Regulatory Framework in Indian Power Sector Module C5

1. Regulatory Framework in Indian Power SectorModule C5 V K Agrawal ED, NLDC POSOCO

2. Contents • Unscheduled Interchange charges and related matters Regulations, 2009 • Measures to relieve congestion in real time operation Regulations, 2009 • Regulation of Power Supply, Regulation,2010 POSOCO

3. UI Regulation

4. Electricity Market • Supply and Demand • to be matched in real time • Control Area: • to maintain its interchange schedule with other control areas • Control its area load/generation • Unscheduled Interchange • The imbalance between scheduled quantum and Actual

5. POSOCO

6. Background • Prior 2002 • No mechanism to handle real time energy imbalance • Booking of energy drawal at the end of the month .. REA • Real time imbalance settlement • ABT Order .. 1999 • Frequency linked real time pricing mechanism • Facilitates Grid Discipline • Promotes Economy exchange/Merit order despatch • Part of IEGC and Tariff Regulation.. Till 2008 • Separate UI Regulation • Principle Regulation: Since 1.4.2009 • Subsequent amendments since 3.5.2010 and 5.3.2012 POSOCO

7. Definitions • ‘Generating station’ • means a generating station whose tariff is determined by CERC • Beneficiary • means the person purchasing electricity generated from the generating station; • Seller • means a person, other than a generating station, supplying electricity, through a transaction scheduled in accordance with the regulations applicable for short term open access, medium term open access and long term access. • Buyer • means a person, other than the beneficiary, buying electricity, through a transaction scheduled in accordance with the regulations applicable for short term open access, medium term open access and long term access • Gaming • in relation to these regulations, shall mean an intentional misdeclaration of declared capacity by any generating Station or seller in order to make an undue commercial gain through Unscheduled Interchange charges. POSOCO

8. A Typical Dispatch Real-time Contingency Forecast UI Day Ahead, PX Buy Buy Sell Sell Surpluses/Deficits - Balance supply and demand ‘00 MW ADVANCE SHORT TERM BILATERAL CONTRACTS FIRM SHARES IN ISGS Hours

9. Regulation 5( UI charges) • Clause 5(1) • UI Charges payable for • Over drawal by buyers and beneficiaries • Under injection by sellers and Generating stations • UI Charges receivable for • Under drawal by the buyers and beneficiaries • Over injection by sellers and Generating stations • Shall be worked out on the average frequency in 15 minutes time block POSOCO

10. Regulation 5 (Contd) • Capping for generators • Generators using coal, lignite or gas supplied under APM • Excess of 105% over DC in a time block and excess of 101% of average DC over a day • Capping for buyers/beneficiaries • In excess of 10% of under drawals w.r.t schedules or • In excess of 250MW which ever is less • Capping for sellers • In excess of injection of 20% of schedules • Subject to a limit of 105% of the station capacity in a time block or 101% of the installed capacity over a day POSOCO

11. Regulation 5( contd) • Clause 5(2) • UI Rate: Rs/-0 /kwh : Freq >50.2 Hz • UI charges corresponding to grid frequency interval <50.02 Hz and >=50.0 Hz based on the • Median value of the average energy charge of coal/lignite based generating stations for the six months period of August 2010 to January 2011 • UI charges corresponding to grid frequency interval <49.82 Hz and >=49.8 Hz based on • Provide sufficient incentive to the generating station based on coal including imported coal to support the grid after meeting fixed and energy charge. POSOCO

12. POSOCO

13. Regulation 5( contd) • Clause 5(2) • UI Rate corresponding to grid frequency interval <49.5 Hz based on • highest of the average energy charges of generating stations for the six months period of August 2010 to January 2011 • UI price vector • Shall be in steps of 0.02 Hz • May be reviewed and notified by the Commission • Infirm power injection • During the testing prior to COD at UI rate • Periodicity not to exceed six months subject to extension with prior permission by the Commission • Subject to ceiling cap rates for the fuels used. • UI over Asynchronous regions • Computed based on UI rates prevailing in that region • Settled as per the average of the UI charges computed for the two regions. POSOCO

14. Regulation 6:Declaration, Scheduling & Gaming • Thermal Gen up to • 105% of DC in a time block and averaging upto 101% of DC in a day : not construed as gaming • UI admissible for such excess generation • In case of Gaming • UI shall be reduced to ‘zero’ • UI shall be adjusted to beneficiaries in the ratio of their capacity share in the station • Hydro Generation • Should respond to Grid freq change and inflow fluctuation • Should not indulge in gaming and cause grid constraints • The difference in actual and schedule energy to be compensated on 4th days schedule • S4=E4+(A1-(E1))

15. Regulation 7: Limits on UI Volume and consequences • The overdrawal by beneficiary/buyer • <12% of its schedule drawal or 150MW which ever is lower in any time block at freq < 49.8 Hz and • < 3% on daily aggregate basis for all the time blocks when freq < 49.8 Hz • The under-injection by generator/seller • <12% of its schedule injection or 150MW which ever is lower in any time block at freq < 49.8 Hz • < 3% on daily aggregate basis for all the time blocks when freq < 49.8 Hz POSOCO

16. Regulation 7: Limits on UI Volume and consequences • Additional UI Charge • Over drawal or Under injection at each time block • Applicable at the frequency below 49.7 Hz • Methodology as per clause 3(a) Schedule A • Additional UI Charge for generating station using APM • Applicable below 49.7 Hz • Methodology as per clause 3(b) of Schedule A • Additional UI Charge • To be specified as percentage on the Base UI rate /Capped rate • Additional UI Charge on IR Exchange • Not applicable

17. Schedule A: Unscheduled Interchange Charges POSOCO

18. UI rates ( Floor and Ceiling) POSOCO

19. UI Rates Infirm Power • Domestic Coal/Lignite/Hydro: ` 1.65/kWh • APM Gas as fuel : ` 2.60/kWh • Imported Coal / RLNG : ` 3.30/kWh • Liquid Fuel : ` 9.00/kWh POSOCO

20. UI Charge receipt side POSOCO

21. Addnl UI Charges • Overdrawal By beneneficiary • <49.7 Hz and >= 49.5 Hz : 20% of the UI charge at corresponding frequency ( 590.63paise /kWh to 1051.88paise /kWh) • <49.5 Hz and >=49.2 Hz: 40% of the UI charge corresponding to frequency of 49.5 Hz i.e 900paise /KWh (1260.63paise /kWh) • <49.2 Hz : 100% of the UI charge corresponding to frequency of 49.5 Hz i.e 900paise /KWh (1800 paise /kWh) • Under injection by seller • <49.7 Hz and >= 49.5 Hz : 10% of the UI charge at corresponding frequency ( 590.63paise /kWh to 961.88paise /kWh) • <49.5 Hz and >=49.2 Hz: 20% of the UI charge corresponding to frequency of 49.5 Hz i.e 900paise /KWh (1080paise /kWh) • <49.2 Hz : 40 % of the UI charge corresponding to frequency of 49.5 Hz i.e 900paise /KWh (1260.63 paise /kWh) POSOCO

22. Addnl UI Charges • Under injection by Generators using fuel under APM • <49.7 Hz and >= 49.5 Hz : 10% of the capped UI rate of 421.50 paise/kWh (463.65 paise/kWh) • <49.5 Hz and >=49.2 Hz: 20% of the capped UI rate of 421.50 paise/kWh (505.8 paise/kWh) • <49.2 Hz : 20% of the capped UI rate of 421.50 paise/kWh (505.8 paise/kWh) (590.1 paise /kWh) POSOCO

23. UI Charges ( payment side) POSOCO

24. UI Accounting • RPC shall issue, to all constituents, by Tuesday, for seven day period ending on the penultimate Sunday mid-night. • “Regional Unscheduled interchange pool account fund” to be maintained by RLDC • Commission may by order direct any other entity to operate and maintain the respective “Regional Unscheduled Interchange Pool Account Funds”: • Separate books of accounts shall be maintained for the principal component and interest component of Unscheduled Interchange charges and Additional Unscheduled Interchange charges by the respective Regional Power Committees.

25. Payment appropriation sequence • All payments received in the “Regional Unscheduled Interchange Pool Account Fund” of each region shall be appropriated in the following sequence: • First towards any cost or expense or other charges incurred on recovery of UI charges • Next towards over dues or penal interest, if applicable • Next towards normal interest • Lastly, towards UI and additional UI charges. • Any additional UI charge collected from a regional entity shall be retained in the “Regional Unscheduled Interchange Pool Account Fund” of the concerned region where the regional entity is located.” Inter-regional UI should have highest priority Mention of normal interest not understood

26. Schedule of UI payment and security • UI payment : high priority • Within 10 days of issuance of accounts by RPC • Delayed payment of interest @0.04 % per day of delay : in case payment is made beyond 12 days of issuance of sttement • RLDC to pay within two days of receipt of UI amount in pool fund

27. Measures to Relieve Congestion in real time

28. Congestion • The condition when actual flow in a transmission system exceeds the available transfer capacity

29. What is Congestion charge • That the congestion charge is a tool to relieve congestion through commercial signals. • When it is imposed When demand for transmission capacity exceeds the Available Transfer Capability limits. • This could happen due to following reasons: • Severe high demand conditions towards one region forcing most of the power to rush towards that. • Severe load crash conditions in a region resulting into large export of power from that region to other regions. • Skewed load generation pattern between two regions which could be combination of first two factors. • Widely prevailing market factors forcing the cheaper generation in one region trying to replace the costlier generation in the other. POSOCO

30. Background • Concept of Congestion Charge • Introduced in 2007 vide CERC order date 7th Nov’2007 • Applicable for constituents in the Northern Region • Congestion charge of 300 Paise /kWh over and above UI for deviation from schedules • Regulations • Draft Regulation : 9th Jan ‘2009 • Final Regulation: 22nd Dec’2009 • Order dated : 8th Jan’2010 seeking comments • Final Order : 17th March ’2010 • Detailed procedures : 11th June 2010 POSOCO

31. Chapter I: Definition • “Available Transfer Capability (ATC)” • means the transfer capability of the inter-control area transmission system available for scheduling commercial transactions (through long term access, medium term open access and short term open access) in a specific direction, taking into account the network security. Mathematically ATC is the Total Transfer Capability less Transmission Reliability Margin. • “Congestion” • means a situation where the demand for transmission capacity exceeds the Available Transmission Capability; • “Congestion charge” • means the supplementary charge kicked in on one or more Regional entities in one or more Regions for transmission of power from one Region to another or from one State to another within a Region when the deviations from the schedule cause the net drawal of power in the inter-regional or intra-regional transmission links to go beyond the Total Transfer Capability limit; POSOCO

32. Chapter I: Definition…. • “Control area” • means an electrical system bounded by interconnections (tie lines), metering and telemetry, where it controls its generation and/or load to maintain its interchange schedule with other control areas whenever required to do so and contributes to frequency regulation of the synchronously operating system; • “Credible contingency” • means the likely-to-happen contingency, which would affect the Total Transfer Capability of the inter-control area transmission system; • “Regional entity” • means such persons whose metering and energy accounting is done at the regional level; POSOCO

33. Chapter I: Definition…. • “Transmission Reliability Margin (TRM)” • means the amount of margin kept in the total transfer capability necessary to ensure that the interconnected transmission network is secure under a reasonable range of uncertainties in system conditions; • “Total Transfer Capability (TTC)” • means the amount of electric power that can be transferred reliably over the inter-control area transmission system under a given set of operating conditions considering the effect of occurrence of the worst credible contingency. POSOCO

34. Chapter II Measures to Relieve Congestion • Calculation of TTC, ATC and TRM • SLDCs shall assess the TTC,TRM&ATC on its iner-state transmission corridor considering the meshed intra-state corridors for export/import of power with ISTS. This figure along with data would be forwarded to respective RLDCs • Regional Load Despatch Centres shall assess TTC, ATC and TRM of individual control areas within the Region, if required, and the same would be put on the website of respective RLDC, along with the details of basis of calculations, including assumptions if any, three months in advance. The specific constraints indicated by the study would also be put on the website POSOCO

35. Calculation of TTC…contd… • The National Load Despatch Centre shall asses the TTC, ATC and TRM of inter-regional links / Corridors in consultation with RLDCs, for three months in advance. • TTC, ATC, and TRM along with the details of basis of calculations, including assumptions if any, shall be put up on the website of NLDC and RLDC at least three months in advance. The specific constraints indicated by the study would also be put on the website. • Provided further that National Load Despatch Centre (NLDC) and/or concerned Regional Load Despatch Centre (RLDC) , may revise the TTC , ATC and TRM due to change in system conditions, which includes change in network topology or change in anticipated active or reactive generation or load, on account of outage or otherwise, of one or more generators or transmission lines, at any of the nodes in the study. POSOCO

36. Power System modelling • EHV transmission network shall be normally modelled down to 220 kV level with exceptions for generating units connected at 132 kV and for North Eastern Region, it shall be modelled down to 132 kV. • Normally all generating units greater than 50 MW and connected at 132kV and above shall be modelled. Smaller generating units (particularly hydro units) may be lumped for study purposes. • Load shall be generally lumped Load shall be generally lumped at 220 kV or 132 kV, as the case may be. Actual system data wherever available shall be used for power system modelling. In cases where data is not available, standard data as given in the CEA Manual on Transmission Planning Criteria shall be considered • Separate base cases calculating the export and import capability corresponding to both peak and off- peak load and generation with the likely scenario during the time frame for which transfer capability is to be assessed shall be used in the Simulation Studies for calculation of TTC and TRM of the required transmission corridors. POSOCO

37. Detailed procedure POSOCO

38. Assessment of TTC/ATC/TRM Methodology • In harmony with the detailed procedure of the Central Transmission Utility (CTU) prepared • reliable system operation and to facilitate non discriminatory open access in transmission as per CERC regulations on Open Access and Power Markets. • Simulation Studies based on a representative scenario POSOCO

39. Power System model • Regional Network • EHV Network upto 220kV • 132 kV Network for NE Region • Unit size of 50 MW and above • Load modelling • State Network • May consider lower voltage network also • Separate Base case • Peak /Off –Peak Load • Export/Import Capability POSOCO

40. Input Data Base case preparation • Network Topology • Unity Availability • Coal Fired Thermal Despatch • Gas /Nuclear Despatch • Hydro Despatch • Reactive Power capability of Units • Nodal MW/MVAR Demand • Operating Limits for Transmission Line • 90% of MCR for ICTs • Emergency limit 110% of normal operating limit POSOCO

41. TTC Assessment • Increasing Demand at the importing area • Increasing generation at the exporting area • Till Credible Contingency • Credible Contingency • Outage of single Transmission element (N-1) in the transmission corridor/connected system. • Outage of largest unit in the importing area • Base case • Transmission loading within normal operating limits • Voltage within operating limits of IEGC • To be declared three months in advance • Regular review in the event of outages/ system condition change POSOCO

42. TTC may be limited by • Violation of grid voltage operating range or • Violation of transmission element operating limit in the base case or • Violation of emergency limit in the contingency case • TRM • To ensure that the interconnected transmission network is secure under a reasonable range of uncertainties in system conditions. • Forecasting uncertainties • Size of largest unit size in the control area • Single largest anticipated infeed in the control area • The TTC: to be available at the website of RLDCs and NLDC • Revisions in case of change in system conditions POSOCO

43. Applicability of Congestion charge • Congestion Charge • To be applied as a commercial measure to relieve congestion • Payable by Regional entities causing congestion in the inter/intra regional link • Receivable by Regional entities relieving congestion • Applicable to any regional entity/entities • Detail procedure by NLDC • Congestion charge • Payable by overdrawing entity over and above UI charges payable POSOCO

44. Applicability of Congestion Charge • Frequency below 50 Hz in a importing control area • For over drawal /under injection • Frequency above 50 Hz in a exporting control area • For under drawal / over injection • May be applicable for intra regional corridor also • Congestion Charge rate • ` 5,45 /kWh as per commission order dated POSOCO

45. Declaration of Congestion • Real Time display at SLDCs/RLDC/NLDC POSOCO

46. A corridor shall be considered congested • Grid voltage in the important nodes downstream/ upstream of the corridor is beyond the operating range specified in the IEGC and/or • The real-time power flow along a corridor exceeds the ATC for that corridor for continuously one time block of 15-minute and/ or • One or more transmission lines in the corridor are loaded beyond the operating limit POSOCO

47. Warning Notice • Violation of ATC or Security Criteria for continuously for two blocks • NLDC to issue warning notice to concerned RLDC • Shall be on website of NLDC POSOCO

48. Non Applicability of Congestion Charge • In case of scheduled power flow • Forced outage of Transmission element • Open Access Transaction be curtailed as per priority as per regulation • Revision of TTC/ATC/TRM • In case congestion is due to • Violation of Grid Voltage operating range • One or more lines loaded beyond operating limits • TTC/ATC/TRM shall be revised POSOCO

49. Application of Congestion Charge • Persistent Congestion • For more than two block( not counting the block when warning was issued) • NLDC/RLDCs to issue notice for application of congestion charge • To be informed to all concerned .. Make available at websites POSOCO

50. Applicability of Congestion Charge. • Congestion Charge shall be applicable to Regional entities as per the CERC (Measures to relieve congestion in real time operation) Regulations and orders on rate of congestion charge as applicable from time to time. • To relieve congestion in the real time, a congestion charge shall be applied as a commercial measure. The congestion charge will be payable by a Regional entity or entities causing congestion in the inter-regional link or intra-regional link and receivable by a Regional entity or entities relieving congestion. POSOCO