CERC Asks Regional Gencos To Be Prepared For Ancillary Services During Peak Demand

The Central Electricity Regulatory Commission (CERC), in its latest order, has asked the regional power generating stations under the control of state governments and other power stations to be prepared to render their ancillary services to counter the peak electricity demand. The peak demands are likely to increase with the country’s temperature rise.

The central authority said that on May 18 this year, India witnessed a peak demand of 221 Gigawatt (GW). However, projections claim that this year’s peak demand might go up to 230 GW. The recent order of the CERC is applicable from today until further orders. It claimed that all those gencos whose tariffs are not determined by the central authority would also make themselves available for use by the nodal agency by declaring their compensation charge in advance to the nodal agency. 

This order will apply to the state-generating stations whose tariffs are determined or adopted by the State Commissions and those mandated by the Central Government whose tariffs are discovered through a competitive bidding process. In addition, the CERC has directed that the nodal agency should prepare the merit order stack of all the generating stations available under a condition of the shortfall for economic dispatch of ancillary services. 

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“Such generating stations shall pay or be paid, as the case may be, for the corresponding quantum of dispatch under shortfall conditions on similar lines as applicable for the generating stations whose tariffs are determined by the Commission under section 62 of the Act, as specified in Regulation 20 of the AS Regulations, 2022 by considering their compensation charge as energy charge,” the order read. 

The order of the CERC came after Grid India, in a communication to the central authority on May 24, requested it to pass directions to consider generation capacity procured in advance for dispatch under shortfall conditions in Tertiary Reserve Ancillary Services (TRAS). 

The Commission noted that appropriate provisions had already been made in the Ancillary Services Regulations, 2022, authorizing the NLDC (National Load Dispatch Centre) as the Nodal Agency for procurement of Ancillary Services in case of shortage and emergency conditions.

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Under the shortage condition, NLDC is enabled to use URS (Un-Requisitioned Surplus) available in the generating stations whose tariffs are determined by the CERC. During the emergency condition, NLDC can use any generating station. 

CERC regularly monitors the power situation in the country and passes suo motu orders accordingly. The orders follow the Central Electricity Regulatory Commission (Ancillary Services) Regulations, 2022. The Regulations provide a regulatory mechanism for ancillary services to ensure the grid’s reliability, safety, and security in different situations like a rise in peak demand and other hurdles. 

Ancillary services (AS) means the service necessary to support the grid operation in maintaining power quality, reliability, and security of the grid and includes Primary Reserve Ancillary Service, Secondary Reserve Ancillary Service, Tertiary Reserve Ancillary Service, and active power support for the load. 

The order adds to the previous announcement by the Power Ministry on preparedness to tackle an expected summer season when demand will hit new peaks. Already, this has meant good news to many stranded coal and gas power stations that were idling due to high cost of power. While the Mundhra power station of Tata Power is a prominent example of a thermal plant based on imported coal benefiting, some gas power plants might also see some revenues flow in, as international gas prices hit levels that make it viable for these plants to sell power.