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TRADITIONAL METHODS
TOPICS COVERED
FREQUENCY BASED DESPATCH
CPP’S GETTING THEM INTO THE GRID
SPOT MARKET
ECONOMIC SYSTEM OPERATION
• TRADITIONAL METHODS• AVAILABILITY BASED TARIFF
– LONG TERM MARKET– DAY AHEAD MARKET– SPOT MARKET
TRADITIONAL METHODS
• COSTS INVOLVED IN A POWER PLANT– FIXED COST (EMBEDDED-STRANDED)
• CAPITAL,INTEREST,INSURANCE,ROE,AMORTIZATION
– VARIABLE COST• BASICALLY FUEL COST(MAIN&ALTERNATE FUELS), VARIABLE
O&M COST ETC• START UP COSTS• RAMP UP/DOWN COSTS• BOX UP COSTS• CONCURRENCY CAPABILITY/COSTS• VALVE POINTS
• CONGESTION CHARGES
• TRANSMISSION LOSS• TRANSMISSION CHARGES
ELECTRICITY PRICE SIGNALSLIGHTING A 100W LAMP
RS0.60/UNIT
RS 1.00/UNIT
WHO WOULD YOU BUY THE POWER FROM?
C1=2400*P1+60000
C2=4000*P2+10000
/HOUR COSTYOU NEED SAY 100 W
WHO WOULD YOU BUY THE POWER FROM?
BOTH PLANTS 500<P<1500
SURPRISINGLY, THE ANSWER IS THE SAME
PLANT A!!
ELECTRICITY PRICE SIGNALS
• THE ‘PRICE SIGNAL’ IN THIS CASE WOULD BE THE 24Ps (PER HOUR) AND THE 40 Ps (PER HOUR) COSTS WE FINALLY ARIVED AT.
• THIS IS FOR THE INCREMENTAL LOAD – YOUR 100W LAMP!
• THE COST /HOUR SHOWN IN PREVIOUS SLIDE IS THE VARIABLE COST
• THE COST DERIVED FOR LIGHTING THE 100W LAMP IS THE ‘INCREMENTAL COST’– INCREMENTAL COST IS THE COST INCURRED FOR
SUPPLYING THE NEXT MW OF POWER.
– REPRESENTED BY λ
POWER SECTOR TODAY…….
• POWER SHORTAGES• LOAD SHEDDING• ROSTERING• POWER CUTS• BROWN OUTS
BUT STILL OUR CAPTIVE AND CO-GENERATION REMAIN UNDER UTILISED
AN EVERY DAY EXAMPLE
SEBCPP + STEEL PLANT
CAPACITY : 2X65 MW
RATE : 100p/UNIT
REQUIREMENT : 120±10 MW
CAPABILITY : 120 MW
AVAILABILITY: FULL FOR 10 MONTHS, ONE UNIT ON OVERHAUL FOR 2 MONTH EVERY YEAR
CONDITIONS1)30 MW MINIMUM
DEMAND2)70 MW MAX DEMAND
FOR 2 MONTHS
REPURCUSSIONS:FOR 10 MONTHS THE CPP RUNS AT PART LOAD
OF 90 MW DUE TO CONDITION 1) ABOVE
A POSSIBLE SOLUTION
• SEB AND CPP AGREE ON A SCHEDULE – SAY 70 MW FOR 2 MONTHS AND 30 MW FOR REST OF THE YEAR.
• ANY DEVIATION FROM THE ABOVE WOULD ATTRACT A FREQUENCY LINKED UI RATE.
A WIN-WIN SITUATION
• IN CASE THE FREQUENCY IS LOW:– CPP GENERATES MORE AND
BENEFITS FROM THE UI.– SEB BENEFITS BECAUSE IT DOES NOT
HAVE TO DRAW FROM THE GRID AT HIGH PRICE.
–MORE LOAD IS SERVED.
A WIN-WIN SITUATION
• IN CASE THE FREQUENCY IS HIGH:– CPP GENERATES LESS .– SEB BENEFITS BECAUSE IT DRAWS POWER
FROM THE GRID AT A LOW PRICE.– MERIT ORDER IS ACHIEVED.
• THE CPP CAN DECIDE LEVEL OF GENERATION DEPENDING ON THE FREQUENCY AND ITS NETT INCREMENTAL COST
ADVANTAGES FOR CPP
• SIMPLICITY – A FREQUENCY METER IS ALL THAT IS REQUIRED
• NO TELEMETRY OR COMMUNICATION WITH SLDC/SEB
• NO PRICE TO BE NEGOTIATED
• CPP DOES NOT HAVE TO SEARCH FOR BUYER
• CPP CAN MAKE A REASONABLE PROFIT.
ADVANTAGES FOR SEB
• IMPARTIAL AND UNBIASED SYSTEM
• NEED NOT WORRY ABOUT CPP UNDER-GENERATING AT LOW FREQUENCY AND OVER-GENERATING AT HIGH FREQUENCY
• FRAMEWORK FOR SETTLEMENT IS ALREADY AVAILABLE