tariff seminar report

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Introduction


The rate at which electrical energy is supplied to a consumer is known as Tariff. Tariff is such that it not only recovers the total cost of producing electrical energy but also earns profits on the capital investment. Proper return, fairness, simplicity, reasonable profit is the desirable characteristic of tariff.
With sustained efforts over the decades, the power generation scenario in India presents a rich and composite mixture of hydro, nuclear, thermal, wind and solar generation. Our installed capacity across the nation well exceeds 1,00,000 MW, a major share of which is derived from thermal sources (coal/lignite, gas, diesel).


Why ABT is required?

• To include incentives and penalties for utilities.
• To reduce grid frequency range from 49.50 to 50.50 (Unacceptably rapid and high frequency deviations (from 50 Hz) causing damage and disruption to large scale industrial consumers)
• To meet higher consumer demand, due to inbuilt incentives to maximize generation in peak load hours.
• To improve the quality of power.
• Frequent grid disturbances resulting in generators tripping, power outages and power grid disintegration.


Which things takes part in the ABT ?

The most significant aspect of ABT is the splitting of the existing monolithic energy charge structure into three components viz. capacity charges (fixed), energy charges (variable) and UI (unscheduled interchange) charges. It is the last component that is expected to bring about the desired grid discipline. Splitting of the tariff into fixed and variable cost components is meant to act as an incentive for power trading which shall (ideally) conclude in a self-regulating power market regime. It is also expected to promote the concept of ELD (Economic Load Dispatch) among power generators.


Capacity charges:

Fixed charges are payable to the generating station, by the intended beneficiaries of the generation facility (state governments of the region in most cases). In the present tariff regime, capacity charges are payable against the PLF (Plant Load Factor) of the station. Full fixed charges are payable at achieving a PLF of 68.49%, and incentive is payable for each unit of electricity generated above this PLF. Under the ABT regime, fixed charges are payable against the availability (declared capacity) of the generating facility.


Variable charges:

Under the present tariff regime, there is no bifurcation between fixed and variable charges. Both are bundled together and payable in proportion to the actual energy drawn by the consumer. As we have seen already, under ABT fixed charges vary with the allocated capacity and has nothing to do with actual energy consumed. In contrast, variable charges are to be paid against the actual energy consumed. This splitting is expected to promote power trading.