WELCOME TO POWER SECTOR BUDGET ZONE

1. WELCOME TO POWER SECTOR BUDGET ZONE 2012-13

2. POWER SECTOR REFORMS AND INFORMATION TECHNOLOGY

3. Agenda • 2012 POWER SECTOR BUDGET • BUDGET EXPECTATIONS • Need for Reforms • Reforms in Power Sector • BUDGET MEASURE • Regulations • Impact • Role of IT • System Overview

4. 2012 POWER SECTOR BUDGET • Over the past few quarters, the power sector has seen hard times given the severe liquidity crunch that hit existing as well as new projects. And as such, the sector once again saw capacity addition that was way below the targets set out as part of the XIth Five Year Plan. While the situation on the funding side has improved considerably since the middle of 2008, companies are stepping up on new projects with utmost caution. This is especially given that linkage for fuel (especially coal and gas) is becoming a tough nut to crack. However, rural electrification continues to get a boost in each passing budget and so is the improvement in the T&D network. Budget 2011 was no different, as it allocated higher funds for the development of the power sector with a view of speeding up the expansion of new generation capacities

5. BUDGET EXPECTATIONS

6. Need for Reforms • Objective of integrated National Grid • 5 regional grids working at varying grid frequency • Integration needs Frequency Normalization means proactive load management • Alternative – Insulation thro’ HVDC links – Expensive • Regional surplus & shortages • Surplus in east and shortage in south • Continued functioning at non-standard grid frequency • Damage to Generator & End User equipment • Hidden cost passed to customer in long term

7. Need for Reforms(contd…) • Central Vs State Generators • Capital cost Vs Variable cost • Beneficiaries not liable to pay fixed cost for their allocated share if not drawing • Increased cost of energy for beneficiaries drawing energy • Generation even without demand • High grid frequency

8. Reforms in Power Sector

9. Objective • Reforms in tariff structure of bulk power • Better system operations • Better grid discipline through commercial incentives & disincentives • Ideal Grid Frequency = 50 Hz

10. Reforms • Electricity Act 2003 • Replaced Electricity (Supply) Act 1948 • Regulations • Availability Based Tariff (ABT) • Merit Order Dispatch (MOD) • Plant Performance • Energy Management • SEB Trifurcation

11. Regulations

12. Availability Based Tariff (ABT) • Deals with tariff structure for bulk power • Performance based tariff for supply based tariff • System of rewards and penalties seeking to enforce day ahead pre-committed schedules (One & One-half hours in advance) • Promote responsibility & accountability in power generation • Paradigm shift from maxpower to maxreliability • A path to deregulated power market

13. ABT Components • Capacity charges (Fixed) • Payable against declared capacity of station for allocated capacity rather than actual consumption • Full fixed charges payable at PLF of 68.49% • Incentive @ 0.4 % of equity for each percentage increase between 70-85%. Beyond 85% it is 0.3% • Energy charges (Variable) • As per actual consumption • Unscheduled Interchange (UI) charges: Penalty that depends on severity of deviation. Payable/recoverable if: • Generator generates more, thereby increasing frequency; • Generator generates less than the schedule, thereby decreasing frequency; • Beneficiary overdraws power, thereby decreasing frequency; • Beneficiary under draws power, thereby increasing frequency

14. Merit Order Dispatch • Objective from maximum production to optimal production • Multiple unit power plant to identify optimum loading for each unit to save on operational costs • Identify units to bring online / offline to meet plant demand at minimum operating cost • Dispatching least cost power in preference to more costly power

15. Holding Company Generation Company Transmission Company Distribution Company Trifurcation • State Electricity Boards (SEBs) trifurcated as shown –

16. Impact of ABT – TRANSCO • Improved and efficient transmission systems • More generation capacity being added • Bottleneck in transmission to be avoided • Better forecasting systems • Vested with role of coordination between consumers & generators • Better communication and information systems • Communicate 15 min generation & consumption schedule to each party • Convey any unforeseen change in such a schedule • Improved metering & billing system • Ensure adequate metering capabilities for proper implementation of tariff structure • Specialized energy meters that keep track of 15-min energy aggregates & frequency for each interval to take care of energy charges and UI charges

17. Impact of ABT – GENCO • Advanced control & monitoring systems to closely monitor ex-bus output of plant • Generation should closely follow 15-minute schedule • Integrated information & communication system • To capture data from all components • Unscheduled downtime is not very acceptable in the ABT regime • MOD to ensure economic operation • Cost of generation, ramping, start up & shut down of each unit varies • Performance calculation for each unit of plant • Corresponding optimization to be done • Pro-active management plan • Unscheduled deviation from power generation schedule incur considerable penalties • Unexpected downtime of power plant should not occur

18. Impact of ABT – DISCOM • Enhanced load forecasting system • Consumer expected to stick to schedule of 96 intervals of 15-minute for each day • Failure to comply will attract penalty - UI charges • Basis of entering into commercial agreements with generating utilities • Reliable communication and information infrastructure • Load forecasting solution highly reliant on historical data for accuracy • To ensure smooth coordination with RLDC • Provision for in-house generation • Captive power plants - going to be more & more popular during transition to decentralized & deregulated power market

19. Efficiency Input Output Minimize Cost Maximize Returns Business Objective • To generate & export electricity • Maximize output at lowest input • Maximizing returns require following ABT demand curve

20. Company ABT, Energy Management Power Plants Merit Order Dispatch Units Plant Performance Regulations – Organization Mapping

21. ABT Regime • Revenue calculation for GENCO depends on • Available capacity of plant • Implemented schedule • Grid Frequency • Actual energy export • Applicable tariff model • To maximize revenue & minimize input cost • Generation to closely follow demand schedule • Optimal loading of plant units

22. Role of IT • Monitor various online real-time plant parameters from different generating stations • Establish a full-fledged Generation Control Room for performance diagnosis & optimization • Provide suitable connectivity between each power station & Control Room

23. IT Solution

24. Software • HQ Level • ABT Optimization for UI Revenue Maximization • Economic Load Dispatch • Online Plant Performance Monitoring • Plant Level • Power Plant Monitoring for each Unit • Online Performance Monitoring & Calculation for each Unit • Merit Order Despatch (MOD) at Plant level • Dispatch Monitoring for Switchyard Energy Meters

25. HQ Level Functions • ABT Optimization for UI Revenue Maximization • Ability to optimize tariff by maximizing UI revenue • Generate invoices on basis of total energy exported & applicable UI charges • Account auxiliary consumption of plant for billing purpose • Account for operations of “Peak Load” plants & grid maintenance • Account for cost of operating (Supply of Reactive power, Startup/ Stop operations) plant for these purposes, as & when they are made applicable • Economic Load Dispatch • Calculate individual plant OLC schedule for all power plants • Provide online communication between LDC & GCR regarding generation schedule • Online Plant Performance Monitoring • Close monitoring of power plants & generating automatic deviation alerts at appropriate times

26. Plant Level Functions • Power Plant Monitoring for each Unit • Integrated information & communication system to capture unit data • Calculate various plant parameters for each unit performance. • Suggest operator for effects of varying plant parameters • Online Performance Monitoring & Calculation for each Unit • Monitor different plant parameters that may affect plant performance such as superheat temperature, reheat temperature, inlet/ outlet temperatures, excess air ratio etc. • Merit Order Despatch (MOD) at plant level • Support simulation facilities • Facilitate in determining optimal loading of plant units • Dispatch monitoring for switchyard energy meters • Close monitoring of switchyard energy meters to compare actual generation against scheduled generation

27. Fuel Reserves Maintenance & Outage Information Generation Capacity Estimation by Plant OLC Grid Management Variation Load Despatch Center Day Ahead Schedule Actual Energy Export Load Forecasting Σ Implemented Schedule Generate Invoice Tariff Calculation MOD Engine Tariff Modeling Plant Performance ABT, PPA Broad Workflow

28. Software Features - ABT • Open communication architecture • Easy to use configuration utility • Flexible tariff calculation & UI charges module • Invoices in user-defined format • Reports and trends • Exporting reports & other data • Collecting 15-minute block aggregate data from meters & storing in ABT server • Monitoring actual generation Vs scheduled generation

29. Software features - MOD • Capability to handle multiple units • Use of historical data to generate a best-fit cost curve for the unit • Configuring individual units with historical data and operating constraints • Unit commitment approach based on maintenance schedule, minimum up and downtimes to be imposed on each unit • Allows users to perform simulation

30. Load Dispatch Center HQ Plant Plant Communication Backbone

31. System Architecture Generation Control Room Parameters from units in plants REPORTS DATA EXPORT MODULE TARIFF CALCULATION MANUAL DATA QUERY DCS/DAS DATA APPLICATION INTERFACE GEN. SCH. ENGINE NON-DCS DATA DATA ACCESS CONTROL GEN. TAR. ENGINE TARIFF MOD. ENGINE DATA LAYER ABT Engine DATA STORAGE Data Layer

32. DATA ACQUISISTION

33. ManualInputs/ Configuration DCS / DAS LocalData Store CommunicationDriver DataValidation PerformanceCalculation Intermediate & Detailed Results Reports & Results DCS Unit Implementation

34. Transducers Signal Splitter Controllers Analog Cards Plotters RTU/ Data Concentrator RTU 1 RTU 2 RTU n TerminalServer MODServer MUX Control Room Router Other data Non-DCS Unit Implementation

35. Challenges DCS Units: • OPC compliance (tag, value and timestamp) • Tags vary from unit to unit – 1 tag list for each DCS - Depends on commissioning • Non OPC Compliant Interface Bus would require protocol gateways • Additional licensing cost or additional one-time licensing cost for implementing protocol gateways Non-DCS Units: • Synchronization between DCS & non-DCS units • Selecting minimum critical parameters to be monitored by GCR • A standard parameter list for all non-DCS units will not work • Parameters – Analog or Digital • Identifying location of critical analog signal • Parallel tapping of signal with without affecting current setup • Real time V/s Polling Frequency • Historical data availability

36. System Overview

37. System Components • Data Acquisition System • Communication Infrastructure at Plant • Communication Backbone • Communication Infrastructure at HQ • Software solution at plant & HQ level

38. System in nutshell • Data Acquisition • Capturing plant parameters • MOD Calculations • Calculating various plant performance parameters for each unit at plant level • Data capture from ABT meters • Monitoring performance of each unit and plant in control room • ABT Calculations • Calculating applicable tariff for each beneficiary

39. OUESTION AND ANSWER