MERIT ORDER OPERATION AND GRID DISCIPLINE

S.P.KUMAR

MANAGER(IT), SRLDC,BANGALORE

TRADITIONAL METHODS

TOPICS COVERED

FREQUENCY BASED DESPATCH

CPP’S GETTING THEM INTO THE GRID

SPOT MARKET

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 SIGNALSLIGHTING 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 COSTYOU NEED SAY 100 W

WHO WOULD YOU BUY THE POWER FROM?

BOTH PLANTS 500<P<1500

SURPRISINGLY, THE ANSWER IS THE SAME

PLANT A!!

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

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

SEBCPP + 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

CONDITIONS1)30 MW MINIMUM

DEMAND2)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

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 OVER-GENERATING AT HIGH FREQUENCY

• FRAMEWORK FOR SETTLEMENT IS ALREADY AVAILABLE