1. MERIT ORDER OPERATION AND GRID DISCIPLINE S.P.KUMAR MANAGER(IT), SRLDC,BANGALORE

2. TRADITIONAL METHODS TOPICS COVERED FREQUENCY BASED DESPATCH CPP’S GETTING THEM INTO THE GRID SPOT MARKET

3. ECONOMIC SYSTEM OPERATION TRADITIONAL METHODS AVAILABILITY BASED TARIFF –LONG TERM MARKET –DAY AHEAD MARKET –SPOT MARKET

4. TRADITIONAL METHODS COSTS INVOLVED IN A POWER PLANT –FIXED COST (EMBEDDED-STRANDED) CAPITAL,INTEREST,INSURANCE,ROE,AMORTIZATION –VARIABLE COST BASICALLY FUEL COST(MAIN&ALTERNATE FUELS), VARIABLE O&M COST ETC START UP COSTS RAMP UP/DOWN COSTS BOX UP COSTS CONCURRENCY CAPABILITY/COSTS VALVE POINTS CONGESTION CHARGES TRANSMISSION LOSS TRANSMISSION CHARGES

5. ELECTRICITY PRICE SIGNALS LIGHTING A 100W LAMP RS0.60/UNIT RS 1.00/UNIT WHO WOULD YOU BUY THE POWER FROM? C1=2400*P1+60000 C2=4000*P2+10000 /HOUR COST YOU NEED SAY 100 W WHO WOULD YOU BUY THE POWER FROM? BOTH PLANTS 500<P<1500 SURPRISINGLY, THE ANSWER IS THE SAME PLANT A!!

6. ELECTRICITY PRICE SIGNALS THE ‘PRICE SIGNAL’ IN THIS CASE WOULD BE THE 24Ps (PER HOUR) AND THE 40 Ps (PER HOUR) COSTS WE FINALLY ARIVED AT. THIS IS FOR THE INCREMENTAL LOAD – YOUR 100W LAMP! THE COST /HOUR SHOWN IN PREVIOUS SLIDE IS THE VARIABLE COST THE COST DERIVED FOR LIGHTING THE 100W LAMP IS THE ‘INCREMENTAL COST’ –INCREMENTAL COST IS THE COST INCURRED FOR SUPPLYING THE NEXT MW OF POWER. –REPRESENTED BY λ

7. Economic Operation: cost curves

8. POWER SECTOR TODAY……. POWER SHORTAGES LOAD SHEDDING ROSTERING POWER CUTS BROWN OUTS BUT STILL OUR CAPTIVE AND CO-GENERATION REMAIN UNDER UTILISED

9. THE AVAILABILITY BASED TARIFF – A FRAMEWORK FOR FACILITATING TRADE GETTING THEM INTO THE GRID

10. AN EVERY DAY EXAMPLE SEB CPP + STEEL PLANT CAPACITY: 2X65 MW RATE: 100p/UNIT REQUIREMENT: 120±10 MW CAPABILITY: 120 MW AVAILABILITY: FULL FOR 10 MONTHS, ONE UNIT ON OVERHAUL FOR 2 MONTH EVERY YEAR CONDITIONS 1)30 MW MINIMUM DEMAND 2)70 MW MAX DEMAND FOR 2 MONTHS REPURCUSSIONS: FOR 10 MONTHS THE CPP RUNS AT PART LOAD OF 90 MW DUE TO CONDITION 1) ABOVE

11. A POSSIBLE SOLUTION SEB AND CPP AGREE ON A SCHEDULE – SAY 70 MW FOR 2 MONTHS AND 30 MW FOR REST OF THE YEAR. ANY DEVIATION FROM THE ABOVE WOULD ATTRACT A FREQUENCY LINKED UI RATE.

12. A WIN-WIN SITUATION IN CASE THE FREQUENCY IS LOW: –CPP GENERATES MORE AND BENEFITS FROM THE UI. –SEB BENEFITS BECAUSE IT DOES NOT HAVE TO DRAW FROM THE GRID AT HIGH PRICE. –MORE LOAD IS SERVED.

13. A WIN-WIN SITUATION IN CASE THE FREQUENCY IS HIGH: –CPP GENERATES LESS. –SEB BENEFITS BECAUSE IT DRAWS POWER FROM THE GRID AT A LOW PRICE. –MERIT ORDER IS ACHIEVED. THE CPP CAN DECIDE LEVEL OF GENERATION DEPENDING ON THE FREQUENCY AND ITS NETT INCREMENTAL COST

14. ADVANTAGES FOR CPP SIMPLICITY – A FREQUENCY METER IS ALL THAT IS REQUIRED NO TELEMETRY OR COMMUNICATION WITH SLDC/SEB NO PRICE TO BE NEGOTIATED CPP DOES NOT HAVE TO SEARCH FOR BUYER CPP CAN MAKE A REASONABLE PROFIT.

15. ADVANTAGES FOR SEB IMPARTIAL AND UNBIASED SYSTEM NEED NOT WORRY ABOUT CPP UNDER-GENERATING AT LOW FREQUENCY AND OVER- GENERATING AT HIGH FREQUENCY FRAMEWORK FOR SETTLEMENT IS ALREADY AVAILABLE