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. © 2016, Springer-Verlag Berlin Heidelberg.