Point of Connection Methodology for Sharing of Transmission Charges

Methodology adopted for Sharing of ISTS Charges Hybrid Method ----A combination of Tracing and Marginal Participation methods

Tracing of Electricity Based on a paper published by Bialek in 1996 Requires base case load flow Uses concept of proportional flows Attempts to identify which generators are supplying which loads

Marginal Participation --- changes in line flows due to incremental 1 MW change in generation/load at a node is used to determine the participation of the node on the lines

The Procedure Solve Base case LF on basic network….truncated to 400 kv Identification of responding buses-tracing Increment 1 MW Marginal generation/Load at desired bus absorbed/generated by responding buses Calculate line utilization factors Allocate costs to nodes Calculate poc rate/nodal prices

The LF studies have been done using Power World Simulator evaluation/student edition

P out Records: One MW Marginal drawal at Bus 2, Supplied by Generator at Bus 5 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO Pout Records Base Case Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

60.38 MW 73 MW MW Contribution of 180 MW generator on line 4= 60.38*180/(180+73)= MW

For a large system It requires the solution of the [A] matrices.

P1=253 P2=260 P3=220 P4= P5= = = = = = =73.00 Pi = nodal power at node i = sum of injections = sum of withdrawals

From “The Tracing of Electricity” J.Bialek, 1996 Contribution of Generator k in line outflow in line i-l emanating from node i= |P i-l |*[A u -1 ] ik *P Gk /P i [A u ] ij = 1 if i=j -|P j-i |/P j if j belongs to set of nodes directly supplying to node i 0otherwise

Au Matrix Au Au Inv

From “The Tracing of Electricity” J.Bialek, 1996 Contribution of Generator k to Load at node i= P Li *[A u -1 ] ik *P Gk /P i

From “The Tracing of Electricity” J.Bialek, 1996 Contribution of Load k in line inflow in line i-j into node i= |P i-l |*[A d -1 ] ik *P Lk /P i [A d ] ij = 1 if i=j -|P j-i |/P j if j belongs to set of nodes directly supplied from node i 0otherwise

Ad matrix Ad Ad Inv

Line1(1-2)Line2(4-2)Line3(5-1)Line4(1-3)Line5(5-3) Line6(5-4) Generator 1 (MW) % Generator 2(MW) % Total

Load line contribution Line1(1- 2)Line2(4-2)Line3(5-1)Line4(1-3)Line5(5-3)Line6(5-4) Load (bus2) % Load (bus 3) % load (bus 4) %

Load (bus 2) Load (bus 3) Load (bus 4) Gen 1(bus1) %53200 Gen 2(bus5) % Total

Increase 1 MW load at Bus 2 ……… and as per result of tracing Generator 1 will respond with 53% that is 0.53 MW and Generator 2 will respond with 47% that is 0.47 MW

Calculation of Seasonal Index & Marginal Participation Factors

Seasonal index (for node i line l): U e,i,l =(|F le i | - |F le |).P ie |F le i | - |F le | must be >0

Pout Records: Marginal 1 MW INCR at Bus 2 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO Pout Records Base Case Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

LineMarginal case Base case Ue2l Ue2(1-2) Ue2(1-3) Ue2(5-1) Ue2(4-2) Ue2(5-3) Ue2(5-4) Seasonal Index for node 2 Seaslonal index for node 2 on line [1-2] = ( )*260

Increase 1 MW load at Bus 1

Pout Records Bus 1 INCR 1 MW Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO Pout Records Base Case Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

LineMarginal case Base case Ue1l Ue1(1-2) Ue1(1-3) Ue1(5-1) Ue1(4-2) Ue1(5-3) Ue1(5-4) Seasonal Index for node 1

Increase 1 MW load at Bus 3

Pout Records: 1MW INCR in bus 3 (load) Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO Pout Records Base Case Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

LineMarginal case Base case Ue3l Ue3(1-2) Ue3(1-3) Ue3(5-1) Ue3(4-2) Ue3(5-3) Ue3(5-4) Seasonal Index for node 3

Increase 1 MW load at Bus 4

Pout Records Base Case Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO Pout Records: 1MW INCR Bus 4 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

LineMarginal case Base case Ue4l Ue4(1-2) Ue4(1-3) Ue4(5-1) Ue4(4-2) Ue4(5-3) Ue4(5-4) Seasonal Index for node 4

Increase 1 MW load at Bus 5

Pout Records: bus 5 INCR 1MW Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW 1 LOAD TO TO BUS MW 1 GENERATOR TO TO TO Pout Records Base Case Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

LineMarginal case Base case Ue4l Ue5(1-2) Ue5(1-3) Ue5(5-1) Ue5(4-2) Ue5(5-3) Ue5(5-4) Seasonal Index for node 5

Marginal Participation Factor( of node i in line l): U eil / ∑ i U eil

Node/b us 1 Bus 2Bus 3Bus 4Bus 5 Line

Zone A

Line Cost Information Linefrom busto buslength in KMCost of line (in Crs) Total=803 Cr Line cost considered as 1 crore/km for indicative purposes only

Calculation of Uniform Charges = Total Transmission Charges/(Sum of approved Injection+Sum of approved Withdrawal) =803/( ) =69.22 lakhs/MW For bus 1 =(69.22*180)=125 Cr For bus 2=(69.22*260) =180 Cr For bus 3=(69.22*220) =152 Cr For bus 4=(69.22*100) = 69 Cr For bus 5=(69.22*400) =277 Cr

Cost allocation to nodes based on marginal participation NodesMarginal Participation case (Cost in Rs Cr) Uniform Charges (Cost in Rs Cr) 50 % Marginal Participation 50% Uniform Charges PoC rates Rs Lakh /MW/mont h Node/Bus Node/Bus Node/Bus Node/Bus Node/Bus Total803

Generator shares Generator Loads Generator Node 1 % share Generator Node 5 % share Load bus Load bus 330 Load bus 46020

Node s MP- Trace UC50 % MP & 50% UC PoC rates Rs Lakh /MW /month Monthly Charges to be paid Rs Lakhs/mont h based on share Monthly Charges to be paid Rs Lakhs/month based on trace Node/ Bus (3.47) Generator node Node/ Bus (5.93) Node/ Bus (6.14) Node/ Bus (5.83) Node/ Bus (6.48) Generator node Total803 Charges to be paid = own drawal*drawal PoC of node+share*generator capacity*injection PoC of generator bus (Figures in brackets are based on MP-Trace only)

Present Issues

There is no internationally adopted best common method for allocation of transmission costs….. All methods have their pros & cons Worldwide a combination of methods is used for allocation such as postage stamp, marginal/nodal pricing, marginal participation, average participation, MW- Mile, peak based, game theory etc Requires not only technical expertise but also Econimics concepts such as marginal price, social welfare, etc

While postage stamp method is the most easiest to understand, it does not capture the congestion costs. While marginal participation has some degree of technical backing it is complex to understand and implement Selection of slack bus/responding nodes in marginal participation is a contentious issue.

While we are rightly concerned with congestion. What if there is over capacity/stranded assets in a corridor? What if the constructed lines remain lightly loaded for most part of the year due to error in planning or change in load generation scenario over time? What is the limit of reliability costs?

In Flow based methods the base case load generation is very important….. More so when the tariff of assets vary widely 50 % Uniform charges distort the locational signals Slabbing further distorts the results of marginal participation

Whether a generator/supplier or Load/Consumer is to be penalized for its geographical location? -----generation zones are predetermined based on availability of resources ----load zones/industrial belts are also result of historical development, resource availability Whether generator or Consumer be penalized due to asymmetries in transmission network created during historical development of ISTS ?

Future Concerns Integration of Renewables in the Grid ---run of the river hydro, wind and solar run on very low PLF. However, transmission must be developed for entire capacity. ---higher transmission cost/unit due to low PLF which is not under the control of generator may result in disincentive for growth of renewables

The issue of integration of renewables is being debated worldwide now Can such transmission projects be funded by Government under NAPCC?

Changes in Sharing Regulations contemplated in the third amendment regulations

Transmission charges to be calculated based on peak scenario rather than average scenario ---In selecting those operating scenarios it is important to recognise that the operating conditions that impose most stress on particular network elements may occur at times other than for system peak demand.

Discontinuation of uniform charges Discontinuation of slabbing Computation based on full basic network rather than truncated network Proportional compensation for use of state lines carrying interstate power

PoC charges under peak conditions

Pout Records: NEW BASE CASE::150% peak drawal at node/bus-2---supplied by generator node 5 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

Load (bus 2) Load (bus 3) Load (bus 4) Gen 1(bus1) %40110 Gen 2(bus5) % Total

Pout Records: NEW BASE CASE::150% peak drawal at node/bus-2 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO Pout Records:: INCR 1 MW at bus 1 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

Pout Records: NEW BASE CASE::150% peak drawal at node/bus-2 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO Pout Records:: INCR 1 MW at bus 2 Bus Flows BUS GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

Pout Records: NEW BASE CASE::150% peak drawal at node/bus-2 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO Pout Records:: 1 MW INCR at Bus 3 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

Pout Records: NEW BASE CASE::150% peak drawal at node/bus-2 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO Pout Records Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

Pout Records: NEW BASE CASE::150% peak drawal at node/bus-2 Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO Pout Records Bus Flows BUS MW GENERATOR TO TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW LOAD TO TO BUS MW GENERATOR TO TO TO

Node/b us 1 Bus 2Bus 3Bus 4Bus 5 Line

Marginal Line Participation Factors peak case and earlier/average case for line 1--2

Total charges allocated to nodes peak case earlier case

Tabulated data for earlier case and peak case NodeEarlier cost allocated to node Peak scenario cost % change Earlier cost/ Lakh/MW /month MP Earlier cost/ Lakh/MW/ month MP+UC Peak Scenario cost/ Lakh/MW/mo nth While the load at bus 2 had increased 1.5 times the total cost allocated to the node has increased only 1.18 times( 1.19 for MP+UC) cost/MW/Month will go down (as MW increased). New entrants/ST customers incentivized Charges allocated to a node will change only if due to it flow in different lines change. Otherwise the charge may remain same under peak scenario also. May also reduce.

From CERC sharing of ISTS charges (third amendment) draft

TABLE 2 DICWithdrawal/Load PoC Charges Scaled PoC Charges X45,79,42,69750,45,52,461 Y18,96,39,55420,89,41215

TABLE 3 ZoneUniform Charges (UC)\(Rs./Month)=Unifo rm Rate*LTA Scaled PoC Charges Rs/Month 50% UC and 50% PoC Rs./Month LTA (MW)Withdrawal Charges (Rs/MW/Month) X 25,22,12,08750,45,52,46137,83,82,2742,6681,41,822 Y 16,44,90,08820,89,41,21518,66,46,8471,7411,07, /20.89= 2.42 ; 37.84/18.66 = 2.07

TABLE- 4 DIC Drawal (MW) LTA (MW) Slab Rate (Rs/MW/Month) Actual Usage (Rs/ Month) Payment (Rs/ Month)Variation X ,09,54445,79,42,69729,22,63,392(-) 36.2% Y ,09,54418,96,39,55419,07,16, % 50.46/20.89= 2.42 ; 37.84/18.66 = 2.07 ; 29.23/19.07 = 1.53 ??

TABLE-5 Zone Generation (MW) Load (MW) Generation Charges (Rs.) Load Charges (MW) LTA (Generation) (MW) LTA (Demand) (MW) Generation PoC (Rs./MW/ Month) Load PoC (Rs./MW /Month) (1)(2)(3)(4)(5)(6)(7)(8)(9) Z ,64,6382,160,51,

TABLE-6 Zone Generation PoC (Rs./MW/ Month) Load PoC (Rs./MW /Month) Generation PoC (Rs./MW/ Month) Load PoC (Rs./MW /Month) Generation PoC (Rs./MW/ Month) Load PoC (Rs./MW/ Month) Generation PoC (Rs./MW/ Month) Load PoC (Rs./M W/Mo nth) Software ComputedLTA Based After 50% Uniform charge and 50% PoC application After Slabs Z8,59474,2295,94545,16650,54772,15479,544

TABLE-7 Sl.No.State /DIC% Allocation 1BIHAR42.89% 2JHARKHAND8.13% 3DVC0.31% 4ODISHA31.8% plus temp allocation 5WEST BENGAL9.1% plus temp allocation 6SIKKIM2.4 7TAMIL NADU0.85% 8NER3.22%

TABLE-8 Sl.No.State /DIC% as per participation factor 1ODISHA DVC12.1 5WEST BENGAL4.93

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