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Frequency band for safe operation of Steam Turbine as
recommended in IEGC
Pre ABT Settlement system
• The payment to Central Generating Station by a constituent - proportion to total energy drawal – Recommendation of K.P.Rao Committee Report.• Both Fixed and Variable charge was payable as per energy drawal• Based on Monthly Regional Energy Account- REA • Conventional Meter Readings • Fixed cost recoverable with deemed generation ( generation not made available)•Incentive payable after accounting for deemed generationAlthough a two part tariff- Single part for constituent
Inadequacies • Non-utilization of Utilities’ Surplus Power
– No incentive for Maximization of own/ IPP/captive generation within a State as the cost of power paid is based on pooled rate of ISGS stations.
– No effective commercial mechanism for pricing deviations from schedule.
• Dumping of surplus power at High Freq– Forced Backing down/ Reserve Shut down– Deemed generation for backing down
• Non-utilization of embedded IPP/Licensee surplus Power.– Administrative problems and no commercial arrangements for utilization of this
power. Any surplus remains unutilized.
• Non-utilization of Pumped Storage Scheme– No commercial mechanism to draw cheap off peak power for pumping. Bhira
PSS/Kadamkadai is not being utilized in the pumping mode.
Contd..
• Inability to Despatch Generation according to Grid requirement.– Generation of Licensees cannot be despatched as per Grid requirements due to
commercial problems.
• Curtailment of Bilateral Transactions due to Grid Indiscipline.– Overdrawing State(s) deliberately increase drawls and cause frequency to dip
below 48.5 Hz so that inter-regional transactions are terminated.
• Absence of Merit Order Operation– As payments are based on drawls and not on shares/schedules, fixed
cost are not perceived as sunk costs.
Inherent Disadvantage• No incentives for generators /utilities to respond to
dispatch orders for issues like frequency control– No Incentive for helping the grid– No disincentive for hurting the grid
• No signal to generators to match availability with system needs
• Did not promote Grid Discipline• No signal for trading of power.
Overall economy was lost.
EFFECT• Backing down of cheaper CS generation
– Caused high per unit cost
• Dumping of energy by other utility at high frequency/off peak hours-
– additional fixed cost liability for generation & transmission.
• Damage to equipments• Shifting of Industries/Investments
Why ABT?Why ABT?•Promote competition, efficiency and Promote competition, efficiency and economy- Merit order dispatcheconomy- Merit order dispatch
•Competitive market based systemCompetitive market based system•Possibility of trading on a non-firm Possibility of trading on a non-firm basis- selling of capacity entitlementbasis- selling of capacity entitlement
•Facilitating Grid discipline- Incentive Facilitating Grid discipline- Incentive and disincentive for deviationand disincentive for deviation
Capacity Ch.Capacity Ch. + + Energy Ch.Energy Ch. UIUI
A + B A + B C C
TOPICS DEALT IN THE ORDERTOPICS DEALT IN THE ORDER• TARGET AVAILABILITYTARGET AVAILABILITY
• CRITERIA FOR INCENTIVECRITERIA FOR INCENTIVE
• PROCEDURE FOR PREVENTION OF GAMINGPROCEDURE FOR PREVENTION OF GAMING
• PROLONGED OUTAGESPROLONGED OUTAGES
• UI CHARGES AND FREQUENCY VARIATIONUI CHARGES AND FREQUENCY VARIATION
• SETTLEMENT OF UI ACCOUNTSETTLEMENT OF UI ACCOUNT
• TREATMENT OF UNALLOCATED CAPACITIESTREATMENT OF UNALLOCATED CAPACITIES
Availablity Based Tariff (ABT)• Links commercial mechanism & Grid Operation• Promotes grid operation• ABT Structure – 3 parts of tariffs
A. Capacity charges– Proportionate to entitlements (not actual drawals)– Full recovery at target availability (not PLF)– Incentives linked to Availability (80%) and PLF (77%)– Incentives half of per KWh fixed charges at target availability /
capped at 21 p/u
B. Energy charges– Payable for schedules (not as per actual drawals)
C. Unscheduled Interchange– Payable for deviations from schedules– Linked to average frequency for 15 minute time block (graph