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Availability Based Tariff

Availability Based Tariff (ABT) is a three part pricing scheme for electricity generators consisting of fixed costs, variable costs, and unscheduled interchange charges. Fixed costs are based on the generator's capacity and depend on actual plant availability. Variable costs cover fuel and operating expenses. Unscheduled interchange charges incentivize generators to match their actual generation to scheduled amounts in order to maintain grid frequency, with penalties for deviations outside a target range and payments for helping compensate for shortages.

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Vijaya Kumar
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158 views2 pages

Availability Based Tariff

Availability Based Tariff (ABT) is a three part pricing scheme for electricity generators consisting of fixed costs, variable costs, and unscheduled interchange charges. Fixed costs are based on the generator's capacity and depend on actual plant availability. Variable costs cover fuel and operating expenses. Unscheduled interchange charges incentivize generators to match their actual generation to scheduled amounts in order to maintain grid frequency, with penalties for deviations outside a target range and payments for helping compensate for shortages.

Uploaded by

Vijaya Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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What is Availability Based Tariff (ABT)?

Availability Based Tariff is a three part pricing scheme i.e. Fixed charge, Variable
charge and Unscheduled Power Interchange (UI) Incentive / Penalty.

1) Fixed Cost is basically imposed on beneficiaries in proportion to their entitled


power from the Generating Station. This means fixed cost is directly proportional to
the plant capacity shared by the beneficiaries. This is the reason Fixed Charge is often
called Capacity Charge. But this does not mean that Generating Station can claim any
amount of fixed cost irrespective of its availability. The reimbursed Fixed Charges
payable to Generating Station is dependent on the availability of plant. If the plant
availability for a year is more than the set norm, the generating station gets paid
higher. In case the plant availability is less than the set norm over a year, the
generating station is going to be paid lower. This is why this tariff is called
Availability Based Tariff. In earlier tariff, fixed charge was dependent on Plant Load
Factor but in Availability Based Tariff, it is linked with Plant Availability.
2) Variable charge is the cost incurred by Generating Station to produce MW day
to day. Variable charge is also called Energy Charge. It comprises of Fuel charge (like
coal for thermal power plant, Nuclear Fuel Bundle for Nuclear Power Plant, Gas for
Gas Power Plant etc.), Operating expenses etc.
3) Unscheduled Interchange Charge (UI Charge):
Unscheduled Interchange means deviation from the scheduled generation of
plant or deviation from scheduled drawl of power by beneficiary. Suppose a
generating station is scheduled to deliver 600 MW but actually on a day it is
supplying 700 MW, even then the station will be paid Energy Charges for scheduled
generation i.e. for 600 MW. For surplus 100 MW, the rate of energy charge will
depend upon the prevailing Grid frequency at the time. This energy charge for surplus
supply i.e. 100 MW (for our example) is called Unscheduled Interchange Charge (UI
Charge). The UI charge is linked with Grid frequency. If the Grid frequency is higher
i.e. more than 50.2 Hz, the rate of UI charge is zero. This means Generating Station
will not be paid for excess generation of 100 MW when Grid frequency is more than
50.2 Hz. Thus the station is forced to reduce its generation to maintain Grid
frequency.
Similarly when the Grid frequency is lower, the generating station is paid incentive
for excess generation at UI rate. Let us say the Grid frequency at that time is 49.4 Hz.
In this case, a UI charge at the rate of around 875 Paisa / kWh is paid to the station.
This encourages to supply excess power into the Grid by the stations so that Grid
frequency do not decrease further. The rate of Unscheduled Interchange Charge
versus Grid frequency is shown in figure below.

Following points can be observed from the UI rate versus frequency graph:
1) UI rate have two distinct slopes.
2) UI rate increases linearly from zero at 50.2 Hz to 387.5 paisa/kWh at 49.7 Hz. Thus
the first slope = (387.5 – 0) / (50.2 – 49.7) = 387.5 / 0.5 = 775 paisa/kWh / Hz
3) After 49.7 Hz, the UI rate increases linearly up to 49.5 Hz with a slope of 2350
paisa/kWh.
4) Beyond 49.7 Hz, the rate is flat at 873 paisa / kWh.

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