RPS

Mid Term-2

Ques. 1. How Transfer capability is limited Explain in Brief?

Ans :- Congestion, as used in deregulation phrase, generally refers to a transmission line hitting
its limit. The ability of interconnected transmission networks to reliably transfer electric power
may be limited by the physical and electrical characteristics of the systems including any or more
of the following:
Thermal Limits: Thermal limits establish the maximum amount of electrical current that a
transmission line or electrical facility can conduct over a specified time period before it sustains
permanent damage by overheating.
Voltage Limits: System voltages and changes in voltages must be maintained within the range
of acceptable minimum and maximum limits. The lower voltage limits determine the maximum
amount of electric power that can be transferred.
Stability Limits: The transmission network must be capable of surviving disturbances through
the transient and dynamic time periods (from milliseconds to several minutes, respectively).
Immediately following a system disturbance, generators begin to oscillate relative to each other,
causing fluctuations in system frequency, line loadings, and system voltages. For the system to
be stable, the oscillations must diminish as the electric system attains a new stable operating
point. The line loadings prior to the disturbance should be at such a level that its tripping does
not cause system-wide dynamic instability.

Ques. 2. Explain the Effects of Congestion in the Transmission system?

Ans :- The network congestion essentially leads to out-of-merit dispatch. The main results of
these can be stated as follows:
Market Inefficiency: Market efficiency, in the short term, refers to a market outcome that
maximizes the sum of the producer surplus and consumer surplus, which is generally known as
social welfare. With respect to generation, market efficiency will result when the most cost-
effective generation resources are used to serve the load. The difference in social welfare
between a perfect market and a real market is a measure of the efficiency of the real market. The
effect of transmission congestion is to create market inefficiency.
Market Power: If the generator can successfully increase its profits by strategic bidding or by
any means other than lowering its costs, it is said to have market power. Imagine a two area
system with cheaper generation in area 1 and relatively costlier generation in area 2. Buyers in
both the areas would prefer the generation in area 1 and eventually the tie-lines between the two
areas would start operating at full capacity such that no further power transfer from area 1 to 2 is
possible. The sellers in area 2 are then said to possess market power. By exercising market
power, these sellers can charge higher price to buyers if the loads are inelastic. Thus, congestion
may lead to market power which ultimately results in market inefficiency.
Ques. 3. Describe the Desired Features of Congestion Management Schemes.

Ans: - Desired Features of Congestion Management Schemes

Tackling the congestion problem takes different forms in different countries. It really depends on
what type of deregulation model is being employed in a particular region. Certain network
topologies, demographic factors and political ideologies influence the implementation of
congestion management schemes in conjunction with overall market design. Any congestion
management scheme should try to accommodate the following features:
Economic Efficiency: Congestion management should minimize its intervention into a
competitive market. In other words, it should achieve system security, forgoing as little social
welfare as possible. The scheme should lead to both, short term and long-term efficiency. The
short-term efficiency is associated with generator dispatch, while long-term efficiency pertains to
investments in new transmission and generation facilities
Non-discriminative: Each market participant should be treated equally. For this, the network
operator should be independent of market parties and he should not derive any kind of benefit
from occurrence of congestion. Otherwise, it provides perverse signals for network expansion.
Be transparent: The implementation should be well defined and transparent for all participants.
Be robust: Congestion management scheme should be robust with respect to strategic
manipulation by the market entities. This again refers back to principle of economic efficiency.

Q.4 Brief Explain the classification of Congestion Management Mechanisms (Methods).

Ans:-
Non - market Methods Market Based Methods
1 Type of 1 Explicit
contract Auctioning of
network
capacity
2 First come 2 Nodal pricing
first serve (OPF based
congestion
management)
3 Pro - rata 3 Zonal pricing
methods
4 Curtailment 4 Price area
congestion
management

Table 4.1: Classification of congestion management schemes

The congestion management schemes are strongly coupled with the overall market design.
Efficient allocation of scarce transmission capacity to the desired participants of the market is
one of the main objectives of congestion management schemes. Thus, distinction among them
can be made based on market based congestion management methods and other methods.
Market-based solutions to congestion are deemed fairer as they contribute better to economic
efficiency than other methods. Methods other than market based make use of some criteria to
allocate the transmission capacity.
Out of several congestion management techniques listed above, following are exclusively termed
as congestion alleviation methods:
1. Re-dispatch
2. Counter Trade
3. Curtailment

Ques. 5. what do you understand by Fundamentals of Locational Marginal Pricing.

Ans: - Locational marginal pricing is a centralized process of market clearing, where it is the
responsibility of the Independent System Operator (ISO) to determine the power dispatch
schedules as well as the energy prices. Unlike system uniform pricing (i.e., unconstrained
bidding) approach, network limits have to be considered while scheduling generators, loads and
bilateral transactions. Since network constraints are considered in the market clearing process, it
is not possible to determine the market equilibrium simply by the intersection of a cumulative
supply curve and a cumulative demand curve. Instead, the power dispatch schedules and energy
prices are calculated through an optimization approach consisting of network and power flow
related constraints.
An LMP market may be a single settlement or two settlement market. In case of a single
settlement market, scheduling is done only in day-ahead, whereas both day-ahead and real-time
scheduling is done for a two settlement market. A real-time market is essentially within the hour
market. The real-time scheduling and settlement are further done in different time blocks. For
example, in PJM, real-time scheduling is done in 5- minute time blocks. The real-time
scheduling starts with the state-estimation solution at the beginning of each time block. The
state-estimation solution gives the actual injection by each generator and actual withdrawal by
each load at the current point of time. It should be noted that the above time frames of settlement
are not strict and change depending upon the market needs.

Ques. 6. Explain the Types of Ancillary Services and start Capability service.

Ans: - Types of Ancillary Services and start Capability service

A large number of activities on the interconnected grid can be termed as ancillary services.
During the process of defining the ancillary services, some proposals tried to define 60 different
ancillary services. In order to remove this large discrepancy, the North American Electric
Reliability Council (NREC) along with Electric Power Research Institute (EPRI) has identified
12 functions as ancillary services. These are:
1. Regulation: The use of generation or load to maintain minute-to-minute generation-load
balance within the control area.

2. Load Following: This service refers to load-generation balance towards end of a scheduling
period.
3. Energy Imbalance: The use of generation to meet the hour-to-hour and daily variations in
load.
4. Operating Reserve (Spinning): The provision of unloaded generating capacity that is
synchronized to the grid and can immediately respond to correct for generation-load imbalances,
caused by generation and /or transmission outages and that is fully available for several minutes.
5. Operating Reserve (Supplemental): The provision of generating capacity and curtailable
load to correct for generation-load imbalances, caused by generation and /or transmission
outages, and that is fully available for several minutes. However, unlike spinning reserves,
supplemental reserve is not required to respond immediately.
6. Backup Supply: This service consists of supply guarantee contracted by generators with other
generators or with electrical systems, to ensure they are able to supply their consumers in case of
scheduled or unscheduled unavailability.
7. System Control: This activity can be compared with the functions of the brain in the human
body. System control is all about control area operator functions that schedule generation and
transactions and control generation in real time to maintain generation load balance.
8. Dynamic Scheduling: It includes real-time metering, tele-metering along with computer
software and hardware to virtually transfer some or all of generator’s output or a customer’s load
from one control area to another.
9. Reactive Power and Voltage Control Support: The injection or absorption of reactive
power from generators or capacitors to maintain system voltages within required ranges.
10. Real Power Transmission Losses: This service is necessary to compensate for the
difference existing between energy supplied to the network by the generator and the energy taken
from the network by the consumer.
11. Network Stability Services from Generation Sources: Maintenance and use of special
equipment (e.g., PSS, dynamic braking resistances) to maintain secure transmission system.
12. System Black Start Capability: The ability of generating unit to proceed from a shutdown
condition to an operating condition without assistance from the grid and then to energize the grid
to help other units start after a blackout occurs.

Ques. 7. What is the Classification of Ancillary Services?

Ans: - Classification of Ancillary Services

There can be various ways of classifying the above ancillary services. One common approach
would be to identify when and how frequently these services are required by the system operator.
Thus, three groups can be formed-

1. Services required for routine operation:

These are the services which the system operator requires quite frequently. Some of these may be
required to provide corrective action on minute-to-minute basis. Following services can be
grouped under this category:
(a) System control
(b) Reactive power support
(c) Regulation
(d) Load following
(e) Energy imbalance
(f) Real power loss displacement

2. Services required to prevent an outage from becoming a catastrophe:

These services prevent the system from going out of step even if a major event occurs. These do
not come into picture on daily basis, or rather; no proactive measures are required to be taken
either by the system operator or the service provider on daily basis. Their effectiveness is sensed
only under contingent situation. Following services fall under this category:
(a) Spinning reserve
(b) Supplemental reserve
(c) Network stability services

3. Services needed to restore a system after blackout:

Re-energizing the system after complete blackout requires support from certain generating
stations, which can pickup generation even in the absence of external electricity support. Such
generating units provide the system black start capability. These services are very rarely used.
A closer look at the list of ancillary services reveals that they are either related to:
i. Generation-load balancing issues or
ii. The network security related issues.

Ques. 8. Writes down short note on the Mandatory provision of ancillary services.

Ans:- In this approach, before a participant is connected to the grid, it has to make sure that it is
in a position to provide the ancillary services mandated by the system operator. The system
operator lays down the rules to be followed by the participants. The rules for the connection to
the grid can be:
 The generator should be equipped with droop characteristics of 5%. This helps in
frequency regulation.
 The generator should be able to operate in a power factor range of 0.85 lead to 0.9 lag. It
should be equipped with Automatic Voltage Regulator (AVR).

These types of compulsions act more or less like the rules existing in the vertically integrated
utility. This will ensure that enough resources will be available towards system security. This
approach is a simpler one; however, it does not lead to economic efficiency. Some of the
problems associated with this approach are as follows-

1. There is a chance that more than sufficient sources are likely to be developed, which is
not desired. For example, each and every generating unit need not take part in the
frequency regulation process.
2. The participants may think that they are denied the profits of the competitive market just
because they are forced to supply services at an additional cost.
3. The approach does not leave room for technological or commercial innovation.
4. Some units may be unable to provide some of the services. For example, nuclear power
plants can not be subjected to rapid changes in its output. Hence, same set of rules can
not be applied to all the participants.
Ques. 9. What do you understand by Loss of Opportunity Cost.

Ans: - Loss of Opportunity Cost

If the NYISO dispatches or directs a generator to reduce its real power output in order to allow
the unit to produce or absorb more reactive power, the generator may receive a component of
payment accounting for the Lost Opportunity Cost (LOC). The concept of loss of opportunity
cost was explained with the help of Figure 6.6.
In NYISO, the method for calculating the LOC is based on the following factors:
i. Real time long-term based marginal price (LBMP).
ii. Original real power dispatch and the new dispatch point.
iii. Bid curve of generator supplying reactive power service.

Figure 6.9: Calculation of LOC

Figure 6.9 describes the calculation of the lost opportunity cost for a generator which decreases
its real power output to provide more reactive power service. PRT is the Long-term Based
Marginal Price (LBMP), and f(P) is the bid curve of the generator supplying reactive power
support. D1 and D2 are the original and new dispatch points respectively while B1 and B2 are
the corresponding bid prices at D1 and D2. This sum is divided by the annual forecasted
transmission usage for the year as projected by the NYISO including the system load, exports
and power wheeling. NYISO calculates this payment hourly. Transmission customers engaged in
power wheeling or exporting, pay the NYISO a charge, which is equal to the value determined as
mentioned above, multiplied by the wheeled energy at that hour.
Ques. 10. International Comparison with Voltage Control, Frequency and power factor on
the following countries
(a) England and Wales
(b) Nordic Countries
(c) California, USA

Ans: - INTERNATIONAL COMPARISON

In this section, a brief account of technical and economic aspects of ancillary services of the markets
of England and Wales, Nordic Countries, California, New York and Australia is given. Aspects of
two important ancillary services, i.e., voltage control and frequency regulation are discussed.
(a) England and Wales:-
National Grid Company (NGC) operates the transmission grid of England and Wales, which is also
responsible for managing ancillary services. The costs associated with the provision of ancillary
services are recovered from the consumers through uplift in transmission payment mechanism.
Voltage Control
Provision of this service is required from all the generation units with a capacity over 30 MW.
Voltage must be kept within the range of Vnom+- 10% for 400, 275 and 132 kV networks and the
power factor (PF) between 0.85 capacitive and 0.95 inductive. The main costs associated with this
service correspond to capacity and operation. The ratio of capacity price to operation price is
approximately 1:2. Consumers pay for the service through an uplift in their electricity tariff.
Frequency Control
The system operator (SO) is required to keep the frequency between 49.5 and 50.5 Hz. In the case of
a contingency, the frequency is allowed to drop under 49.5 Hz, but for not more than 1 minute. The
supply of primary frequency regulation is mandatory for all the generators with an installed capacity
of over 50MW, which must provide the service in continuous time. Generators are set for a droop of
3–5%. Large consumers can provide primary frequency regulation through load shedding, where a
response period of 10 s and a duration period of 20 s are required. The costs associated with the
service are generally traded through annual bilateral contracts. Consumers pay for this service
through an increase in their electricity payment which includes capacity, operation and
compensation. The service of secondary frequency regulation is considered as a commercial service
and it is not considered as a mandatory provision. Generators provide it using AGC. For those that
provide the service, a response time of 30 s and a duration period of 30 min are required.

(b) Nordic Countries:-

Ancillary services are traded in a real-time market managed by the transmission system operators.
The costs associated with ancillary services are directly transferred to the users through the
transmission payment.
Voltage Control
The local provision of voltage control and reactive power is mandatory for all the system generators.
A response time of 5 s is required and the service must be supported for the period that is needed.
The costs associated with the service are low, since the provision is in charge of the hydraulic
generators, and the transaction mechanism corresponds to annual contracts at a fixed price. The
suppliers receive an operational payment, only for quantities that exceed the mandatory range and the
consumers’ payment is incorporated in the transmission tariff.
Frequency Control
The system frequency is required to be within the range of 49.5 and 50.5 Hz. The service of primary
frequency regulation must be provided within 30 s after being requested by the system operator and
must be supported for the period that is needed. The required quantity is locally calculated in every
country. This is an obligatory service for all the generation units, where they are required to keep a
droop between 2 and 5%. The transaction mechanism corresponds to annual contracts. The suppliers
get a payment for capacity and other for operation, and the consumers pay through the transmission
tariff. For example, Statuette, the system operator in Norway, determines a total amount to be paid
and each generator receives a payment according to its contribution to the service provision. The
service of secondary frequency regulation is only considered an ancillary service when it is provided
in the case of a contingency. For this service, a response time of 15 minutes and a minimal provision
period of 4 hours is required. The costs associated with secondary frequency regulation are minor,
since this provision is in charge of hydraulic generators. The provision is assured through
competitive offers. The consumers pay through the transmission tariff.
(c) California, USA:-
After the power market crisis of 2001, the Californian ISO (CAISO) redesigned its electric energy
market. It then introduced the concept of available capacity (ACAP), whose objective is to allow the
ISO to verify in advance the availability of enough resources to satisfy the customer load as well as
reserves. In the new market structure, the energy market, the ancillary service market and the
congestion management market are jointly optimized.
Voltage Control
In the California system, the ISO procures reactive power support services on long-term contracts
from reliable must-run generating units. The actual short-term requirement is determined on a day-
ahead basis, after the real power market is settled and the energy demand and schedules are known.
Thereafter the ISO determines the location-wise amount of reactive power required based on system
power flow analysis. Daily voltage schedules are issued to contracted generators and the transmission
operators within the region. The generators are mandated to provide reactive power within the power
factor range of 0.90 lag to 0.95 lead. For reactive power absorption / generation beyond these limits,
the generators are financially compensated for, including, a payment if they are required to reduce
their real power output.
Frequency Control
Primary frequency regulation and secondary frequency regulation are not mandatory services. There
exists up and down service regulation. The costs associated with this service correspond to capital,
operation, fuel, and reduced efficiency costs, etc. For secondary frequency regulation, the service
must be available in 10 min and should be supported for at least 2 hours. The system operator
calculates the quantity required of the service according to a criteria that takes care of demand and
contingency. The quantity required generally comes close to 3% of the maximum demand of the
system.

Solved By: - BITTU SONI

Preferred By: - DR. DIGAMBAR SINGH