discussion paper on parallel operation charge - Infraline

CHHATTISGARH STATE ELECTRICITY REGULATORY
COMMISSION, RAIPUR
DISCUSSION PAPER
ON
PARALLEL OPERATION CHARGE
DATE:01.06.2008
1

1. BACKGROUND
CSEB filed before the Commission its first tariff application for determination of ARR and tariff
under Section 62 of the Electricity Act,2003(the Act) and other miscellaneous and general
charges under Section 45 and 46 of the Act. In addition to revision of the rates of various
services rendered by the Utility, the Utility had proposed to levy stand-by charges on the
Captive Power Plants (CPPs) running in parallel with the CSEB’s Grid at the rate of 7.5% of
demand charges on the installed capacity of the CPP, in view of the benefits enjoyed by the
CPPs running in parallel with grid and the intangible services being rendered by the CSEB.
In its first tariff order, the Commission fixed various miscellaneous and general charges, as
proposed by the Board which were based on the rates then prevailing in MPSEB, which had the
same rates before bifurcation of the erstwhile MPEB, as requisite significant data input was a
constraint. However in case of parallel operation charges, the Commission fixed Rs. 16 per kVA
on the installed capacity of the CPPs, which was less than that of the Board’s proposal.
While disposing off the petition No. 17 of 2005 (M), in the matter of power purchase and related
dispensation in respect of Captive Generating Plants, the Commission passed an order on
06.02.2006 wherein various issues were addressed in light of the provisions of the Act, National
Electricity Policy and Tariff Policy. Keeping in view of the objections of the CPPs, the
Commission reduced the parallel operation charges to 60% of the approved charge i.e., Rs. 10
per kVA per month till the rate was reviewed and revised, if necessary, in the next tariff order on
the basis of a realistic study.
The Urla Industries Association, the petitioner in petition No. 17 of 2005, preferred an appeal
(No. 99 of 2006) before the Hon’ble Appellate Tribunal for Electricity (ATE) against the Order
passed by the Commission.
The directions of the Hon'ble Appellate Tribunal for Electricity in their judgement of 12th
September 2006 passed in appeal no. 99 of 2006 are as follows:
"The contention that no charges at all is payable for parallel operation or transmission
system can not be sustained and such a claim is contrary to factual position. There is no escape
of CPP to pay charges for parallel operation by which the CPP gains while the transmission
system of the second respondent CSEB is affected apart from the admitted fact the
transmission grid is strengthened by the power injected by CPP. However, we make it clear that
in the tariff petition which is pending consideration, the Commission may fix the charges for
parallel operation on the basis of the data, materials and scientific inputs relating to parallel
operation charge already placed by the parties or that may be placed by the parties before the
conclusion of hearing and such exercise shall be carried out by the first respondent Regulatory
Commission independently and without in any manner being influenced by this judgment."
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By the time this judgement was received, the tariff order for the year 2006-07 was passed by the
Commission on 13 th September 2006.The Commission hence registered a suo-motu petition
No. 39 of 2006 for determination of parallel operation charges proposed to be levied on captive
power plants operating in parallel with the CSEB grid. Notice was issued to the CSEB for
submission of proposal in light of the Hon’ble Appellate Tribunal’s judgement. M/s BALCO
Limited, M/s Bajrang Power and Ispat Limited, M/s Jayaswal Neco Ltd. alongwith Urla Industries
Association were made parties as co-respondents who were also parties to the earlier petition
No. 17 of 2005 (M) filed in the Commission. During the course of hearing, Urla Industries
Association and M/s Jaiswal Neco Ltd. pleaded that before final decision on charges towards
parallel operation is taken by the Commission, it would be advisable to go in for a technical
study. The Commission also felt that a detailed study needs to be carried out as the various
inputs received from the parties, although valuable, do not help the Commission much in
quantifying justifiable charges for parallel operation. The Commission accordingly ordered on
11.07.2007 to seek assistance of a technical consultant for quantifying the benefits drawn by the
CPPs as well as CSEB and to study the disturbances created in the system and also for
quantifying the compensation which the CSEB should get by way of parallel operation and
related matters. In the light of the above decision of the Commission, the assignment was
awarded to M/s Electrical Research & Development Association, Vadodara, one of the leading
research organisation in the field of power, through competitive bidding process covering
evaluation of parallel operation charges in the scope of study.
2. INTRODUCTION
Electrical power is recognized as a basic input to the economic growth and development of the
country. After independence, with the thrust given to power development in the five-year plans,
the extent and reach of electricity has undergone dramatic changes. With thrust on programme
for rural electrification and large scale energization of pumpsets from 3 rd five year Plan onwards,
the sub-transmission and distribution networks expanded rapidly.
The demand for electricity increased among all the categories of consumers, industrial sector
being the largest section of consumers of electricity in India. The use of electricity in most
industries increased due to rapid industrial growth. Even if new floor area is not added, more
intensive manufacture within a given area increases the amount of electricity consumption by 3
to 5 per cent a year. Our economy is rapidly expanding. Consumers including bulk consumers
are demanding quality, low cost, uninterrupted and reliable electric power to meet their service
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needs. The electric power utility is undergoing rapid changes due to the emergence of a
competitive environment.
Presently there is a shortage of power in India due to the gap between generation and demand.
In Chhattisgarh State there was a shortage of both energy as well as demand. The shortage of
power resulted in power cut on the bulk consumers. Hence many bulk consumers started
setting up Captive Power Plants for their use encouraged with the liberal provisions of the Act
(Section -9) and the National Electricity Policy with a view to not only securing reliable, quality
and cost effective power but also facilitating creation of employment opportunities through
speedy and efficient growth of power industry. These bulk consumers with captive power plants
have since reduced their contract demand with utility to pay minimum as fixed charges per
month on the reduced contract demand. Most of the captive power plants however, continued to
operate their plants in parallel with the utility grid.
Parallel operation is an electrical activity where one electrical system is allowed to operate with
connectivity to another system at the similar operating conditions. In this process, the power
system operate in tandem with all the connected generators for better operational efficiency and
ease. However, the captive generating stations can also run their plant in islanding mode
without having any connectivity with grid.
The CSEB in its tariff petition for the year 2005-06 submitted on 11.03.05 has given the
following justifications for levy of parallel operation charges:
The industries having captive power plants are keeping less contract demand with utility and the
services provided by the utility are much higher than the revenue collected from such
connections. More so the energy supplied to such industries is cross subsidizing. The services
provided by utility to CPP are not accounted for and result in loss of revenue to the utility in spite
of having made huge investment for laying the infrastructure.
2.1 POWER SUPPLY STATUS IN CHHATTISGARH:
CSEB is an integrated utility for generation, transmission, distribution and supply of electricity in
the state of Chhattisgarh. CSEB was created on November 15, 2000 when the new State of
Chhattisgarh was carved out of the erstwhile State of Madhya Pradesh. CSEB is the state
Generation & Transmission Utility and a deemed licensee in the State for electricity distribution.
CSEB has a total installed capacity of 1423.85 MW; comprising 1280 MW thermal, 6 MW of cogeneration
and 137.85 hydro generations. NTPC has an installed thermal capacity of 2100
MW. Apart from NTPC and CSEB, there are number of private generation units of large and
small capacity. The Board has added 500 MW of thermal generation capacity by
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commissioning two new units of 250 MW each at Korba East in the year 2007-2008. Thus the
installed capacity of CSEB became 1923.85 MW at the end of year 2007-2008 increasing the
thermal generation to 1780 MW.
The additional thermal power plants are planned in the State of which some power plants shall
be in the central sector. Most of these plants are in various stages of implementation. The
details of the plants and their installed capacity are given in the table - I below:
Table-I
Name of Plant FY 2005-06
(Total)
FY 2006-07
(Total)
FY 2007-08
(Total)
Korba East TPS PH3,
4units (50MW each)
200.00 200.00 200.00
Korba East TPS PH 3,
2 units (120 MW each)
240.00 240.00 240.00
Korba West TPS,
4 units (210 MW each)
840.00 840.00 840.00
Korba Eest TPS,
2 units (250 MW each)
-- -- 500.00
Total (Thermal) 1280.00 1280.00 1780.00
Total (Hydro & Others) 120.85 143.85 143.85
Total Installed Capacity 1400.85 1423.85 1923.85
Total power generation capacity available in Chhattisgarh is given in table – II below :
Table-II
Sr. No. Particular Capacity in MW
1 CSEB 1923.85
2 Captive power plants 2253.69 (Share of CG is 227.25 MW )
3 Bio-mass generators 131.40
4 IPPs 335
5 Central sector (NTPC) 2100 (Share of CG is 450 MW )
6 TOTAL 6743.94 (Available for state 5093.94)
2.2 EXISTING STATUS OF CPP:
The capacity of CPP in the state of Chhattisgarh has increased substantially only after formation
of the State. As on March’08, out of 46 CPPs existed in the State, 35 CPPs are operating their
plant in parallel with CSEB having connectivity to its grid. M/s BALCO, Korba and M/s Jindal
Steel and Power Ltd are the major contributors with a installed capacity of 810 MW and 347.7
MW respectively. The total installed capacity of these CPPs is 2440.00 MVA and total contract
for selling to CSEB is 227.25 MW. Total demand contracted by these CPPs with CSEB is
492.57 MVA. The details of 35 nos. of CPPs are given in table-III below:
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Sl.No.
Name of Consumers
(CPPs)
Location
Table-III
Interconnection
Voltage in
KV
Installed
Capacity
(MVA)
Contract
Demand
(CD) in
MVA
Sale
Contract
with
CSEB
(MW)
1 M/s BALCO, Korba Korba 220 993.088 120 45
2 M/s Arasmeta, Champa Janjgir 132 57.75 3.125 7
3 M/s M.S.P.,Raigarh Raigarh 33 30 2.9 1
4 M/s JSPL,Raigarh Raigarh 220 364.625 1 70
5 M/s Singhal Ent.,Raigarh Raigarh 33 20 3.75 8
M/s Nav Durga Fules,
6 Raigarh Raigarh 33 5 1.6 2
7
M/s Ind Agro
Synergy,Raigarh Raigarh 33 20 2.5 6
8
Shri Radhe Ind.
Ltd.,Bilaspur Bilaspur 33 10 0.8 1.5
9
M/s Crest Steel & Poer
Ltd. Durg 33 13.33 4.5 3
10 M/S Bhilai Electic Supply Bhilai 220 0 0 0
11 M/sPrakash Industry ltd Champa 132 98.15 19.5 0
12 M/S Lafarge Sonadih 132 22.5 0 0
13 M/s Ultratech cement Raipur 132 38.2 25 0
14 M/s Monnet Power Raipur 132 72.375 2 12
15 M/s Grasim Cement Raipur 132 22.5 18 0
16 M/s Jaiswal Neco Raipur 132 26.875 8 8.5
17 Sarda Energy. Raipur 33 77.5 5 5
18 Century Cement Baikunth 132 19.625 6 0
19 ACC Jamul Jamul 132 25 1 2
Madhya Bharat Paper
20 Mill Champa 33 3.33 2.5 -
21 Godawari Ispat Raipur 132 106.25 4 5
22 M/S shri Bajrang Power Raipur 132 22.5 1.1 1.5
23 Vandana Global Raipur 132 51.25 4 12
24 Real Ispat & Power Raigarh 132 15 12 5.5
25 Nakoda Ispat Ltd Raipur 33 7.5 3.5 2.75
26 S.K.S .Ispat Raipur 132 68.75 10 10
27 Indsil Energy Raipur 33 15 3.75 1
28 Heera Ferro Unit-II Raipur 33 25 1.8 4
29 Bhilai Steel Plant Bhilai 220&132 142.9 216 0
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Sl.No.
Name of Consumers
(CPPs)
Location
Interconnection
Voltage
Installed
Capacity
(MVA)
Contract
Demand
(CD)
Sale
Contract
with
CSEB
(MW)
30 M/s HEG Ltd.,Borai Borai 33 16 2.75 1.5
API Ispat & Power
31 Ltd.,Siltara Raipur 33 10 2 6
32
Mahendra Sponge &
Power Pvt.Ltd Raipur 33 10 1.3 3
33
M/s Rashmi Sponge Iron
Pvt.Ltd. Raipur 33 10 0.95 1
34 M/s G.R. Sponge Pvt.Ltd. Raipur 33 10 0.95 1
35 Vasvani Industry Raipur 33 10 1.29 2
2440.00 492.57 227.25
3.0 PROMOTIONAL POLICY
There are ample examples, where large quantities of low cost waste heat or by-product fuel are
available from which the industrial plant can generate low-cost electric power. Typical of such
industries are large integrated steel mills which burn the excess blast-furnace gas for the
generation of electric power. In some cases where loads are very large (50,000 kW or more),
load factor is high, and low-cost fuel is available, captive power generation has been chosen by
the industrial plants, when power was not readily/fully available at reasonable price from the
electric utility. Typical of such cases are the aluminum-process plants, chemical plants, steel
mills and other industries requiring large quantities of electric power. Where such type of
conditions exist, it is required to study cost of generating a part or all of the power requirements
within the industrial plant. The most economical arrangement is often to generate only such
power as can be made from the process heat or as can be generated from by-product fuel and
to purchase the remainder power.
The State Government of Chhattisgarh has had a positive approach to encourage CPPs in the
new State. A set of policy directives were issued by the Chhattisgarh Government on 12.07.02
(Notification No. 2714/Sec/Energy Deptt/dated 12.7.02) with a view to encourage establishment
of Captive Power Plants. As per these policy directives, CPPs could be set up by any new
industry or existing industries undertaking expansion of capacity for generation of electricity to
meet their own requirements. The utility was given the authority to permit setting up of CPP up
to 25 MW capacity and in consultation with Central Electricity Authority for any capacity above
that. The CPPs under this policy were not permitted to sell electricity to any consumer (third
party); they were, however, allowed to sell excess power outside the State, as well as the State
utility.
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As per Electricity Act 2003, a person may construct, maintain or operate generating plant and
dedicated transmission lines provided that the supply of electricity from the captive generating
plant through the grid shall be regulated in the same manner as the generating station of a
generating company.(Section-9(1))
Any generating company may establish, operate and maintain a generating station without
obtaining a licence under the Act if it complies with the technical standards for construction of
electrical plants, electric lines and connectivity with the grid. (Section-7)
Every person, who has constructed a captive generating plant and maintains and operates such
plant, shall have right to open access for the purpose of carrying electricity from his captive
generating plant to the destination of his use provided that such open access shall be subject to
availability of adequate transmission facility and such availability of transmission facility shall be
determined by the Central Transmission Utility or the State transmission Utility, as the case may
be, provided further that any dispute regarding the availability of transmission facility shall be
adjudicated upon by the Appropriate Commission. (Section- 9(2))
In the National Electricity Policy, liberal provisions with respect to setting up of captive power
plant has been made with a view to not only securing reliable, quality and cost effective power
but also to facilitate creation of employment opportunities through speedy and efficient growth of
industry. The provision relating to CPPs to be set up by group of consumers is primarily aimed
at enabling small and medium scale industries or other consumers that may not individually be
in a position to set up plant of optimal size in a cost effective manner. The two major objectives
of the liberal provision with regard to CPPs in the Act thus are (i) to promote decentralized
generation so as to secure reliable and quality power, and (ii) as a viable cost effective power
source for small and medium scale industries. Besides this, the other most important objective
is harnessing the surplus capacity of CPPs and accepting it in the grid.
A large number of captive and standby generating stations in India are reported to have surplus
capacity that could be supplied to the grid either continuously or during certain time periods.
These plants offer a sizeable and potentially competitive capacity that could be harnessed for
meeting demand for power. The Tariff Policy requires SERCs to create an enabling
environment that encourages captive power plants to be connected to the grid. Appropriate
commercial arrangements would need to be instituted between licensees and the captive
generators for harnessing of such spare capacity energy from captive power plants in addition
to norms for operating in parallel to grid.
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Thus the provisions of the Electricity Act 2003, the National Electricity Policy and Tariff Policy
have introduced a liberal regime for CPPs, the objective being to promote captive generation
and encourage CPPs to put their surplus power in the grid.
4.0 PARALLEL OPERATION OF CPP WITH GRID
The circumstances under which a captive power plant seeks to operate in parallel with a large
interconnected grid are as follows:
CPPs having surplus capacity over and above their own requirement, connected in
parallel with the grid in order to sell power to the grid or bank such surplus energy, which
is a general phenomenon in seasonal industries.
CPPs having load of such nature that results in large momentary peaks, starting currents
and runs the plant in parallel to avail the support of grid beyond the contract demand.
Process industries with CPP’s runs in parallel in order to avail continuous power supply,
in the event of failure of CPP generating units.
Black start of CPP, where the start up power is required to restart the units.
4.1 PARALLEL OPERATION CHARGES
The issues relating to parallel operation of CPPs and its charges are:
(1) Why grid support charges?
(2) Whether and to what extent CPP can pollute quality of grid power?
(3) Does the CPP require grid support to run its production units without drawing any power
from the grid?
(4) Whether the present parallel operation charge of Rs. 10/ kVA is justifiable?
(5) Does the CPP require grid power in emergency when the Captive power plant is in shut
down?
(6) Does the State require CPP generation to meet their demand-supply gap?
(7) Will the Grid support Charge have any effect on industrialization of the state?
These issues needs to be deliberated. The nature of parallel operation charges should not be
confused with the demand charges. Demand charges are charged for the demand of electricity
supply contracted and can also be charged from those CPPs who have not opted for parallel
operation. Therefore, those wanting to operate in parallel must necessarily be distinguished
from those who have not opted for the same. As mentioned earlier, CPPs opt for parallel
operation to seek safety, security and comfort of a larger system and the system has to make
9

investment to provide for such security and safety. The moment a CPP opts for parallel
operation, it lays its claim on a portion of infrastructure of generation, transmission and
distribution created by the utility / licensee. Enumeration of the techno-financial correlation for
the services requires detailed system study.
Hence, Chhattisgarh State Electricity Regulatory Commission (CSERC) assigned this
responsibility to M/s Electrical Research & Development Association (ERDA) to study various
system data and system parameters of representative selected CPPs. ERDA has measured
various system parameters like harmonics, unbalance current, plant load factor, load cycle, fault
level calculations etc. by measurement on selected CPPs and relevant substation.
ERDA has suggested working out the parallel operation charges on sound technical basis
taking into consideration advantages and disadvantages to both CPPs & CSEB.
4.2 Grid Support Charges - Status across the Country
Parallel operation charges in some of the states are levied in the name of grid support charge or
stand-bye charge. These are as follows:
Sr.No.
Commission/
utility
5.0 TECHNICAL STUDY
Rates of Parallel operation charges
1 MPERC 25% of transmission charges on arc induction furnaces, rolling mills
to compensate for the ill effects of such loads
2 RERC Parallel operation charges for capacity not dedicated to DISCOMs
@ 5% of transmission charges.
3 PSERC Parallel Operation Charges at the rate of Rs. 200 per kVA per
month on 5% of the capacity of the captive plant capacity.
4 J&K Rs.16/- per kVA per month on the installed capacity of the CPP
5 CSERC Rs. 10/- per kVA on installed capacity of the CPP
6 TNERC The parallel operation charges are 37% of the demand charges
7 UPERC The PoC charges are same as normal HT tariff fixed charges
ERDA has conducted several measurements on ten of the selected captive power plants
(CPPs) in the state to carry out the techno-econo1mic study. ERDA has carried out the study
as per the following scope of work:
5.1 SCOPE OF WORK
(a) Critical analysis of various data and technical details of CSEB’s generation, distribution and
transmission system and of captive power plants in the State.
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(b) The studies mentioned below to be carried out for 10 sample industries, which draw power
from their CPPs. These were so selected so that they represented all types of CPPs:
Sr.No.
Type of industry
Table- IV
Total No. of
industrial unit
Units to be selected for
study
1. Sponge iron 13 2
2. Arc furnace 4 2
3. Aluminum 1 1
4. Ferro-alloy 5 2
5. Rolling mill 1 1
6. Cement 8 2
For the above industries the following studies were to be done:
(i)
(ii)
Study of load cycle of each type of industry.
Study of generating plant load factor for each type of industry
(a)
(b)
While running in isolation.
Running in parallel with licensee’s supply system
(iii)
(iv)
(v)
(vi)
Study of electrical parameters i.e. change in voltage, frequency, power factor,
MVAr, MW loading for industries (having high intensity fluctuating loads) during
incidence of high intensity peaking load.
Study of harmonics produced by industries having fluctuating and unbalanced
loads.
Study of voltage unbalance and negative phase sequence current and voltage
during operation for each type of industries.
Study for requirement of installation of SVC and harmonics filters.
(c) Enumeration and quantification of benefits to CPPs and CSEB separately due to parallel
operation of CPPs with the grid.
(d) Assessment of benefits and services extended to CPP in financial terms for suggesting levy
of parallel operation / grid support charges payable by CPPs.
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5.2 METHODOLOGY FOR TECHNICAL STUDY
Following captive power plants were selected jointly by CSERC and CSEB for detailed study:
Sr.
No.
Name of selected
captive power plants
Table-V
Total Installed
Capacity in MW
Total Installed
Capacity in MVA
Contract demand
with CSEB in MVA
1 P 810
993.1
120
2 Q 325.7
364.6
1
3 R 20
25.0
1.8
4 S 55
68.8
10
5 T 21.5
26.9
8
6 U 14.3
16.0
2.75
7 V 15
19.6
6
8 W 43
57.8
3.125
9 X NA
0.0
16
10 Y 15
18.7
2
TOTAL 1319.5 1590.5 170.68
It was jointly decided to carry out measurement at the point of common coupling with
(a) Grid interconnection( parallel operating condition)
(b) Without grid interconnection (Islanding operating condition)
But ERDA was not granted permission for measurements in islanding mode as the CPPs
expressed their inability to run in isolated mode. Hence, ERDA has carried out the
measurements at following two locations as jointly decided -
(1) Point of common coupling, and
(2) Generator output terminals.
ERDA has carried out measurements for 24 hours at above mentioned locations for the
selected CPPs. Technical report of the results of the measurements has been submitted to the
Commission. The highlights of the study results observed from measurements and power
system studies are given in clause 5.3.
ERDA has also collected required data for power system studies from the transmission division
of CSEB for carrying out the load flow and fault level calculation.
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5.3 HIGHLIGHTS OF MEASURED POWER QUALITY PARAMETERS
5.3.1 HARMONICS
Fig.1 Current THD measured at point of common coupling
Fig.2 Current THD measured at generator output
Fig. 1 and Fig. 2 show the variation in the current THD measured at point of common coupling
(132 kV) and at generator output terminal respectively for a typical captive power plant. It is found
that current THD at point of common coupling is much higher than the current THD at generator
output terminal. The current THD limit at point of common coupling is 6 % which is based on fault
level at point of common coupling. Higher current THD at PCC clearly indicates support drawn by
CPP from grid.
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5.3.2 NEGATIVE PHASE SEQUENCE CURRENT
Fig.3 Negative phase sequence current at point of common coupling
Fig.4 Negative phase sequence current at generator output
Fig. 3 and Fig. 4 show the variation in the negative phase sequence current measured at point
of common coupling (132 kV) and at generator output terminal respectively for a typical captive
power plant. It is found that the magnitude of negative phase sequence current at the point of
common coupling is much higher than that at generator output terminal. Higher negative phase
sequence current at PCC clearly indicates the support drawn by CPP from grid.
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5.3.3 POWER FACTOR
Fig.5 Power Factor at point of common coupling
Fig.6 Power Factor at generator output
Fig. 5 and Fig. 6 show the variation in the power factor measured at the point of common
coupling (132 kV) and at generator output terminal respectively for a typical captive power plant.
It is found that the magnitude of power factor at the point of common coupling is much less than
that at generator output terminal. The variation in the power factor is more at point of common
coupling. This is due to the fact that the variation in load, load power factor & reactive power are
all absorbed to a large extent by the grid than the CPP which proves that the support is drawn
by CPP from the grid.
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5.3.4 ACTIVE POWER
Fig.7 Active Power at point of common coupling
Fig.8 Active Power at generator output
Fig. 7 and Fig. 8 show the variation in the Active Power measured at the point of common
coupling (132 kV) and at generator output terminal respectively for a typical captive power plant.
It is found that variation in the active power at point of common coupling is higher than that at
generator output terminal. The CPP generator operates at constant power mode operation and
grid takes care for the variation in the demand required by CPP loads thereby providing the
support required by CPP.
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5.3.5 REACTIVE POWER
Fig.9 Reactive Power at point of common coupling
Fig.10 Reactive Power at generator output
Fig. 9 and Fig. 10 show the variation in the Reactive Power measured at the point of common
coupling (132 kV) and at generator output terminal respectively for a typical captive power plant.
It is found that variation in the reactive power at the point of common coupling is higher than that
at generator output terminal. The CPP generator operates at constant power mode operation
and grid takes care for the variation in the demand of reactive power required by CPP loads
thereby providing the support required by CPP.

5.3.6 APPARENT POWER IMPORT AND EXPORT
Fig.11 Apparent Power Import and Export
From the fig. 11, it is clear that captive power plant can supply the excess power to the utility
grid only after meeting the requirement for in-house loads.
Above are the results of power quality parameters measured for one typical captive power plant.
In the similar way power quality parameters have been measured for 10 nos. of sample captive
power plants. From these graphical representations, it is clear that Grid provides support
through parallel operation in terms of:
Absorbing harmonics
Absorbing negative phase sequences current
Improvement in power factor
Meeting fluctuations in load
Providing reactive power support, etc.
5.4 FAULT LEVEL AT POINT OF COMMON COUPLING
In addition to the measurements of power quality parameters, the fault level at point of common
coupling have been obtained through system study analysis as total fault level and quantum of
fault level contributed by CPP.
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Table-VI
Sr. No. Name of CPP Fault level at point of Fault level contributed
common coupling (MVA) by CPP (MVA)
1 P 9609.60 2540.20
2 Q 3446.50 1095.20
3 R 507.50 86.80
4 S 1393.50 167.90
5 T 2956.30 71.50
6 U 109.00 20.30
7 V 1155.60 59.70
8 W 1230.10 156.70
9 X 653.30
10 Y 287.60 55.90
From the above data, it is clear that the fault level at the point of common coupling is very high
compared to the fault level contributed by the individual captive power plant.
5.5 ADVANTANGE OF PARALLEL OPERATION TO CPP
From the above technical studies, we can summarize the advantages of parallel operation to
CPPs as below:
(1) The fluctuations in the load is absorbed by the utility in parallel operation mode (fig. 7).
This will reduce the stresses on the consumer's equipments. The bulk consumer can
operate his generating units at constant power mode irrespective of load cycle (fig.8).
(2) Fluctuating loads of the industries connected in parallel with the grid inject the harmonics
into the grid. The current harmonics absorbed by utility grid is much more than that by
CPP generator (fig. 1&2). These harmonics flowing in the system are harmful to the
equipments and are also responsible for polluting the power quality of the system
(3) Negative phase sequence current is generated by unbalance loads in the system. The
magnitude of negative phase sequence current is much higher at the point of common
coupling than at generator output terminal (fig. 3&4). This unbalance current normally
creates problem of overheating of the generators and other equipments of CPP, if not
running in parallel with grid. When they are connected to the grid the negative phase
sequence current will flow in to the grid.
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(4) Captive power plants will have higher fault level support when they are connected in
parallel with the grid supply (Table-VI). Because of the higher fault level, the voltage
drop will be less in the system.
(5) Additional revenues can be generated by the CPPs by sale of surplus power to utility
grid (fig.11) which could attract new investments in CPP.
In addition to above, CPPs enjoy the following advantages also:
(1) In case of fault in CPP generating units or other equipment, bulk consumers can draw
the required power from the grid and can save their production loss.
(2) The shock and disturbances in the generating units and also of industries are absorbed
by the grid system which is very large (infinite bus).
(3) The grid provides stability to the plant to start heavy loads like HT motors.
(4) The variation in the voltage and frequency at the time of starting large motors and heavy
loads is minimized in the industry, as the grid supply acts as an infinite bus.
(5) The impact created by sudden load throw off and consequent tripping of CPP generator
on over speeding is avoided with the grid taking care of the impact.
(6) The transient surges reduce the life of equipment of CPP. In some cases the equipment
fails if transient is beyond limit. If the system is connected to the grid, however, the grid
absorbs the transient. Hence grid enhances the life of CPP equipments.
In short, for smooth operation of industry and generator, CPPs gain is manifold in case there is
grid support from the utility.
5.6 ADVANTAGE OF PARALLEL OPERATION TO UTILITY
(1) Power generated by captive power plants (bulk consumers) partially bridges the gap
between demand and supply because there is a gap between generation and demand in
most of the States in the country.
(2) Fault level of both the grid and CPP improves due to parallel operation of captive power
plant connected with the grid. However, the fault level contribution by CPP units is less
as compared to the contribution of grid.
(3) CPP takes power from the grid at very low load factor with respect to its contract
demand, which results in high diversity. The demand charge is recovered from the
consumers irrespective of diversity and also results in lower per MVA investment cost.
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Also due to higher diversity, in addition to recovery of full demand charges from CPPs,
the utility will have surplus stand by power which can be used as spinning reserve.
(4) Addition of generation capacity at centralized station may not be the most economical
solution to the power sector utilities, but to manage generation capacities belonging to
other generators like CPPs at different location may be an optimum solution (lesser T &
D loss).
(5) The service lines are lightly loaded due less power flow to the CPPs. The capacity of
service line is very much higher than the contract demand. Hence, it reduces the line
losses to a small extent. Utility gets over compensated by such lightly loaded lines.
5.7 DISADVANTAGE OF PARALLEL OPERATION TO CPP
(1) CPP holder is required to pay for minimum contract demand even if connection is
floating to take care of emergency.
(2) CPP holder is required to install higher rating switchgear depending on grid fault level.
5.8 DISADVANTAGE OF PARALLEL OPERATION TO UTILITY
(1) Load fluctuations of consumers are passed on to utility’s system thereby the efficiency of
utility’s system may be affected, which will have impact on utility’s other consumers.
(2) In case of an ungrounded (or grounded through resistance) system supply, fault on
interconnecting line (consumer’s side) results into interruption of system. For single
phase to ground fault which are 80 to 85% of the short circuit fault level, the grounding of
the system is achieved through the neutral or step down transformer of the utility, when
the generator runs in parallel with the utility’s grid. This supply is likely to cause damage
to the terminal equipments at utility’s sub-stations and line insulators, as voltage on the
other two healthy phases rise beyond the limit, under such conditions.
(3) Utility has to sustain the impact of highly fluctuating peak loads like Arc Furnace, Rolling
Mill etc. for which utility does not get any return on the capital investment to create
system reserve.
(4) The variation in reactive power requirement increases the system losses and lowering of
the voltage profile. Utility is incurring the cost of such effects.
(5) The lower voltage profile and fluctuations affect the service to the neighboring
consumers due to deteriorations in quality of supply thus resulting in revenue loss to the
utility.
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5.9 SUMMARY OF STUDY
It can be summarized from the above study reports that
The parallel operation is a service which extends support to the system of CPP and at
the same time it may cause voltage dip, harmonics injection, additional reactive power
requirement etc.
The parallel operation charges are levied for the grid support provided to the generator
for its smooth and efficient operation, for bearing all the harmful effects of their load
fluctuations and for enhancing and stabilizing captive generator’s PLF, utility has a
logical claim to be suitably compensated. The charges for parallel operation have to be
evaluated on the basis of the data and scientific inputs relating to parallel operations.
6.0 METHODOLOGIES FOR EVALUATION OF PARALLEL OPERATION CHARGES
Based on the technical results, following methodologies will be the most appropriate to
determine Parallel Operation Charges:
6.1 BASE MVA SUPPORT:
Fault level in electrical system is analogous with the shock absorbing capacity of mechanical
system. The fault level in MVA corresponds to the fault current flowing through the power
system in the event of a short circuit in the system. Short circuit is a very important concept in
power system. The voltage fluctuation caused by fluctuating loads are strongly dependant on
the impedance of the network at the point of common coupling (PCC), which is classically
related to the concept of short circuit level.
We know that grid is having higher fault MVA capacity. The higher fault level is the significance
of better voltage profile. The fault level in the network depends on the generator parameters,
voltage level, etc. Based on the data made available from CPP and CSEB, the fault level has
been calculated at all the buses of CSEB network including the point of common coupling (PCC)
of CPPs. Total fault level at PCC and fault level contributed by CPP units have been calculated
separately. In this method, base MVA support on the basis of fault level has been calculated.
This method measures the support available at PCC bus in terms of fault level / Base MVA.
Normally the consumers connected at higher voltage level will have higher Base MVA support.
The voltage profile depends on short circuit level of the bus as per equation (1). When captive
power plant units operate in parallel with the grid, they get support from the grid and to an extent
they also provide support to the grid. But they provide lesser Base MVA support in comparison
to the support they receive, in addition to the other ancillary services which are enjoyed by CPP.
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For example,
Capacity of captive power plant unit
= 30 MVA
Normal impedance of generators = 10%.
Capacity of captive power plant unit
The fault level at the generator terminal = ------------------------------------------------
Normal impedance of generator
= 30MVA / 0.1 = 300 MVA.
Grid fault level
= 3000 MVA (Say), the grid has very high fault level.
When the CPP is connected with the grid and runs in parallel,
Total fault level of the system
= 3000 MVA + 300 MVA = 3300 MVA
Thus by running the CPP in parallel with grid, the fault level for the CPP increases drastically.
Is
Grid supply
Fault level
contribution by grid =
3000 MVA
Fault level
contribution by
CPP unit = 300
Zs = Rs + jXs
I L
Fault level at point of
common coupling
(PCC) = 3300 MVA
30 MVA
Z = 10%
CPP
Fig. 12
S L = P L + jQ L
Load
System Load line
V
Gradient = -E/Ssc
E
∆V
0
Fig. 13
Q L
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Above figure depicts variation in the voltage across the load with respect to drawal of reactive
power by the load. X- axis shows reactive power Q L and Y- axis is the voltage across the load.
Voltage gradient for the circuit shown in fig. 12 can be given as
E ∆V
----- = ------
Ssc Q L
where, E = Rated voltage
Q L = Reactive power drawn
∆V = Drop in voltage
Ssc = Short circuit apparent power
From the above formula and fig. 13, voltage across the load can be given as,
V ≈ E ≈ E { 1 - Q L } -------------- (1)
1 + Q L /Ssc Ssc
From the above formula, it is clear that higher the short circuit apparent power or fault level,
higher will be the terminal voltage or better voltage profile.
The short circuit level at the point of common coupling has been calculated for all the selected
10 nos. of CPPs. ERDA has also calculated the short circuit level contributed by CPPs. This
method measures the Base MVA support given to CPPs by grid and support taken by utility
from CPP. This method is most suitable for both utility as well as CPPs. The parallel operation
charges have been calculated as per following steps:
(1) Base MVA (A) = fault level at PCC x transient reactance
Where, fault level at PCC is equal to the difference between the fault level in MVA with
grid interconnection and fault level contributed by CPP. This is the support available at
PCC.
(2) CPP is supplying surplus power to the utility grid and for this export of power; CPPs are
required to regulate their system. Hence, the power export to grid should be given due
weightage while arriving at PoC. The bulk consumers with CPPs pay demand charges
on the contract demand. The contract demand should also be given due weightage.
MVA support required by CPP from grid is equal to the installed capacity (B) of the CPP.
(3) It may happen that support available at the point of common coupling is higher than what
CPP needs. Hence we should consider minimum of support available and support
required by CPP(C).
C = (A) or (B), whichever is minimum
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(4) As per the tariff order passed by the Commission for the year 2007-08, the transmission
related fixed cost is Rs. 185.61 crores per year. Any system connected with the utility
grid takes support from the grid through transmission system. Hence, the bulk
consumers with grid for interconnecting the plant should pay the transmission related
fixed charges on minimum support at the point of common coupling.
(5) The transmission related fixed charges per kVA per month can be evaluated considering
the total generation capacity connected to the grid of CSEB.
Generation in Chhattisgarh is,
Chhattisgarh State Electricity Board = 1923.85 MW
Captive Power Plants = 2253.69 MW
Biomass generators = 131.40 MW
IPPs = 335.00 MW
Share from NTPC = 450.00 MW
Total generation in Chhattisgarh = 5093.94 MW
The transmission related fixed charges in Rs. per kVA per month can be given as,
(Total transmission related fixed cost in crores x 10 7 ) ÷ (12 x 1000 x [Generation capacity
connected to CSEB Grid ]
= (185.61 x 10 7 ) ÷ (12 x 1000 x [(5093.94) / 0.9 ]
= Rs.27.32 per kVA per month
Therefore, the total support provided by utility to CPP in financial terms,
D = Transmission related fixed charges per kVA per month x minimum support required
“C” x 1000
(6) Now, the Base MVA support provided by CPP to utility can be given as,
E =(Installed capacity of CPP X Fault level contributed by CPP) / (Fault level in MVA at
PCC)
Therefore the Base MVA support provided by CPP to grid in financial terms is,
F = Transmission related fixed charges per kVA per month x Base MVA support
provided by CPP “E” x 1000
(7) Hence, net grid support charges per month to be paid to utility by CPP,
G = Base MVA support provided by utility in financial terms – Base MVA support
provided by CPP in financial terms
i.e., G = D – F
(8) Also, the no load loss of power transformer is always present irrespective of quantum of
load, installed capacity, CD, export etc. The average cost of no load loss works out to
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Rs. 0.74 / KVA / Month. This is directly added and is to be paid by the CPP. (Refer
section 6.4).
(9) Rate of Parallel Operation Charge (POC) in Rs. per kVA per Month = (Charges for
net support received by CPP in Rs. / Installed capacity in kVA) + No load charges
per kVA
This rate can be worked out as average of the 10 sample CPPs included in the study.
(10) Total PoC for individual CPP = Rate of Parallel Operation Charge (POC) in Rs.per kVA
per Month X (Installed capacity of CPP in kVA - Contracted Demand taken by CPP in
kVA – Contracted export power by CPP to the utility in kVA). Due weightage to the
contract demand of the CPP and the contracted power for sale by the CPP is
considered.
6.2 POWER QUALITY PARAMETERS:
In this method, the parallel operation charges have been worked out on the basis of the
quantum of distortion/ power quality parameters like current THD and negative phase sequence
current, etc. because there is cost on account of increased losses in the network and reduced
equipment life due to higher stresses.
The levy of parallel operation charge is considered as either 10% or 25 % of demand charges
depending on the type and quantum of distortion, the harmonic pollution and negative phase
sequence current imposed (10% for mild stress causing loads and 25% for heavy stress
causing loads).
The generation and transmission related fixed charges per kVA per month can be evaluated as
below:
(Total generation related fixed cost in crores x 10 7 + Total transmission related fixed cost in
crores x 10 7 ) ÷ (12 x 1000 x [Generation capacity connected with CSEB Grid – Installed CPP
capacity connected with CSEB Grid]
= (508.01 x 10 7 + 185.61 x 10 7 ) ÷ {12 x 1000 x (5093.94 - 2253.69) / 0.9}
= Rs.183.16 per kVA per month
Therefore,
Rate of POC (per kVA per Month) = [ (Fixed charges x Distortion factor) + No load loss
charges]
This charge would vary from CPP to CPP based on the installed capacity and distortion factor of
the respective CPP. Hence to have a uniform rate for all the CPPs, the average rate for ten
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sample CPPs can be considered. Due weightage can be given to the contracted demand of the
individual CPP.
Hence, Total POC to be paid by individual CPP = Rate of POC X (Installed capacity of CPP in
kVA - Contracted Demand taken by CPP in kVA)
6.3 SIZE OF INTERCONNECTING TRANSFORMER OF CPP
Since the transformer gets overloaded for considerable amount of time during motor starting, it
is desirable to have the grid transformer of higher capacity. Hence CPPs are providing the
interconnecting transformers of higher capacity even though the contract demand with utility is
less.
Parallel operation charges can be calculated based on the capacity of interconnecting
transformers provided.
In this method the parallel operation charges can be calculated by following steps:
(1) A = Installed capacity in MVA
(2) B = Size of interconnecting transformers
(3) Support required by CPP can be given as,
C = (A) or (B), whichever is minimum.
(4) D = transmission related fixed cost.
Rate of PoC (per kVA per Month) = {( C x D ) / Installed capacity } + No load loss charges
Average of ten samples industries can be taken as the rate of POC.
Total, parallel operation charges per month to be given by the individual CPP can be
enumerated after giving due weightage for export power and contract demand.
Thus total POC to be paid by individual CPP per Month = Rate of PoC X (Installed Capacity –
Contract Demand – Contracted Power Export to grid)
6.4 COST OF NO LOAD LOSS:
In addition to above, grid bears constantly no load loss on transformers specially installed for
those CPPs which have contracted lesser load, energy for this is not fully accounted for in
billing.
If bulk consumers with captive power plants are operating in parallel with the grid, utility may
have to provide power transformer of higher capacity when the captive power plant may be
having very small contract demand with utility. This results in much higher transformation
capacity at every level than the contracted demand with the utility. With such system the utility
bears extra no load losses continuously. The cost of this no load loss is evaluated as below:
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Total capacity of the power transformers installed by CSEB = 6795.5 MVA.
Total no load loss of all the power transformers = 1681920 Units per Month
Cost of no load loss per Month = Rs. 2.98X 1681920 = Rs.5012121.60
(Average cost of supply for the year 2007-08 is Rs. 2.98 per unit)
No load loss per kVA per Month = Rs. 0.74
7.0 RECOMMENDATION:
Considering the various advantages and implementation aspects, ERDA has worked out the
parallel operation charges by following three methods:
a. BASE MVA SUPPORT
b. POWER QUALITY PARAMETERS
c. INTERCONNECTING TRANSFORMERS OF THE CPP
Parallel operation charges based on "Base MVA" method as compared to other two methods
has been preferred due to following reasons:
(1) This method takes into consideration the Base MVA support taken from the grid as well
as Base MVA support given to the grid. This method considers the advantages of
parallel operation to both the captive power plants and to the utility. Thus, this method is
technically justified to utility as well as CPP.
(2) This method is based on the fault level support available at point of common coupling.
Basically the fault level has the significance of service provided by utility to captive
power plants in terms of voltage regulation, stability and absorbing the load variation
which depends on the "fault level of grid and fault level contributed by CPP generator"
etc. Most of the ancillary services are thus provided by utility to CPP through better fault
level.
(3) Due to higher fault level at the point of common coupling, the flow of pollutants like
harmonics, negative phase sequence current etc are absorbed by the grid due to low
impedance path of the grid compared to that of CPP generators.
(4) As the fault level is higher, it results in better voltage regulation.
(5) Stability of a system is defined as P = E x V Sin δ/X . Lower the X-impedance, higher will
be the stability.
(6) Fault level contribution of the grid and CPP, both are given due weightage while arriving
at PoC.
The “Power Quality” method assumes percent distortion based on type of load as either 10%
or 25%. Industrial load can have distortion varying from CPP to CPP, both in terms of quality
28

and quantity. Power quality parameters method considers the lumpsum charges as 10% and
25% depending on the quantum of pollution. Variation from CPP to CPP will be high in this
method. Also quantum of pollution may vary from time to time depending on the operation of
loads. This method does not take into account the advantage gained by the grid due to parallel
operation.
In case of interconnecting transformer method, uniform applicability of levying parallel
operation charges on all the CPPs connected to the grid can not be enumerated as the highest
capacity motor of individual CPPs and its impact in terms of voltage dip, special torque
requirement, frequency dip will be altogether different and also it will not be judiciously
applicable on all CPP consumers. Also like power quality method this method does not take into
account the advantage gained by Grid due to parallel operation unlike Base MVA method.
In view of all above, the ERDA has recommended the evaluation of Parallel Operation Charges
by Base MVA method as this method is technically justified and is most suitable for both utility
as well as CPPs.
8.0 CONCLUSION:
The study has been carried out as per the scope of work and Commission’s observations on the
technical study are as below:
(1) As permission for isolation of CPP from the grid was not given by the CPP holders
because it was not possible for CPPs to run their plant in isolation, it itself establishes
that CPP cannot run independently. In view of the above, power quality parameters were
extensively measured by ERDA teams and analyzed on generator terminals and the
points of common coupling.
(2) The voltage THD is within the permissible limit (CBIP 251).
(3) The current THD is high compared to permissible limit (IEEE519).
(4) Percent negative phase sequence current at point of common coupling is much higher
than the percent negative phase sequence current at generator output terminal.
(5) CPP generator is able to operate at constant power mode operation (with very good
PLF), when running in parallel with grid.
(6) Utility's grid takes care for the variation in the load demand of the CPP holder’s industry.
(7) Contract demand chosen by the CPP holder is very less compared to the installed load
in the industry.
From the observations of harmonic generation, negative phase sequence currents, absorbing
reactive power from the grid etc., it is very clear that such loads are harmful for smooth and
efficient operation without the help of utility's grid because the grid is an infinite bus and absorbs
29

these pollutants. It is also observed that these consumers maintain very low contract demand
with the utility as compared to the consumers without CPP. This is also one of the important
reasons why grid support charge/POC is necessary for bulk consumers with CPP. Parallel
operation charges on CD contracted from the utility and power export to the grid system of the
utility may be exempted from the total parallel operation charges on the installed capacity of the
CPP, so as to encourage CPPs to be able to export maximum possible power to the grid. So it
can be concluded that CPP must contribute some reasonable charge in the form of POC.
In view of the above, the Commission is of the view that as recommended by the ERDA,
evaluation of Parallel Operation Charges by Base MVA method seems to be technically sound
and justified and this method is most suitable for both utility as well as CPPs.
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