CERC regulation on Ancillary Services Operations, 2015

Objective of the Regulation:

To restore the frequency at desired level & to relieve the congestion in the transmission network.


These regulations shall be applicable to the Regional Entities involved in the transactions facilitated through short-term open access or medium-term open access or long-term access in inter-State transmission of electricity.

Eligibility for participation for Ancillary Services:

All Generating Stations that are regional entities & whose tariff is determined or adopted by CERC for their full capacity.

New concepts:

  • “Virtual Ancillary Entity” means a virtual entity participating in the Regional Deviation Pool, as operationalized under CERC (DSM) Regulations, 2014, which shall act as the counterparty for the schedule prepared for despatch of Ancillary services;
  • “Regulation Down Service” means an Ancillary Service provider that can decrease generation on instruction of the Nodal Agency.
  • “Regulation Up Service” means an Ancillary Service provider that can increase generation on instruction of the Nodal Agency.
  • “un-requisitioned surplus” means the reserve capacity in a generating station that has not been requisitioned & is available for despatch, & is computed as the difference between the declared capacity of the generation station & its total schedule under long-term, medium-term & short-term transactions, as per the relevant regulations of the Commission.


Nodal Agency: National Load Despatch Centre through the Regional Load Despatch Centres shall be the nodal agency for implementation of the ancillary services at the inter-state level.

Role of Nodal Agency:

  • Preparing merit order stack of Inter-State Generating Stations taking into account ramp up/down rate, response time, transmission congestion & such other parameters as stipulated in the Detailed Procedure.
  • For Regulation-Up, preparing a stack of un-requisitioned surplus capacities available in respect of Inter-State Generating Stations from lowest variable cost to highest variable cost in each time block.
  • For Regulation-Down, preparing a merit order stack from highest variable cost to lowest variable cost in each time block.
  • Directing the selected Ancillary Services provider based on the merit order for economical dispatch for Increase/Decrease in generation, as & when requirement arises in the system on account of any of the following events:
  1. Extreme weather forecasts &/or special day;
  2. Generating unit or transmission line outages;
  • Trend of load met;
  1. Trends of frequency;
  2. Any abnormal event such as outage of hydro generating units due to silt, coal supply blockade etc.;
  3. Excessive loop flows leading to congestion; &
  • Such other events.
  • Directing the selected Ancillary Services providers to withdraw their services after the circumstances leading to triggering of Ancillary Services no longer exist. The time-frame for withdrawal of service shall be determined as per the Detailed Procedure.

Role of Ancillary Services Providers

  • Submission of details of fixed charge, variable charge & any other statutory charges to the Regional Power Committees on monthly basis.
  • Injecting or backing down the generation as per the instruction of the Nodal Agency for Increase/Decrease in generation respectively.

Role of Regional Power Committees

  • Submission of details of fixed charge, variable charge & any other statutory charges of Ancillary Services Providers to the Nodal Agency for merit order dispatch on monthly basis.
  • Preparation of their energy/ Deviation Accounts by using above details.

Dispatch of Ancillary Services

  • Generation under Ancillary services shall be scheduled to the Virtual Ancillary Entity in any one or more Regional Grids as decided by the Nodal Agency.
  • Once the time period specified by nodal agency starts, Ancillary Services shall be deemed to have been triggered.
  • Schedules of Ancillary Services providers shall be considered as revised by the quantum scheduled by nodal agency under Ancillary Services.
  • Any deviations in schedule of Ancillary Services providers beyond revised schedule shall be treated in accordance with CERC DSM Regulations, 2014.

Withdrawal of Ancillary Services

  • The Nodal Agency, having been satisfied that the circumstances leading to triggering of Ancillary Services no longer exist, shall direct the Ancillary Services Provider(s) to withdraw with effect from the time block as specified in the Detailed Procedure.

Scheduling of Ancillary Services

  • The quantum of generation dispatched shall be directly incorporated in the schedule of respective Ancillary Services providers.
  • For Regulation Up Service, power shall be scheduled from the generating station to the Virtual Ancillary Entity.
  • For Regulation Down Service, power shall be scheduled from the Virtual Ancillary Entity to the generating station, so that effective scheduled injection of the generating station comes down.
  • Separate statement shall be maintained along with Regional Deviation Settlement Account for Ancillary Services
  • The energy despatched under Ancillary services shall be deemed as delivered ex-bus.

Energy Accounting:

  • To be done by Regional Power Committee on weekly basis along with Deviation settlement account based on interface meters data & schedule
  • Regional Power Committee shall issue an ancillary services statement along with Deviation settlement Mechanism account

Ancillary Services Settlement

  • Settlement to be done by nodal agency under deviation settlement account under separate account head of Ancillary Services.
  • Payment to Ancillary Services provider shall be from the Regional Deviation Pool Account Fund.
  • Ancillary Services provider to be paid at their fixed & variable charges, with mark-up on fixed cost, as decided by the Commission from time to time in case of Regulation Up service.
  • The fixed & variable charges allowed by the Commission & as applicable at the time of delivery of Ancillary services shall be used to calculate the payment for this service & no retrospective settlement of fixed or variable charges shall be undertaken even if the fixed or variable charges are revised at a later date.
  • The Ancillary services Provider(s) shall adjust the fixed charges to the original beneficiaries for the quantum of un-requisitioned surplus scheduled under Regulation Up service.
  • For Regulation Down service, the Ancillary services Provider(s) shall pay back 75% of the variable charges corresponding to the quantum of Regulation Down services scheduled, to the Regional Deviation Pool Account Fund.
  • Any deviations in schedule of Ancillary Services providers beyond revised schedule shall be treated in accordance with CERC DSM Regulations, 2014.
  • Sustained failure to provide the Services Provider (barring unit tripping) or violation of directions of RLDC shall attract penalties on account of gaming.
  • No commitment charges shall be payable to Ancillary Services provider for making themselves available for the Ancillary Services.


The Nodal Agency will issue the Detailed Procedure within a period of 3 months of notification of these regulations. The Detailed Procedure shall contain the guidelines regarding operational aspects of Ancillary Services including scheduling & dispatch & any residual matter.

Views on the regulation:

  • New revenue generation opportunity opens-up for inter-state generators.
  • Costly generation to be backed down first, resulting in lower overall cost of power in the grid.
  • Reduction in UI charges for discoms.
  • Intra-state generators should have been given an opportunity to participate.
  • Name of the regulation could have been ‘CERC (Frequency control Ancillary Services Operations) Regulations, 2015. This would have helped in future to differentiate with other ancillary services like Voltage control, Black start ancillary services etc.
  • As per the present scenario, in case of increase in frequency, existing plant is backed down by RLDC, so the need of for Regulation down service is questionable.
  • Relevant amendments to the scheduling and dispatch regulations need to be done.
  • Will adjustment in SHR be allowed for Regulation Down Service?
  • Who will pay the mark up is not specified in the regulations, the same needs to be clarified.
  • Will the generator become eligible for ‘incentive’ as per PPA due to higher dispatch as per Regulation up service.
  • Detailed procedure will bring in more clarity on the financial impact.

About the Author:

Abhishek Amarnani has completed his MBA in ‘Power Management’ from National Power Training Institute (NPTI), Faridabad and is a B.E. in ‘Power Generation’ from NPTI, Nagpur. Abhishek wants to ‘create a difference’ in the power sector and is currently employed with Feedback Infra’s Energy division.

Click to Download: anncilary services regulations_principal regulations



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