
  scheduled.
• - For example, if a power plant delivers
  600 MW while it was scheduled to supply only 500
  MW, the energy charge payment would be for the
  scheduled generation (500 MW) only, and the
  excess generation (100 MW) would be paid for at a
  certain rate.
• - If the grid has surplus power at that time
  and frequency is above 50.0 Hz, the rate would be
  small. If the excess generation is at the time of
  generation deficit in the system (frequency
  below 50.0 Hz), the payment for extra generation
  would be at a higher rate.
• ABT has been adopted for maintaining the grid
  discipline and already been implemented in
  Western Region w.e.f. 1.7.2002, in Northern
  Region w.e.f. 1.12.2002 and in southern Region
  w.e.f. 1.1.2003

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Availability Based Tariff (contd..)

• The process starts with the Central generating
  stations in the region declaring their expected
  output capability for the next day to the RLDC.
  The RLDC breaks up and tabulates these output
  capability declarations as per beneficiaries'
  plant-wise shares and conveys the same to SLDCs.
• The SLDCs then carry out an exercise to see how
  best they can meet the load of their consumers
  over the day, from their own generating stations
  and their entitlement in the Central Stations and
  then convey to the RLDC how they wish to draw
  power from the Central Stations out of their
  entitlement for the day.
• The RLDC compiles these and determines the
  generation schedules for the Central generating
  stations and the drawal schedules for the
  beneficiaries, which acts as the operational
  commercial datum.
• Deviations from these are allowed as long as they
  do not endanger the system security. The
  schedules are also used for determination of
  energy charges. Deviations from schedules are
  determined in 15-minute time blocks through
  special metering, and these deviations are
  priced.
• As long as the actual generation / drawal is
  according to the given schedule, the third
  component of Availability Tariff is zero. In case
  of under-drawal, a beneficiary is paid back
  according to the frequency dependent rate
  specified for deviations from the schedule.

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Frequency Profile of SR(Courtesy Sh. Bhanu
Bhusan former Director (Operation) PGCIL)
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Certain Technical Issues in deregulated
Electricity Market

• Bid Settlement
• Transmission Pricing
• Transaction Allocation
• Ancillary Services Management (Volt/Var control,
  Freq. control/AGC etc.)
• ATC Calculation
• Congestion Management

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ANCILLARY SERVICES

• NERC defines Ancillary Services as An
  Interconnected operation services necessary to
  effect transfer of electricity between purchasing
  and selling entities, and which a transmission
  provider must include in an open access
  transmission tariff.
• Ancillary Services may consist of services
  required for
• - Maintaining generation and load balance
  (frequency control)
• - Maintaining Voltage and reactive power
  support
• - Maintaining generation and transmission
  reserves
• - Emergency preparedness (system restart
  stability control)
• Ancillary services cost may be about 10 of total
  generation and transmission cost. Most of it are
  required for power balancing/frequency
  regulation, loss make-up and voltage/reactive
  power support.

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Primary And Ancillary Services   Power
Transportation (A) Moving power from one
location to the other   System Operation (A,B)
Monitoring and control of P.S.   Reactive Power
(A,B) Balancing reactive power needs
locally.   Losses Make-up (A,B,C) Providing
extra power to move the power.   Energy
Imbalance (A,B,C) Making up for supply/demand
shortfall.   Load Following (A,B,C)
Compensating instantaneous load
fluctuation.  Operating Reserve (A,B,C) System
back up in case of generator failure.  Other
services such as Dynamic scheduling, supply
reserve, Black start etc.  .. A
S.O. must provide B Buyer must purchase from
S.O. C Buyer has an option to provide
themselves
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REGULATING POWER MARKETS FOR POWER BALANCING (
Ref. A. Krishna Kumar, A Simulation Module for
a Regulating Power Market, M.Tech Thesis, IIT
Kanpur, India, 2002)
Prices
               Fig
Power market in Norway Metering
Power trade Metering, Change of
supplier Metering, Settlement,

Production Forecast
Metering, Invoicing Metering, Power
trade
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Price of regulation
  Price for

up-regulation    Price for
down-regulation  


Amount of regulation Fig Regulation power
market for physical balance (Norway)
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TThe Electricity market in Sweden
Fig The physical flow
of electricity and the relationships between the
players in the Swedish electricity market
Svanska Kraftnat
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• 
  Balance Service
• 
  
     Maintains the countrys
• 
  
  balance
• 
  
     Trades in regulating power
• 
  
  (frequency regulation)
  
  Balance Providers
• 
  
     Hourly company balance
• 
  
  Offer regulating power
• 
  
  
• 
  
  Electricity suppliers
• 
     Supply
  electricity to the consumers
• Fig The three levels of responsibility for the
  electricity balance

 
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  The Elbas market supplements Elspot and the
national Nordic regulating power markets or
balance services by providing continuous power
trading covering individual hours, up to two
    0 12 15 18
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24   Fig Trading in the ELBAS market
 
T(hrs)
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THE ELECTRICITY MARKET IN GREAT BRITAIN
                      T-One Year
T-One Month T-One Day T-3 ½ hrs   Fig
Trading Under the New Arrangements
 
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Today 48 hours 3.5 hrs
Gate closure Real time 0hrs t
 Fig The Wholesale market
Updated PNs from BM Units
continuously received
Day ahead
Day ahead1 9.00
11.00 12.00 16.00
5.00 5.00
        Fig Day balancing mechanism

Today
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The Regulating markets in Europe
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VOLTAGE / REACTIVE POWERSUPPORT SERVICE

• In order to maintain transmission voltages on the
  Transmission System within acceptable limits,
  generation facilities under the control of the SO
  are operated to produce (or absorb) reactive
  power.
• Separate reactive power market may be set up by
  in which the reactive power suppliers (owning
  synchronous generators or shunt
  capacitor/inductor banks) may submit their bids.
• The pricing of reactive power supply from shunt
  compensators are relatively straight forward than
  that from synchronous generators.

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Reactive Power as an Ancillary Service, Kankar
Bhattacharya and Jin Zhong, IEEE Transaction on
Power Systems, Vol. 16, No. 2, May 2001

• Key Features
• Addresses the problem of reactive power
  procurement by an ISO in deregulated electricity
  market.
• A reactive bid structure is proposed in context
  of a reactive power market.
• A two-tier approach is developed to determine the
  most beneficial reactive power contracts for the
  ISO.
• The opportunity costs of generators are also
  included in the model.

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Synchronous generator capability curve
Revenue loss RL ?(PA PB )-C(PA)
C(PB) Where, C(.) is the production cost ? is
the real power price.
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Reactive Bid Structure

• The three region identified from generator
  capability curve are
• Region-I Qmin ? Q Q1 ? Qbase
• No payment to generator
• Region-II QBase ? Q Q2 ? QA
• Payment is made to generator at a constant
  rate
• Region-III QA ? Q Q3 ? QB
• Payment will be proportional to the reactive
  support provided by the generator and at a rate
  determined by its revenue loss

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Generators Expectation of Financial Compensation
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Reactive Power Procurement

• For reactive power procurement, a two step
  approach is proposed
• The ISO determines the marginal benefit of each
  reactive bid with regard to system losses. The
  ISO shall seek to minimize the losses least, it
  would require to procure higher loss compensation
  services.
• With marginal benefit of each reactive bid known
  to the ISO, it seeks to maximize a societal
  advantage function (SAF) formulated by
  incorporating the price bid offers at this stage.

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Assessing the Value of Generator Reactive Power
Support for Transmission Access Kundur et al,
IEE Proc.-Gen. Trans. Dist., Vol. 148, No. 4,
July 2001.

• Key Features
• Reactive support valuation is defined and
  analyzed.
• A new concept of value curve is introduced.
• A method is proposed to determine the value of
  reactive support provided by the different
  generators.
• VALUE CURVE
• Represents the value of the VAr produced by an
  individual reactive power source.

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Equivalent Reactive Compensation (ERC) Method

• Establish a solved case for the system condition
  of interest
• Add fictitious condensers to each load bus.
• Hold the reactive power output of all existing
  dynamic reactive sources at the base case
  levels.
• For the dynamic VAr source to be valued, decrease
  its reactive power output from the base case
  value to zero or until load flow diverges. The
  total reactive power output of all fictitious
  condensers, QERC are calculated in the process
• Step (iv) is repeated by increasing the reactive
  power output of the study source from the base
  case value to the maximum value.
• Plot QERC as a function of Qi,, the output of the
  evaluated source. This curve measures the impact
  of Qi on the system
• Step (iv)-(vi) can be repeated for all physical
  dynamic VAr sources of interest. A family of
  curves can be generated. Each curve represents
  one VAr source.

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Determination of Value Curve from QERC Curve