What is ABT?
Availability Based Tariff (ABT) stands for a rational tariff structure, for supply of electricity from generating station to beneficiaries on a contracted basis. It is a system of scheduling and dispatch, with rewards and penalties seeking to enforce day-ahead pre-committed schedules for both generators and beneficiaries.
Availability Based Tariff (ABT) is a frequency based pricing mechanism for electric power. ABT tries to improve the quality of power and curtail the following disruptive trends:
♦ Unacceptable rapid and high frequency deviations causing damage and
♦ Frequent grid disturbances resulting in generators tripping, power outages
and grid instability.
♦ Scheduling and load dispatch (current day, day ahead scheduling).
♦ Tariff structure (fixed charges, schedule or energy charges
and unscheduled interchange).
Pre ABT Tariff structure
The power plants have normally two types of costs.
The fixed cost elements are interest on loan, return on equity (ROE), depreciation, O&M expenses, insurance, taxes and interest on working capital.
The variable cost comprises of the fuel cost, i.e., coal and oil in case of thermal plants and nuclear fuel in case of nuclear plants.
Before introducing ABT, there was no bifurcation between fixed and variable charges and the total amount payable to the generating company over a year towards the fixed cost depends on the average availability (MW delivering capability) of the plant over the year. This tariff mechanism did not provide any incentive for either backing down generation during off-peak hours or for reducing consumer load/enhancing generation during peak-load hours. In other words, this pre ABT tariff mechanism encouraged grid indiscipline.
Availability Based tariff components
ABT splits the existing monolithic energy charge structure into three basic components. By treating both fixed and variable cost components separately.
Capacity charges (fixed): Towards reimbursement of the fixed cost of the plant, linked to the plant’s declared capacity to supply MWs, it is linked to availability of the generating station. That is, its capability to deliver MWs on a day-by-day basis. At zero availability, no capacity charges shall be payable.
Energy charges (variable): Energy charge is the fuel cost for scheduled generation. Energy charges or variable charges shall be payable by every user on the scheduled energy irrespective of actual drawal.
UI(unscheduled interchange) charges: It is a payment for deviations from schedule at a rate dependent on system conditions(frequency) at that time. The deviation from schedule is technically termed as unscheduled interchange (UI) in Availability based Tariff terminology. This component would be negative in case the power plant is delivering less power than scheduled.
Objectives of ABT at regional level
Promote trade in energy and capacity
Economic load dispatch.
Encourage higher generation availability.
To Encourage grid discipline
Benefits of ABT
- Help to enforce grid discipline by maintaining frequency in prescribed band (49.5-50.5Hz) and control frequency excursions. And equipment damage correspondingly also reduced. Enhanced grid discipline will pave the way for higher quality power with more reliability and availability.
- By bifurcating the method of charging Capacity Charges (fixed) and Energy Charges (variable), the incentive for trading in power is enhanced.
- The beneficiaries have a claim on the capacity, which they can trade either within or outside the region.
- Facilitates Merit Order Dispatch. Means because of clear separation between fixed and variable charges, generation according to merit-order is encouraged and pithead stations do not have to back down normally. The overall generation cost accordingly comes down.
- More relevant incentives and disincentives encourage better performance by giving scope for encouraging competition among generators.
- Commercial and operational disputes resolved.Faster settlement process.
- Transparency and sharing of the information to all participants-improved trust.
- Voltages improved, Transmission losses reduced, Transmission capacity increased.
Taken from Ieema journal available on internet.
By Er. B Manikyalu