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Sharing of Inter-State Transmission Charges and Losses (PoC Regime). Abbhimanyu Gartia, Dy General Manager, WRLDC, MUMBAI. In this Presentation. Historical Background Evolution Regional Postage Stamp Method Drivers of Change POC Mechanism – Features Issues - PowerPoint PPT Presentation
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Sharing of Inter-State Transmission Charges and Losses (PoC Regime)
Abbhimanyu Gartia,Dy General Manager, WRLDC, MUMBAI
In this Presentation Historical Background
Evolution Regional Postage Stamp Method
Drivers of Change
POC Mechanism – Features
Issues
Regulation Amendment and Related Orders
Historical Background
Historical Background
Evolution of Transmission Pricing
Implicit transmission pricing model Transmission charges were clubbed with generation tariff
Unbundling of generation and transmission
Transmission pricing model changed from implicit to explicit Transmission charges were apportioned on the basis of net
energy drawn
Evolution of Transmission Pricing
Late 1970’s: Regional generation projects by CPSUs
Development of associated regional transmission schemes
to enable drawal of respective shares by regional beneficiaries
Regional Postage Stamp method to suit above arrangement
Pooling of Transmission Charges of associated transmission
schemes and sharing on the basis of allocation
Neutral to distance and direction
Evolution of Transmission Pricing
Regional Postage Stamp Method: Interregional
allocation
Pan caking of regional transmission charges and losses
Beneficiary states were to pay
transmission charges of other region in which generation
source located
Transmission charges of intermediate regions involved in
case generation source located which is not adjacent
(pancacking and cross subsidisation)
o …………………………………
Pancaking in Losses
Generation Located in NER
Drawee Entity in NR
NER-ER Boundary
ER-NR Boundary
3%4 %5%
100 MW97 MW93.12 MW88.46 MW
Drivers of Change
Drivers for Change
Holding Pattern: Risk Mitigation
4776
Network Size Complexities
Buses 4830
Generating Stations 557
Generating Units 1148
Loads 2672
Branches
DC Lines 7
765 kV 2
400 kV 622
220 kV 3034
132 kV 5130
Total 8795
Transformers 2031
National Transmission Pricing Framework
National Transmission Pricing Framework
As per mandate of NEP/ TP
Sensitivity to distance and direction
Avoids pan- caking of charges
Addresses multiple transmission licensee regime
Provides economic signal for locating generation and
load
New Pricing Framework
a necessity rather than a choice
Policy Mandate
Provisions of National Electricity PolicySection 5.3.2
“Network expansion should be planned and implemented keeping in view the anticipated transmission needs that would be incident on the system in the open access regime. Prior agreement with the beneficiaries would not be a pre-condition for network expansion. CTU/STU should undertake network expansion after identifying the requirements in consultation with stakeholders and taking up the execution after due regulatory approvals.”
Policy Mandate
Section 5.3.5“To facilitate orderly growth and development of the power sector and also for secure and reliable operation of the grid, adequate margins in transmission system should be created. The transmission capacity would be planned and built to cater to both the redundancy levels and margins keeping in view international standards and practices.”
“To facilitate cost effective transmission of power across the region, a national transmission tariff framework needs to be implemented by CERC. The tariff mechanism would be sensitive to distance, direction and related to quantum of flow.”
Policy Mandate
Provisions of Tariff Policy
Section 7.1(2)
“The National Electricity Policy mandates that the national tariff framework implemented should be sensitive to distance, direction and related to quantum of power flow. This would be developed by CERC taking into consideration the advice of the CEA. Such tariff mechanism should be implemented by 1st April 2006”
Policy Mandate
Section 7.1(2)
“Transmission charges, under this framework, can be determined on MW per circuit kilometer basis, zonal postage stamp basis, or some other pragmatic variant, the ultimate objective being to get the transmission system users to share the total transmission cost in proportion to their respective utilization of the transmission system. The overall tariff framework should be such as not to inhibit planned development / augmentation of the transmission system, but should discourage non-optimal transmission investment.”
Policy Mandate
Section 7.1(4)
“In view of the approach laid down by the NEP, prior agreement with the beneficiaries would not be a pre-condition for network expansion. CTU/STU should undertake network expansion after identifying the requirements in consonance with the National Electricity Plan and in consultation with stakeholders, and taking up the execution after due regulatory approvals.”
Policy Mandate
Section 7.1(7)
“After coming into effect the CERC regulation on the framework for the inter-state transmission, a similar approach should be implemented by SERCs in next two years for the intra state transmission, duly considering factors like voltage, distance, direction and quantum of flow.”
Policy Mandate
Section 7.2Transmission Losses
“Transactions should be charged on the basis of average losses arrived at after appropriately considering the distance and directional sensitivity, as applicable to relevant voltage level, on the transmission system. Based on the methodology laid down by the CERC in this regard for inter- state transmission, the Forum of Regulators may evolve a similar approach for intra-state transmission.”
Regulatory Initiatives
Discussion Paper on Sharing of Charges and losses in Inter-State Transmission System (ISTS) (2007)
Approach Paper on Formulating Pricing Methodology for Inter-State Transmission in India (May 2009)
Draft Regulation on Sharing of Inter-State Transmission Charges and Losses (February 2010)
Regulation on Sharing of Inter-State Transmission Charges and Losses (June 2010)
25th February 2011 NLDC 22
PoC Mechanism
Distance Sensitivity
Direction Sensitivity
Quantum Sensitivity
Methodology Proposed in India
Point of Connection (PoC) Charges In Rs. per MW per month Nodal / Zonal Charges Separate Injection & Withdrawal Charge
Usage Based Methodology Based on Load Flow Studies Hybrid of Average Participation and Marginal Participation
methods
PoC Charges To be made known upfront To be applied on Medium Term and Short Term Trades
Handling Transition To begin with 50% Uniform Charges and 50% PoC Charges Gradual movement towards 100% PoC Charges
NLDC
Average Participation
Tracing of Power Load Tracing Generator Tracing
25th February 2011 NLDC 25
Marginal Participation
Marginal Participation The charges are based on incremental utilization of
network assessed through load flows.
25th February 2011 NLDC 26
Hybrid Methodology
Hybrid of Average Participation Marginal Participation
Average Participation Used to identify slack (responding) buses for each node
Marginal Participation To compute the participation factor of each node on each
line.
25th February 2011 NLDC 27
Distance Sensitivity
Flow of electricity Based on Laws of Physics Independent of Contract Path
Electrical Distance is captured in PoC Mechanism Conductor Impedance Charges of Transmission Lines
Direction Sensitivity
Separate PoC Rates for Withdrawal and Injection Generation Hub
High Injection PoC Rate Demand Met from Local Generation
Low Withdrawal PoC Rate
ZONE AInjection PoC Rate(Rs 100000 per MW)
Withdrawal PoC Rate(Rs 70000 per MW)
Quantum Sensitivity
Access vs Usage
Planning based on Access
Usage reflected in PoC Rates
Access is reflected in charges payable
Process of Computation of PoC Rates
Input Data from various
stakeholders
Preparation of Basic Network &
Load Flow Studies
Network Truncation &
Load Flow Studies on Truncated Network
Computation of Nodal Charges(Average and
Marginal Participation)
Zoning of Nodes (Generation Nodes
and Demand Nodes)
Scaling of PoC Rates to Recover
Total Charges
PoC Rates Slabs
Zones are made out of nodes Nodes are the substations appearing in the truncated
network 400 kV & above substations in NR,WR,SR,ER and 132 kV &
above substations in NER
Nodal Charges are computed from Hybrid Method
Zoning……………Sample Case
Bus Name Owner
Generation Charges
Load Charges Generation Load
BAWANA-G
DEL_TH31242888 0 388 0
BAMNOL4 DEL_STU 0 59138840 0 645
BAWANA4 DEL_STU 0 39132218 0 425
MAHARANI NR_PGCIL0 17697566 0 295
MANDOLA NR_PGCIL0 77146314 0 793
PANIPAT * BBMB 0 10870697 0 163
Total31242888 203985637 388 2321
Computation of Zonal PoC Rate
Zonal Withdrawal PoC Rate (Rs/MW/Month)
= Total Charges
Total LTA
Zonal Withdrawal PoC Rate of Delhi: =Rs 203985635 / 3563 MW = 57244 Rs/MW/Month
Zonal Injection PoC Rate of Delhi:= Rs 31242888 / 420 MW = 74388 Rs/MW/Month
Computation of Zonal PoC Rate
Uniform Rate (Rs/MW/Month) =
Total MTC-----------------------------------------------------------------------------------
-(Sum of Approved Injection + Sum of Approved Withdrawal +
Sum of Approved Additional Medium Term Injection + Sum of Approved Additional Medium Term Withdrawal)
= Rs 5957754576 (MTC of NEW Grid) / (40161 + 33751) MW
=80606 Rs/MW/Month
Computation of Zonal PoC Rate
Net Injection PoC Rate: 0.5*82495 + 0.5*80606 =81550 Rs/MW/Month
Net Withdarwal PoC Rate: 0.5*63482 + 0.5*80606 =72044 Rs/MW/Month
• Net PoC Rate = 50% PoC + 50% Uniform Rate
Injection PoC Slab Rate of Delhi : Rs 85000 Rs/MW/MonthWithdrawal PoC Slab Rate of Delhi : Rs 70000 Rs/MW/Month
Approved Slab Rates (Rs/MW/Month)
Slab for PoC rates approved by CERC
100000
85000
70000
110000
95000
80000
NEW GridNEW Grid SR GridSR Grid
Slab rates for PoC Losses approved by CERC
Average Loss
Average Los + 0.3%
Average Loss - 0.3%
PoC Charges Slab Rates………………..(1)
Envy Free Allocation
Min-Max Theory
Principle of Minimum Regret
Certainty in Transmission Rate
Transmission Rate in Postage Stamp Method
= Total Regional ISTS Charges
(Total LTA of all states of a region)+ (Export LTA)
Variation in Total Regional ISTS Charges Approval of tariff of new assets by the Commission
Variation in Total LTA Commissioning of new generators
PoC Mechanism Single PoC Rate Year Ahead Declaration
Siting Signals
Hydro Generation Location Depends upon availability of water head Fixed
Liquid Fuel or Coal Fired generation Freight Charges vs Electron Carriage Charges
Postage Stamp method Signal for investment near buyer
PoC Method Signal for investment at efficient locations
41
Point of Connection Mechanism
•In Rs. per MW per month•Nodal / Zonal Charges•Separate Injection & Withdrawal Charges•To be made known upfront•To be applied on Long Term, Medium Term and Short Term Trades
•Based on Load Flow Studies•Hybrid of Average Participation and Marginal Participation methods
•To begin with 50% Uniform Charges and 50% PoC Charges•Introduction of Slabs
Important Numbers 2011-12
Total Yearly Transmission Charges : 8700 Cr (approx)
Total LTA : 47000 MW (approx)
Total Zones : 71 (Nodes: 500 approx)
Uniform Rate NEW Grid : 80000 Rs/MW/Month SR Grid : 90000 Rs/MW/Month
20/04/23 POSOCO 43
ISSUES
Change in Transmission Charges
Change in CERC norms Tariff based on 2009-14 norms Provisional Tariff approved by the Commission
Inclusion of tariff of transmission system expected to be commissioned up to 30th September 2011.
Avoidance of Pancaking
Transmission Line Vintage
Transmission is a service Same service offered by old and new lines Power flow independent of vintage
Comparison with other cybernetics Same tariff in rail, road and air transport irrespective of
vintage of carrier.
Transmission Line Vintage
Uniform Charge Component
Regulation provides
50% Uniform Charge in total PoC Rate
Discussed in SOR
“3.3.62 : This is a transition mechanism adopted to
avoid tariff shock to any beneficiary. This may be
reconsidered by the Commission after two years”
Fallout of 100 % PoC
Wide variation in PoC Rates
Shock during transition
National Pool vs Regional Pool Uniform Charge Computed separately for NEW and SR
Grid
Regional boundaries losing significance Trans Regional ISGS Increasing Inter Regional Flows Meshed Network
Regional Pool Signal for planning
NEP 2005 and Tariff Policy 2006 National transmission tariff framework
Single Scenario
Unavailability of Data
Adjustment Prone/Gaming/Disputes
Authentic Data Published by CEA
Single PoC Rate
Easy to Comprehend
Stable Signal
Market Friendly
RPC Certified Lines
Charges of RPC Certified Lines
Charges shared before 15.6.2010 considered
Criteria for certifying new lines
50% or more inter state power flow
Unavailability of approved Tariff
RPC Certified lines charges
Should be excluded from ARR of STUs
Way Forward
“Implement, Gain Experience & Ramp Up”
Improvements in PoC mechanism based on the
experience gained
Similar Mechanism to be replicated in states.
Section 7.1(7) of the amended Tariff Policy:
“After coming into effect of the CERC Regulation on the framework
for inter-State transmission, a similar approach should be
implemented by the SERCs in next two years for the intra-State
transmission, duly considering factors like voltage, distance,
direction and quantum of flow.”
CERC (Sharing of Inter State Transmission Charges and Losses) (First Amendment)
Regulations 2011
Amendment to Regulation 2 of Principal Regulations … (2)
Amendment to Regulation 2 of Principal Regulations … (3)
Definition of DIC DISCOMs/ Designated Agency in State prior to PoC
implementation to be treated as DIC in that State for preparation of RTA and for Billing & Collection
After Implementation, States may designate any agency as DIC
Definition of ‘Target Region’ after sub-clause (t) of Regulation 2 inserted as:
"(ti) 'Target Region' means the region to which a generator proposes to sell power after obtaining Long-term Access from the CTU and for which beneficiaries in the said region have not been identified."
CERC (Sharing of Inter State Transmission Charges and Losses) (First Amendment) Regulations 2011
Definition of YTC:Sub-clause (y) of clause (1) of Regulation 2 substituted as:
“(y) ‘Yearly Transmission Charge (YTC)’ means the Annual Transmission Charges for the existing and new transmission assets of the transmission licensees and deemed ISTS Licensees including non-ISTS lines certified by Regional Power Committees for carrying inter-State power, determined by the Appropriate Commission under section 62 of the Act or adopted by the Appropriate Commission under section 63 of the Act or as otherwise provided in these Regulations”
Amendment to Regulation 7 of Principal Regulations Amendment to Clause (1)(l) of Regulation 7:
YTC to be revised on six monthly basis i.e., on 1st April and 1st October in first year
Subsequently, revision on Quarterly basis i.e., 1st April, 1st July, 1st October and 1st December
Sub-Clause (m) of Clause (1) of Regulation 7 (allocation of YTC of sub-stations to transmission lines) to be deleted
Revenue collected from Approved Additional MTOA in a synchronous grid to be reimbursed to DICs in same synchronously connected grid having LTA in following month
Injection PoC and Demand PoC charges for MTOA to target region to be adjusted against Injection PoC and Demand PoC Charges for LTA to target region without identified beneficiaries and not against LTA granted to any other target region without identified beneficiaries
Generator with LTA to a target region without identified beneficiaries Injection PoC Charges plus lowest of Demand PoC Charge among all
DICs in target region for remaining quantum after offsetting MTOA
Adjustment not allowed for Collective and Bilateral transactions
Amendment to Regulation 11 of Principal Regulations
Amendment to Regulation 11 of Principal Regulations
Injection PoC and Demand PoC charges for STOA to target region to be adjusted against Injection PoC and Demand PoC Charges for LTA to target region without identified beneficiaries and not against LTA granted to any other target region without identified beneficiaries
Generator with LTA to a target region without identified beneficiaries Injection PoC Charges plus lowest of Demand PoC Charge
among all DICs in target region for remaining quantum after offsetting MTOA and STOA
Amendment to Annexure of Principal Regulations YTC computed for assets at each Voltage level and for
each Conductor configuration based on Indicative Cost submitted by CTU
YTC for RPC certified non-ISTS lines To be approved by Appropriate Commission Average YTC to be used if tariff not approved by Appropriate
Commission Common methodology to be adopted by NLDC for
certifying non-ISTS lines carrying Inter-State power Recovery of YTC of assets to be commissioned in
Application period based on Approved/Provisional tariff Disbursement to owners of RPC certified non-ISTS lines
only after tariff is approved by Appropriate Commission
Amendment to Annexure of Principal Regulations
Following to be added after first paragraph in Step 4 of Clause (2) under Para 2.7
“The charges of the HVDC back to back inter-regional links at Chandrapur and Gazuwaka shall be included in the YTC of the NEW grid and the SR grid in the ratio of 1:1 and charges for Talcher–Kolar HVDC bi-pole link shall be shared by DICs of SR only.”
Thank You