ABC of ABT - MP Power generating company limited

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“OPEN ACCESS”, “WHEELING”AND “ENERGY BANKING”JAvailability Tariff is primarily meant for long-term supply from generatingstations on a contractual basis and is not directly applicable for transactionsunder “open access” and “wheeling” provisions in the Electricity Act, 2003.However, its third component (UI) has a great relevance. “Open access” and“wheeling” generally involve two parties, one supplying a certain quantum ofpower to the other through the regional / State grid. Any such transactioninvolves a number of parties, and disputes could arise in scheduling, energyaccounting and commercial settlement, unless an appropriate framework is inplace.Suppose party - A has contracted to supply 10 MW round the clock to party -B (in the same State) at a certain price (which need not be disclosed toothers), through the State grid. Suppose the transmission loss apportioned tothis transaction has been determined as 0.5 MW. Party - B would then beentitled to receive 9.5 MW, provided party - A is actually injecting 10.0 MWinto the State grid at its end. In actual operation, both injection by A anddrawal by B may fluctuate over the day and the differential may vary from 0.5MW. Who would pick up the commercial liability arising on account of thesedeviations? Since A and B are physically apart and operationally independent,a pragmatic solution for commercial treatment in such a case would be tometer the actual injection of A and actual drawal of B in 15-minute timeblocks, and separately compute their deviations from their respectiveschedules (10.0 MW / 2.5 MWh for A and 9.5 MW / 2.375 MWh for B). Thefrequency-dependent UI rate can then be applied for the deviations, A gettingpaid from (paying into) the State UI pool account for over (under) - injection,and B getting paid from (paying into) the State UI pool account for under(over) - drawal. The above would supplement the contractual payment byparty - B to party - A for 10.0 MW of power supply, and applicable wheelingcharges to the State grid owner, to complete the settlement. Installation of thismechanism is absolutely a must for dispute - free and judicious34
operationalisation of “open access” and “wheeling” provisions. Besides, UIhas another application.It would have been realized from chapter - D that UI provides an alternative tobilateral trading of power. An entity with a surplus can sell it either by enteringinto a contract with another entity, or can supply (sell) it to the pool (theregional grid) as UI. Similarly, an entity with a deficit, or an entity wishing toreplace its own costly generation with cheaper energy, can buy itsrequirement either by entering into a contract with another entity, or simplydraw (buy) it from the pool (the regional grid) as UI.A contracted sale or purchase necessarily involves (i) identifying acounterpart, (ii) agreeing on power quantum, duration, price and other terms &conditions, (iii) ascertaining the adequacy of transmission system, (iv)payment of applicable transmission / wheeling charges and absorption ofwheeling losses, (v) day-ahead scheduling through SLDC / RLDC concerned,(vii) payment security for transaction, etc. An agreement also means acommitment by both the parties, to sell / buy as per agreed terms. In case theseller fails to schedule the supply of the agreed quantum of power (due to ashort-fall in its own power availability, etc), or the buyer fails to schedule thedrawal of the agreed quantum of power (due to fall in its requirement, etc), itwould mean a contractual default. The agreement between the two partiesmust specify how such defaults are to be handled. Another issue would be asto how a party (in case it is a regulated utility) selected its counterpart andagreed on the price, and whether these have been done judiciously. Requiredchecks and balances may even delay the finalization of agreement, andtrading opportunities may be missed.All of the above-listed complications get avoided if one goes through the UIroute, but it has the following implications: (i) there is no certainty about price(ii) RLDC/SLDC may ask the supply/drawal to be curtailed in case of atransmission constraint. The major advantage, however, is the flexibility: thereis no commitment about the quantum. Also, no question can be raised on theprice from audit angle, since it is the prevailing pool price or system marginal35
Page 1 and 2: ABC of ABTA PRIMER ONAVAILABILITY T
Page 3 and 4: INTRODUCTIONAWhat is Availability T
Page 5: How does the mechanism workThe proc
Page 8 and 9: THE DAILY SCHEDULINGPROCESSBSuppose
Page 10 and 11: DEVIATIONS FROMSCHEDULECAs mentione
Page 12 and 13: at a much higher UI rate. On the ot
Page 14 and 15: iii)Instead of selling the off-peak
Page 16 and 17: U.I. RATE vs. SYSTEMMARGINAL COSTEU
Page 18 and 19: As a consequence of this, the grid
Page 20 and 21: TRADING OF STATES’SURPLUS GENERAT
Page 22 and 23: EXPECTATIONS FROMCENTRAL STATIONSGI
Page 24 and 25: 100CBAEFGH75DUNIT LOAD (%)50J25049.
Page 26 and 27: shall be as per instructions of the
Page 28 and 29: increase in consumer load or reduct
Page 30 and 31: consumers in the State is however t
Page 32 and 33: mostly located at load-centres and
Page 36: cost. The point being made here is

ABC of ABT - MP Power generating company limited

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