FEASIBILITY OF POWER TRADINGND PROCUREMENT AND INSTALLATION OF POWER TRADING FACILITY IN HMT

PROCUREMENT AND INSTALLATION OF POWER TRADING FACILITY IN HMTROHITH P (19110040)UNMESH N(19110049)VAISAKH K.P(19110050)

CONTENTINTRODUCTIONCOMPANI PROFILE HMT KALAMASSERYELECTRICITY ACT 2003POWER TRADING OR OPEN ACCESSNEED FOR OPEN ACCESSCATEGORIZATION OF OPEN ACCESS CUSTOMERSCURRENT SCENARIO HMTCASE STUDY IN TCCFACILITIES REQUERED FOR OPEN ACCESSFEASIBILITY OF OPEN ACCESS IN HMTSUMMARY

INTRODUCTION

Currently HMT is purchasing power from KSEB on Two Part Tariff basis with a contract demand of 2900KW.

Supply of power is a monopoly of KSEB in the state of Kerala.

EA 2003 give the freedom to the industries to buy the power through power exchanges

The KSEB rates are fixed and we cant bargain. But, Power trading allows a customer to bid in a reasonable rate of his interest.

INTRODUCTION (CONTIN.)In 2012 KSEB has imposed 25% Load shedding for EHT consumers. Every year during summer KSEB imposing load shedding open access ensure continuous supply of power

There are a number of companies in Kerala like Travancore Cochin Chemicals (TCC) and Binani Zinc are engaged in open access and they are making profit out of that.

OBJECTIVE OF PROJECTTo understand the mechanism of interflow of electricity among different regions and within state and put forth this information in the form of grant of connectivity and intra-state open access regulations for HMT Machine tools Ltd, Kalamassery after correlating the intricacies of this mechanism. To understand the various methods of pricing of open access customers To understand the regulations of CERC and KSERC To study the requirements of open accessCompare the cost of energy of KSEB and open access rates

SCOPE OF THE PROJECT

power failure will get enhanced in order to meet the demand of the load, open access offer equal amount of power during that period. This will lead to the continuous production of power without any lagging.Power trading leads to a competition in the power market. This make the DISCOMS more responsible and competition lead to reduction in ratesIt is an emerging concept in power market, this project leads to the study of power trading and the detailed procedure for the implementation.Since the unit price provided by the K.S.E.B is comparatively higher, so more companies will get into power trading.Power that produce at any corner of India can be accessible through power trading.There is a considerable savings in the electricity bill

HMT KALAMASSERY

Hindustan Machine Tools Ltd, a leading public sector undertaking commenced its production during 1955-56 at its factory in Bangalore. It started with one type of machine tool, the H22 lathes. At present the company has 11 factories and 19 units.

HMT Kalamassery was commissioned on 2nd October 1964, with its headquarters at Bangalore.HMT kalamassery was awarded with ISO 9001 certificate for proficiency in design, production and marketing areas.Among the 19 units of H.M.T Ltd all over India, H.M.T Kalamassery is one of the outstanding units -

PRODUCT RANGE OF MACHINE TOOLS IN KALAMASSERY

CNC turning CentreTurn mill CentreFlexible turning cellsCopying lathesCentre lathesOffset printing pressesCutting machines

MAJOR CUSTOMERS OF HMT

DEFENCERAILWAYAUTOMOBILES etc.

ELECTRICITY ACT 2003EA 2003 is a watershed in Indian power sectorThe main features of the act are as followsConsumers with contract demand more than 1MW are eligible for open accessOpen access in transmission with provision for surcharge for taking care of current level of cross subsidy, with the surcharge being gradually phased out.The state government required to unbundle State Electricity boards. However they may continue with them as distribution licensees and state transmission utilitiesSetting up state electricity regulatory commission (SERC) made mandatoryMetering of electricity supplied made mandatoryCentral government to prepare National Electricity Policy and tariff PolicyCentral electricity authority (CEA) to prepare National electricity plan

11Market Structure Prior to Electricity Act, 2003 (Bundled)

CGS IPP

Govt ConsentGeneration+Transmission+Distribution

Consumer

SEB

12Market Structure after Electricity Act, 2003

CGSSTATE GENCOIPPTraderTraderDiscom

Consumer

POWER TRADING OR OPEN ACCESSAs per Electricity Act 2003 Open Access is

Non-discriminatory provision for the use of transmission lines or distribution system or associated facilities with such lines or system by any licensee or consumer or a person engaged in generation in accordance with the regulations specified by the Appropriate Commission.

Consumers with contract demand more than 1MW are eligible for open access

The minimum volume that can be bided is 0.1MW.

NEED FOR OPEN ACCESS

Electric Networks in India are natural monopoly open access Breaks monopoly status

To introduce competition for the Power Market in India Regulation- Increased competition leading to efficient operation and thereby reduced tariffs and better quality of power in the state.

Providing access non discrimination

Expected benefits of open access:

Optimum utilization of the network and efficiency gains through increased system

NEED FOR OPEN ACCESS

strengthening investments

Unlocking of the unused / economic capacities in the sector.

Sale of surplus Captive capacity to third parties to improve the availability and reliability of supply and reduce unmet demand as well as maximize capacity utilization.

Provide licensees the freedom to source power from alternative sources in a competitive

Categorization of open access customers1. Inter State Open Access: When buying and selling entity belongs to different states. In this case CERC regulations are followed. It is further categorized as:(a)Long-term access customer (LTOA): A long-term open access customer is one who avails open access for a period of 12 years to 25 years. (b) Medium-term open access customer (MTOA): A medium-term open access customer is one who avails open access for a period of 3 months to 3 years. (c) Short-term open access customer (STOA): A short-term open access customer is one who avails open access for a period of one month and below.

2. Intra State Open Access: When buying and selling entity belongs to same state. In this case SERC regulations are followed. It is further categorized as STOA, MTOA, and LTOA and the duration of which depends on the respective state open access regulations

TYPES OF TRANSACTIONS

Bilateral TransactionsA PPA (Power Purchase Agreement) is signed between the buyer and seller, which are generally facilitated by a trader for a little margin.Collective transactionsThe electricity is traded through exchanges, by exchange members for a very small margin fixed by commission

THE VARIOUS OPPORTUNITIES FAVOURING OPEN ACCESSLoad Shedding : Due to large demand-supply gap, distribution companies are forced to cut the power supply of the industrial consumers. Due to which industrial consumers are forced to run on diesel which will cost them around Rs 13/unit

High Industrial Tariff : Industries are facing a very high industrial tariff. In some states like Maharashtra tariff for industrial consumers is as high as Rs 7.01/unit, in Punjab tariff for industrial consumers is Rs 6.33/unit

Cheaper Power:If any consumer buys power through Power Exchange or Bilateral Transactions then he can save around 15-20% of his electricity bills. Last year average tariff for electricity at IEX was Rs 3.17/unit.

VARIOUS OPEN ACCESS CHARGESPOINT OF CONNECTION CHARGE(PAISE/UNIT)12.35Determined by NLDC once in 6 monthsNLDC OPERATING CHARGE(RS/DAY)200Fixed charges irrespective of energy transactedSLDC OPERATING CHARGE(RS/DAY)2000Fixed charges irrespective of energy transactedNLDC APPLICATION FEE (RS/DAY)4Fixed charges irrespective of energy transactedIEX TRANSACTION FEE (PAISE/UNIT)1PTCIL TRANSACTION FEE(PAISE/UNIT)1CROSS SUBSIDYNil for 66KVWHEELING CHARGE(PAISE/UNIT)0.19Determined by KSERCSERVICE TAX (%)12.36NOC CHARGE(Rs/ MONTH)5000Determined by KSERC

CERC REGULATIONS FOR OPEN ACCESSopen access shall be allowed on payment of a surcharge in addition to the charges for wheeling as may be determined by the State Commission:

Provided further that such surcharge shall be utilized to meet the requirements of current level of cross subsidy within the area of supply of the distribution licensee:

Provided also that such surcharge and cross subsidies shall be progressively reduced in the manner as may be specified by the State Commission:

Provided also that such surcharge shall not be applicable in case open access is provided to a person who has established a captive generating plant for carrying the electricity to the destination of his own use

Role of different agenciesNLDC (National Load Dispatch Centre)

A center at the national level, to be known as the National Load Dispatch Centre for optimum scheduling and dispatch of electricity among the Regional Load Dispatch Centers

The functions of NLDC is prescribed by the Central Government.

2. RLDC (Regional Load Dispatch Centre)

As per EA 2003 The Central Government shall establish a center for each region to be known as the RLDCThe RLDC shall be operated by a Government company or any authority or corporation established or constituted by or under any Central Act.RLDC having territorial jurisdiction as determined by the Central Government in accordance with section 25 for the purposes of exercising the powers and discharging the functions

3. SLDC (State Load Dispatch Centre)The State Government shall establish a Centre to be known as the SLDC for the purposes of exercising the powers and discharging the functions.

It is operated by a Government company or any authority or corporation established or constituted by or under any State Act4. CTU (Central Transmission Utility)The Central Government may notify any Government company as the Central Transmission Utility - PGCILOne of the functions of CTU Utility is to provide nondiscriminatory Open Access to its transmission system5. STU (State Transmission Utility)The State Government may notify the Board or a Government company as the State Transmission Utility.One of the functions of State Transmission Utility is to provide nondiscriminatory open access to its transmission system

POWER EXCHANGESPower Exchange is a common platform where buyers & sellers of Electricity come together for tradeAims of Power Exchange are to retrieve the excess generation from surplus region and transmit to a deficit regionPower exchanges changed Indian power market byEvenly distributing transmission losses at both ends. Enabling participants to hedge against UI risks. Guaranteeing secure & timely payment to sellers. Generously improving the market environment to encourage investment in new generation capacity, thus helping make India a power-surplus country.At present, two power exchanges are operational in India, namely Indian Energy Exchange (IEX) and Power Exchange of India Ltd. (PXIL).

INDIAN ENERGY EXCHANGE (IEX)

Indian Energy Exchange (IEX) is the first and largest power exchange in India.TheIndian Energy Exchange(IEX)was granted approval to operate as an automated electronic trading exchange by the regulator, CERC, on June 9, 2008One year later IEX had recorded 37.4 million transactions, the same month that electricity prices on the exchange hit a record low 13 paisa/KWh.

Salient features

India's No. 1 power exchange with 86% market share.

Average Daily Volume for Q1 FY 2011 - 20,921 MWh

Highest turnover reported in the Day Ahead Market in fiscal 2010 was 31,429 MWh on 19 February 2010

The exchange has 29 state utilities, 110 Private generators and over 145 direct consumers participating for better managing their energy portfolio.

IEX Bid Areas

POWER EXCHANGE INDIA LTD (PXIL)

Power Exchange India Limited (PXIL)is Indias first institutionally promoted Power Exchange that provides innovative and credible solutions to transform the Indian Power Markets.

PXIL is India's first and only Quality Management System with ISO 9001:2008" certified Power Exchange in the country.

IEX DAY-AHEAD MARKETIt is the daily based double side closed auction for delivery on the following day

Day Ahead Market operations will be carried out in accordance with the Procedure for scheduling of collective transactions issued by the Central Transmission Utility (PGCIL), CERC (Open Access in inter-State Transmission) Regulations, 2008Minimum allowable quantity for buy/ sell is 0.1 MW

Minimum quotation Rs. 1 per MWh

TERM AHEAD MARKETTerm Ahead Market provides an opportunity to the market participants to trade in contracts with various underlying such as Weeks, Months, Quarters, Contingency and Intraday etc. CERC has given its final approval to launch Term Ahead Contracts on 31st August, 2009 .

BIDDING LINE DIAGRAM

PTC TRADING PLATFORMThe industry which has agreement with PTC India Ltd can trade through their website.

It is an automated trading platform and the consumers are provided with a unique id and password and by using that they can access this facility.

The bidding volume and the duration should provide at the appropriate boxes as shown in the figure.

PROCEDURE FOR POWER TRADING Procurement of NOC from KSEB(From The Chief engineer, System operation, Kalamassery) Reply within 3 days.Selecting the trader PTC INDIA LtdNOC to be send to the trading company Signing of agreement with trader.Client registration form to be signedService charge of 1 lakh + tax to be paid in advance Commission of 1 paisa per unitSigning of risk disclosure documentInitial deposit to be paid in advance Account with sufficient balanceTrading license can be obtained (if required) by a payment of 15 lakh rupees.

HOW TRADING HAPPENS????

TREATMENT OF LOSSES FOR OPEN ACCESS

CURRENT SCENARIO IN HMTThe HMT Machine Tools Ltd Kalamassery has a 66kv substation with a maximum demand of 2900kVA.The monthly consumption is about 300,000 units and the tariff is Two Part Tariff. The current metering system is ToD (Time of Day) metering.The CT and PT used are of 0.5s accuracy class.In kerala the HT/EHT consumers tariff is TWO PART TARIFF

TWO PART TARIFFElectrical energy is charged on the basis of MD and the units consumedthe total charge to be made from the consumer is split into two components viz., fixed charges and running charges.Billing demand is on the recorded MD for the month or 75% of the CD whichever is higherPF incentive/disincentive0.25 per unit/ Rs.1 per unit for 0.01%Classified into 3 zones:CHARGES(EHT)Normal period: 6AM-6PMRs.4.4/unitPeak hours: 6PM-10PMRs.6.6/unitOff peak: 10PM-6AMRs.3.3/unit

ToD Meteringrecords demand, time, and energy UsageDifferent charges for zonesDecreases rate of overloading at peak hoursThe metering option benefits utility companies by decreasing the required capacitybenefits customers by providing reduced demand and usage rates during off-peak times

UTILITY COMPAY offers incentives to customers that are willing to shift

HMT Substation

66 kv incomer2 CT(75-150/5A)3 PT(66KV/110V)

2 CT3 PT

5MVA Transformer

Monthly Consumption Graph

EHT TARIFF FOR HMT

POWER FACTOR INCENTIVE / DISINCENTIVE

LIST OF TRANSFORMERS

CASE STUDY IN TRAVANCORE COCHIN CHEMICALS (TCC)TCC is the first State public sector company to have opted for power through power exchange.

The company being a power-intensive unit consumes about 4.5 lakh units per day and pays a power bill of about Rs.6 - 6.5 crore every month. It is about 30 times of HMTs daily consumption.

TCC got permission for open access for 3 months as a trial period and they are trading with PTC INDIA LTD. For these 3 months they made a savings of 90 lakhs.The contract demand of TCC is 25MW and they have obtained an NOC from KSEB for an amount of only 15MW.

BIDDING COMMITTEE The members are:

1. Finance controller 2. AGM (Production) 3. Sales head 4. Maintenance head 5. GM (technical)COMPONENTS OF 110KV SUBSTATION AT TCC 1. Transformer: 25MVA, 110/11KV 2. Current Transformer: 123KV, 250A, 50VA, .2S class 3. Potential Transformer: 110kv/110V, 100VA, .2S class 4. ABT Meter: Secure Apex 100

FACILITIES REQUIRED FOR OPEN ACCESSThe CT and PT of accuracy class 0.5 should be replaced with CT/PT of accuracy class 0.2 as per the regulation of KSERC.

The current ToD Meter to be replaced with accurate ABT Meter which enables the metering in 15 minute slots.ABT METERING

The accuracy will not drift with timeFixed chargesRunning chargesUI CHARGES

PENALTY FOR UNSCHEDULED INTERCHANGE

Reduces high frequency deviations i.e frequency decrease in PEAK hrs and frequency increase in OFF PEAK

Wide variety of display parameters

initially applicable to CGS having more than one SEB as its beneficiary.

ABT concerns itself with the tariff structure for bulk power and brings more responsibility and accountability in power generation and consumption through a scheme of incentives and disincentives.

CERClooks forward to improve quality of power and Unacceptably rapid and high frequency causing damage and disruption to large scale industrial consumers

Frequent grid disturbances resulting in generators tripping, power outages and power grid disintegration.

ABT FEATURES

ABT brings about enhanced grid discipline

Stabilizes grid frequency

Economically viable power with right pricing

Promote competition and efficiency

Encourage Economic Dispatch in India

Addressing grid disturbance issues

Sequential implementation

Readings in every 15 minute

Chance for communication and rescheduling

CURRENT TRANSFORMERTheCurrent Transformer(CT) produce an alternating current in its secondary winding which is proportional to the current being measured in its primary.

reduce high voltage currents to a much lower value and provide a convenient way of safe monitoringACCURACY CLASS OF CTThe accuracy of a CT is directly related to a number of factors including:

Burden The secondary load of a current transformer is usually called the "burden" to distinguish it from the load of the circuit whose current is being measured.

The burden, in a CT meteringcircuitis the impedance presented to its secondary winding.indicates the amount of resistance (in ohms) and inductance (in milli-henries) which may be connected to its secondary without causing a metering error greater than specified by its accuracy classification.by converting each device into terms of volt amperes and power factor

Typical burden ratings for CTs are 1.5 VA, 3 VA, 5 VA, 10 VA, 15 VA, 20 VA, 30 VA, 45 VA and 60 VA.

Knee-point core-saturation voltage Theknee-point voltageof a current transformer is the magnitude of the secondary voltage above which the output current ceases to linearly follow the input current within declared accuracy.The knee point is defined as the voltage at which a 10% increase in applied voltage increases the magnetizing current by 50%.

Rating factorRating factor is a factor by which the nominal full load current of a CT can be multiplied to determine its absolute maximum measurable primary current.the minimum primary current a CT can accurately measure is 10% of the nominal current

Phase shift

Ideally the secondary current of a current transformer should be perfectly in phase with the primary current.Practcally as low as a few tenths of a degreeMetering Class CTClassApplications0.1 To 0.2Precision measurements0.5High grade kilowatt hour meters for commercial grade kilowatt hour meters3General industrial measurements3 OR 5Approximate measurements

POTENTIAL TRANSFORMER

Usedfor stepping down the system voltage to a safe value which can be fed to low ratings meters and relays.

The secondary voltage of the PT is generally 110V

Ideally, when rated burden connected across the secondary, Vs/Vp is equal to the turns ratio and the two terminal voltages are in precise phase opposite to each other.

FEASIBILITY OF POWER TRADING IN HMT UNIT RATE AMOUNTTOTAL DEMEND CHARGE2175300652500ENERGY CHARGE -NORMAL1988004.4874720ENERGY CHARGE-PEAK255006.6168300ENERGY CHARGE- OFF PEAK350003.3115500TOTAL ENERGY CHARGES1158520PF INCENTIVES/PENALTY-8688.90ELECTRICITY DUTY2593000.125930ELECTRICITY SURCHARGE2593000.0256482.5TOTAL CHARGE1834744

CALCULATIONSKSEB ELECTRICITY BILL

BILLING VIA OPEN ACCESSITEMUNITRATETOTAL AMOUNTENERGY CHARGEE1E2E319880025500350003.34.02.865604010200098000WHEELING CHARGES259300.19ps/UNIT49267POC WITHDRAWL CHARGE2593000.1235ps/UNIT32023NLDC APPLICATION CHARGE4 Rs/DAY120NLDC OPERATING CHARGE200 PER DAY6000SLDC OPERATING CHARGE2000 PER DAY60000IEX TRANSACTION FEES2593001 PS PER UNIT2593PTC TRANSACTION FEES2593001 PS PER UNIT2593NOC CHARGES5000 PER MONTH5000TOTAL1013686SERVICE TAX12.36% OF TOTAL125277TOTAL AMOUNT FOR OPEN ACCESS1138843

IEX MARKET CLEARNG PRCE(august 2013)4008.594300.093608.872249.713499.93494.933492.54017.814300.223608.082000.563499.883495.433496.384017.884300.223608.082000.563499.883495.433496.384018.074300.223608.082000.563499.883495.433496.384018.24300.223608.082000.563499.883495.433496.384000.554300.223607.972000.563499.873495.43496.194000.554300.223607.972000.563499.873495.43496.194000.554300.223607.972000.563499.873495.43496.214000.554300.223607.972000.563499.873495.43496.214000.473510.291749.63000.23499.333495.033492.664000.473510.2917503000.23499.333495.033492.664000.933510.012100.572800.823499.333495.023492.654000.933510.012199.352800.823499.333495.023492.654045.971498.091739.853110.013496.063494.243492.55

1918:00018:1518:15018:3018:30018:4518:45019:002019:00019:1519:15019:3019:30019:4519:45020:002120:00020:1520:15020:3020:30020:4520:45021:002221:00021:1521:15021:3021:30021:4521:45022:00

8aug9aug 10aug 11aug 12aug13aug 14aug

Total monthly bill via open access = Maximum demand charges + Total amount for open access =652500+1138843 =Rs.1791342 Savings= KSEB monthly bill - Monthly bill via open access =1834744-1791342 =Rs.43401

CAPITAL INVESTMENTITEMQUANTITYUNIT PRICE(LAKHS)TOTAL (LAKHS)CURRENT TRANSFORMER 21.22.4POTENTIAL TRANSFORMER31.23.6ABT METER122PTC INITIAL CHARGE1INSTALLATION CHARGE1OTHERS 1TOTAL COST11 LAKHS

SIMPLE PAY BACK PERIOD

Simple pay back period= Total investment / Savings per month

=1100000/ 43400 =26 months =2 years and 2 months

SUMMARYCONCLUSIONPower trading is found to be feasible in HMT with a simple payback period of about two years.For power trading there is a considerable investment for CT and PT of accuracy class 0.2 and ABT Meter of the same class.In 2012, KSEB imposed 25% load shedding for EHT consumers. Open access allows HMT to overcome this and hence to have a continuous supply of power.

Conclusion (cont.)The process of power trading is very complex and it involves many agencies like NLDC, RLDC, SLDC, CENTRAL TRANSMISSION UTILITY, STATE TRANSMISSION UTILITY etc.

CERC, CEA and State Electricity Regulatory Commissions are accountable for the regulation of power trading and open access in India.

In India, power exchanges(IEX and PXIL) are the platform for the trading of electricity

RECOMMONDATIONS

Continuous working of furnaceProper communication between various departmentsProper planning of work shiftsBetter utilization of off peak hoursImplement battery less solar panel on the top of General Administrative Block of HMT

LIMITATION OF THE PROJECT

Power trading is very complex procedure

In different states , order of state regulatory commission regards to power trading is not unique

Supply of power cannot be ensured but it depends on the matching between the bidding prices

Contract demand with the electricity board cannot be reduced

Refund will not be permitted, if any sort of technical fault occurs, or strike of workers initiates at the time of power trading

FUTURE SCOPE OF THE PROJECT

Grid synchronization between New Grid and Southern Grid will leads to reduction, based on the expense of electricity.

The charging of the 765kV line between Sholapur in Maharashtra and Raichur in Karnataka will serve this purpose.

When Koodankulam Atomic Power plant attains its extremity in production capacity, it will permit a boom to southern grid. (planned maximum power generation capacity is 9200MW)

Govt. of India is planning to enhance the nuclear energy contribution from 2% to 9% by 2025 and atomic plants like Jaitapur in Maharashtra (ottal capacity of 9900MW)are a part of this.

BIBLIOGRAPHY

Electricity act 2003 ministry of power http://www.powermin.nic.inKerala State Electricity Regulatory Commission (Grant of Connectivity and Open Access in intra-State Transmission /Distribution System and related matters ) Regulations, 2012 - http://www.erckerala.org/Central Electricity Authority(CEA) Metering Solutions http://www.cea.nic.inOpen Access | Indian Power Sector http://indianpowersector.comCentral Electricity Regulatory Commission (Open Access in inter-State Transmission) Regulations, 2008.R.N.Nayak, Y.K.Sehgal and Manju Gupta,Change in Approach to Planning and Operation of Power Systems under Open Access Regime - Indian Experience. IEEE conference: Power Tech., 2005 Russia, 27-30 June 2005

Open Access In Inter State Transmission S.K Soonee (Chief Executive Officer, Power System Operation Corporation)International Conference On Power Systems, Icps2004, Kathmandu, Nepal (P110): Electricity Trading In Competitive PowerMarket: An Overview And Key Issues by Prabodh Bajpai and S. N. SinghRural Electrification Corp OfIndia - http://www.recindia.nic.inKerala State Electricity Board - www.kseb.inManikaran India Ltd - http://www.manikaranpowerltd.in/Indian Energy Exchange(IEX) www.iexindia.comNLDC http://www.nldc.inPTC India Ltd. www.ptcindia.comElectricity India, Vision 2027:Road Map for Sustainable Power Development and Power Sector Directory Virendra Kumar Sharma

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