Northern Power Distribution Company of AP Ltd
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Contents
1 Executive Summary
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2 Background
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3 TOD in AP
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4 Annexure (TOD Tariffs in other States)
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1 Executive SummaryThe Hon’ble Commission in the Tariff Order – “Wheeling Tariff for 2009-14 and Retail Supply Tariff for 2009-10” – has directed the distribution licensees to prepare an approach paper on Time-of-day (TOD) tariffs by duly considering such tariffs in other states. Additionally, the Hon’ble Commission has directed the licensees to file the TOD tariffs in the retail supply filings (for 2010-11) based on this approach paper. Demand-side management measures such as Time-of-day tariff will help the state reduce its peak deficit, thereby reducing the quantum of power to be procured from costly sources such as direct injectors (CPPs), traders, unscheduled interchange (UI) and power exchange. The following questions have been answered in this approach paper: 1. What is the state demand-supply scenario? Can TOD be a mechanism to address the state peak / energy deficit? 2. What are the categories that can be targeted for TOD? 3. What are the TOD time blocks and tariff structure? 4. What are the TOD tariffs in other states? The paper discusses about the prevailing deficit scenario in the state and the likely deficit situation in years to come. To address the peak deficit problem in future, at least partially, the licensees wish to introduce time-of-day tariffs. After studying the time-of-day tariffs prevailing in other states, the licensees wish to implement TOD tariffs, in the present scenario, only to HT-I (A) (Industrial) category. They shall extend TOD tariffs to other HT-categories after assessing the peak-mitigation due to TOD implementation for HT-I (A) (Industrial) category. These tariffs may also be extended to LT-categories in future. The licensees have studied the average state load curve, the average HT-I (Industrial) load curve and the average UI price curve in a day to arrive at the time-blocks. They have also studied the TOD tariffs as is being levied in other states. After having analyzed the above factors, the licensees propose to implement TOD tariffs to HT-I (A) (Industrial) category in the present scenario. These tariffs would be applicable during the time-blocks 10 AM to 2 PM, with a TOD tariff of 75 paise / kWh and during 6 PM to 10 PM, with a TOD tariff of Rs. 1 / kWh on any consumption during these time-blocks. The licensees are not proposing any TOD incentives in the present scenario, as the licensees in the current deficit situation may have to procure expensive power during non-peak hours too, to meet the demand from all categories. Providing TOD incentives to consumers, in the present scenario, may have a huge financial burden on the distribution licensees. 2 BackgroundAP Demand-Supply Scenario
The state shall continue to be in deficit as the generation is not keeping pace with the growing demand. The table below details the peak demand-supply scenario in the state:
The licensees
have been bridging the demand-supply gap in the state by procuring costly power,
which constitutes close to 12% of total power purchase (in MU terms), in FY
2008-09. The costly power has been procured from various sources such as direct
injectors (CPPs), traders, unscheduled interchange (UI) and power exchange. The
table below gives particulars on costly power purchase for 2008-09 (Actuals)
and for 2009-10 (1st half Actuals):
For FY 2008-09, the state procured additional power from the costly sources for an amount of Rs. 4,271 crores at an average price of Rs. 6.64 / kWh. For the first-half of 2009-10, the state procured additional power from the costly sources for an amount of Rs. 1,345 crores at an average price of Rs. 6.41 / kWh. With the deficit in future years becoming even wider, the licensees expect the expensive power purchase quantum and cost to increase substantially. As one of the measures to curtail the quantum of expensive power quantum and cost, the licensee plan to introduce certain demand-side measures such as, time-of-day (TOD) tariffs in the state, as per directive issued by the Hon’ble Commission in the current year (2009-10) tariff order. The introduction of TOD tariffs would also be in line with the guidelines of the National Tariff Policy (NTP). 3 TOD in APSeveral major states have implemented TOD tariffs. The table below gives a snapshot of the various categories that are subject to TOD tariffs in these states:
The details of TOD tariffs in other states are as shown in Annexure – 1. The TOD time-blocks have been identified after analyzing the following factors: · The average state load curve in a day (SLDC data for the full year FY 2008-09 has been considered) vis-à-vis the average HT-I (Industrial) load curve in a day (plotted after considering data from predominant HT-Industrial feeders for the period October’2007 to September’2008). · The average state load curve in a day (SLDC data for the full year FY 2008-09 has been considered) vis-à-vis the average UI price in a day (SLDC data for the full year FY 2008-09 has been considered); The chart below compares the patterns of the average state load curve in a day w.r.t the average HT-I (Industrial) load curve in a day.
From the above chart, it can be seen that the HT-I (Industrial) category contributes to the state-peak during the time-blocks – 10 AM to 2 PM and also during 6 PM to 10 PM. Though the state has a peak from 4 AM to 10 AM, it can be seen from the above chart that the HT-I (Industrial) category doesn’t contribute to this peak and hence introducing a TOD time-block in this period will not encourage / force the HT-I (Industrial) category load curve to shift, as there is very less scope, due to low consumption. Though the HT – I (Industrial) has a peak during 3 PM to 6 PM, it can be seen from the graph that the state is not peaking during this period, infact, the state curve during this period is below its average demand in a day. During the time-blocks identified – 10 AM to 2 PM and 6 PM to 10 PM, the UI prices have been observed to be on a higher side, i.e., if the licensees were to procure additional power during these time-blocks, they would have to pay a higher price to meet the additional demand. The chart below shows details of the average UI prices in a day w.r.t to the state load curve.
As can be seen from the chart above, the UI prices in the period 10 AM to 2 PM and 6 PM to 10 PM are among the highest average UI prices in a day. Hence, the licensees proposes a TOD tariff of 75 paise / kWh for the period 10 AM to 2 PM and a TOD tariff of Rs. 1 / kWh for the period 6 PM to 10 PM. These tariffs are being proposed after studying the TOD tariffs prevailing in other states. The licensees believe that during the above time-blocks, there is tremendous potential for the HT-I (Industrial) category to shift to other periods in a day. 4 Annexure (TOD Tariffs in other States)
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In
certain states, the TOD tariffs have been implemented in both LT and HT
categories. But in the case of AP, it will not be possible to implement TOD in
LT categories, in the present scenario, as the meters installed at LT-consumer
premises is not TOD compatible. The licensees would like to implement TOD in a
phased manner by introducing the same for HT-I (A) (Industrial) category, in
the present scenario, as it not only contributes to 25 % of the peak demand but
also has a great TOD potential, i.e., there is huge scope for HT-Industrial category
to shift its consumption patterns to different time-blocks in a day. The TOD
implementation for the other HT categories shall be done after gaining the
actual impact on additional power purchase because of TOD implementation in HT
– 1 category and the same can be further extended to LT categories, after
replacing the present meters with TOD compatible meters.
