sharing of ists charges and losses

8/7/2019 Sharing of ISTS Charges and Losses

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Sharing of ISTS Charges

and LossesMarch 18,2011

www.pwc.com


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Agenda

Indian Power Sector Review

Exiting Method for sharingISTS charges and losses

Need for a change

Proposed Methods

Hybrid Method

Pricing Mechanism

Transition

Point of Connection (PoC) Charges & Impact

ISTS Charges & Losses 218/03/11


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Introduction

Notification of Regulations : 15th June 2010

Applicable to:

- DesignatedISTS Customers (DIC)

- Inter State Transmission Licensees

- NLDC, RLDC, SLDCs, and RPCs

Regulations shall come into force from 1.4.2011 (as amended)

Responsible agencies:

- ImplementingAgency (IA): NLDC

- Collection & disbursement of charges: CTU (PGCIL)



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Evolution of National Grid


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Indian Power Sector ReviewInter State Transmission System (ISTS)


Therapidlyincreasinginter-regionalcapacityhascausedachangeinthenatureofthe

ISTS withinashorttime. Fromapredominantlyregional systemithas quicklyevolved

intoanational transmissionsystem.

Thepresentmechanismofallocationoftransmissionchargesamongstvarious

networkusersis basedonaregional postagestampmethod.

IR Links End of 9th Plan By 10th Plan By 11th Plan By 2014-15

ER-SR 620 3120 3620 3620

ER-NR 120 4220 11120 19420

ER-WR 360 1760 6460 12760

ER-NER 1240 1240 2840 2840

NR-WR 980 2080 4180 7180

WR-SR 1680 1680 2680 6880

NER/ER-NR/WR - 0 6000 6000

Total (MW) 5000 14100 37400 58700


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Existing Method for sharing ISTS charges & lossesRegional Postage Stamp (RPS) Method

All users of a system in a region pay the same price per MW ofallocated transmission capacity

They are charged at a flat rate on a per MW basis

Mathematically, the rates are calculated as follows:- Rt = TC * Pt/P Allocated, where,

Rt = Transmission price for transaction t in a particular region

TC = Total transmission charges for each region

Pt = Load for transaction

P Allocated = MW capacity allocations in central sector power plants



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Existing Method for sharing ISTS charges & lossesRegional Postage Stamp (RPS) Method

Power in NERis considered to be generated by a hydro resource at Rs. 3/ kWh

Total transmission charges to the load centre work out to Rs. 0.90/kWh

Similarly, the transmission losses (assumed @ 4% in each region) also getpancaked and the landed price of electrical energy at the load centre works outto approximately Rs. 4.64/kWh



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Need for a changeKey triggers


Change in configuration of the ISTS

Changingnature ofuse of the transmission system by various users

Pricinginefficiencyin the emerging circumstances

Evolution of open access and competitive power markets

Changes caused by law and policy (distance, direction and quantum)


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Proposed MethodsMarginal Participation (MP) method

MP method analyzes how much the flow through each network branch jincreases when the injection/ withdrawal in a bus iis increased by 1 MW


Flowvariationiscomputedforeachscenario,Winter- peak,otherthanpeak, Summer- peak,otherthanpeak,and Monsoon- peak,otherthan

peak

Any1 MWincreaseingeneration (orload)atnodeihasto becompensatedbyacorresponding1 MWincreaseinload (orgeneration)atsomeothernodeornodes (slack bus)

Oncetheflowvariationisobtained,itispossibletocomputeaseasonalusageindexforeachnetworkuser


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Proposed MethodsMarginal Participation (MP) method

The seasonal index is computed as,

- Ueil is the seasonal usage index in line ldue to injection/withdrawal at node i- Fle is the flowin line lunder scenario e under base case

- File is the flowin line lunder scenario e due to injection / withdrawal of 1 MW at node i

- Pie is power dispatch / demand at bus iunder scenario e under base case

The revenue requirement of each line is allocated pro-rata to the different agents

according to their total participationin the corresponding line

- Cl is the seasonal ARR of line



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Proposed MethodsAverage Participation (AP) method

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Foreveryindividualgeneratori, anumberofphysicalpathsareconstructed,tracingpowerproducedanddispatched

Similarcalculationsarealsoperformedforthedemands

Aruleallocatesresponsibilityforthecostsofactualflowsonvariouslinesfromsourcestosinksaccordingtoasimpleallocationrule,inwhichinflowsaredistributedproportionally betweentheoutflows.

(12/40)*100 = 30%

(28/40)*100 = 70%


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Proposed MethodsComparison


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Attribute AP Method MP Method RPS Method

Cost-reflectiveness Based on flow patternscaused by all networkusers

Based onincremental useofnetwork assessedthrough load flows

Transmission charges do notreflect networkutilization

Locational signals forinvestment

Weak locational signals Provides good locationalsignals in terms oftransmission charges

Provide no signal

Technical Soundness Maynot strictly reflectthe laws of physics

Adheres better to thelaws of physics allocationdepends on the selectionof slacknodes

Does not relate to physicallaws of the network flows

Suitability for longterm, short term andspot transactions

No difference betweenshort term and longterm use

No difference betweenshort term and long termuse

Transmission charges forshort term access need to bedetermined

Implementation Not difficult if principleis accepted byusers

Not difficult if principle isaccepted byusers

Implementationis easythough there may be issuesregarding fairness in thecontext of large networks


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Hybrid MethodA combination of MP & AP method

Reasons for adopting Hybrid method:

The nodal transmission access charges in the Hybrid method have aacceptable variance

Hybrid method takes into account all the incidental flows


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HybridMethod

Computationofcharges &lossesoneachnodeusing

MP method

Selectionofslack busesusingAP method


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Pricing MechanismUsing Hybrid method

- All injection from the lower voltage system shall be treated as a generatorand vice-versa in the case ofnet withdrawal

Identification of the slacknodes: usingAP method

Computation: Hybrid Method for the determination of TransmissionCharges (as discussed earlier)

Computation: Hybrid Method for the Sharing Of TransmissionLosses (methodology will be same as for charges)


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Marginal Loss factor

Loss allocation factor


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Computation: Determination of sharing of YTC & TransmissionLosses

- Treatment of HVDC

Zero Marginal Participation for HVDC Line MP Method cannot recover its cost directly

HVDC line can be modeled as:

Load at sending end

Generator at receiving end

Compute Transmission Charges for all load andgenerators with allHVDC lines in service

Disconnect HVDC line and again compute new transmission chargesfor all loads andgenerators


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Compute difference betweennodal charges with or without HVDC

Identifynodes which benefits with the presence of HVDC

Benefit is new (with disconnection) usage cost minus old (with HVDC)cost. If benefit is -ve, it is set to zero.

Allocate HVDC line cost to the identifiednodes

- YTC of substations to be apportionedin line

2/3 to higher voltage lines

1/3 to lower voltage lines

Apportionment among lines on the basis of length

- PoC Charges to be computed for 5 blocks of month and peak and other thepeak conditions


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- Representative Blocks of Months

April to June

July to September

October to November December to February

March

- Peak Hours : 8hrs, Other than Peak Hours :16 Hrs

- 50% recovery of transmission charges through Hybrid Methodology and

50% through Uniform Charge Sharing Mechanism

- 50% losses through Hybrid Method and 50% through Uniform LossAllocation Mechanism


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Creation of Zones & determination of Zonal Charges & Losses

- Zones shall contain relevant nodes with Costs in the same range

- Nodes within zones shall be combinedin a manner that they areGeographically and electrically proximate

- Nodes with connectivity to Thermal Generators > 1500 MW or HydroGenerators > 500 MW to be taken as separate zones

- Demand zones : State Control Area

Except NER states which are to taken as one zone

- Zonal Charges : WeightedAverage of Nodal Charges


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TransitionAccounting, Billing & Collection of charges

Accounting


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Billing


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TransitionAccounting, Billing & Collection of charges

Treatment of deviations


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Demand/ Gen

Net drawl/injection

Netinjection/drawl

Deviation

>20%

Deviation


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TransitionCommercial Agreements


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Transmission ServiceAgreement (TSA)

Governstheprovisionoftransmissionservicesandcharges

CTU shallpublishthedraft Model TSA

SigningofTSAshallnot beapre-conditionforconstructionofnewnetworkelementsbyCTU and Transmission Licensees

Revenue SharingAgreement

CTU shallenterintoaseparateRSAwithother ISTS Transmission Licenseesfor

disbursingmonthlytransmissionchargesamongthemselves

AmendmentsofContracts

Realignmentofallexistingcontractswithin60daysofnotificationofTSA


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PoC Charges & Impact


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Dateofnotification:December30,2010

ImpactforWest Bengal:

Change as per new charges: (196621301 167984790)/167984790 = 17%

Increase in the retail tariffin state by1 paisa considering sales of 35,000 MU


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Thank you...

Questions?


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Key triggersChangingnature ofuse of the transmission system by various users

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Following analysis indicates that most of the proposed private sector capacityisbeing established with an optimal resource utilization perspective

Category XIth plan XIIth Plan

Pithead 12500 MW 25000 MW

Coastal 8200 MW 13400 MW

Hydro 3500 MW 21500 MW

InIndia it has been the practice that the users pay for the transmission charges onthe ISTS, andnot the generators. The introduction of Merchant power would requirea change in these arrangements.


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Data acquisition

ISTS Charges & Losses

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sharing of ists charges and losses

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