Availability based tariffs. Unscheduled interchange of power

1. BY: Amit Kumar Singh
Nupur Vaidya

2.  Conventional
Generation -
Thermal
Hydro
 Oil,
natural gas and nuclear power accounts for
smaller proportion of power.
 Emphasis also on non-conventional energy
sources i.e. solar, wind, biogas and tidal.
 Captive power plants being encouraged to
supply surplus power to Grid.

3. 1. Thermal 86,003.38 MW
2. Gas 17,220.85 MW
3. Nuclear 4,560.00 MW
4. Hydro 36,953.40 MW
5. Renewable 16,429.42 MW
6. Oil 1,199.75 MW
Total 162,366.80 MW

4. 18
16
14
12
% Energy Shortage
10
2004-05
8 2005-06
2006-07
6
2007-08
4
2
0
0 2 4 6 8 10 12 14
Months

5. Diversification
Jammu
Ludhiana
SIKKIM
NR Delhi NEPAL
BHUTAN
Partabpur
RAPP Jaipur Guwahati
Lucknow CHICKEN
NECK NER
AR
Patna BANGLA
MM
DESH
Vindhyachal ER
AN
MY
Gandhinagar
Kolkata
Indore Bhopal Korba
Pipavav
WR Talcher/Ib Valley
Raipur Bhubaneswar
Tarapur
Mumbai
Vizag
LEGEND
Simhadri
Hyderabad Generation Load-Centre
SR Coal
Kaiga Krishnapatnam
Ennore Hydro
Bangalore South Madras
Kozhikode
Mangalore Chennai
Cuddalore Lignite
Coastal
Kayamkulam
Thiruvananthapuram
Kudankulam
COLOMBO Nuclear
SRI LANKA

6. Diversification
 Cost of electricity from different
generations, such as hydro, nuclear and
thermal differ, depending upon the regional
resources and government policies.
Energy Resources are unevenly distributed:
Coal resources are abundant in
Bihar/Jharkhand, Orissa, West Bengal and
Hydro Resources are mainly concentrated in
Northern and North-Eastern Regions

7.  Electricity Act 2003 has been enacted and
came into force from 15.06.2003.
 The objective is to introduce competition,
protect consumers interests and provide
power for all.

8. The Act provides for
 National Electricity Policy
 Rural Electrification
 Open access in transmission
 Open access in distribution
 Mandatory SERCs,
 License free generation and distribution,
 Power trading,
 Mandatory metering and stringent penalties for theft
of electricity.

9. Energy traded at Inter State level
35000
30000
30000
25000 22526 23134
Energy in MU
20000
16441
15000
10000
5000
0
2004-05 2005-06 2006-07 2007-08
Year

10.  It is the rate at which consumers are required
to pay for electrical services
 Generation, transmission and distribution of
the electrical energy involve a huge amount of
money
 Tariff and its governing rules play a very
important role in the life, health and growth of
the organization.

11.  Low frequency
 High frequency
 Very frequent grid disturbances , causing tripping of
generating stations, interruption of supply to large
block of consumers, and disintegration of the regional
grids

12. 1. Capacity Charge: towards reimbursement of the
fixed cost of the plant, linked to the plant's
declared capacity to supply MWs
2. Energy Charge: to reimburse the fuel cost for
scheduled generation
3. Unscheduled Interchange: a payment for
deviations from schedule, at a rate dependent
on system frequency conditions.

13.  Fixed cost  Variable cost
 Interest on loan  Fuel cost, i.e., coal
 Return on equity and oil in case of
 Depreciation thermal plants
 O&M expenses
 Insurance  Nuclear fuel in
 Taxes and interest case of nuclear
on working capital. plants.

14.  The payment of fixed cost to  The payment of variable cost
the generating company is to the generating company is
linked to availability of the dependent on scheduled
plant. generation
 (e.g., if a power plant delivers
 If average availability over 600 MW while it was
the year is higher than the scheduled to supply only 500
specified norm, the MW),
generating company gets a  the energy charge payment
higher payment. would still be for the
scheduled generation (500
MW), and the excess
generation (100 MW) would
 This is the first component of
get paid for at a rate
Availability Tariff, and is
dependent on the system
termed ‘capacity charge’.
conditions prevailing at the
time.

15. UNSCHEDULED INTER-CHANGE
(UI) CHARGES
 The UI for a Generating Station shall be equal to its actual
generation minus its scheduled generation. UI for States shall
be equal to its total actual drawal minus its total scheduled
drawal.
 UI shall be worked out for each 15 minutes time block.
Charges for all UI transactions are based on average
frequency of the time block.
 The UI Tariff structure as on 31.3.2007 is as under.
Average Frequency of time-block UI Rate (P/kWh)
---------------------------------------- -----------------------------------
50.5 Hz and above 0.00
Below 50.50 Hz and upto 50.48 Hz 6.00
Below 49.04 Hz and upto 49.02 Hz 561.00
Below 49.02 Hz 570.00
Between 50.50 Hz and 49.82 Hz Linear in 0.02 Hz steps
@ 6 P/kWh for each step
Below 49.82 Hz Linear in 0.02 Hz steps
@ 9P/kWh for each step
15

17. PROPOSED NEW UI RATES
 CERC vide Press Release dated 7-4-2007 has
proposed the New UI Vector for enforcing strict
Grid discipline as given below :
Average Frequency of time-block UI Rate (P/kWh)
---------------------------------------- -----------------------------------
50.5 Hz and above 0.00
Below 50.50 Hz and upto 50.48 Hz 6.00
Below 49.52 Hz and upto 49.50 Hz 345.00
Below 49.02 Hz 745.00
Between 50.50 Hz and 49.82 Hz Linear in 0.02 Hz steps
@ 6 P/kWh for each step
Between 49.80 Hz and 49.52 Hz Linear in 0.02 Hz steps
@ 9P/kWh for each step
Between 49.50 Hz and 49.02 Hz Linear in 0.02 Hz steps
@ 16P/kWh for each step
COMMENTS ARE INVITED BY CERC BY 23rd APRIL 2007
ON THE ABOVE PROPOSAL FOR REVISION OF UI VECTOR.
17

18. UI SETTLEMENT MECHANISM IN
INTRA-STATE ABT
At Inter – state level the Unscheduled interchanges of
central sector and Inter regional sources are determined
with reference to their schedule at the point of injection
but those of SEBs with reference to their ex-periphery
schedule. Datum for working out UI not being same for
all entities, this results in UI MISMATCH which is
equalised by averaging the two ON DAILY BASIS.
The above adjustment is required to equalize payable UI
amount to receivable UI amount so that UI pool account
is maintained as a Zero balance account.
18

19. 1. UI AMOUNT IS DRAWN FOR ALL THE UI POOL MEMBERS ON ACTUAL BASIS.
2. FROM THE UI ACCOUNT AMOUNT RECEIVABLE MEMBERS AND AMOUNT PAYABLE
MEMBERS TO THE POOL IS SEPERATELY DRAWN OUT.
3. AMOUNT PAYABLE AND RECEIVABLE WILL NOT MATCH BECAUSE FOR GENERATORS
THE UI IS DRAWN OUT BASED ON INJECTION & SCHEDULE AT GENERATOR PERIPHERY
WHEREAS FOR STATES THE SAME IS BASED ON DRAWAL & SCHEDULE AT STATE
PERIPHERY.
4. AS PER THE CERC STIPULATION THE UI POOL ACCOUNT SHOULD BE A ZERO BALANCE
ACCOUNT.
5. AT RPC LEVEL THE UI MISMATCH i.e. THE DIFFERENCE BETWEEN UI PAYABLE &
RECEIVABLE IS EQUALIZED BY AVERAGING THE TWO ON DAILY BASIS. HOWEVER THE
UI OVER HVDC AND OTHER INTER-REGIONAL LINKS IS RETAINED WITHOUT ANY
ADJUSTMENT.
6. THE UI MIS-MATCH IS CALCULATED ON DAILY BASIS AND APPORTIONED TO ALL UI
POOL MEMBERS IN THE RATIO 50:50 TO THE PAYING AND RECEIVING MEMBERS IN THE
RATIO OF THE ORIGINAL UI AMOUNT DRAWN OUT.
19

20. SCHEDULING GUIDELINES CONSTITUENTS
1. While requisitioning power requirement ,minimum technical
requirement to ensure the continuity of the generating
stations and maximum availability should be taken care of by
DISCOMs. The requisition from central sector gas stations
should not be less than 70% of the respective availability
capacity in normal conditions and 50% under emergency
conditions. As far as Hydro and Nuclear stations are
concerned, the entire availability would be utilized at all the
times. However the storage capacity of Hydro stations is
exploited by RLDC depending upon the requirement of the grid.
2. Requisition for BTPS should not be less than 80% due to size
and age of the machines.
3. PPCL cannot go beyond 80% due to pollution stipulations.
4. Full requisition should be there for IP and RPH considering their
age and core generation.
5. Due to size & pollution stipulation for IPGCL’s GT, it should not
be less than 70%.

21. PROCESS FOR SCHEDULING
BY 10:00 HRS— ISGS shall advise NRLDC the station wise MW and MWH capabilities.
BY 10:00 HRS— BTPS,GENCO and PPCL shall declare the availability in 15 minutes time block in terms of MW and MWH.
BY 11:00 HRS— Entitlement of the state shall be posted by NRLDC in their website www.nrldc.org for central sector.
BY 11:00 HRS— SLDC shall post the GENCO,PPCL and BTPS availability in its website www.delhisldc.org
BY 13:00 HRS— NDPL,BRPL,BYPL,NDMC and MES shall intimate the SLDC, source-wise requirement of power for
succeeding day in terms in MW and MWH in 15 minutes time block.
BY 15:00 HRS— SLDC shall assess the requirement of power from all sources and intimate the same to NRLDC.
BY 17:00 HRS— NRLDC shall convey the net drawal schedule for Delhi and posted in the website.
BY 18:00 HRS— SLDC shall post the provisional Drawal Schedule and Generation Schedule of Generating stations within
Delhi based on the provisional Drawal schedule of Delhi as a whole posted on the NRLDC website.
BY 19:00 HRS— GENCOs/Licensees shall alter the schedule of generation /requirement and intimate the same to SLDC
for forwarding the same to NRLDC for incorporation in final drawal schedule of Delhi.
BY 22:00 HRS— SLDC shall inform the modification if any,for incorporating in the final drawal schedule to NRLDC.
BY 23:00 HRS— NRLDC shall issue the final drawal schedule of Delhi state along with other states and posted in their
website.
BY 23:30 HRS— SLDC shall compute the drawal schedule of DISCOMs and generation schedule of generating stations
within Delhi based upon the availability from central sector stations bilateral agreements entered into by
various distribution licensees for the next day.
Intra-day scheduling as per IEGC provisions is also permitted.

22.  Enhanced grid discipline ensuring quality power supply
for all consumers.
 Improvement in grid voltage levels leading to reduction
in transmission losses and enhancement of
transmission capacity.
 Enabling environment for meeting peak demand.
 Promote power trading & commercial dealings.
 Introduce and encourage merit order dispatch in Indian
power system.

23. Benefits of Intra – State ABT
a) Benefits to the Power System
• Brings about grid discipline by maintaining
frequency in prescribed band (49.5 to 50.5 Hz).
• Ensures optimum utilization of available
generation capacities.
• Enhances opportunities for Open access,
and Trading of electricity.
• Scope for encouraging competition among
generators.

24. b) Benefits to the Generator
• Encourages maximization of Generation during
peak hours with incentives and discourages the
same during off-peak hours with penalties linked
with frequency.
• Enables systematic scheduling in terms of long
term, short term as well as day ahead, duly
considering plant availability and maintenance.
• Ensures better life of equipments due to efficient
management of Demand Vs Supply. Thereby the
‘Hidden Costs’ due to damage is avoided.
• The three-part Tariff under ABT provides for proper
recovery of fixed and variable costs of Generator.

25. c) Benefits to the Distribution Licensees
• Economic efficiency dictates that the least cost
power should be dispatched in preference to
costly power (Merit Order Dispatch). ABT
provides for the same.
• Licensees can plan their requirement, both for
peak and off peak demands.
• Enables efficient Load Management through their
own Area Load Dispatch Centers.

26. d) Benefits to the End Users
• Enables open access, captive generation and
trading of electricity.
• Ensures quality and reliable power supply.
• Scope for reduction in cost of power due to
licensees opting for merit order dispatch in their
scheduling.

27. Frequency profile
50.2
50
49.8
49.6
Frequency (Hz)
2004-05
49.4
2005-06
49.2 2006-07
2007-08
49
48.8
48.6
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Months

29. Grid Disturbances
80 74
70
60
53
50
No's
40
30 minor
20
major
10 7
3 4 2
0 0 1 0 0 0 0 0
0
2000-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
Year

30. Max Voltage profile at important grid point
445
440
435
Max Voltage (KV)
430
2004-05
425
2005-06
420
2006-07
415 2007-08
410
405
0 2 4 6 8 10 12 14
Months

31. Min Voltage profile at important grid points
410
400
390
Min Voltage (KV)
2004-05
380
2005-06
370 2006-07
2007-08
360
350
0 2 4 6 8 10 12 14
Months

32. PLF
48
53
58
63
68
73
78
1985-86 52.4
1986-87 53.2
1987-88 56.5
1988-89 55
1989-90 56.5
1990-91 53.9
1991-92 55.3
1992-93 57.1
1993-94 61
1994-95 60
1995-96 63
1996-97 64.4
Year
1997-98 64.7
1998-99 64.6
1999-00 67.3
2000-01 69
2001-02 69.9
2002-03 72.2
2003-04 72.7
2004-05 74.8
2005-06 74.3
Over all PLF of Thermal Power Station
2006-07 76.8
2007-08

33. NTPC UI Trends
500 2003-
UI Charges in Rs Lakhs
04
0 2004-
05
-500 2005-
06
2006-
-1000 07
2007-
-1500 08
2008-
-2000 09
weeks

34. KARNATKA UI TrendS
4000
UI Charges in Rs Lakhs
3000
2000 2005-
1000 06
2006-
0 07
2007-
-1000 08
-2000
-3000
weeks

35.  The ABT must be extended to state and retail
level up to the level of feasibility.
 Time-differentiated tariff can further encourage
the stack holders to participate in the system
management.
 The real time pricing may have locational
features in addition to the system condition.
 Subsidy should be reduced in phased manner
and finally be eliminated within the target period.

36.  Cross-subsidization should not be done from
other type of the consumers within the system;
rather it should be done from the other areas in
consultation with the ministry that deals the
matters of social welfare.
 More encouragement should be given to private
investors.
 Open market to be developed for better power
trading.

37.  Tariff amendments after the Electricity Act 03 have
played a major role to bring discipline and
responsibility in the Indian Power System.
 The UI mechanism provides equal chance of earning
the performance-linked incentive to generators as
well as loads.
 With increased complexity of the power system, tariff
has became very complex and involved concept to
realize.
 A novel competitive power market in India is yet to
evolve.

38. Thank You