Availability-based tariff

Availability Based Tariff (ABT) is a frequency based pricing mechanism applicable in India for unscheduled
electric power transactions. The ABT falls under electricity market mechanisms to charge and regulate power to
achieve short term and long term network stability as well as incentives and dis-incentives to grid participants
against deviations in committed supplies as the case may be.[1]

Introduction [edit]
ABT Mechanism in Electricity sector in India is adopted since the year 2000 and in a few other countries for pricing
bulk power across various stakeholders. ABT concerns itself with the tariff structure for bulk power and is aimed at
bringing about more responsibility and accountability in power generation and consumption through a scheme of
incentives and disincentives. As per the notification, ABT was initially made applicable to only central generating
stations having more than one SEB/State/Union Territory as its beneficiary. Through this scheme, the Central
Electricity Regulatory Commission (CERC) looks forward to improve the quality of power and curtail the following
disruptive trends in power sector:

 Unacceptably rapid and high frequency deviations (from 50 Hz) causing damage and disruption to
large scale industrial consumers

 Frequent grid disturbances resulting in generators tripping, power outages and power grid
disintegration.
The ABT scheme has now been expanded to cover the Intrastate systems as well. [2] The power generation or grid
capacity has increased substantially in last fifteen years particularly after the Electricity Act 2003 by introduction of
competition and unbundling of vertically integrated utilities (SEBs) into separate entities in charge ofelectricity
generation, electricity transmission, and electricity distribution. Deregulation and competition has facilitated
participation of private sector on large scale in electricity generation, transmission and distribution. Of late, Indian
electricity sector is transforming from perennial deficit to surplus electricity availability.[3] The volume of purchased
electricity that could not be transmitted to the buyers due to transmission lines congestion is only 0.3% of the total
electricity consumed in the financial year 2013-14. [4] It means that the actual power deficit in India is less than 1%
excluding under priced electricity demand. ABT/DSM mechanism needs improvements to address the requirements
of all stake holders (including final electricity consumers) for encouraging least cost electricity generation / tariff
based on demand verses availability in the grid. [5][6] There is a need of well represented Electric Reliability
Organization to involve all the grid participants for framing guidelines for power system operation and accreditation
which is presently looked after by the CEA

ABT details [edit]

 What is availability?
Availability, for the purpose of the ABT order means the readiness of the generating station to deliver ex-bus output
expressed as a percentage of its ex-bus rated capacity (MCR). Electricity is a commodity whose cost of storing is
more than its production cost. The most economical method for electricity generation, transmission and distribution
is just in time production where the availability and reliability of the entire system shall be very high to meet the
unpredictable electricity demand on minute to minute basis.

 How is availability calculated?

Availability of thermal generating station for any period shall be the percentage ratio of average Sent Out Capability
(SOC) for all the time blocks during that period and the rated MCR / SOC of generating station. The SAIDI (System
Average Interruption Duration Index) is commonly used as a reliability indicator by electric power utilities.

 Is unified electric grid of India, a smart grid?

During the fiscal year 2014-15, 1043 billion KWh of electricity (three times that of National Grid) was supplied and
met 138,215 MW maximum peak load.[7] The total installed generation capacity is 267,637 MW at the end of fiscal
 year 2014–15. Its size is of global scale comparable only with EU grid, NERC grid, China electricity
grid and Russian electricity grid.[8] However, Indian grid lacks the basic features of smart grid for optimum use of its
deployed resources.

 What is the effectiveness criteria of a smart grid?

Generally the top 10% of the unrestricted daily peak load (MW) persists only for 1% (15 minutes) of the total
duration and its energy share (MWHr) is of the order of 0.2% of the daily energy supplied. Instead of generating this
substantial extra power for a short duration, automatic selective load shedding can be implemented on bulk
consumers to eliminate the load spikes without inconvenience to the consumers. [9][10] Alternatively, working captive
power plants start feeding to the grid by giving break to the captive power supply up to a maximum of 30 minutes
duration.
With an installed capacity of proper mix of base load and variable load generation capability (excluding low capacity
utilisation or secondary power or negative loadtype on daily basis such as solar, wind, etc) equivalent to the
unrestricted annual maximum peak load, the most effective and economical smart grid shall be able to cater more
than 99 percentile duration unrestricted load/demand on daily basis with 100% stable operation of the grid. [11] The
purpose of smart grid is to supply required electricity at optimum cost with reliable supply to the final consumers.

Scheduling [edit]
 Each day of 24 hrs starting from 00.00 hours be divided into 96 time blocks of 15 minutes each.

 Each generating station is to make advance declaration of its capacity for generation in terms of
MWh delivery ex-bus for each time block of the next day. In addition, the total ex-bus MWh which can actually be
delivered during the day will also be declared in case of hydro stations. These shall constitute the basis of
generation scheduling.

 While declaring the capability, the generator should ensure that the capability during peak hours is
not less than that during other hours.

 The Scheduling as referred to above should be in accordance with the operating procedures in
force.

 Based on the above declaration, the Regional Load Dispatch Centre(RLDC) shall communicate to
the various beneficiaries their respective shares of the available capability.

 After the beneficiaries give their requisition for power based on the generation schedules, the
RLDC shall prepare the generation schedules and drawal schedules for each time block after taking into account
technical limitations and transmission constraints.

 The schedule of actual generation shall be quantified on ex-bus basis, whereas for beneficiaries,
scheduled drawals shall be quantified at their respective receiving points.

 For calculating the drawal schedule for beneficiaries, the transmission losses shall be apportioned
in proportion to their drawals.

 In case of any forced outage of a unit, or in case of any transmission bottleneck, RLDC will revise
the schedules. The revised schedules will become effective from the 4th time block, counting the time block in
which the revision is advised by the generator, to be the 1st one.

 It is also permissible for the generators and the beneficiaries to revise their schedules during a
day, but any such revisions shall be effective only from the 6th time block reckoned in the manner as already
stated.
 ABT features [edit]
 ABT brings about enhanced grid discipline

 Economically viable power with right pricing

 Promote competition and efficiency

 Encourage use of Merit Order Dispatch / Economic Dispatch in India.

 Addressing grid disturbance issues

 Gaming and avoiding the same

 Requires special meters, remote metering with open protocols and communication mechanisms to
read meters timely

 Software that is comprehensive to do calculations, address regulatory issues and modifications as

per different Regulatory Commission requirements.

 Interface options to various stakeholders in the ABT mechanism on line to enable effective
implementation and benefits to all* Capability of power producers to be able to control their cost of production as
well as flexibility in operations

ABT drawbacks [edit]

An idealized representation of the four kinds of reserve power and the time intervals after an unexpected failure that they are in
use.[12]

 As per DSM / UI procedure, the incentives and penalty to the grid participants are charged based
on the average grid frequency in a time block of 15 minutes duration. [13][14] During a time block, it is normal that
frequency goes above rated 50 Hz frequency and comes down below rated frequency as the number of frequency
excursions above 50 Hz are more than 100 in a day.[15] Thus the average frequency in a time block remains close to
the 50 Hz without giving much benefit in the applicable UI tariff for a Discom who is consuming the surplus power
available in the grid or a generators with valid scheduling who is reducing the generation when frequency is above
50 Hz. Similarly, the generators and Discoms who are not adhering to grid discipline are not penalised with UI tariff
in excess of normal tariff when average grid frequency in a time block is used for fixing UI/DSM charges. Each time
block is further needs to be separated into two parts for application of UI charges. One for the duration the
frequency is more than 50 Hz whose average frequency is considered for fixing UI/ DSM charges to consume the
excess power in the grid or reduce excess power generation. Another for the duration the frequency is less than
 50 Hz whose average frequency is considered for fixing UI/DSM charges to reduce over drawl and encourage
additional power generation.

 Whenever distribution feeders from a substation are switched on after a break down or scheduled
power cut, it should be done only when grid frequency is above 50 Hz such that it does not lead to steep drop in the
frequency . The total numbers of feeders switching on, in a day are substantial at national level to cause load (≥
500 MW) increase on the grid to cause wide fluctuations.

 The incentives and disincentives are prefixed (annually/periodically) by the electricity regulator
(CERC) for the variation in the grid frequency which may not reflect the actual situation temporally and spatially on
day-to-day basis. There is a need to decide the electricity tariff by the grid participants (generators, discoms,
transcos & final consumers) on day-to-day basis for achieving further fine tuning. [5]

 The ABT mechanism aims to maintain grid frequency at 50 Hz but does not permit the grid
participants to decide the optimum frequency within the permitted frequency band (say 49.20 to 50.80 Hz) on day-
to-day basis.[5][16] This is required not to impose additional load shedding/power cuts when frequency is within the
safe variation limits.[14]

 Transmission system operator (TSO) is obliged to provide non-discriminatory transmission access

to electricity generators and consumers in order to promote competition. ABT mechanism does not bring at par all
the grid participants whether in private or central sector or state sector ownership. [17] ABT mechanism does not
encourage to install the generating units at advantageous locations to offer least cost electricity to the final
electricity consumers.[5] ABT mechanism is suitable in an electricity grid suffering from perennial power shortages to
prevent overdrwals but it is not suitable for the grid with surplus electricity generation with non-discriminatory
responsibility.[18] CERC regulation on ancillary services operations, are permitting only inter state power generating
stations to provide these services which are discriminatory by not allowing rest of electricity generators. [19]

 Every state is conducting independently load management to avoid overdrawal from other states
by using mix of generation sources (ex: hydro power or peaking power plants) to adhere to their power drawal
commitments on 15 minutes period basis in ABT mechanism. Thus hydro power stations are ending up to cater
base load instead of peak load in non-monsoon months also (ex: Kerala, Karnataka, Telangana, HP, J&K,
Uttarakhand, etc.).[20] TSO is responsible to ensure the provision of reserves (including spinning reserve for base
load power plants by operating in frequency follow mode with upper & lower generation caps) that will allow for
sudden contingencies by determining the optimal combination of generating stations and reserve providers for each
grid trading period. The available hydro power stations in a region/grid should be used to cater peaking load only at
regional/national level. Using hydro power stations to cater peak load, would improve the peaking load capability of
a regional/national grid and maintain safe grid frequency and network stability. The 24 hours duration of a day
should be divided in to four parts only (i.e. day time peak load period, day time off peak load period, night time peak
load period and night time off peak load period) instead of 96 number 15 minutes periods for commercially settling
the power transactions to cater better to the peak load requirements within the safe frequency range.

 Many gas turbine power stations are not operating due to perennial natural gas shortage.
Recently, many DG sets (large & medium sizes) are also idling throughout the year due to better availability of
[21]

grid power.[22] Alternatively, these power generation units can be put to use for grid reserve service either with
liquid / gas fuels when there is unexpected tripping of operating power plants (five nos of 660 MW stations in a
short duration) or tripping of a high voltage transmission line to prevent the grid operation below safe limit. [23][24] This
would also allow all the available transmission lines at their full capacity in service without the need to maintain n+1
reserve capacity for meeting any break down and thus accruing savings in high voltage transmission losses. [25] The
unified national grid stability can also be enhanced further by converting the existing back to back HVDC links in to
HVAC links bypassing the existing converter stations. These are Chandrapur back to back HVDC converter
station, Vizag back to back HVDC converter station, Sasaram back to back HVDC converter station, Vindhyachal
back to back HVDC converter station and HVDC Sileru–Barsoor link. The yearly cost of ensuring grid safety would
be less than 2 paisa per Kwh for the total electricity generation in India.

Natural gas transmission[edit]

The Petroleum and Natural Gas Regulatory Board (PNGRB) was created in the year 2005 to regulate downstream
activities in the petroleum and natural gas sector.[26] There is requirement of natural gas TSO also for imparting
optimum use of the gas on hourly basis for meeting peak load in the electricity grid and minimize gas transport
distances. The available gas should be stored up to rated pressure in the pipe grid for generating power during
peak demand hours on a daily (or more) basis. Thus available limited quantity is needed to meet the peak
electricity loads by all gas based power stations. Also gas should not be transported from a power deficit region to a
power surplus region by the gas grid and generated power from gas there shall not be transmitted to the power
deficit region to avoid misuse of the gas and power grid infrastructure. Natural gas TSO would also serve other
sectors such as petro-chemical plants, CNG, Fertilizer plants, PNG, LNG, etc. as per their hourly requirement in
addition to receive gas from various types of natural gas producers.