Brief Introduction

The developing countries have sustained power shortage problem compared to developed countries for many reasons, mostly financial in nature. Mismatch between power generation and demands, results in deviation of system frequency and tie-line power. Automatic Generation Control (AGC) is a very indispensable control strategy in electric power system, utilized to maintain the tie-line-power flows stipulated tolerances and to hold the system frequency at or very close to a specified nominal value. Each unit generates most economic values and also maintains the correct value of share of power generations between generators, for mitigating growing power demands.

In India, before introduction of Availability Based Tariff (ABT) grid was undisciplined. There was large variation in the grid frequency. After implementation of ABT grid frequency was narrowed as well as grid was disciplined. Main aim of ABT was to increase generation capacity of the nation but it was taken as a profit making entity. Deviation Settlement Mechanism (DSM) is a regulatory mechanism by which grid stability is achieved by imposing penalty and incentives for over drawl/injection or under drawl/injection from the schedule. DSM is a frequency linked mechanism. It is not related to any market conditions.

The management of grid imbalances plays a crucial role in maintaining a secure and reliable grid, and ensuring a healthy and robust interplay across the power generation, transmission and distribution segments. The central regulator, together with system operators, is taking steps to ensure secure and reliable grid operations in a rapidly changing market scenario.

Any power system needs to balance the generation and consumption of energy over multiple timeframes from seconds, hours, days and even years ahead. There is always deviation in actual generation from scheduled generation and actual drawl from scheduled drawl. There will always be differences between the contracted volumes and the actual metered volumes. Thus, to handle these differences (or imbalances) in real time, there is a need for imbalance handling mechanism. The imbalance handling mechanism has been in operation at the inter-state level for nearly 15 years.