CERC Proposes Allowing Energy Storage Resources to Help in Maintaining Grid Stability

The Central Electricity Regulatory Commission (CERC) has drafted the Ancillary Services Regulations, 2021. The guidelines aim to provide for power procurement through the administered process as well as from the spot market through power exchanges to pay for ancillary services and maintaining the grid frequency close to 50 Hz. The regulations have made provisions for allowing for energy storage and demand response resources to participate in providing ancillary services.

CERC has invited comments and suggestions from stakeholders and interested parties on the proposal within June 30, 2021.

These regulations are to help restore the grid frequency as specified in the Grid Code and for relieving congestion in the transmission network to ensure smooth operation of the grid.

The types of ancillary services covered under these regulations are Primary Reserve Ancillary Service (PRAS), Secondary Reserve Ancillary Service (SRAS), and Tertiary Reserve Ancillary Service (TRAS). Apart from the three services, other ancillary services as specified in Grid Code will also be created.


The draft regulations provide more details on procurement, assessment, and compensation for SRAS and TRAS, which are open to entities with energy storage or demand response resources connected to the transmission system.

Secondary Reserve Ancillary Service

Secondary Reserve Ancillary Services are frequency control ancillary service capacities of qualified generating plants and energy storage systems that are assigned to restore the system frequency to 50 Hz. They are used to provide supply-demand balance during small frequency deviations.

A generating station having energy storage resource and connected to the interstate transmission system (ISTS) or intrastate transmission system will be eligible to provide SRAS, provided:

  • It has a bi-directional communication system with the national load dispatch center and the regional load dispatch center
  • It is automatic gain control-enabled
  • It can provide a minimum response of 1 MW
  • Has metering and supervisory control and data acquisition (SCADA) telemetry in place for measuring the energy delivered under SRAS
  • It is capable of responding to SRAS signal within 30 seconds and providing the entire SRAS capacity within 15 minutes and sustained for at least the next 30 minutes

The SRAS provider willing to participate will be required to provide consent to the state nodal agency for participation, which will remain valid until it is modified or withdrawn. The SRAS providers who are generating stations will be required to declare the technical parameters by the nodal agency. The SRAS providers other than generating stations will be required to pay the variable and the compensation charges upfront every month.

The nodal agency will also ascertain the availability of adequate reserves on a day-ahead and on a real-time basis before the closure of the real-time market. The SRAS provider will be selected on a regional basis by the nodal agency for providing the SRAS-Up and SRAS-Down based on custom participation factors. The custom participation factor for SRA-Up will be directly proportional to the normalized cost factor, and the custom participation factor for the SRAS-Down will be directly proportional to the product of the normalized rate participation factor and the normalized cost factor.

The SRAS will be despatched on a regional basis through secondary control signals by the nodal agency. The SRAS provider should increase or decrease active power injection or the withdrawal or consumption as per the automatic signal from the nodal agency.

The average of SRAS-Up and SRAS-Down MW data will be calculated by the nodal agency every five minutes in absolute terms using archived SCADA data at the nodal agency and will be used to pay incentive. The average of SRAS-up and SRAS-down MW data will be calculated for every 15 minutes time block in MWh for every SRAS provider by the nodal agency using the archived SCADA data. It will be used for paying variable or compensation charges.

Performance below 20% for two consecutive days will make the provider liable for disqualification for participation in SRAS for a week.

Tertiary Reserves Ancillary Services

Tertiary Reserve Ancillary Services are frequency control ancillary service capacities of qualified power plants and energy storage systems and interruptible loads readily available for dispatch to restore the secondary reserve and cover variation of renewable energy generations. This service must also be used in maintaining the grid frequency as prescribed levels in case the primary and secondary reserves are not sufficient or already exhausted. A generating station or energy storage resource connected to an ISTS or intrastate transmission system will be eligible for participation as a TRAS provider. The TRAS will be activated and deployed by the nodal agency on account of the following factors:

  • In case the secondary reserve has been deployed continuously in one direction for 15 minutes for more than 100 MW
  • Other events as specified in the Grid Code

As per the order, the nodal agency will communicate to the power exchanges the quantum of TRAS-Up and TRAS-Down needed on a day-ahead basis before the commencement of the day-ahead market.

The TRAS providers will submit bids in the following manner:

  • Bids will be submitted for each time block or for a minimum of two consecutive time blocks in the day-ahead market or the real-time market
  • For TRAS-UP, energy up bid in ₹/MWh should be submitted for the offer volume in MW
  • For TRAS-Down, energy down bid in ₹/MW should be submitted for the offer volume in MW

The TRAS provider cleared in the day-ahead market may place incremental bids in the real-time market. The TRAS provider not cleared in the day-ahead market or not participating in the day-ahead market may also place bids in the real-time market. The price discovered for the TRAS-Up will be based on the principle of uniform market clearing price. The price discovery for TRAS-Down will be based on the principle of Pay-as-bid.

The scheduling and despatch of TRAS will be according to the provisions of the Grid Code. Information regarding the TRAS-Up and TRAS-Down cleared for the day-ahead market, and the real-time market will be published on the website of the nodal agency. It will be simultaneously communicated to the power exchanges concerned for onward communication to the selected TRAS providers.

The TRAS-Up provider will receive MCP-Energy-Up, as discovered in the day-ahead market or the real-time market, as the case may be, for the quantum of energy instructed to be despatched by the nodal agency.

The TRAS-Up Provider shall receive commitment charges at the rate of 10% of the MCP-Energy-Up-day-ahead market or the MCP-Energy-Up-real-time market, as the case may be, subject to the ceiling of ₹0.20/kWh for the quantum of TRAS-Up cleared in the day-ahead market or the real-time market.

The accounting of SRAS shall be done by the regional power committee every week, based on SCADA data. The accounting of TRAS will be done by the committee every week, based on interface meter data and schedules.

The deviation and ancillary service pool account will be charged for:

  • The full cost of despatched SRAS-Up, including the variable charge or the energy charge or the compensation charge for every time-block on a regional basis, as well as the incentive for SRAS, payable to the concerned SRAS provider.
  • The full cost towards TRAS-Up, including the charges for the quantum, cleared and despatched and the commitment charge for the quantum cleared but not despatched

The deviation and ancillary service pool account will receive credits for:

  • Payments made by SRAS provider for the SRAS-Down despatched
  • Payments made by TRAS provider for the TRAS-Down despatched

As per the order document, no transmission charges or transmission losses, or transmission deviation charges will be payable for SRAS and TRAS.

Recently, the Union Cabinet approved the ‘National Program on Advanced Chemistry Cell Battery Storage’ under the production-linked incentive initiative. According to the Cabinet’s notification, the program aims to achieve 50 GWh of advanced chemistry cell and 5 GWh of niche advanced chemistry cell manufacturing capacity with an outlay of ₹181 billion (~$2.46 billion).

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