Comments on CERC’s Staff Paper: Developing a Common Platform for Electricity Trading
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Transcript of Comments on CERC’s Staff Paper: Developing a Common Platform for Electricity Trading
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Comments on CERC’s Staff Paper: Developing a Common Platform for
Electricity Trading
S. A. Khaparde, A. R. Abhyankar and V. Sarkar
Indian Institute of Technology Bombay
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Topics of suggestions
Congestion Management Issue of congestion surplus Utility of market splitting under meshed
network situation Transmission Pricing
Compatibility of PX transmission costs with those of bilateral trades
Ex-ante or ex-post? Point-of-connection (POC) scheme
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Suggestions related to Congestion Management
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Proposed approach for handling congestion surplus
Area A(2000Rs/MWh)
Area B(3000Rs/MWh)
100 MW
50 MW
150 MW
150 MW
50 MW
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Proposed approach for handling congestion surplus (con..)
Original pricing rule: Generator at area A is paid a price of
2000Rs/MWh Load at area A pays a price of 2000Rs/MWh Generator at area B is paid a price of
3000Rs/MWh Load at area B pays a price of 3000Rs/MWh ISO collects a net congestion surplus of
100000Rs/h
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Proposed approach for handling congestion surplus (con..)
Proposed pricing rule: Generator at area A is paid a price of
2000Rs/MWh Load at area A pays a price of 2000Rs/MWh Generator at area B is paid a price of
3000Rs/MWh Load at area B pays a price of
(50*3000+100*2000)/150= 2333.33Rs/MWh ISO collects a net congestion surplus of 0
Rs/h
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problem of power mixing
Area A(2000Rs/MWh)
Area C(3000Rs/MWh)
Area B(2200Rs/MWh)
100
MW
80 M
W
200 MW
100 MW
Area D(3500Rs/MWh)
70 MW
120 MW 70 MW
100 MW
180 MW
200 MW
130MW
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Problem of power mixing (con..)
Area ‘A’ & ‘B’ are generation surplus areas Area ‘C’ & ‘D’ are generation deficit areas 100 MW from area ‘A’ and 50 MW from area ‘B’ are
mixed first to form a net surplus amount of 150 MW. Areas ‘C’ and ‘D’ get shares in this mixed amount in a
ratio of 8:7 It can’t be immediately determined how much power
is delivered from a sending end area to a receiving end area
Therefore an additional tie-breaking strategy is required to implement the proposed method
Principle of proportional sharing may be adopted for the purpose of tie-breaking
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Compatibility of Nord Pool version of area pricing with Indian system
Nord Pool approach of market splitting considers only area power balance and inter-zonal capacity limit constraints
This approach is mainly applicable to a radial system where removal of any inter-zonal link separates the original system into two totally disconnected systems
In case of a radial system, for a certain zonal injection and withdrawal pattern, power balance equations give a unique solution to the inter-zonal flows
However, for a meshed system, Nord Pool approach may lead to multiple solutions
Unfortunately, our system is a meshed system
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Structure of the Indian system
NR
WR
SR
ER
NER
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Structure of the Indian system (con..)
Three loops are there in the system NR-WR-SR-ER NR-WR-ER WR-SR-ER
There is no synchronous loop in the current system However, an additional tie breaking strategy is to be
designed to distribute the net incoming or outgoing flow of each of the regions NR, WR, SR & ER over the corresponding interfaces
In presence of synchronous loop, Nord Pool approach will fail!
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Our proposal
To go for a direct OPF based congestion management mechanism considering regions as nodes
Joint clearance of power exchange and bilateral trades for a better utilization of transmission resources
Financial transmission rights to give financial security to bilateral traders
Setting up curtailment priority among the bilateral trades by means of transmission service request mechanism
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Suggestions related to Transmission Charges
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Compatibility of PX transmission costs with bilateral trades
It is not clear whether the transmission charges for PX in Rs/MW/Hour would be comparable with prevailing long term rates or short term rates?
The staff paper mentions that the usage of pre-assigned transmission capacity by PX on inter-regional corridors shall be ‘akin’ to long term usage.
If this is so, whether, the charges would be comparable with long term rates?
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Compatibility of PX transmission costs with bilateral trades (con..)
We believe that the PX trades and short term bilateral trades would act as two parallel activities for sale and purchase of power.
It is expected that the PX would help the price discovery for bilateral transactions
This would hold true only if the entities involved in both mechanisms are subjected to common transmission prices
Common platform for transmission capacities mandates common platform of its pricing
The transmission charges for PX trades and short term bilateral trades should be comparable
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Ex-ante or Ex-post?
No specific details about socializing total transmission cost among the participants are given in the staff paper
Ex-post scheme of transmission usage charge Members of PX would come to know about their
share in transmission cost, only after market clearance
If the costs are made distance based or direction sensitive (rightly so!), then participants are exposed to vagaries of transmission charges
Socializing transmission costs does not necessarily mean assigning charges based only on MWs traded
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Our Suggestions
The transmission pricing scheme should be ‘ex-ante’
The transmission charges should be sensitive to distance and topology of the network
This gives rise to appropriate price signals for generator and load investments
The ‘point-of-connection’ (POC) transmission tariff provides a good solution to the above problem
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Point-of-Connection (POC) Scheme
The payment at one point, the point of connection, gives access to the whole network system, and thus the whole electricity market place
Single charge in Rs/MW/Hr, depending upon the level of connection
Real power tracing can be employed to arrive at point charges in POC tariff
Tracing results are topology dependent and hence give rise to spatially variant price signals
POC scheme can be applied to both, i.e., PX trades and short term bilateral transactions
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Thank [email protected]