NATURAL GAS MARKET

MRITUNJAY SRIVASTAVA
HEAD MARKET OPERATIONS
Natural Gas Basics

Sour Gas – High H2S

Sweet Gas – Low H2S
Chemistry of Natural Gas
LNG Supply Chain
Natural Gas Supply Chain
Natural Gas Basics…

• Earth's cleanest fossil fuel

• Is colorless and odorless in its
natural state
• Primarily Methane- CH4 (~95%)
• Dry Gas: >85% Methane
• Wet Gas: 85% Methane and NGLs
• NGLs: ethane, propane, butanes,
and pentanes
• LNG: Liquified Natural Gas
• LPG: Liquified Petroleum Gas
Movement of Natural Gas….
Natural Gas Usage

• Residential sector: PNG for heating, cooking.

• Commercial sector PNG for space and water

heating, air conditioning, lighting, refrigeration and
cooking – on a scale larger than residential.

• Industrial sector: to fuel industrial processes, such

as heat treating steel or manufacturing glass.  It is
also a feedstock for other chemical products such as
fertilizer.

• Power generators Power generators,, burn natural

gas to produce electric power.
How Natural Gas is Measured

Volume Calorific Value Energy

releases approximately 1 MMBTU = 2,52,000 Kcal

1 SCM Standard 9500 Kcal (amount of (amount of heat/energy
cubic meter (SCM) heat / energy) which is content)
of natural gas termed as a GCV (Gross
Calorific Value)

1 MMBTU = 25.2 SCM

Indian Gas Sector Industry
India’s Gas Sector value Chain

Terminal/ Distribution
Domestic supply Pipeline
sourcing of gas and marketing

Regulator Upstream domestic Pipeline and CGD Operation

operations

Key
players Number of JV/companies
operating

• Domestic prices regulated • Regas tariffs • Regulated pipeline tariff • End-customer prices
• LNG prices unregulated unregulated margins to give at most unregulated
12% post-tax ROCE
Regulatory
regime
Source: Ministry of Petroleum and Natural Gas, BCG Analysis
 Power vs Gas market: Fundamental differences

Non uniform transmission pricing

1 • Transmission pricing based on distance traversed in the pipeline (zonal).
• Each pipeline an asset in itself hence different zonal prices for each.

2 Non uniform taxation structure

• CST/VAT on gas as commodity. Multiple and cascading taxes (entry tax @Gujarat)
• GST on transmission charges.

3 No system operator
• No system operator to do system balancing.
• Multiple pipeline operators with their own operating norms.

4 Third party access- Commodity and transmission are bundled

• Most of the contracts currently are bundled giving comfort to the buyers,
Sellers exert their monopolistic power by not allowing unbundled trades.
• Within a CGD the threshold quantum for open access is quite high (50k SCMD).

5 Gas exchange design

• Gas as commodity is always in excess, also some storage available within pipelines.
• Gas exchange design has to ensure ‘exchange of choice’ rather than ‘exchange of last resort’.
India-Gas Supply and Demand

Supply

In mmscmd
India Gas Transportation

Existing Pipelines
A : HVJ - Hazira Vijaipur Jagdishpur PL (GAIL)-4222 KM-53 MMSCMD
B : GERP - Part of HVJ PL (GAIL)-1280 KM-54 MMSCMD
C : DUPL/DPPL - Dahej – Uran – Dabhol PL (GAIL)-815-19.9 MMSCMD

D : E-W PL - East West PL (RGTIL)-1460 KM-80 MMSCMD

E : VKPL - Vijaipur Kota PL (GAIL)
F : Regional Networks-Mumbai, Assam, Gujarat Pipeline-GAIL-4 to 16
MMSCMD
G : DBNL- Dadri Nangal PL (GAIL)-886 KM-31 MMSCMD
Pipeline Tariff

 Regulation-Pipeline Operator has to indicate pipeline tariff for each zone=300 KM of a

pipeline.
 Tariff is additive in nature. For Eg. Pipeline Tariff for East West Pipeline • Zone 1- 42 INR/ MMBTU
• Zone 2- 42 INR/ MMBTU
• Zone 3 – 53.69 INR/ MMBTU
• Zone 4 – 58.75 INR/ MMBTU
• Zone 5 - 60.94 INR/ MMBTU
Ms)
0K
(60
2
ne MBT
U Consumer1
o
e A-Z 5/M
elin s. 2
) Pi p R
s
KM 0
(30
n e 1 BTU
A-Zo /MM Pipeline B-Zone 1 (60 KMs)
li ne s. 10
e R Rs. 12/MMBTU
Pip
Source Consumer 2
Pipeline C-Zone 1 (40 KMs)
Rs. 15/MMBTU
Tariff Charged to Consumer 1:- Distance from Source to 600 KMs-25/MMBtu
Tariff Charged to Consumer 1:- Distance from Source to 390 KMs-10+12+15=Rs. 37/MMBtu
 GAS CONTRACTING IN INDIA

 Two types of Contractual Framework

 Unbundled Contracts

 Delivered Contracts
 Gas Transactions and Scheduling

Terms and Explanation:-

 Gas Day:- 0600 hrs of D day to 06 hrs of D+1 day
 Daily Contracted Quantity (DCQ): - Maximum contracted quantity that can be drawn on
daily basis
 Nomination Quantity (NQ):- Indents/ request by consumer either usually on monthly,
weekly or daily basis.
 Confirmation Quantity (CQ): -Supplier confirms the quantity of gas available against each
nomination by customer under GSA. Similarly, Transporter also confirms the quantity of gas
that can be transported based on the capacity available.
 Scheduled Quantity (SQ): -Final agreed quantity of gas scheduled for flow
 Metered Quantity (MQ):- Measured quantity of gas delivered during a Gas Day (D).
 Allocation Quantity (AQ) Apportionment of metered quantity to each buyers located
on common metering point
Gas Transactions and Scheduling

 CASES in Excel
India-Gas Pricing

 Domestic Gas Pricing-As per Gas Utilization Policy, 2008

 NELP contractor would sell gas as per marketing priorities set by GoI and at a price
derived on the basis of a formula approved by GoI
 Allocation Priority on the basis of Sector
 Priorities are applicable only to the connected customers.
 Guidelines are applicable for 5 years
 Sectoral Priority for KG D6 Basin:- Fertilizers, Power, CGD, Others like Steel, Refinery
etc.
Gas Price Formation

 Two ways of Wholesale Price Level-

 Market Based Pricing-
 Oil (Product) Indexation-Gas Prices linked to Oil Prices
 Gas-to-gas Competition-Indexation
 Netback from Final Product (<1%)

 Regulated Pricing like Cost of Service, No Price etc. more available in Domestic Market of Russia, Middle East,
India etc.
 Natural Gas Regional Markets

 North American Market- Liberalised and competitive; Most Liquid

Spot Market Trading Hub-Henry Hub; Future Market-NYMEX NG Henry
Hub
 European Market- Mainly Oil Indexed Price, now shifting to Gas to Gas
Competition as more trading hubs are coming-The most important
natural gas hubs for trading in Europe are:
 National Balancing Point (NBP) in the UK; Title Transfer Facility (TTF) in the
Netherlands; Zeebrugge Hub (ZEE) in Belgium; NetConnect Germany (NCG);
Gaspool Hub (GPL) in Germany.
 Asian Market- Japan and South Korea cover most of the gas demand through
LNG, mainly from Indonesia, Malaysia, Australia and the Middle East. This
market is dominated by long-term contracts linked to crude oil prices.
The breakout growth in demand, increasing dependence on LNG, development in gas infrastructure
and falling LNG prices have enabled demand for trading of gas

Indian gas sector is poised for a breakout growth Led by CGD and fertilizer sectors.. Coupled with domestic supply shortfall and increasing dependency
in demand…. on imported LNG ...
​+150% ​+70%
380 180 162 166
400 227 143 144 153
25 141
​+8%
300 281 75 79
120 49 51 59 68
208 15
200 166 179
91 60 LNG
100 95 90 85 85 87 88 impor
ts
0 0
FY 19 FY 20 FY 22 FY 26 FY 30 2018 2027e 2018 2022e FY14 FY15 FY16 FY17 FY18 FY19
CGD Geographical CGD Geographical Ammonia India gas consumption split by domestic and
India estimated gas demandAreas
(MMSCMD)
areas production cap. imported gas, FY14-19

Supported by ramp up in LNG terminal and

And a continuous fall in LNG prices.. Enabling short term trading of gas..
gas T&D infrastructure..
Pipeline network LNG ports capacity 11.3 40% 37%
12 33%
​+88% ​+110% 9.3 35%
28%
10 8
7.4 30%
62.5 MTPA 8 6.6 25%
32,000 km
6 4.41 20%
17,000 30 4 15%
10%
2 5%
0 0%
2019 2022e 2019 2023e FY15 FY16 FY17 FY18 FY19 Jul-19 FY20 FY23 FY25
LNG ports India spot LNG prices ($/MMBTU) Expected ST trading trajectory
Pipeline network
capacity
Indian Gas Market

 Fourth largest importer of LNG, behind Japan, South Korea and

China
 LNG plays a critical role in partially bridging the gas supply gap
in the country
 Supplies to India’s gas market are categorized into two
segments: domestically produced and imported (via LNG) gas.
The price of domestic gas is lower than that of LNG and is
defined by the Government’s adopted indexation formula.
 Petronet LNG has been importing 7.5 mmtpa LNG on a long-
term basis from Qatar. The price is indexed to oil, linked to the
60-month average of Japanese Custom Cleared (JCC) oil prices.
 BASICS ON
ELECTRICITY MARKET

MRITUNJAY SRIVASTAVA
HEAD MARKET OPERATIONS
In this Presentation…..

 A Brief on Electricity Market

 Open Electricity Energy Market
Scheduling Process of Collective Transactions
Scheduling Process of Bilateral Transactions
• DEEP Portal Mechanism
 Real Time Market in India
 Managed Tool by System Operators
Handling Congestion and Congestion Charges
Ancillary Services
DSM Mechanism
 Conventional Sources
 Renewable Sources
Elements for any Market to be Competitive
 Price Determination Methods-Auction (Forward, Reverse & Double side), Continuous Trading

S S B S B S
B S S S S

B S B S B

S B B B B

 Liquid Marketplace-Many buyers and many sellers; lack of market power at both buyer and
seller sides of the market;
 Efficient marketplaces- participants cannot predict which way prices will move
 Complete Market-Full set of forward and spot markets (marketplaces) and risk-management
tools
 No External Intervention and hence Equal and Sufficient access to any essential facilities (in
our case transmission and distribution wires)
 Prices published in Public Domain
 MWhr different from a Barrel of Oil, 1 ounce of Gold?

Electrical energy is linked with a physical system that functions much faster than
any other market. Supply and Demand – generation and load – must be
balanced on a second-by-second basis which cannot be left to a relatively slow-
moving and unaccountable entity such as a market.

Physical flow and Financial Contractual agreement has no correlation.

Demand for electrical energy exhibits predictable daily and weekly cyclical
variations. Due to extremely small short-run price elasticity of demand,
Generating units have to response as per demand which is very unusual in
other commodities.
 Markets for Electrical Energy
Features of Electricity That Constrain Trading Arrangements
Feature Problem Design Issues
No storage Contract amounts will not Imbalances
match usage or output
Path of least resistance Possible overloading Congestion management
Network interactions Plants need to produce several Ancillary services
outputs and stand as
Reserve

Speed of light System Operator needs to be Scheduling (in advance) and

in charge dispatch (real time)

Conclusion:
Conclusion:-- While a large proportion of the electrical energy can be traded through an unmanaged open
market
• Open(like Long-Term,
Electrical EnergyDay-Ahead • Managed
Markets and Contingency Contracts),
Marketssuch a market
by System is unable to maintain the
Operatpr
reliability
 Bilateralof Trading
the power system. A managed market run by SystemMarket
 Reserve/Ancillary Operator that provides a mechanism for
balancing loadPools/PXs
 Electricity and generation must therefore supersedeMechanism
Balancing the open energy market as the time of delivery
approaches. Its function is to match residual load and generation by adjusting the production of flexible
generators and curtailing the demand of willing consumers. It should also be able to respond to major
disruptions caused by the sudden and unforeseen disconnection of large generating units because of
unavoidable technical problems.
Markets for Electrical Energy-Managed Market
 In Electricity, Imbalances between generation and load must be corrected very quickly
to make system in balance and the Responsibility is given to System Operator. Here the
bids are submitted in advance by generators and loads and selection of bid is done by
System Operator depending on system/network conditions.

Gate Closure Start of Delivery

Open Electrical Energy Markets Managed Market

Balancing Services/
Long-Term Medium-Term Short-Term Power Exchange Contingency Contracts Ancillary Services
Forward Contracts Forward Contracts Forward Contracts Day-Ahead Contracts

 Ancillary services for a specific period are normally offered by market participants to
the SO after the open energy market for that period has closed/Gate Closure.
Generating units that are not fully loaded can submit bids to increase their output. A
generating unit can also offer to pay to reduce its output. The demand side can also
provide balancing resources.
INDIAN ELECTRICITY MARKET…..1
OPEN ELECTRICITY ENERGY MARKET

Bilateral Contracts Collective Contracts,

Day-Ahead Market
(Standard)

Long-Term Medium-Term 1. Development of Power Market,

(Highly Structured)
1. Post ’11, Competitive
Bidding Section 63 of Act
2. Duration >7 Years
3. ~90% of Total Generation
4. Case1 and Case 2 Bidding
5. Auction Type-Reverse
(Structured) Section 66.
2. In DAM Market
3. Double Side Auction
1. Competitive Bidding as per
Section 63 of Act
Short-Term 4. Next Day Delivery
5. ~4% of Total Generation
2. Duration From 1 upto 7 ys
3. <1% of Total Generation
4. Case1 and Case 2 Bidding
5. Auction Type-Reverse
6. One Part or Two Part Tariff

Thru Traders Direct Thru Power Exc

(Both Str. & Non-Stru.) (Both Str. & Non-Stru.) (Standard )

1. Competitive Bidding, Section 1. Competitive Bidding, Section 1. Development of Power Market,

63. At DEEP Portal 63. At DEEP Portal Section 66.
2. Banking Trans. 2. Banking Trans. 2. In TAM Market
3. Duration up to 3 Months 2. Duration up to 3 Months 3. Continuous Trading & Double
4. ~3% of Total Generation 3. ~2% of Total Generation Side Auction
5. No. of Traders 43 2. Duration Intra-Day and Weekly
6. Market Share of Top5 Traders 3. <0.5% of Total Generation
75%
INDIAN ELECTRICITY MARKET…..2

MANAGED TOOLS BY SYSTEM OPERATOR

DSM as Balancing
Congestion Charges Schedule Curtailment Ancillary Services
Mechanism
1. Started in Dec’ 2009. 1. Schedules Curtailed due 1. CERC (Ancillary Services 1. Started in ‘02.
2. Penalty and Reward for to outage of important Operations) Regulations, 2015 2. Penalty and Reward
Deviation during Transmission elements. 2. Restore Frequency and relieve Provision,
specific system 2. Short-Term First and congestion 3. Freq. Linked Rate
conditions. Long-Term last to
3. Current rate is 545 p/u. curtail.
As per CERC MMC Report Oct’19
SCHEDULING PROCESS OF DAY-AHEAD MARKET
 “No Objection” or “ Prior Standing Clearance”:-
Pre-requisite for Buyers and Sellers

State 1 (Power System Operated by SLDC A) State 2 (Power System Operated by SLDC B)
Intra-State Transm. System
Inter-State Transm. System
Operated
by RLDC

State Utilities and intra-State Entities proposing to participate Regional Entity shall obtain prior
requires NoC from respective SLDCs with preconditions of:- approval from the respective
a) Existence of necessary infrastructure for time block wise metering RLDCs/RPCs, by making an application.
and energy accounting,
b) Availability of transmission capacity in the grid
c) Affidavit regarding absence of any other contract for sale of same power
 Processing of Format PX-I
• Clause 2.2 State Utilities and intra-State Entities proposing to participate in trading through Power
Exchange(s) shall obtain “Concurrence” or “No Objection” or “Prior Standing Clearance” from the
respective State Load Despatch Centres (SLDCs), as per the enclosed format. [FORMAT-PX-I:
“Concurrence” or “No Objection” or “Prior Standing Clearance” by SLDCs to Power Exchange.]

Seller-Format PX-I Buyer-Format PX-I

 Processing of Format PX-I
Eastern Region

200 MW max. West Bengal

allowable to Bid
at Regional Peri.
Indian Energy PoC Loss-1.16% State Loss-5%
Exchange Seller-ABC

202.35 MW 213 MW ex-bus quantity

100 MW max. at State Peri. in Format PX-I
allowable to Bid
at Regional Peri.

PoC Loss-3.7%

96.3 MW Southern Region

Andhra Pradesh at State Peri.

State Loss-5.5%
91 MW ex-bus quantity
in Format PX-I
Buyer-DEF
 BID, PRICE MATCHING and TRADE
• Two regions have been considered i.e. ER and SR.
• Four Sellers and Two Buyers in a 15-Min Block are taken with following Bid Scenario: -

Seller Seller Seller Seller

200 MW @2000
100 MW@3000 100 MW @3000 100 MW@4000

ER REGION SR REGION

Buyer Buyer
100 MW @3000 300 MW @4000

Quantity (MW) Price (Rs./MWhr)

ER Seller-1 200 2000
ER Seller-2 100 3000
SR Seller-1 100 3000
SR Seller-2 100 4000
SR Buyer 300 4000
ER Buyer 100 3000
Understanding Aggregation of Bids
Seller Seller Seller Seller
200 MW @2000
100 MW@3000 100 MW @3000 100 MW@4000

ER REGION SR REGION

Buyer Buyer
100 MW @3000 300 MW @4000

Price (Rs./MWh) 0 999 1000 1999 2000 2999 3000 3001 3999 4000 4001 6000 8000 10000 20000

ER Seller-1 0 0 0 0 200 200 200 200 200 200 200 200 200 200 200
Understanding Aggregation of Bids
Seller Seller Seller Seller
200 MW @2000
100 MW@3000 100 MW @3000 100 MW@4000

ER REGION SR REGION

Buyer Buyer
100 MW @3000 300 MW @4000
Understanding Provisional Unconstrained
Price Matching
3005
ER Seller-1 ER Seller-2 SR Seller-1 SR Seller-2 SR(MW)
Total Buy Buyer Total Sell (MW)ER Buyer
200 MW@ 100 MW@ 100 MW@ 100 MW@
3004
300 MW@
Demand-Supply 100 MW@
2000/MWhr 3000/MWhr 3000/MWhr 4000/MWhr
3003 intersection
4000/MWhr with 3000/MWhr
3002 high resolution
3001

3000
2999

2998
150 200 250 300
(300,4000)
350 400
(300,4000)

(500,4000)
(500,4000)
(500,4000)

(400,3000)
(400,3000)
(400,3000)
(400,3000)
(400,3000)

(200,2000)
(200,2000)
(200,2000)
(200,2000)
(200,2000)

Market Clearing Price (MCP)= Rs. 3000/MWhr

Market Clearing Volume(MCV)= 400 MW
Price Buy Quantity Sell Quantity
400.00
3000 400.00
REQUIREMENT OF CORRIDOR FROM NLDC

ER SR

Net Demand 100 Net Demand 300

Net Required Flow- 200 MW

Net Supply  300 Net Supply  100

Net  100 – 300 = -200 Net  300-100 =200
Demand and Supply gap in two regions get balanced by unconstrained flow between the two regions
Demand
hence aand SupplyMCP
common gapisinderived.
two regions get balanced by unconstrained flow between the two regions
hence a common MCP is derived.

Seller Seller Seller Seller

200 MW @2000
100 MW@3000 100 MW @3000 0 MW@4000

ER REGION SR REGION

Buyer Buyer
100 MW @3000 300 MW @4000
Constraint Solution (Market Splitting)

Congestion was reported by NLDC from ER to SR corridor and flow is constrained to 100MW. Due to
Congestion was reported by NLDC from ER to SR corridor and flow is constrained to 100MW. Due to
flow constraint, system will “Split” the market in to two regions i.e. Deficit (SR Region) and Surplus
flow constraint, system will “Split” the market in to two regions i.e. Deficit (SR Region) and Surplus
region (ER Region),and will again run the calculation chronology for both the regions separately
region (ER Region),and will again run the calculation chronology for both the regions separately
considering the flow constraint and will derive the ACP and ACV.
considering the flow constraint and will derive the ACP and ACV.

Price (Rs./kWh) 0 999 1000 1999 2000 2999 3000 3001 3999 4000 4001 6000 8000 10000 20000
ER Seller-1 0 0 0 0 -200 -200 -200 -200 -200 -200 -200 -200 -200 -200 -200
ER-Surplus ER Seller-2 0 0 0 0 0 0 -100 -100 -100 -100 -100 -100 -100 -100 -100
Region ER Buyer 100 100 100 100 100 100 100 0 0 0 0 0 0 0 0

Net (Buy-Sell) 100 100 100 100 -100 -100 -200 -300 -300 -300 -300 -300 -300 -300 -300

Flow Towards SR of 100 MW

Price (Rs./kWh) 0 999 1000 1999 2000 2999 3000 3001 3999 4000 4001 6000 8000 10000 20000
SR Seller-1 0 0 0 0 0 0 -100 -100 -100 -100 -100 -100 -100 -100 -100
SR-Deficit SR Seller-2
SR Buyer
0
300
0
300
0
300
0
300
0
300
0
300
0
300
0
300
0
300
-100
300
-100
0
-100
0
-100
0
-100
0
-100
0
Region
Net (Buy-Sell) 300 300 300 300 300 300 200 200 200 100 -200 -200 -200 -200 -200
ER Surplus Region SR Deficit Region
Demand-Supply Curve Demand-Supply Curve
 A Punjab Trade and Schedule
STU Charges @
107.07 MW Punjab Loss-6.6%
Rs. 80/MWHr Northern Region
Scheduling & Operating
103.09
Charges @Rs. MW
2000/Day PoC/CTU Charges @ Eastern Region
Rs. 100/MWHr
NR Loss-3%
Scheduling & Operating
Charges
Trade Selected:
100 MW 100 MW Sell
West Bengal

Indian Energy 100 MW

Exchange B
Trade Selected:
100 MW Sell

Trade Selected:
200 MW 200 MW Buy

Madhya Pradesh Western Region

C
Submission of Provisional Report to NLDC
3.2 Power exchange(s) shall furnish by 13:00 Hrs, the interchange on various interfaces/control areas/regional
transmission systems as intimated by NLDC. Power Exchange(s), shall also furnish the information of total drawal and
injection in each of the regions.
Exception Report from NLDC
3.3 Based on the information furnished as per Para 3.2 by Power Exchange(s), NLDC shall check for congestion. If there is
no congestion, the Power Exchange(s) shall submit the application as per clause 3.5. However, in case of congestion,
NLDC shall inform the exchange(s) by 14:00 Hrs. about the period of congestion and the available limit for scheduling of
collective transaction on respective interfaces/control areas/transmission system(s) during the period of congestion for
scheduling of Collective Transaction through that respective Power Exchange.

A. No Congestion File Format

B. Congestion File Format

Submission of Final Report to NLDC

Regional Entity Wise Details at Regional Periphery (Trade)

Application For Scheduling To NLDC
3.5 The Application for Scheduling of Collective Transaction shall be submitted by the Power Exchange(s)
by 15:00 Hrs each day, to the NLDC as per Format-PX-II: “Application for Scheduling of Collective
Transaction”, for transactions to be implemented on the following day.
Communication with RLDCs & Acceptance from NLDC

3.7 NLDC shall send the details (Scheduling Request of Collective

Transaction) to different RLDCs by 16:00 Hrs for final checking and
accommodating them in their schedules. RLDCs shall confirm its
acceptance to NLDC by 17:00 Hrs.

3.8 After getting acceptance from the RLDCs, NLDC shall convey the
acceptance of scheduling of Collective Transaction to Power Exchange(s)
by 17:30 Hrs.
Accommodation of Collective Transactions
4.1 Concerned RLDCs shall accommodate the Schedule of Collective Transactions in the respective Regional
Entity’s and inter-Regional Schedules, which would be issued finally by RLDCs at 18:00 Hrs of each day.
4.3 RLDCs shall incorporate all buyers within a State (clubbed together as one group) and all sellers within a
State (clubbed together as another group), in the schedules of the Collective Transactions.
Trade at Regional Periphery
for a Regional Entity
Trade-Breakup of Schedule to SLDC
4.4 The individual transactions for State Utilities/intra-State Entities shall be scheduled by the respective
SLDCs. Power Exchange(s) shall send the detailed breakup of each point of injection and each point of
drawal within the State to respective SLDCs by 18:00 Hrs. after receipt of acceptance from NLDC.
Summary:- Scheduling Process
Open Access: What a consumer pays Charges

PoC charges
• Inter-State Transmission charges payable by the open access consumer

Transmission Charges or STU Charges

• Payable to the state transmission utility for the use of the transmission system for availing power
through open access.

Wheeling charges
• Charge to the Discom for conveyance of electricity through open access as determined by the SERCs

Cross Subsidy Surcharge

• Subsidising open access consumer has to pay a cross subsidy surcharge to the Discom.

Others
• Additional Charges, if any
• NLDC application fee, scheduling and operating charges, SLDC Charges
• IEX transaction charges/Trading Margin
 ‘Make in India’ to thrust OA aimed at PX Markets

 Open Access seen as one of the Cross subsidy surcharges for Collective Transactions
thrust areas for ‘Make in India’, so
as to provide industries cheap
energy through Power Exchanges
 States continue to restrict Open
Access through tariff or non-tariff
barriers
Open Access Charges (Rs./u)
Tariff
Region State Voltage Lvl Rate/Energy State Distribution/ Tariff Barriers Non-Tariff Barriers
Charge (Rs/u) Transmission Wheeling Cross Subsidy Additional Surcharge

High CSS, additional Surcharge and high wheeling

Punjab 33 6.03 0.23 1.32 0.70 1.25 charges State OA Regulation restricts CD
Rajasthan 33 7.00 0.30 0.11 0.88 0.80 High CSS and Additional Surcharge
NR Haryana 33 6.45/kVA 0.33 0.71 1.57 0.87 High CSS and additional surcharge
Delhi 33 7.40/kVA 0.25 0.61 0.96 1.67 High CSS and additional surcharge
Uttar Pradesh 33 6.35 0.17 0.29 0.63 Open Access not allowed due to
Infrastructure Constraints
Sec 11 imposed on Sellers in high demand
Karnataka 33 6.80 0.08 0.14 1.52 High CSS
season
Tamil Nadu 33 6.35 0.12 0.19 3.38 High Additional Surcharge
SR
No Open Access allowed for new
Telangana 33 6.15 0.11 0.02 1.48 High CSS industries approaching from Oct'16
onwards.
Chhattisgarh 33 6.35 0.24 0.24 1.26 High CSS
Gujarat 33 6.60 0.33 0.14 1.44 0.49 High CSS and additional surcharge
WR Madhya 33 5.50 0.62 0.25 1.54 0.65 High CSS and additional surcharge
Pradesh
Maharashtra 33 7.07 0.32 0.09 1.65 1.11 State OA Regulations 2014 imposed RTC
NoC requirement etc.
Open Access: What a consumer pays Losses

• An open access consumer has to bear in kind the following losses as defined by the
relevant regulations

Point of connection (PoC) loss

• Inter-State transmission system loss

Transmission loss or state loss

• Consumer to absorb apportioned energy losses in the

transmission system as per the relevant regulations

Wheeling loss

• Technical losses in the distribution system determined at

various voltage level by the state commissions.
SCHEDULING PROCESS OF TERM-AHEAD MARKET
(Short-Term Bilateral Transactions)
Scheduling Process of Short-Term Bilateral Transactions

 Short-Term Trade executed at DEEP Portal, TAM Market, Banking or Negotiated Arrangements
are Scheduled as per Provisions of “Central Electricity Regulatory Commission (Open Access in
inter-State Transmission) Regulations, 2008” and Procedure for “Scheduling of Bilateral
Transactions”.
 Delivery point is Seller Regional Periphery.
 Application for Scheduling is made by “Applicant” to the “Buyer” Regional Load Despatch Centre
of the Region.
The Application is accompanied with Concurrence of SLDC from buyer and seller state as
under:-
i) For Advance Scheduling and First Come First Serve basis (FCFS):- Under Format-II
ii) For Contingency Contracts- Either Format-II or Format PX-I.

 Advance Scheduling Application for delivery dates of “M+1”, “M+2”, and “M+3” to be received
to RLDC in current Month “M” on “L-10”, “L-5” and “L” date, where in “L” stands for Last Date of
Current Month.
 FCFS Application for delivery in current month to be received on at least “D-3” basis, where “D”
is Delivery Start Date.
 Contingency Application to be received at least 2 hrs. prior to start of delivery hour.
Format-II “Concurrence from SLDC”
Seller SLDC Consent Buyer SLDC Consent
Format-I “Application to RLDC”
On-Line Application Punching at Nodal RLDC Web Site
Format-VI “Approval from RLDC”
Scheduling by RLDC at Website
Treatment of Charges and Losses

PCKL Karnataka

Scheduling & Operating STU Charges @

240.62 MW Karnataka Loss-6.6%
Charges @Rs. 1000/Day Rs. 80/MWHr Southern Region
224.74 MW
Scheduling & Operating PoC/CTU Charges @
Charges @Rs. 1000/Day Rs. 292/MWHr
PoC Loss-3%

Trade:
218 MW 218 MW Sell

Trade:
218 MW
218 MW Buy

West Bengal

Eastern Region

WBSEDCL
 Difference Between Short-Term Bilateral and Collective Transactions
Dimension
Open Access Duration
Nodal Agency
Charges for use of Transmission
System
Charges of System Operators (as
Scheduling and Operating Charges)
Congestion Management
Balancing Mechanism
Revision of Schedules
Short-Term Bilateral
Up to 3 months and Intra Day
Regional Load Dispatch Centre
(RLDCs)
i) PoC Charges for use of Inter-Regional
Transmission System (in Rs./MWhr)
ii) State Charges for use of State
Transmission System (in Rs./MWhr)
i) RLDC Charges for Scheduling over Inter-
Regional Transmission System (in Rs./day)
ii) SLDC Charges for Scheduling over State
Transmission System (in Rs./day)
E-Bidding (Explicit Auction), FCFS
Basis, Pro-Rata basis
Frequency-linked-Deviation
Settlement (DSM) Mechanism
Minimum 3 days notice
DAM Collective
Only Day ahead
National Load Dispatch Centre (NLDC)
i) PoC Charges for use of Inter-Regional
Transmission System (in Rs./MWhr)
ii) State Charges for use of State
Transmission System (in Rs./MWhr)
i) NLDC Charges for Scheduling over Inter-
Regional Transmission System (in Rs./day)
ii) SLDC Charges for Scheduling over State
Transmission System (in Rs./day)
Market splitting (NLDC in
coordination with IEX)
Frequency-linked-Deviation
Settlement (DSM) Mechanism
No Revision
DEEP Portal of MSTC for Power Procurement
Summary of MoP Guidelines

 As per Section 63 of EA 2003- (Determination of tariff by bidding process):

MoP issued the new ‘Guidelines for short-term (i.e. for a period of more
than one day to one year) Procurement of Power by Distribution Licensees
through Tariff based bidding process’ dated 30th March 2016
Medium Term also started from Feb’19
 Power procured from Power Exchanges are excluded from the scope of
these Guidelines (Power Procurement from Power Exchanges falls under Section-66 of the Act)
 MSTC holds e-Tendering and e-Auction to facilitate signing of PPA to
procurers with bidders i.e. Sellers. Financial and Physical settlement is
guided by terms of PPA to which MSTC is not a party.
An Illustration of DEEP E-Bidding Portal
 Process 1:- RfP invited by Discom (Procurer) as below:-
Period of supply Time Period Quantum in Minimum Bid Delivery Point
(Hrs) MW Quantum* in MW
01.08.2019 to RTC 1000 20 Buyer Regional
31.08.2019 Peri.

*Minimum bid quantum from each source shall be 20 MW

 Process 2:- e-Tendering-Non financial Technical Bid and Financial Bid i.e. Initial Price Offer,
Sellers Bid Quote are:-
Bidder Min. Qty. Quantity (MW) IPO Rate (Rs./kWhr)
Quote (MW)
Bidder 1 20 200 3.100
Bidder 2 40 400 3.200
Bidder 3 60 500 3.900
Bidder 4 80 600 3.300
Bidder 5 100 700 3.000
Bidder 6 200 1000 4.050
Total Quoted Qty. 3400
An Illustration of DEEP E-Bidding Portal
 Process 3:- Elimination Round-Upon Opening of Initial Price Offer, H1 Bid Rejected if
{(Total Quoted Qty.-H1 Bid)>=2* Requisitoned Qty.}.
Bidder Min. Qty. Quantity (MW) IPO Rate (Rs./kWhr)
Quote (MW)
Bidder 1 20 200 3.100
Bidder 2 40 400 3.200
Bidder 3 60 500 3.900
Bidder 4 80 600 3.300
Bidder 5 100 700 3.000
Bidder 6 200 1000 4.050
Total Quoted Qty. 2400

 Process 4:- Intimation to Shortlisted Bidder by system generated emails.

An Illustration of DEEP E-Bidding Portal
 Process 5:- Reverse Auction Process. (Should start within 2 Hrs. of Opening of Initial Price
Offers.) Duration of Reverse Auction 2 Hrs.
Criteria 1:- Rate can only be decreased in one paise or multiples thereof.
Criteria 2:- Quantum can be increased by 1 MW or multiples thereof.
Criteria 3:- Lowest Tariff would be visible to all the Bidders.
Bidder Min. Qty. Quantity (MW) IPO Rate (Rs./kWhr)
Quote (MW)
Bidder 1 20 200 3.100
Bidder 2 40 400 3.200
Bidder 3 60 500 3.900
Bidder 4 80 600 3.300
Bidder 5 100 700 3.000

Hence the Seller Bidders will be able to see the Lowest Tariff and Total Required Qty.
An Illustration of DEEP E-Bidding Portal
 Process 5:- Reverse Auction Process
L1 3.000 L1 2.900 L1 2.800 L1 2.800
Bidder Quantity IPO Rate Quantity Rate Quantity Rate Quantity Rate
(MW) (Rs./kWh) (MW) (Rs./kWhr) (MW) (Rs./kWhr) (MW) (Rs./kWhr)
Bidder 1 (Min. 20, Q-200) 200 3.100 200 3.100 300 2.800 300 2.800
Bidder 2 (Min. 40, Q-400) 400 3.200 500 2.900 500 2.900 600 2.900
Bidder 3 (Min. 60, Q-500) 500 3.900 500 3.900 500 3.900 500 3.900
Bidder 4 (Min. 80, Q-600) 600 3.300 600 3.300 600 2.900 600 2.900
Bidder 5 (Min. 100, Q700) 700 3.000 700 3.000 700 3.000 700 3.000

Start of Reverse Time 1:- Bidder 2 Time 2:- Bidder 4

Auction revised Price and Qty. revised Price. Bidder 1 Time 3:- Bidder 2
Revised Price and Revised Quantity
Quantity
An Illustration of DEEP E-Bidding Portal

Process 6:- Ranking and Selection of Bids

Bidder Quantity Rate Qty.
(MW) (Rs./kWhr) Selected/
Rejected
Bidder 1 (Min. 20) 300 2.800 Y, 300
Bidder 2 (Min. 40) 600 2.900 Y, 350
Bidder 4 (Min. 80) 600 2.900 Y, 350
Bidder 5 (Min. 100) 700 3.000 N
Bidder 3 (Min. 60) 500 3.900 N

 Process 7:- Procurers shall have the right to issue Letter of Award (LoA) to the Successful Bidder
Highlights of DEEP Portal
 Trading Platform: -DEEP E-Bidding Portal www.mstcecommerce.com
 E-Bidding followed by Reverse Auction at Deep Portal
 Platform provider (s):- MSTC Ltd, with PFC Consulting Ltd as the consultant
 Registration to participate in e-bidding:- Bidders would be able to participate in the eBidding events on
making payment of the requisite fees of 500 per MW for the maximum capacity, a bidder is willing to bid,
to PFCCL. Non-successful bidders will be refunded within 7 working days.
 Offer Price Quote:- Single price quote, upto 3 decimal places, at the delivery point which includes
capacity charge, energy charge, trading margin, applicable transmission charges upto delivery point, and
all taxes, duties, cess etc
 Delivery Point : -State/Regional periphery of the Procurer, for inter-state transactions
 Pre-trade Margin by Bidder (Seller)
a. EMD (as BG) to MSTC for the maximum capacity on offer @ Rs. 30,000/- per MW per month on RTC
(30days, 24 hours) basis, or prorate for non-RTC power
b. EMD (as BG) of the Successful Bidder(s) shall be refunded after furnishing the Contract Performance
Guarantee (CPG)
 Post-trade Margin by Bidder Contract Performance Guarantee (CPG, as BG) to the Procurer within 7 days
from the date of selection of Successful Bidder(s) for an amount calculated at Rs. 2 lac per MW per
month. For performing the terms of contractual obligations, and released within 30 days after completion
of Contract Period.
 Procurers shall have the right to issue Letter of Award (LoA) to the Successful Bidder(s) upto 15 days from
close of e-RA
RECENT…
 RfP Notice by Telangana State Power Coordination Committee (TSPCC):-

RfP-Telangana

 Auction Results:-
Real Time Electricity Markets in India 

CERC​ has​ issued​ framework​ for​ Real Time Electricity Markets in India ​on​Aug’19.​
Summary​of​the​proposal​is​as​under:
1.       Issues in present market design: The volume traded under intra-day market is at a very
miniscule level of less than 1% due to:
 The price discovery methodology viz., continuous trading based on pay as you bid
principle
 Absence of gate closure
 The original beneficiaries (discoms) have the right to recall contracted generation at any
time from the fourth time block ahead. This often leads to sub-optimal utilization.
 Substantial growth in RE generation -issues related to its integration
 Alternatively, the discoms themselves can sell the surplus power from their contracted
generation sources in the real time market and earn the revenue in full.
Real Time Electricity Markets in India

Proposed Real-time Market (RTM) design:

 Double​sided​closed​auctions​with​uniform​market​clearing​price.
 Energy​hour​for​delivery​in​two​fifteen​minute​blocks​in​each​half​hour.
 Energy​trade​for​the​first​half​hour​(00.00​Hrs.​to​00.30​Hrs.)​of​the​day​starts​at​
22.30​Hrs.​of​the​previous​day​and​is​repeated​every​hour​thereafter.
 To​ensure​firmness​of​such​bids​and​offers,​the​gate​for​schedule​revision​will​close​
before​the​start​of​the​auction.
 Revenue​over​and​above​the​regulated​variable​cost​shall​​be​shared​in​the​ratio​of​
50:​50,​Buyers​consent​not​required​for​URS​Power
 ​Transmission​Corridor​Allocation​and​Congestion​Management:​POSOCO​to​
declare​in​advance​the​transmission​corridor​margin​available​for​real-time​
transaction.​
Proposed Model for Real time market

 MCP​and​MCV​will​be​discovered​for​each​15 minute block.

 DISCOMs,​Traders,​GENCOs​​&​consumer​with​demand​can​participate.
 Schedule​at​the​end​of​RTM​will​be​both​financially​and​physically​binding.​

Proposed Time-Line for RTM & Gate Closure

Benefits to DISCOM

 Liquidity​ in​ the​ proposed​ RTM​ will​ increase​ because​ of​ the​ design​ change​ in​ the​
form​of​auction​and​gate​closure.

 Resource​optimization​across​regions​to​take​advantage​of​cheap​resources.

 Access​to​larger​pool​of​generation​resources​to​meet​contingent​requirement​in​real​
time​as​against​the​existing​bilateral​resources.

 Prices​ discovered​ in​ such​ real​ time​ market​ are​ likely​ to​ be​ more​ efficient​ than​ the​
cost​of​procurement​of​power​from​the​bilateral​arrangement​under​the​right​to​recall;

 Net​gains​shall​be​shared​with​the​discoms​in​the​ratio​of​50:50;

 Alternatively,​ the​ discoms​ themselves​ can​ sell​ the​ surplus​ power​ from​ their​
contracted​generation​sources​in​the​real​time​market​and​earn​the​revenue​in​full.
MANAGED TOOL BY SYSTEM OPERATOR
 Intra-day STOA

Day-ahead STOA

Collective (PX) STOA

First Come First Served STOA ATC

Corridor TTC
Alloc.
Priority Advance Short Term Open Access (STOA)

MEDIUM TERM OPEN ACCESS (For Medium Term Contracts)

LONG TERM ACCESS (For Long Term Contracts)

RELIABILITY MARGIN RM

Available Transfer Capability is Total Transfer Capability less Reliability Margin

 National Load Despatch Centre (NLDC) informs the TTC and ATC of inter and intra-regional
links/ Corridors respectively for three months in advance for each month up to the fourth
month.

Link:- https://posoco.in/market/monthly-atc-inter-regional/
 Real Time Power flow in the corridor is also published by NLDC:-

http://wbs.nldc.in:82/Web_TTC_ATC.aspx
CONGESTION CHARGES
 As per Central Electricity Regulatory Commission (Measures to relieve congestion in real time
operation) Regulations, 2009.

 Few Important Definitions:-

a.“Available Transfer Capability (ATC)” means the transfer capability of the inter-control area transmission
system available for scheduling commercial transactions (through long term access, medium term open
access and short term open access) in a specific direction, taking into account the network security.
b.“Congestion charge” means the supplementary charge kicked in on one or more Regional entities
due to deviations in schedule. Present Congestion Charge Rate- 5.45/u
c. A corridor shall be considered congested under the following circumstances:
i. Grid voltage in the important nodes downstream/ upstream of the corridor is beyond the operating
range specified in the IEGC and/or
ii. The real time power flow along a corridor is such that n-1 criteria may not be satisfied.
iii. One or more transmission lines in the corridor are loaded beyond the normal limit specified in CEA
Manual on Transmission Planning Criteria.
Congestion caused by forced outages of a transmission line in the corridor

Control Area A
(Region or State)
No Schedule Deviation
by any Seller or Buyer

Control Area B
(Region or State)

Action by System Operator: Open access transactions curtailed in the priority as

below:-
a) All STOA Bilateral Curtailed irrespective of type of transaction on Pro-Rata basis
b) Day-Ahead Collective Transactions second
c) Medium-Term Transactions
d) Long-Term Transactions at last
Congestion Occurred due to:- a) Grid voltage in the important nodes beyond Operating range;
(b) Real time power flow in a corridor is such that n-1 not satisfied;
(c) Corridor loaded beyond specified normal limit

 Congestion charge levied on all Regional Entities for

a) over drawal or under-injection in the importing control area and
b) under drawal or over-injection in the exporting control area.
 Payable by entities causing congestion and receivable by entities relieving congestion

Control Area A, Import Under Dra-X

(Region or State) Over Dra-Y

Congested Link A-B

Control Area B, Export Under Dra-A

(Region or State) Over Dra-B

Case 1: Frequency > 50.00Hz; Regional Entity A CAUSING CONGESTION

Case 2:- Frequency < 50.00Hz; Regional Entity Y CAUSING CONGESTION

 Whenever actual flow on inter/ intra regional link/ corridor exceeds ATC and security
criteria-RLDC, NLDC may issue a warning notice as per Format-III
 If violation of TTC limits persists for 2 time-blocks not counting the time-block in which
warning notice was issued by RLDC and no affirmative action is taken by the defaulting
agency, NLDC/ RLDC(s) shall issue a notice for application of congestion charge.
 Statement of congestion charge disbursal to be issued by RPCs on weekly basis
Ancillary Services (RRAS)
Objective and Players

 As per Central Electricity Regulatory Commission (Ancillary Services Operations) Regulations,

2015
 Objective is to restore the frequency at desired level in case of an imbalance between the active
power consumption and generation and to relieve the congestion in the transmission network
 Players and their Roles: -
1. Ancillary Service Provider or RRAS Provider: -All Generating Stations that are regional entities
and whose tariff is determined or adopted by the Commission for their full capacity shall
provide RRAS. URS of ISGS.
2. NLDC: -
a) Prepare Merit Order Stack based on variable
cost of generation considering technical
parameters.
b) Instructions for Regulation Up and Regulation Down
c) Factors- Region, Time Block, Ramp Up, Ramp Down,
Response Time, Transmission Constraint at
Inter-Regional and Intra-Regional Level
Triggering, Scheduling and Settlement

 Triggering Criteria of RRAS:-

1. Extreme Weather Forecasts and/or Special day which may lead to change in demand
pattern
2. Outage of Transmission Line and/or Generating Unit
3. Frequency Trend like if f<49.9 Hz for 5 min or more may issue Regulation Up
4. Excessive Loop flows leading to congestion and other such events
 Scheduling: -
1. Regulation Up Service-Power scheduled from the generating station to Virtual Regional
Entity termed as Virtual Ancillary Entity VAE
2. Regulation Down Service-Power scheduled to the generating station from the VAE
3. RRAS deemed to be triggered for Time period specified by the Nodal Agency
4. Energy despatched under RRAS shall be deemed as delivered ex-bus
5. Withdrawal-Nodal Agency direct the RRAS Provider to withdraw from the time block if
satisfied that the circumstances leading to triggering of RRAS Services no longer exist
Triggering, Scheduling and Settlement

 Settlement
1) Regulation Up- RRAS provider paid at their fixed & variable charges with markup
2) Regulation Down-RRAS provider shall pay 75 % of variable charges to Pool Fund
3) Average Mark Up paid to RRAS provider- 50 Paise/Unit
4) Fixed charges to be reimbursed by RRAS providers to the original beneficiaries
5) Penalties for sustained failure to provide RRAS and violation of directions of RLDC
Oct-19 Ancillary Services

* From POSOCO Monthly Report

Oct-19 Ancillary Services

* From POSOCO Monthly Report

Oct-19 Ancillary Services

* From POSOCO Monthly Report

DEVIATION SETTLEMENT MECHANISM
 Deviation Settlement Mechanism

 Actual Generation – Scheduled Generation (For Generators)

 Total Actual Drawl – Total Scheduled Drawl (For Beneficiaries)
 For Renewable
‘Absolute Error’ : absolute value of the error in actual generation w.r.t. scheduled
generation and the 'Available Capacity' (AvC), for each time block:
Error (%) = 100 X [Actual Generation– Scheduled Generation] / (AvC)
 Worked out for each 15 min time block
 Four Scenarios for Generators…
 Inter-State Conventional (Non-Renewable)
 Inter-State Renewable
 Intra-State Conventional
 Intra-State Renewable
Scenario 1 Inter-State Conventional Source Generator
 Based on average frequency of the relevant time block
 Payable for over-drawl/under-injection by buyer/seller Receivable for under-
drawl/over-injection by buyer/seller
 DSM Price Vector linked to the daily average Area Clearing Price of Exchange at 50 Hz
(previous fixed rate 1.78/u).
 DSM rate vector has a dynamic slope determined by joining the identified price points at 50
Hz (daily simple average ACP), frequency of 49.85 Hz (Rs. 8 per unit) and 50.05 Hz (zero) on
a daily basis.
 Cap rate for the charges for deviation for the generating stations whose tariff is not
determined by the Commission is 303.04 Paise/kWh
 Change of sign in each 12 time block or by remaining in ±10 MW w.r.t. schedule Made
mandatory in case of sustained deviation in one direction. Additional surcharge of 10% on
the daily base DSM payable/receivable in case of violation. Not applicable for run of river
projects without pondage.
DAM price linking to DSM Charges
NLDC Link: - https://dsm.nldc.in/
Avrg Frequency (Hz) Charges for Deviation Charges for Deviation
For date 5th April
Below Not​Below (Paise/kWh) (Paise/kWh)
50.05 0 0 0
50.05 50.04 1xP/5 63.2
50.04 50.03 Slope​determined​by​joining​the​price​at​ 2xP/5 126.39
Not​Below​50.05​Hz​and​identified​price​at​
50.03 50.02 50.00​Hz 3xP/5 189.59
50.02 50.01 4xP/5 252.78
Daily​(simple)​average​ACP​discovered​in​
50.01 50 P 315.98
the​DAM​segment​of​power​exchange
50 49.99 50.00+15xP/16 346.23
49.99 49.98 100.00+14xP/16 376.48
49.98 49.97 150.00+13xP/16 406.73
49.97 49.96 200.00+12xP/16 436.99
49.96 49.95 250.00+11xP/16 467.24
49.95 49.94 300.00+10xP/16 497.49
49.94 49.93 Slope​determined​by​joining​the​price​ 350.00+9xP/16 527.74
identified​at​50.00​Hz​and​price​at​below​
49.93 49.92 49.85​Hz 400.00+8xP/16 557.99
49.92 49.91 450.00+7xP/16 588.24
49.91 49.9 500.00+6xP/16 618.49
49.9 49.89 550.00+5xP/16 648.74
49.89 49.88 600.00+4xP/16 679
49.88 49.87 650.00+3xP/16 709.25
49.87 49.86 700.00+2xP/16 739.5
49.86 49.85 ​ 750.00+1xP/16 769.75
49.85 ​ 800 800 800
Scenario 2 Inter-State Renewable Source Generator
 The generator will be paid for over injection from the regional DSM pool and will pay the
regional DSM pool for under injection according to the deviation charges.
 The absolute error (deviation from schedule) is defined as a percentage of the Available
Capacity, i.e.
Error (%) = 100 X [Actual Generation– Scheduled Generation] / (AvC)

Available Actual Deviation Deviation

Schedule Error (%), Fixed Rate
Time Block Capacity Injection Charges upto Charges upto
(MW),b e=(c-b)/a (Rs./MWhr)
(MW),a (MW),c 15%(Rs.) 25%(Rs.)
T1 (UnderInjection) 15 3.02 0.3168 -18.02% 1968 4428 981

T2 (UnderInjection) 15 1.5 0.1296 -9.14% 1968 2697 0

T3 (OverInjection) 15 9.5 10.3584 5.72% 1968 -1689 0

T4 (OverInjection) 15 5.82 8.3088 16.59% 1968 -4428 -423

 Assuming PPA Rate=Rs. 2.48/u
Payment Paid/Received under Weekly DSM
Payment Net Payment
CASE Available Schedule tion Deviation Buyer asfrom
Genera % Received Total Payment Received per unit of
Capacity per Upto ±15% Upto ± 25% Upto ± 35% >±35% Received (Rs.) Actual Generation
Schedule (Rs.) Deviation Deviation Deviation Deviation (Rs./unit)

No Deviation 100 100 100 0.00% 62,000 - - - - 62,000 2.480

OverInjection within
±15% 100 100 110 10.00% 62,000 6,200 - - - 68,200 2.480
UnderInjection within
±15% 100 100 90 -10.00% 62,000 -6,200 - - - 55,800 2.480
OverInjection within
±25% 100 100 120 20.00% 62,000 9,300 2,790 - - 74,090 2.470
UnderInjection within
±25% 100 100 80 -20.00% 62,000 -9,300 -3,410 - - 49,290 2.465
OverInjection within
±35% 100 100 130 30.00% 62,000 9,300 5,580 2,480 - 79,360 2.442
UnderInjection within
±35% 100 100 70 -30.00% 62,000 -9,300 -6,820 -3,720 - 42,160 2.409
OverInjection beyond
±35% 100 100 140 40.00% 62,000 9,300 5,580 4,960 2,170 84,010 2.400
UnderInjection
beyond ±35% 100 100 60 -40.00% 62,000 -9,300 -6,820 -7,440 -4,030 34,410 2.294
 Inter-State DSM Billing Cycle
Illustration for delivery period starting from 28 th Jan (Monday) to 3rd Feb (Sunday).
 Step 1: -Central Utility will take weekly meter readings for previous week i.e. 28 th Jan to 3rd Feb and
transfer the same to NRLDC by next Tuesday i.e. 5 th Feb noon.
 Step 2: - NRLDC will process the meter data and with additional data like schedule will forward to the
RPC secretariat by each Thursday noon i.e. 7 th Feb for the above mentioned seven day period for
preparation of Deviation Settlement Account.
 Step 3: -All computations carried out by NRLDC shall be open for Regional Entities for
checking/verifications for a period of 15 days.
 Step 4: - NRPC will prepare the DSM Bill by next Tuesday i.e. 12 th Feb.
 Step 5: -
 Payment of Charges from Regional Entity for Deviation is required to be paid within 10 days of issue of
DSM Account Statement into “Regional Deviation Pool Account Fund”. Beyond 12 days interest @0.04%
for each day of delay.
 Receivable of charges to Regional Entity within 2 working days of receipt of payments in “Regional
Deviation Pool Account Fund”.
Intra-State:- Why RE Forecasting & Scheduling?
Objective of FSS Regulation
 To​roll​out​forecasting​&​scheduling​for​wind​and​solar​generators​so​that​Grid operators
 have​day-ahead​and​hour-ahead​visibility​into​how​much​renew.​is​expected​to​be​injected
 can​forecast​‘net​load’​(load​–​RE​power)
 can​plan​for​up​and​down​ramps​of​net​load
 can​plan​balancing​resources​for​managing​uncertainty
 To​provide​incentives​for​accurate​forecasting​&​minimizing​MW​deviations​from​schedule
Current Challenges
 Operational​Challenge​for​System​Operator:​-​Seasonal​and​Diurnal​Variation​of​Wind​and​Solar​
Generation,​Flexible​operation​of​power​system​is​needed
 Insufficient​transmission​infrastructure​for​inter-state​and/or​inter-regional​balancing​
 Low​availability​of​Hydro​power​and​gas​fired​TPS
 Limited​ability​to​back-down​thermal​generation​(limitation​due​to​technical​minimum)
 Scheduling​&​Energy​accounting​is​a​pre-requisite​for​load​generation​balance
Role of Qualified Coordinating Agency (QCA)
 To coordinate at a pooling station level for:
 Forecasting
 Aggregate schedules and schedule revisions
 Metering & telemetry Support
 Communication with SLDC and Generators
 De-pool deviation charges; on basis of actual generated units
 Advantages
 SLDCs do not need to interact with thousands of generators
 Small generators do not have to build capacity on forecasting & scheduling
Key Components and Stakeholders of F&S Framework at State Level

Deviation Data Management Generator

Forecasting Scheduling
Settlement and Repository Payments
• Decentralized Forecast • Decentralized • Error w.r.t Available • Data Sharing by wind • De-pooling at PSS
• Models based on Scheduling Capacity farms mandatory
European/ USA • Operation of Virtual • Rates are fixed amount • System Operator
level by QCA
context Pool (0.5, 1.0, 1.5/u) in steps needs to maintain
• Day-Ahead & 16/9 • Payable for over/under databases for
Intra Day revisions injection renewable energy

RE Generator QCA SLDC

• Responsible for implementing
Regulation
• Appoint QCA
• Submit technical details to SLDC
• Monitor o/p of QCA
• Forecasting & Scheduling for each
PSS
• Coordination with SLDCs for meter
reading, data collection
• Deviation Settlement and de-
pooling within PSS
• Aggregation of PSS schedule
to control area level
• Preparation of L-G Balance
• Computation of Deviation
charges at PSS level
• Design data communication
infrastructure
Scenario 3 Intra-State Renewable Source Generator
 As per Forecasting, Schdeuling and Settlement Regulations for a State
 The generator will pay the state DSM pool for both over injection and under injection
according to the deviation charges
 The absolute error (deviation from schedule) is defined as a percentage of the Available
Capacity, i.e.
Error (%) = 100 X [Actual Generation– Scheduled Generation] / (AvC)

15% tolerance band for existing wind / solar generators

Scenario 3 Intra-State Renewable Source Generator
State Regulation/Procedure Aggregation Deviation Range Deviation charges
Andhra Pradesh State Level Technology wise <=15% Nil
Rajasthan PSS level >15% and <=25% 0.50INR/kWh
Both Notified >25% and <=35% 1.0INR/kWh
Maharashtra PSS level >35% 1.5INR/kWh
Karnataka State Level
Existing:
<=15% Nil
>15% and <=25% 0.50 INR/kWh
>25% and <=35% 1.00 INR/kWh
>35% 1.50 INR/kWh
Madhya Pradesh Both Notified PSS level
New:
<=10% Nil
>10% and <=20% 0.50 INR/kWh
>20% and <=30% 1.00 INR/kWh
>30% 1.50 INR/kWh
<=10% Nil
>10% and <=20% 0.50 INR/kWh
Tamil Nadu Notified/Draft Procedure PSS level
>20% and <=30% 1.00 INR/kWh
>30% 1.50 INR/kWh
<=15% Nil
>15% and <=25% 0.50 INR/kWh
Telangana Notified/Draft Procedure Substation Level
>25% and <=35% 1.00 INR/kWh
>35% 1.50 INR/kWh
Wind :
>=12% Nil
>12% and <=20% 0.25 INR/kWh
>20% and <=28% 0.50 INR/kWh
>28% 0.75 INR/kWh
Gujarat Notified/Draft Procedure PSS level
Solar:
>=7% Nil
>7% and <=15% 0.25 INR/kWh
>15% and <=23% 0.50 INR/kWh
>23% 0.75 INR/kWh
THANK YOU