INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

Network Pricing
A New Concept for future India. Prof. Narayana Prasad Padhy Department of Electrical Engineering

Why? h ?

Year 1910 1948 1950 1951 1975 1996 1998

Development Electricity Act 1910 Electricity Supply Act 1910 SEB formation CEA established as a parttime body CEA established as a fulltime body First SERC was formed in the state of Orissa Electricity Regulatory Commission Act 1998

Year 2001 2002 2003 2005 2006

Development Energy conservation A t 2001 Act The bureau of Energy gy Efficiency Electricity Act 2003 NEP, Appellate Tribunal for Electricity Tariff Policy

2007-2011 2007 2011 POC and PX

Electricity y Act 2003

The act creates a liberal and transparent framework for power sector It facilitates investment by creating competitive environment and reforming distribution segment of power industry Entry barriers removed/reduced No license required for generation Freedom to captive generation including group captives Recognizing trading as an independent activity

Open access in transmission already in place

Open access to consumers above 1 MW within five years commencing from 27th Jan 2004 (date of enforcement of amendment of Electricity act)

Multiple licenses permitted in same distribution area Regulatory Commissions-to fix tariff and to regulate

Objective
Mainly to develop an efficient pricing algorithm for transmission/distribution use of system charges to encourage perturbation of new industrial loads and generations.

Vision
To provide technical inputs and develop models in the area of network pricing for both Central Electricity Regulatory Commission (CERC) State Electricity Regulatory Commission (SERC)

TRANSMISSION SYSTEM IN EASTERN REGION OF INDIA(Curtsey POWER GRID)

BIHARSHARIF
3X315 MVA 192 KM 201KM 172KM BSEB 95 KM 146 KM

KhSTPP (NTPC)

4 X 210 + 3X500 MW

FSTPP (NTPC)

2 X 500 + 3 X 200 MW

40 KM K

1X315 MVA

MALDA
2X315 MVA

150 KM

SASARAM
1X 500MW 2X315 MVA

To Dehri (BSEB)

KARAMNASA (BSEB) ARA 2X100 MVA To Shahupuri (UPPCL)

MAITHON
2X315 MVA

DURGAPUR
2X315 MVA

236 KM

DEHRI (BSEB)

MALDA
3X50 MVA 238 KM

116 KM

WBSEB

432 KM

TO ALLA AHABAD

KAGHAUL (BSEB)
153 KM

SHUBHASGRAM
DVC 276 KM (176+100) WBSEB DVC

DALKHOLA

PURNEA
41KM

151 KM

ROURKELA
2X315 MVA

GRIDCO LINE G

22 K KM

51 K KM

RENGALI
GRIDCO 2X315 MVA 356 KM

Meramundali

= 220/132KV ICT
456 KM

G E N D

27 KM

TO RAIPUR (WR)
GRIDCO

70 KM

211 KM

SARNATH (UPPCL)NR-I JAMSHEDPUR

2X315 MVA 1X160 MVA JSEB WBSEB LINE 1X315 MVA

6 X 210 MW

119 KM

Kolaghat (WBSEB) JEERAT (WBSEB)

2X315 MVA

BARIPADA ( POWERGRID) HVDC,

SILIGURI
= 400KV = 220KV = 132KV = 66 KV = 400KV LINE/BUS (O&M) LINE/BUS (O&M) LINE/BUS (O&M) LINE/BUS (O&M ) LINE/BUS (U/C)

3X100 MVA

L E
WBSEB RANGIT (NHPC)
37 KM

169 KM

TSTPP (NTPC)

1X100 MVA

1X315 MVA BSEB

Talcher

6 X 500 MW

= 400/220KV ICT

GANGTOK

86 KM

RAMMAM (WBSEB) MELLI (WBSEB)

To Kolaghat, WBSEB

= HVDC To Kolar (SR) )

2X50 MVA

1*100+1X50 MVA

BIRPARA
45 KM M

INDRAVATI

SINGIGAON

76 KM

1X 500MW

GAZUWAKA(SR)

JEYPORE
2X315 MVA

G G

34 KM

= THERMAL GENERATION = HYDEL GENERATION = SHUNT REACTOR

CHPC (BHUTAN)

WBSEB

225 KM GRIDCO

4 X 84 MW

SALAKATI (NER)

BONGAIGAON (NER)

Network Pricing Issues

Network Cost Evaluation Cost Allocation Revenue Reconciliation

----

Economic Issue Technical Issue Regulatory Issue

Network Cost Evaluation (Tariff)

CAPITAL COST OF THE PROJECT LOAN EQUITY RATE OF INTEREST ON LOAN : Rs 100 Crs : Rs 70 Crs : Rs 30 Crs : 8% PA

Tariff P/A IOL (Interest on loan) : 70 x 0.08 = 5.60 Crs ROE ( (Return on equity) q y) : 30 x 0.14 = 4.20 Crs DEPRECIATION : 100 x 0.0297 = 2.97 Crs O & M : 276 x 0.227 = 62.65 Lakhs (for 276 ckt kms Line) : 2 x 28.12 = 56.24 Lakhs ( for 2 bays) y ) TOTAL O&M : 62.65+56.24 = 118.89 LAKHS = 1.19 Crs IOWC(Interest on Working Capital) : 10% WC : 3.42 Crs i) ) Two months receivables : 2.32 Crs ii)ii) One month O&M : 0.10 Crs iii)iii) 1% of capital cost as spares: 1.00 Crs IOWC : 3.42 x .10 = 0.34 Crs AAD(Annual ( average g damage) g ) : 5.83 -2.97= 2.86 Crs Repayment of loan @ 5.83 Crs per annum in 12 yrs TOTAL ANNUAL TARIFF : =17.16 Crs

Cost Allocation
Costs to be Allocated Entry y Service Exit Service Common Service Network Use of System Charges

 Entry & Exit Charges Entry Charges for Generators, Exit Charges for Load Varies With System Voltage Levels Between Entry & Exit Points

 Common Service Charges Asset Related Costs & Services Ensuring Integrity of Network & Benefiting All

 Network Use of System Charges Return on Capital Value of Network

Pricing Methodologies
PSM (Postage Stamp Method) DRM (Distribution Reinforcement Model)

Postage Stamp Method

Same rate to all users irrespective p of length g of transmission path
Socializes the cost of transmission Does not require q flow calculations Allocates charges based on average embedded cost and magnitude of users transacted power Sends incorrect economic signals

A transaction i i short in h electrical l i l distance di crosssubsidizes a transaction in long electrical distance between injection j and receipt p p point
Calculation is simple, hence used throughout the utility

Lacks technical framework

Pt Rt = TC * Ppeak
Rt= transmission price for load t
TC= total transmission charges

Pt= peak power of load t Ppeak= system peak power

DRM (Distribution Reinforcement Model)

Need for New Model

LRSIC (Long (L Run R Shared Sh d Incremental I l Cost) C )

a new shared and back to future methodology

From Bus 1 4 5 3 5

To Bus 5 2 2 4 4

Xfrmr Yes No No Yes No

MW From 394.8 303.7 525.7 440 -133.4

Mvar From 114.3 121.5 263 297.5 -182.5

MVA From 411 327.1 587.8 531.1 226.1

Lim MVA 600 1200 1200 1000 1200

% of MVA Limit (Max) 68.5 27.3 49 53.1 18.8

MW Loss 2.53 11.84 17.5 1.92 1.04

Mvar Loss 33.79 -17.57 122.13 25.59 -32.18

Future Scope

Future Scope

GSP

CAPACITY=1MVA

LOAD

GSP GSP

CAPACITY=1MVA CAPACITY=1MVA REAL POWER=1MW POWER=0.8MW REAL POWER=0.6MW

LOAD LOAD (1+ j0)MVA (0.8+j0.6)MVA (0.6+j0.8)MVA

Real and Reactive Price Sharing

Q sin

P cos

Price Elasticity

ICRP Charging Model

Framework

THANK YOU