Energy storage participation in ancillary services heralds a new market

09 June 2021 |

India’s central power sector regulator, CERC, has issued draft ancillary services regulations aimed at ensuring smooth operation of the power system. The highlight of the draft regulations is to allow energy storage facilities and demand side resources, for the first time ever, to provide secondary and tertiary ancillary services.

The draft regulations come almost three years after CERC released a discussion paper for redesign of ancillary services mechanism. In the meantime, pilot projects have been undertaken for secondary frequency control through Automatic Generation Control (AGC) and ‘fast’ tertiary frequency control through Fast Response Ancillary Services (FRAS). The definition and scope of primary reserves, triggered by a sudden change in frequency and controlled at individual generation asset level, remain untouched. Proposed secondary and tertiary reserves should encourage new resources to be connected to the grid for innovation in technical and commercial solutions.

Table: Minimum requirements for ancillary services

Note: Tertiary reserve can be used to replenish secondary reserve deployed continuously in one direction for 15 min for > 100 MW as well as to respond to other events specified in the Grid Code.

Rapid growth of renewables, coupled with retirement of fossil fuel power, which has traditionally been providing synchronous inertia to the system, has resulted in growing need for frequency regulation. Such services demand extremely quick response times as well as accuracy, which can be best met with advanced age batteries. Globally, energy storage and demand response have already proven to be ideal solutions for these needs. Moreover, projects in the US, the UK and European Union have demonstrated that such solutions can also capture other value streams creating a value-stack, in effect, kick-starting a growth cycle for energy storage facilities.

CERC has invited comments and suggestions on the draft regulations by 30 June 2021. The proposal to allow energy storage and demand side resources to provide ancillary services is a critical step in the right direction. We expect energy storage to be allowed to provide primary reserve ancillary services at a later date. This timetable might even get accelerated in view of the Ministry of Power’s recent suggestion to states to explore need for setting up large storage systems around cities to mitigate incidents like recent grid collapse in Mumbai.

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