ABC of ABT - MP Power generating company limited

mostly located at load-centres and have a higher variable cost as comparedto Central stations, which are mostly pit-head. In the earlier regime (pre-ABT),in case an SEB reduced its drawal from Central stations, its payment liabilitycame down at the composite rate (fixed + variable cost) of those stations. TheSEBs, therefore, made an uneven comparison: variable cost of their ownstations versus composite cost of Central stations, and did not back downtheir own stations if former was lower, even if it was higher than the variablecost of Central stations. In effect, the merit order was being distorted andgeneration was not being optimized. The position has now radically changed.The SEBs compare only the variable costs, and ask intra-State stations toback down during off-peak hours. These stations, however, are reluctant toback down (due to continuation of single-part tariff for them, whichdiscourages such backing down) and SLDCs face problems. The remedy liesin implementation of Availability Tariff for all intra-State stations as well, andonly then would the States be able to achieve maximum optimization in theirown operation.Further, extension of the UI mechanism to the intra-State stations would getthem to respond to grid conditions on their own in the most desirable way.The States would be directly benefiting: higher power availability during peakloadhours, reduced load shedding, and a possibility of earning UI.All hydro-electric stations, to the extent possible with storage / pondagevolume available, should be scheduled to generate during hours of peaksystem demand and to shut off / back down during off-peak hours. Duringactual operation, they should back down any time the grid frequency tends torise and remain above a threshold even if it means deviating from theschedule advised by SLDC. Similarly, when frequency tends to be below thethreshold, the generation should be increased (even if not scheduled duringthose hours of the day). Further, bringing in of hydro generation should beheld up/deferred if frequency is rising, and backing down should be held updeferred if frequency is falling.32