MERIT ORDER OPERATION AND GRID DISCIPLINE S P

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

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

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

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

ELECTRICITY PRICE SIGNALS LIGHTING A 100 W LAMP RS 0. 60/UNIT RS 1. 00/UNIT /HOUR COST C 1=2400*P 1+60000 BOTH PLANTS 500

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

Economic Operation: cost curves

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

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

AN EVERY DAY EXAMPLE SEB CPP + STEEL PLANT CAPACITY : 2 X 65 MW RATE : 100 p/UNIT REQUIREMENT : 120± 10 MW CAPABILITY CONDITIONS 1)30 MW MINIMUM DEMAND 2)70 MW MAX DEMAND FOR 2 MONTHS : 120 MW AVAILABILITY: FULL FOR 10 MONTHS, ONE UNIT ON OVERHAUL FOR 2 MONTH EVERY YEAR REPURCUSSIONS: FOR 10 MONTHS THE CPP RUNS AT PART LOAD OF 90 MW DUE TO CONDITION 1) ABOVE

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.

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.

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

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.

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