role of tariff in regulation of indian power
TRANSCRIPT
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By
Arun Kumar Singh
Anurag Srivastava
Gajwant Singh
KIET, Ghaziabad
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` The installed capacity of Indian power system on28.02.2009 was 1,47,715.51 MW excluding CPPconnected to Grid.
` the 11th plan capacity addition of 78,700 MW wasprojected which after the announcement ofNuclear Deal revised to 90,000 MW.
` At the end of 12th plan the total installed capacityis expected to reach to 2,00,000 MW.
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` The countrys transmission perspective plan for
eleventh plan focuses on the strengthening of National
Power Grid through addition of over 60,000 ckm of
Transmission Network by 2012. The transmission
network will be able to transmit 60% of the power
generated in the country.
` The existing inter-regional power transfer capacity is
17,000 MW, which is to be further enhanced to 37,000MW by 2012 through creation of Transmission Super
Highways .
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0
2
4
6
8
10
12
14
16
18
0 2 4 6 8 10 12 14
%EnergyShortage
Months
2004-05
2005-06
2006-07
2007-08
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0
2
4
6
8
10
12
14
16
18
20
0 1 2 3 4 5 6 7 8 9 10 11 12 13
%peakshortage
Months
Peak Shortage
2004-05
2005-06
2006-07
2007-08
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` Cost of electricity from different generations, such
as hydro, nuclear and thermal differ, depending
upon the regional resources and government
policies.
` The exploitable energy resources in our country
are unevenly distributed, like Coal resources are
abundant in Bihar/Jharkhand, Orissa, WestBengal and Hydro Resources are mainly
concentrated in Northern and North-Eastern
Regions
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NR
WR
SR
ER
NER
Ennore
Kudankulam
Kayamkulam
Partabpur
Talcher/Ib Valley
Vindhyachal
Korba
LEGEND
Coal
Hydro
Lignite
Coastal
Nuclear
Vizag
Simhadri
Kaiga
Tarapur
Mangalore
Krishnapatnam
RAPP
SIKKIM
MYANM
MAR
CHICKENNECK
Cuddalore
SRI LANKACOLOMBO
NEPALBHUTAN
DESHBANGLA
South Madras
Pipavav
Generation Load-Centre
Kolkata
Bhubaneswar
Patna
Lucknow
Delhi
Mumbai
Chennai
Bangalore
Bhopal
Guwahati
Jammu
Ludhiana
Jaipur
Gandhinagar
Indore
Raipur
Thiruvananthapuram
Kozhikode
Hyderabad
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y At the time of independence, the total generation capacity installed inthe country was 1362 MW.
y GOI created SEBs under I E (supply) Act 1948.
y
Indian Power System was originally grown as vertically integratedsystem.
y The Generation, Transmission and Distribution systems were bundledtogether.
y This was first initiated by Chile in 1982 continued to improve and
adopted by major countries of the world.
y It proved to be the optimum solution in the changed conditionsworldwide
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` To Encourage installation and generation GOI
issued a policy of private participation in 1991.
` Electricity Regulatory commission Act, 1998.
` ABT along with the Electricity Act of 2003 is the
most important step taken in the Indian Power
System.
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16441
22526 23134
30000
0
5000
10000
15000
20000
25000
30000
35000
2004-05 2005-06 2006-07 2007-08
EnergyinMU
Year
Energy traded at Inter State level
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778
3938
5787
9560
0
2000
4000
6000
8000
10000
12000
2004-05 2005-06 2006-07 2007-08
No's
Year
Transaction at Inter State level
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` In electrical paradigm tariff refers to the rate atwhich different types of consumers are required topay for being facilitated with electrical services
` Generation, transmission and distribution of theelectrical energy involve a huge amount of moneythus, tariff and rules for recovery of appropriateamount of return for provided service plays a very
important role in the life, health and growth of theorganization.
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` The criteria for deciding the tariff of end users is
quite different from the tariff of the power plants for
supplying power to utilities.
` The end user tariff is decided by socio-techno-
economic principles whereas the power plant tariff
is purely a matter of techno-economics
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y Low frequency during the peak load hours , with frequency going down to
48-48.5 Hz for many hours every day
y High frequency during the off peak hours, with frequency going up to 50.5
to 51 Hz for many hours everyday
y
Rapid and wide changes of frequencies everydayy Very frequent grid disturbances , causing tripping of generating stations,
interruption of supply to large block of consumers, and disintegration of the
regional grids
y Least cost power not dispatch in preference of more costly power
y
Integrated grid operations require the normalization of frequency across allfive Regions requiring proactive load management by beneficiaries and
dispatch discipline by generator
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y Capacity charge: This component represents fixed cost, payable togenerating station, which comprises of interest on loan, return on equity,depreciation, insurance, taxes and interest on working capital.
y The payment of fixed cost to the generating company is linked toavailability of the plant, that is, its capability to deliver MWs on a day-by-
day basis.
y In the Availability Tariff mechanism, the fixed and variable costcomponents are treated separately.
y In case the average actually achieved over the year is higher than the
specified norm for plant availability, the generating company gets ahigher payment. In case the average availability achieved is lower, thepayment is also lower. Hence the name is Availability Based Tariff.
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` Energy Charges: this component represents variable cost,which comprises of the fuel cost, i.e., coal and oil in case ofthermal plants and nuclear fuel in case of nuclear plants ofthe power plant for generating energy as per the given
schedule for the day.
` Energy charge is not based on actual generation and plantoutput, but on scheduled generation.
` Unscheduled Interchange Charge: This charge is payablefor the deviation from the schedule depending upon the systemcondition.
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` Enhanced grid discipline ensuring quality power
supply for all consumers.
` Promote competition, efficiency and power
trading.
` Introduce and encourage merit order dispatch inIndian power system.
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48.6
48.8
49
49.2
49.4
49.6
49.8
50
50.2
0 1 2 3 4 5 6 7 8 9 10 11 12 13
Frequency(Hz)
Months
Frequency profile
2004-05
2005-06
2006-07
2007-08
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74
53
72 1 0 0
3 40 0 0 0 0
0
10
20
30
40
50
60
70
80
2000-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
No's
Year
Grid Disturbances
minor major
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405
410
415
420
425
430
435
440
445
0 2 4 6 8 10 12 14
MaxVoltage(KV)
Months
Max Voltage profile at important grid point
2004-05
2005-06
2006-07
2007-08
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350
360
370
380
390
400
410
0 2 4 6 8 10 12 14
MinVoltage(KV)
Months
Min Voltage profile at important grid points
2004-05
2005-06
2006-07
2007-08
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52.4
53.2
56.5
55
56.5
53.9
55.3
57.1
61
60
63
64.4
64.7
64.6
67.3
69
69.9
72.2
72.7
74.8
74.3
76.8
48
53
58
63
68
73
78
PLF
Year
OverallPLFofThermalPowerStat
ion
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-2000
-1500
-1000
-500
0
500
UICharge
sinRsLakh
s
weeks
NTPC UI Trends
2003-
042004-052005-062006-
072007-082008-09
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-3000
-2000
-1000
0
1000
2000
3000
4000
UIChar
gesinRsLakh
s
weeks
KARNATKA UI TrendS
2005-062006-072007-
08
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` The ABT must be extended to state and retail level upto the level of feasibility.
` Time-differentiated tariff can further encourage the
stack holders to participate in the systemmanagement.
` The real time pricing may have locational features inaddition to the system condition.
` Subsidy should be reduced in phased manner andfinally be eliminated within the target period.
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y Cross-subsidization should not be done from othertype of the consumers within the system; rather itshould be done from the other areas in consultation
with the ministry that deals the matters of socialwelfare.
y More encouragement should be given to privateinvestors.
y Open market to be developed for better power trading.
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y Tariff amendments after the Electricity Act 03 have played amajor role to bring discipline and responsibility in the IndianPower System.
y The UI mechanism provides equal chance of earning the
performance-linked incentive to generators as well as loads.
y With increased complexity of the power system, tariff hasbecame very complex and involved concept to realize.
y
A novel competitive power market in India is yet to evolve.
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1. www.powermin.nic.in
2. www.cea.nic.in
3. Electricity Act 2003, www.powermin.nic.in
4. Introduction to Availability Based Tariff, Kalki Communications Technology,
Bangalore, India. [Online]. Available: http://
www.kalkitech.com/downindex/Introduction To ABT.pdf
5. Impact of ABT on different Players, Kalki Communications Technology, Bangalore,
India. [Online]. Available: http:// www.kalkitech.com
6. ABT to Deregulated Power Market, Kalki Communications Technology, Bangalore,
India. [Online]. Available: http:// www.kalkitech.com
7. K.V.V. Reddy, Ashwani Kumar and Saurabh Chanana, Frequency Linked Pricing as
an Instrument for Frequency Regulation Market and ABT Mechanism,
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8. K.S. Chaube, Restructuring of the Power Supply Industry in India, Cigre Regional
meeting 2001- International Conference on Bulk Power Transmission System
Integration in Developing Countries, 8-10 November 2001, New Delhi, pp. IX-i - IX-
viii.
9. Rabidra Tripathy and S.K. Khiani, Restructuring of Power Supply Industry and
Privatization Subsidies as Social Responsibility , Cigre Regional meeting 2001-
International Conference on Bulk Power Transmission System Integration inDeveloping Countries, 8-10 November 2001, New Delhi, pp. IX-1 - IX-8.
10. Yog Raj Sood, Narayana Prasad Padhy and H.O. Gupta, Privatization of Power
Industry A Bibliographical Survey, Cigre Regional meeting 2001- International
Conference on Bulk Power Transmission System Integration in Developing
Countries, 8-10 November 2001, New Delhi, pp. IX-9 IX-16.
11.
Anjan Roy, M. G. Raoot, P. Pentayya and R. K. Medratta, Famework for FacilitatingPower Trading in India, Cigre Regional meeting 2001- International Conference on
Bulk Power Transmission System Integration in Developing Countries, 8-10
November 2001, New Delhi, pp. IX-25 IX-32.
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Thank You