Availability-based tariff (ABT) is a frequency based pricing mechanism applicable in India for unscheduled electric power transactions. The ABT falls under electricity market mechanisms to charge and regulate power to achieve short term and long term network stability as well as incentives and dis-incentives to grid participants against deviations in committed supplies as the case may be.
Introduction ABT Mechanism in electricity sector in India is adopted since the year 2000 and in a few other countries for pricing bulk power across various stakeholders. ABT concerns itself with the tariff structure for bulk power and is aimed at bringing about more responsibility and accountability in power generation and consumption through a scheme of incentives and disincentives. As per the notification, ABT was initially made applicable to only central generating stations having more than one SEB / state / union territory as its beneficiary. Through this scheme, the Central Electricity Regulatory Commission (CERC) looks forward to improve the quality of power and curtail the following disruptive trends in power sector:
Unacceptably rapid and high frequency deviations (from 50 Hz) causing damage and disruption to large scale industrial consumers Frequent grid disturbances resulting in generators tripping, power outages and power grid disintegration.
The ABT scheme has now been expanded to cover the Intrastate systems as well. The power generation or grid capacity has increased substantially in last fifteen years particularly after the Electricity Act 2003 by introduction of competition and unbundling of vertically integrated utilities (SEBs) into separate entities in charge of electricity generation, electricity transmission, and electricity distribution. Deregulation and competition has facilitated participation of private sector on large scale in electricity generation, transmission and distribution. Of late, Indian electricity sector is transforming from perennial deficit to surplus electricity availability. The volume of purchased electricity that could not be transmitted to the buyers due to transmission lines congestion is only 0.3% of the total electricity consumed in the financial year 2013–14. It means that the actual power deficit in India is less than 1% excluding under priced electricity demand. ABT/DSM mechanism needs improvements to address the requirements of all stake holders (including final electricity consumers) for encouraging least cost electricity generation / tariff based on demand verses availability in the grid.Electricity online trading in India There is a need of well represented Electric Reliability Organization to involve all the grid participants for framing guidelines for power system operation and accreditation which is presently looked after by the CEA
Bulk power purchasers can buy electricity on daily basis for short, medium and long term duration from reverse e-auction facility. In reverse e-auction, availability-based tariff / deviation settlement mechanism (DSM) is applied to settle the failed commitments by the electricity sellers or buyers The electricity prices transacted under reverse e-auction facility are far less than the prices agreed under bilateral agreements.
For those power generators who have made power purchase agreements (PPA) with distribution companies and need not participate in day ahead market (DAM) trading on daily basis, the pecking order among the power generators in a state is called merit order power generation where the lesser variable generation cost electricity producer is selected out of the available generators to maintain the normal grid frequency. IEX is also implementing real-time round the clock trading or one hour ahead trading which will take care of intra day market dynamics. GoI also permitted electricity trading on exchanges with forward and derivatives contracts.
A reverse auction is not a perfect price discovery mechanism or balanced market coupling where single price is applicable to all traders when there is no transmission constraints. However, when the demand is slightly more than the supply, the market discovered price (Rs/KWh) would go steeply high and vice versa. When there is a transmission constraint to export power to a region, the difference between the market-discovered prices of different regions are unreasonably high. In reverse auction trading, the buyers pay a very high price/KWh (many times more than the cost of power from the diesel generator sets) for the incremental purchases.
In 2021, CERC proposed a grid management system where ancillary service providers are fully responsible for maintaining grid frequency within the safe range similar to prevalent practice in developed countries. Generators and distribution companies are not required to keep the grid frequency in the permitted range under this proposal and the applicable power tariff is delinked from the grid frequency. Observing its detrimental effects on grid safety, it was discontinued after implementing for a few weeks.
ABT details
What is availability? Availability, for the purpose of the ABT order means the readiness of the generating station to deliver ex-bus output expressed as a percentage of its ex-bus rated capacity (MCR). Electricity is a commodity whose cost of storing is more than its production cost. The most economical method for electricity generation, transmission and distribution is just in time production where the availability and reliability of the entire system shall be very high to meet the unpredictable electricity demand on minute to minute basis.
How is availability calculated? Availability of thermal generating station for any period shall be the percentage ratio of average sent out capability (SOC) for all the time blocks during that period and the rated MCR / SOC of generating station. The SAIDI (system average interruption duration index) is commonly used as a reliability indicator by electric power utilities.
Is unified electric grid of India a smart grid? During the fiscal year 2014–15, 1,043 billion KWh of electricity (three times that of National Grid) was supplied and met 138,215 MW maximum peak load. The total installed generation capacity is 267,637 MW at the end of fiscal year 2014–15. Its size is of global scale comparable only with EU grid, NERC grid, China electricity grid and Russian electricity grid.Electricity sector in India#Electricity transmission and distribution However, Indian grid lacks the basic features of smart grid for optimum use of its deployed resources.
What is the effectiveness criteria of a smart grid? Generally the top 10% of the unrestricted daily peak load (MW) persists only for 1% (15 minutes) of the total duration and its energy share (MWHr) is of the order of 0.2% of the daily energy supplied. Instead of generating this substantial extra power for a short duration, automatic selective load shedding can be implemented on bulk consumers possessing with standby power facility to eliminate the load spikes without inconvenience to most of the consumers.Control of the National Grid (Great Britain)#Frequency Service Alternatively, working captive power plants start feeding to the grid by giving break to the captive power supply up to a maximum of 30 minutes duration. The standby generator / captive power owner would be paid for providing grid reserve ancillary services.
With an installed capacity of proper mix of base load and variable load generation capability (excluding low capacity utilisation or secondary power or negative load type on daily basis such as solar, wind, etc. without storage) equivalent to the unrestricted annual maximum peak load, the most effective and economical smart grid shall be able to cater more than 99 percentile duration unrestricted load/demand on daily basis with 100% stable operation of the grid.Talk:Availability-based tariff The purpose of smart grid is to supply required electricity at optimum cost with reliability to the final consumers.
Scheduling
Each day of 24 hrs starting from 00.00 hours be divided into 96 time blocks of 15 minutes each. Each generating station is to make advance declaration of its capacity for generation in terms of MWh delivery ex-bus for each time block of the next day. In addition, the total ex-bus MWh which can actually be delivered during the day will also be declared in case of hydro stations. These shall constitute the basis of generation scheduling. While declaring the capability, the generator should ensure that the capability during peak hours is not less than that during other hours. The Scheduling as referred to above should be in accordance with the operating procedures in force. Based on the above declaration, the Regional Load Dispatch Centre (RLDC) shall communicate to the various beneficiaries their respective shares of the available capability. After the beneficiaries give their requisition for power based on the generation schedules, the RLDC shall prepare the generation schedules and drawal schedules for each time block after taking into account technical limitations and transmission constraints. The schedule of actual generation shall be quantified on ex-bus basis, whereas for beneficiaries, scheduled drawals shall be quantified at their respective receiving points. For calculating the drawal schedule for beneficiaries, the transmission losses shall be apportioned in proportion to their drawals. In case of any forced outage of a unit, or in case of any transmission bottleneck, RLDC will revise the schedules. The revised schedules will become effective from the 4th time block, counting the time block in which the revision is advised by the generator, to be the 1st one. It is also permissible for the generators and the beneficiaries to revise their schedules during a day, but any such revisions shall be effective only from the 6th time block reckoned in the manner as already stated.
ABT features
ABT brings about enhanced grid discipline
Economically viable power with right pricing Promote competition and efficiency Encourage use of merit order dispatch / economic dispatch in India. Addressing grid disturbance issues Gaming and avoiding the same Requires special meters, remote metering with open protocols and communication mechanisms to read meters timely Software that is comprehensive to do calculations, address regulatory issues and modifications as per different Regulatory Commission requirements. Interface options to various stakeholders in the ABT mechanism on line to enable effective implementation and benefits to all* Capability of power producers to be able to control their cost of production as well as flexibility in operations
ABT drawbacks