Energy Transactions in De-Regulated Market

The present deregulated market environment in India has separated the business functions related to transmission, generation and distribution. Consequently issues that were not present in the in the past in managing and accounting above functions have surfaced with a plethora of problems and approximate solutions. Some of the important issues are:

• Transmission Pricing. How much a consumer must pay a transmission company for utilizing its services?
• Grid Support Charges. How much a consumer must pay to a transmission company or a distribution company for merely providing grid support, so that plant can absorb fluctuations in power supply and can get emergency support from the grid?
• Wheeling and Banking Charges. What if a generation company wants to sell its excess capacity to a consumer located somewhere in the grid network any where in India? What will be the charges to be paid to the various transmission companies and distribution companies whose facilities might have been used in such transaction?
• What is the influence of transmission congestion on the pricing?
• What about the pricing for the reactive power support?
• How do we monitor actual energy transactions between various stake holders? This is essential to determine the actual finance charges to be paid from the user of the facilities to the provider of services (facilities) according to an accepted and agreed norm. These monitoring and associated computing methods are essential as the pricing may take into consideration various factors as opposed to earlier simple energy transaction as the basis.
• How do we know whether the tariff arrived at is based on correct calculations of an accepted norm?
• How do we know, whether a pricing norm is justifiable? Or needs revision due to certain new factors that were not considered in the earlier norm?
• Transmission facilities used by a consumer may have been used by other consumers as well. How are the charges of transmission pricing to be shared among all users of the transmission facilities?
• Should the charges payable to new transmission facility and old transmission facilities be same?
• In a given power transaction between supplier (generation company) and a customer, which are the transmission facilities that have been used? what is the extent of usage and hence, what are the charges to be paid?

Most of the factors indicated in this section need plain load flow analytical tool (load flow studies) to provide solution at the present time based on accepted system data. Some of the factors need continuous monitoring, recording and evaluation of energy transactions. Additional information that may be needed are financial aspects of investment (capital cost), depreciation charges, O&M charges and other establishment charges of a utility company.

The best and most justifiable pricing policy guidelines according to us are:

• User of a transmission facility must pay for the portion of the facility used.
• User of a transmission facility must pay for the extent of usage of the facility.

Earlier, transmission pricing was uniform without regard to above factors on usage.

It will be difficult to any consultant to address all the issues and to arrive at satisfactory solution acceptable to all parties involved. Our experience is that no matter, how much we trust our solutions and wisdom, there will always be a differing view from the other quarters. We therefore will act in the best interest of our clients on any issues raised by statutory regulatory bodies by performing needed technical analysis based on available information. These technical analyses primarily use load flow solutions and other technical solutions may also be needed depending on the issues that may arise. On any issues for which a client may need solution, we will study the applicable central and state grid code, tariff orders, electricity acts and will provide essential technical support to our clients.

Energy Audit Services

Many utilities in India do not have adequate and reliable metering facilities for all their consumers. Often this has resulted in erroneous estimations in the following:

• Energy consumptions by un-metered facilities.
• Transmission losses.
• Distribution losses.
• Growth in energy demand in different categories of consumers.
• Energy theft.

In addition there is a need to identify erroneous meters and plug holes in revenues. To meet the objectives stated it becomes necessary to provide comprehensive metering and analysis of the metered data through efficient computerization. Computer analysis using technical analysis tools and other suitable commercial analysis can indicate errors if any in metering, billing and other aspects if any. This information can be used to take corrective and preventive actions by a utility