Article Positives of availability based tariff for. bulk power bela te fda) amen: A401 oe Introduction Power generation and distribution in India enter the twenty-first century. With sustained efforts over the decades, the power generation scenario in India presents a rich and composite mixture of hydro, nuclear, thermal, wind and solar generation. It is identified as key area for our development. How well we can manage this vast infrastructure and how close itcan keep pace with our increasing eneray demands will be a crucial deciding factor in achieving our dream of an annual double digit growth. Operation of regional grids in India, as you would be aware, has undergone a sea change since 2002, primarily due to introduction of Availability Tariff, which started on 1st July 2002 for Western Region, on 1st December 2002 for Northern Region, and ontst January 2003, for southern Region. The Indian Electricity Grid Code (IEGC) and the Availabilty Based Tariff (ABT) have provided a certain direction on the issues of scheduling, metering, accounting and poo! settlement. Now a days, almost inall the regional grids of india, the Availablity Based Tariff (ABT) has been implemented, which actually aims at bringing responsibility, accountability in 70 . power generation and also schemes of incentives and disincentives for consumption by frequency dependent pricing. ABT (Availability Based Tariff) along with the Electricity Act of 2003 is perhaps the most significant and definitive step taken in the Indian power sector so far to bring more efficiency and focus to this vital infrastructure. The fact that the ABT regime was introduced to replace the Electricity Supplies Act of ‘1948 would perhaps be an indicator of how overdue reforms were. This review article is an attempt to Introduce the significant objectives and clauses of ABT in a concise manner. Pre ABT Tariff structure The power plants have normally two types of costs. © Fixed cost © Variable cost. ‘The fixed cost elements are interest on loan, return on equity (ROE), depreciation, O&M expenses, insurance, taxes and interest on working capital. The variable cost comprises of the fuel cost, .¢., coal and January 2009 (BMG yournalArticle «il in case of thermal plants and nuclear fuel in case of nuclear plants. Under the two-part tariff regime, there Was no bifurcation between fixed and variable charges. Both were bundled together and payable in proportion to the actual energy drawn by the consumer during a particular period. (e.g. say beneficiary is state/SEBs), Before introducing ABT, the total amount payable to the generating company over a year towards the ‘fixed cost depends on the average availablity (MW delivering capabilty) of the plant over the year. In ‘case the average availablity actualy achieved over the year is higher than the specified norm for plant availabilty, the generating company gets a higher payment. In case the average availabilty achieved is lower, the payment is also lower. If a beneficiary over draws a portion of the other beneficiary's share of power, there was no penalty on those who get the benefit or there was no compensation for those who suffered. In this two tariff regime, capacity charges are payable against the 62.79% (deemed) PLF (Plant Load Factor) of the station. 50% full charges are payable for 0% deemed PLF and full fixed charges (100%) are payable at achieving a PLF of 68.49%, ‘and above 68.49% PLF incentive is payable at 1 paise/KWh for each 1% increase in PLF ©. This tai ‘mechanism did not provide any incentive for either backing down generation during oftpeak hours or {or reducing consumer load/ enhancing generation uring peak-load hours. In fact, it was proftable to go on generating at a increasing rate even when the consumer demand had fallen down, In other words, this pre ABT tarif mechanisms encouraged tid indisciptine. What is ABT? ABT particularly in the Indian context stands for fa techno-economic tool for bringing rational tariff structure for supply of electricity from generating station to beneficiaries on a contracted basis. I a new system of scheduling and dispatch, With rewards and penalties seeking to enforce day-ahead re-committed schedules for both generators and beneficiaries though variations are permitted ifnotiied fone and one and halt-hours in advance. ABT tries to improve the quality of power and curtail the following disruptive trends: '® Unacceptable rapid and high frequency deviations causing damage and disruptions. © Frequent grid disturbances resulting in generators. tripping, power outages and grid instability. ABT includes: > Scheduling and load dispatch (current day, day ahead scheduling) > Tariff structure (fixed charges, schedule or energy charges, unscheduled interchange) i@ema journal Janay 2000 ABT splits the existing monolithic energy charge: structure into three basic components. By treating both fixed and variable cost components separately. Availability Based tariff component - Capacity charges (fixed): Towards reimbursement of the fixed cost ofthe plant, linked to the plant's declared ‘capacity to supply MWS, iis linked to availabilty of the generating station. Thats, its capablity to deliver MWs on a day-by-day basis. At zero availabilty, no capacity charges shall be payable. ‘Availabilty for any specific time-period defined as the ratio of the average send out capability (SOC) for all ime blocks of the time-period to the rated ‘SOC. Thus availabilty can be expressed using the formula: Avaebity = (2: y=p$0Gbras +] yo T= TAUKDTIOO LC. = Installed Capacity of the station in MW ‘$0Ci = SOC of the ith time block of the period n= Number of time blocks during the period AUX = Normative Auxiliary consumption as a percentage of gross generation. h = Number of hrs during the period = n/4 CL = Gross MWH units of capacity kept closed. fon account of generating scheduling order. Capacity charges of the generators shall be payable by users on the capacity allocated to them, ltrespective of the quantum of power they draw or scheduled to draw. Fixed charges are payable in two parts: (1) Fixed charges excluding ROE is payable on a prorated basis for 0-30% availability. (2) Fixed charges with Prorated ROE is payable from 30-70% availabilty, Then incentive given to generating station beyond 70% availabilty @ 0.4% of equity for each percentage increase between 70-85%. Beyond 85%, it is 0.39% this decrement in incentive is to discourage the generating facility from overloading the units at the Cost of maintenance and equipment life [3]. Also Penalty given to generating utility for over/under declaration of the availability. Energy charges (variable): Energy charge is reim- bbursement of the fuel cost for scheduled generation, Energy charges or variable charges shall be payable by every user on the scheduled energy irespective of actual drawal UI (unscheduled interchange) charges: It is ‘a payment for deviations from schedule at a rate 7Article dependent on system conditions (frequency) at that time. The deviation from schedule is technically termed as unscheduled interchange (UI) in Availabilty ‘Tariff terminology. This component would be negative in case the power plant is delivering less power than scheduled, For example, if a power plant delivers 600 MW while it was scheduled to supply only 500 MW, the energy charge payment would be for the scheduled generation (500 MW) only, and the excess generation (100 MW) would be paid for at a certain rate. if the grid has surplus power at that time and frequency is above 50.0 Hz, the rate would be small. Ifthe excess ‘generation is at the time of generation deficit in the system ({requency below 50.0 Hz), the payment for extra generation would be at a higher rate. As long as the actual generation/drawal is equal to the given schedule, payment on account ofthis component of ‘Availabilty Tariff is zero. The relationship between the Ul rate and grid frequency, forthe inter-state system, is specified by CERC. For e.g. the relationship, applicable from. 10.2004 is shown in figure - 1. Figure: 1 Ul rates vis grid frequency Se ga ee ee eee eee The Ul charges are payable /receivable it, © Abeneficiary overdraws power, thus by decreasing the frequency. © A beneficiary under draws power, thus by increasing the frequency. © A generator generates more than the schedule, thereby increasing the frequency. © A generator generates less than the schedule, there by decreasing the frequency. How UI mechanism works Refer Table | & I System operation in India © Atregional levelFive RLDCs viz. NRLDC, SRLDC, ERLDC, WRLDC and NERLDC. © SRLDCS in each state. ® LDCs have been modernized with modem Energy Managentent System tools. © SLDCs carry out the optimum scheduling of the state generating units and the RLDCs are responsible for scheduling of the Central Sector Generating Units only. © SLDGs send the requisition to the RLDCs against thelr entitlements out of available power from Central Sector Generation and the RLDCs allocate total available power to various states in the ratio oftheir entitlements Objectives of ABT at regional level © To Encourage grid aisciptine © Promote trade in energy and capacity eC ea ey Commercial incentive to ‘Generating [Over energy (G5. wl get pay ssaion | svontyto gta mento lf ur. | beck down generation FE : plus energy sdoiy._ | ding high frequency [Generang [Under energy |NA Positve |Lowerorni JS. wl pay back eaten [supoiyio and or ni for decont eray supply at ower ato, Beneicary [NA (Ove erersy | Negaive Lower ornit | Stata vl oot era Advised to back down 35 State! drawal tom ower at lower ato 88 own costor gonort SEBS grid |then scheduled rate. |ing station Beneficiary [NA Under energy Postive [Lower ori [State wil get pay | Advio toro ls State) éraval rom back for energy not | schedule orto increase 56s one awn at ower rato | ts crawal and also hast pay as pr acheter Unnecessary fr drawal ener. 2 January 2009 WeING journal