What is ABT?

The term Availability Based Tariff, particularly in the Indian context, stands for a rational
tariff structure for power supply from generating stations, on an availability basis. It is a
performance based tariff structure for the supply of electricity by generators owned and
controlled by the central government that provides for a new system of scheduling and
dispatch which mandates the generators and beneficiaries to commit to day ahead schedules
through a system of reward and penalty. The defaulters are liable to pay a penalty which
entails payment of prescribed charges, non-payment of which will call for appropriate action
under sections 44 and 45 of the ERC Act. The most significant aspect of ABT is the splitting
of the existing rigid energy charges into three components viz. capacity charges/ fixed
charges, variable charges and a third charge viz. the unscheduled interchange (UI) charges.

Unscheduled Interchange: Under the earlier regime, no penalty was applicable for deviation
from generating/drawal schedule by an entity. An attempt has been made to do away with
this drawback under the ABT regime through introduction of UI charge. Here, for any
withdrawal of power other than the schedule, the beneficiary has to pay an unscheduled
interchange (UI) charge for deviation from the day ahead schedule which is linked to the
frequency. The relationship between the UI rate and grid frequency, for the inter-state
system, is specified by Central Electricity Regulatory Commission. UI charges are calculated
using the following relationship:
 A generator generates more/less than the schedule causing grid frequency to deviate
upwards/ downwards.
 Beneficiary draws more/ less than the schedule causing grid frequency to deviate
downwards/upwards.

Availability Based Tariff (ABT) is a frequency based pricing mechanism applicable in

India for unscheduled electric power transactions. The ABT falls under electricity market
mechanisms to charge and regulate power to achieve short term and long term network
stability as well as incentives and dis-incentives to grid participants against deviations in
committed supplies as the case may be.

ABT Mechanism in Electricity sector in India is adopted since the year 2000 and in a few
other countries for pricing bulk power across various stakeholders. ABT concerns itself with
the tariff structure for bulk power and is aimed at bringing about more responsibility and
accountability in power generation and consumption through a scheme of incentives and
disincentives. As per the notification, ABT was initially made applicable to only central
generating stations having more than one SEB/State/Union Territory as its beneficiary.
Through this scheme, the Central Electricity Regulatory Commission (CERC) looks forward
to improve the quality of power and curtail the following disruptive trends in power sector:

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 Unacceptably rapid and high frequency deviations (from 50 Hz) causing damage and
disruption to large scale industrial consumers
 Frequent grid disturbances resulting in generators tripping, power outages and power grid
disintegration.

The ABT scheme has now been expanded to cover the Intra state systems as well. The power
generation or grid capacity has increased substantially in last fifteen years particularly after
the Electricity Act 2003 by introduction of competition and unbundling of vertically
integrated utilities (SEBs) into separate entities in charge of electricity generation, electricity
transmission, and electricity distribution. Deregulation and competition has facilitated
participation of private sector on large scale in electricity generation, transmission and
distribution. Of late, Indian electricity sector is transforming from perennial deficit to surplus
electricity availability.

Need for ABT

Prior to the introduction of Availability Based Tariff, the regional grids were operating in a
very undisciplined and unsystematic manner. There were large deviations in frequency from
the rated frequency of 50 cycles per second (Hz) leading to low and high frequency
situations. The low frequency situations resulted due to a higher consumer load than the total
generation available in the grid and high frequency resulted as a result of insufficient backing
down of generation when the total consumer load fell during off-peak hours. This continued
functioning at non-standard frequency resulted in long-term damages to both generation and
end use equipment resulting in hidden costs that ultimately had to be borne by the end
consumers.

Apart from this, the earlier regime did not provide any incentive for either backing down
generation during off-peak hours or for reducing consumer load/enhancing generation during
peak-load hours. The reasons for the same were that the full fixed charges were payable at
achieving a PLF of 68.49% and an incentive was payable for each unit of electricity
generated above this PLF which made it profitable to go on generating at a high level even
when the consumer demand had come down. Further, if a beneficiary decided not to draw
any energy, he could escape payment of the fixed charges, which were paid by the person
drawing energy. Also, there was no provision of penalizing any consumer who was
overdrawing power. The new increased cost of electricity was covered by other beneficiaries.

Scheduling

 Each day of 24 hrs starting from 00.00 hours be divided into 96 time blocks of 15
minutes each.

 Each generating station is to make advance declaration of its capacity for generation in
terms of MWh delivery ex-bus for each time block of the next day. In addition, the total

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 ex-bus MWh which can actually be delivered during the day will also be declared in case
of hydro stations. These shall constitute the basis of generation scheduling.

 Based on the above declaration, the Regional Load Dispatch Centre (RLDC) shall
communicate to the various beneficiaries their respective shares of the available
capability.

 After the beneficiaries give their requisition for power based on the generation schedules,
the RLDC shall prepare the generation schedules and drawal schedules for each time
block after taking into account technical limitations and transmission constraints.

 In case of any forced outage of a unit, or in case of any transmission bottleneck, RLDC
will revise the schedules. The revised schedules will become effective from the 4th time
block, counting the time block in which the revision is advised by the generator, to be the
1st one.

 It is also permissible for the generators and the beneficiaries to revise their schedules
during a day, but any such revisions shall be effective only from the 6th time block
reckoned in the manner as already stated.

ABT features

 ABT brings about enhanced grid discipline

 Economically viable power with right pricing

 Promote competition and efficiency

 Encourage use of Merit Order Dispatch / Economic Dispatch in India.

 Addressing grid disturbance issues

 Gaming and avoiding the same

 Requires special meters, remote metering with open protocols and communication
mechanisms to read meters timely

 Software that is comprehensive to do calculations, address regulatory issues and

modifications as per different Regulatory Commission requirements.

Interface options to various stakeholders in the ABT mechanism on line to enable effective
implementation and benefits to all Capability of power producers to be able to control their
cost of production as well as flexibility in operations