ABC of ABT - MP Power generating company limited

TRADING OF STATES’SURPLUS GENERATIONFA simple trading opportunity has been described in chapter - D, for thepurpose of explaining the working of the available mechanism. A surplusavailability of Central station entitlement for State - C has been assumedtherein. Most of the large Central stations are, however, pit-head or nuclearplants, with comparatively low variable costs / energy charge rates. Theinstances of such low variable cost power being determined as surplus wouldoccur only when the off-peak hour consumer demand in the State can be andis met from other sources having a comparable or still lower variable cost.State - C would generally have its own load-centre plants, with a variable costhigher than that of the Central station under consideration. These load-centreplants would naturally be scheduled to back down during off-peak hours,before the possibility or requirement of backing down the Central stationarises.In other words, the more common situation would be that the States’ owngenerating stations are backed down during off-peak hours. It would thereforebe the energy from off-peak surplus of such stations that would be morecommonly available daily for being offered to another State, either for cateringto consumer demand which the latter cannot meet on its own, or to replacecostlier energy. The State - C (which has such off-peak surplus) should firsttry to find out if there are any buyers available for its own surplus generation.Obviously, such buyers would have to pay a price higher than the variablecost of load-centre stations concerned. If nobody is ready to pay such a pricefor this off-peak energy, the concerned load-centre stations will have to bebacked down. If State - C has a surplus even after the permissible backingdown / shutting down of all such stations, the circumstances described inchapter - D would arise, and options as explained therein shall have to beexercised.20