Availability-based tariff

General layout of electricity networks (typical).

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.^[1]

Introduction

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:

• 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 Intrastate systems as well.^[2] 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) in to 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.^[3] The volume of purchased electricity that could not be transmitted to the buyers due to transmission lines congestion is only 0.6% of the total electricity consumed in the financial year 2013-14.^[4] It means that the actual power deficit in India is less than 1% excluding non-price related (under priced) electricity demand. ABT mechanism needs improvements to address the requirements of all stake holders (including final electricity consumers) for encouraging least cost electricity generation / tariff based on demand verses availability in the grid.^[5][6] There is a need of well represented Electric Reliability Organization to involve all the grid participants for framing guidelines for power system operation and accreditation which is presently looked after by the CEA

ABT details

• What is availability?

'Availability', for the purpose of the ABT Order means the readiness of the generating station to deliver ex-bus output expressed as a percentage of its related ex-bus output capability as per rated capacity.

• How is availability calculated?

Availability of thermal generating station for any period shall be the percentage ratio of average Sent Out Capability (SOC) for all the time blocks during that period and rated SOC of the generating station

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 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.
• While declaring the capability, the generator should ensure that the capability during peak hours is not less than that during other hours.
• The Scheduling as referred to above should be in accordance with the operating procedures in force.
• 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.
• The schedule of actual generation shall be quantified on ex-bus basis, whereas for beneficiaries, scheduled drawals shall be quantified at their respective receiving points.
• For calculating the drawal schedule for beneficiaries, the transmission losses shall be apportioned in proportion to their drawals.
• 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.^[7]
• 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

ABT drawbacks

An idealized representation of the four kinds of reserve power and the time intervals after an unexpected failure that they are in use.^[8]

• The incentives and disincentives are prefixed (annually/periodically) by the electricity regulator (CERC) for the variation in the grid frequency which may not reflect the actual situation temporally and spatially on day-to-day basis. There is a need to decide the electricity tariff by the grid participants (generators, discoms, transcos & final consumers) on day-to-day basis for achieving further fine tuning.^[5]

• The ABT mechanism aims to maintain grid frequency at 50 Hz but does not permit the grid participants to decide the optimum frequency within the permitted frequency band (say 49.7 to 50.05 Hz) on day-to-day basis.^[5] This is required not to impose additional load shedding/power cuts when frequency is within the safe variation limits.^[9]

• Transmission system operator (TSO) is obliged to provide non-discriminatory transmission access to electricity generators and customers in order to promote competition. ABT mechanism does not bring at par all the grid participants whether in private or central sector or state sector ownership.^[10] ABT mechanism does not encourage to install the generating units at advantageous locations to offer least cost electricity to the final electricity consumers.^[5] ABT mechanism is suitable in an electricity grid suffering from perennial power shortages to prevent overdrwals but it is not suitable for the grid with surplus electricity generation with non-discriminatory responsibility.^[11]

• Every state is conducting independently load management to avoid overdrawal from other states by using mix of generation sources (ex: hydro power or peaking power plants) to adhere to their power drawal commitments on 15 minutes period basis in ABT mechanism. Thus hydro power stations are ending up to cater base load instead of peak load in non-monsoon months also (ex: Kerala, Karnataka, Telangana, HP, J&K, Uttarakhand, etc.).^[12] TSO is responsible to ensure the provision of reserves (including spinning reserve for base load power plants by operating in frequency follow mode with upper & lower generation caps) that will allow for sudden contingencies by determining the optimal combination of generating stations and reserve providers for each grid trading period. The available hydro power stations in a region/grid should be used to cater peaking load only at regional/national level. Using hydro power stations to cater peak load, would improve the peaking load capability of a regional/national grid and maintain stable grid frequency and network stability. The 24 hours duration of a day should be divided in to four parts only (i.e. day time peak load period, day time off peak load period, night time peak load period and night time off peak load period) instead of 96 number 15 minutes periods for commercially settling the power transactions to cater better to the peak load requirements within the safe frequency range.

• Many gas turbine power stations are not operating due to perennial natural gas shortage.^[13] Recently, many DG sets (large & medium sizes) are also idling throughout the year due to better availability of grid power. Alternatively, these power generation units can be put to use for grid reserve service either with liquid / gas fuels when there is unexpected tripping of operating power plants (four nos of 660 MW stations in a short duration) to prevent the grid operation below safe limit.^[14][15] The yearly cost of ensuring grid safety would be less than 2 paisa per Kwh for the total electricity generation in India.

Natural gas transmission

The Petroleum and Natural Gas Regulatory Board (PNGRB) was created in the year 2005 to regulate downstream activities in the petroleum and natural gas sector.^[16] There is requirement of natural gas TSO also for imparting optimum use of the gas on hourly basis for meeting peak load in the electricity grid and minimize gas transport distances. The available gas should be stored up to rated pressure in the pipe grid for generating power during peak demand hours on daily (or more) basis. Thus available limited quantity is used to meet the peak electricity loads by all gas based power stations. Also gas should not be transported from power deficit region to a power surplus region by the gas grid and generated power from gas there shall not be transmitted to the power deficit region to avoid misuse of the gas & power grid infrastructure. Natural gas TSO would also serve other sectors such as petro-chemical plants, CNG, Fertilizer plants, PNG, etc. as per their hourly requirement in addition to receive gas from various types of natural gas producers.

See also

References

External links

• Grid maps of southern region
• CERC INDIA Website
• Significance of UI Mechanism for Power Pricing
• Introduction to ABT - A White Paper
• ABT Software
• COMPASS an Availability Based Tariff software from Engineering Consultants Group Inc