Power System Planning

21EE721

Prepared by:
Prof.Arjun joshi
Assistant professor
Dept.of EEE
Course Details
Course objectives:
(1)To discuss primary components of power system planning namely load furcating,
evaluation of energy resources, provisions of electricity Act and Energy Conservation
Act.
(2)To explain planning methodology for optimum power system expansion, various
types of generation, transmission and distribution.
(3)To explain forecasting of anticipated future load requirements of both demand and
energy by deterministic and statistical techniques using forecasting tools.
(4)To discuss methods to mobilize resources to meet the investment requirement for
the power sector.
(5)To perform economic appraisal to allocate the resources efficiently and take proper
investment decisions
(6)To discuss expansion of power generation and planning for system energy in the
country
Course objectives:
(7)To discuss evaluation of operating states of transmission system, their associated
contingencies and determination of the stability of the system for worst case conditions
(8)To discuss principles of distribution planning, supply rules, network development
and the system studies.
(9)To discuss reliability criteria for generation, transmission, distribution and reliability
evaluation and analysis.
(10)To discuss grid reliability, voltage disturbances and their remedies.
(11)To discuss planning and implementation of electric –utility activities designed to
influence consumer uses of electricity.
(12)To discuss market principles and the norms framed by CERC for online trading and
exchange in the interstate power market.
POWER SYSTEM
• Electricity plays a key role in the modem society because of its versatility with respect
to input energy form.
• Versatile and easy to transform
• Electricity can also be transformed into other types of energy such as light (lighting a
light bulb), heat (lighting an electric radiator), or motion (using an engine).
POWER SYSTEM
• India's per capita electricity consumption was 1255 kWh in 2021-22.
• Electric power in the form of synchronized AC .
POWER SYSTEM
• The electricity is an electromagnetic wave and the speed of electromagnetic waves
always equal to 3×10^8 m/s that is the speed of light. Hence the electricity flows at
the speed of light that is at 3×10^8 m/s. (299,792,458 meters per second)
POWER SYSTEM
• A rise in this consumption to three times the value is likely to substantially raise the
standard of living of the people in the country with respect to education, health,
transport, communication, media, productivity etc.
POWER SYSTEM
• India aims for 500 GW of renewable energy installed capacity by 2030
POWER SYSTEM
POWER SYSTEM
• Electric power system planning is the process of determining the time, size, and location of new
generation, transmission, and distribution upgrades over a defined period to meet targeted
economic, reliability, and environmental objectives.
Process of power system planning
POWER SYSTEM
• Electricity can be produced with coal, nuclear fuels, oil, gas, hydro power, diesel, geothermal energy, biomass, wind
energy, solar energy or fuel cells. Electrical supply also offers the opportunity of total environmental enhancement
compared to other energy use patterns.
POWER SYSTEM _https://pib.gov.in/PressReleasePage.aspx?PRID=1883918
 Module-1
Power System: Planning Principles, Planning Process, Project
Planning, Power Development, National and Regional Planning,
Enterprise Resources Planning, Planning Tools, Power Planning
Organization, Scenario Planning.
Electricity Forecasting: Load Requirement, System Load,
Electricity Forecasting, Forecasting Techniques, Forecasting
Modelling, Spatial – Load Forecasting, Peak Load - Forecast,
Reactive – Load Forecast, Unloading of a System.
 Module-2
Power-System Economics: Financial Planning, Techno –
Economic Viability, Private Participation, Financial Analysis,
Economic Analysis, Transmission, Rural Electrification
Investment, Total System Analysis, Credit - Risk Assessment.
Generation Expansion: Generation Capacity and Energy,
Generation Mix, Clean Coal Technologies Renovation and
Modernization of Power Plants.
.
 Module-3
Transmission Planning: Transmission Planning Criteria, Right – of – Way,
Network Studies, High – Voltage Transmission, HVDC Transmission,
Conductors, Sub – Stations, Power Grid, Reactive Power Planning, Energy
Storage.
 Module-4
Distribution: Distribution Deregulation, Planning Principles, Electricity –
Supply Rules, Criteria and Standards, Sub – Transmission, Basic Network,
Low Voltage Direct Current Electricity, Upgradation of Existing Lines and
Sub – Stations, Network Development, System Studies, Urban Distribution,
Rural Electrification.
Reliability and Quality: Reliability Models, System Reliability, Reliability
and Quality Planning, Functional Zones, Generation Reliability Planning
Criteria, Transmission Reliability Criteria, Distribution Reliability,
Reliability Evaluation, Grid Reliability, Quality of Supply.
 Module-5

Demand-Side Planning: Demand Response, Demand – Response Programmes, Demand–

Response Technologies, Energy Efficiency, Energy - Economical Products, Efficient –
Energy Users, Supply – Side Efficiency, Energy Audit.

Electricity Market: Market Principles, Power Pool, Independent System Operator,

Distribution System Operator, Power Markets, Market Rules, Bidding, Trading, Settlement
System, Merchant Power, Differential Electricity, Congestion Management, Ancillary
Services, Hedging, Smart Power Market.
Course outcome (Course Skill Set)
At the end of the course the student will be able to :
(1)Discuss primary components of power system planning, planning methodology for optimum power
system expansion and load forecasting.
(2)Understand economic appraisal to allocate the resources efficiently and appreciate the investment
decisions
(3)Discuss expansion of power generation and planning for system energy in the country, evaluation of
operating states of transmission system, their associated contingencies and the stability of the system.
(4)Discuss principles of distribution planning, supply rules, network development and the system
studies.
(5)Discuss reliability criteria for generation, transmission, distribution and reliability evaluation and
analysis, grid reliability, voltage disturbances and their remedies
(6)Discuss planning and implementation of electric –utility activities, market principles and the norms
framed.
 Assessment Details (both CIE and SEE)
CIE=50M
SEE=50M
TOTAL=100M

Minimum passing mark for the CIE & SEE 20 out of 50M.
Continuous Internal Evaluation:
1. Three Unit Tests each of 20 Marks (duration 01 hour).=60M
2. Two assignments each of 10 Marks =20M
3. Class room activities like Group discussion/Seminar/quiz any one of three suitably planned to attain the COs
and POs for 10 Marks (duration 01 hours).
4. Pedagogy =10Marks
TOTAL=100M (Scale down to 50M)
 Assessment Details (both CIE and SEE)

Semester End Examination:

• Theory SEE will be conducted by University as per the scheduled timetable, with
common question papers for the subject (duration 03 hours)
• The question paper will have ten questions. Each question is set for 20 marks.
• There will be 2 questions from each module. Each of the two questions under a
module (with a maximum of 3 sub-questions), should have a mix of topics under
that module.
• The students have to answer 5 full questions, selecting one full question from each
module.
 Pedagogy activity for 7TH Sem PSP_21EE731 :
PI-2_Real World Exposure & Skills.

Activity Name: Awareness about PM SURYA GHAR : MUFT BIJLI

YOJANA (PMSGMBY) _ GRID CONNECTED ROOFTOP SOLAR PV SYSTEM
for Government High school students.

Guidelines:
1. Make a Group of 5 Members(As per your wish).
2. Collect the appreciation certificate from the Government High school students.
3. Presentation is on November 30th 2024.
4. Submit the Report on or before December 2nd 2024.
5. Photos and videos are mandatory for documentation purpose.
TEXT BOOK
REFERENCES:
• https://powermin.gov.in/en/content/500gw-nonfossil-fuel-target#:~:text=Govt.,a.
• https://pib.gov.in/newsite/pmphoto.aspx?mincode=52
• https://cea.nic.in/?lang=en
• https://npp.gov.in/dgrReports
• https://www.nrel.gov/docs/fy08osti/42297.pdf
• https://pib.gov.in/PressReleasePage.aspx?PRID=1883918
• https://www.vturesource.com/vtu-question-papers/EE/2015/15EE744/Power-
System-Planning#google_vignette
•
Power system planning
Prof. Arjun Joshi
Asst. Professor
EEE,VVIET-Mysore
POWER DEVELOPMENT
• The development of power is closely linked with the growth of gross national
product(GNP).
• Gross National Product (GNP) is a measure of the total value of goods and
services produced by a country's residents.
• The economic strength of a region in the next century will be greatly dependent
on the availability of power.
• In the planning of power system development, priority is given to regional
systems and generation load balances are maintained.
• Also, keeping in view that different transmission lines are not too 'redundant'
but are sufficiently robust regional links, there must be strategic planning to
foresee, evaluate and co-ordinate future requirements and concentrate resources
to dovetail with medium and short-term objectives.
POWER DEVELOPMENT
POWER DEVELOPMENT

• The starting point in the planning process is to develop clear vision, good
values and mission.
• The other processes follow, such as to develop load forecasts in terms of
annual peaks and energy needs for the entire utility area as well as for each
region consisting of many utilities.
• The system expansion is determined by load-flow studies under steady state
and abnormal conditions.
• The load-flow studies are made for calculation of currents, voltages, and real
and reactive power flows taking into account the voltage regulating capability
of generators and transformers, capacitors, generation schedules, power
interchange etc.
POWER DEVELOPMENT

• To design an economical system that meets the operating, design,

environmental and cost criteria.
• After determining the best system configuration from the load-flow studies,
the planning engineer studies system behavior under fault conditions by
carrying out Short-circuit studies as a short-term plan to determine design
parameters of protection systems.
• Finally the planner performs the stability studies to ensure that the power
system will remain stable following severe fault.
POWER GROWTH

• The electricity generation capacity in India is the fifth largest in

the world.
• India is also the sixth largest consumer of electricity, and
accounts for 3.4 per cent of the global energy consumption.
POWER GROWTH
Power Sector
at a Glance
ALL
INDIA(https:
//powermin.g
ov.in/en/con
tent/power-
sector-
glance-all-
india)
Power Sector
at a Glance
ALL
INDIA(https://
powermin.gov.
in/en/content
/power-
sector-glance-
all-india)
National and Regional Planning

GRIDS
 Northern Region
 Western Region
 Eastern Region
 North-eastern Region
 Southern Region
 National and Regional Planning
ADVANTAGES & DISADVANTAGES OF NATIONAL AND REGIONAL
PLANNING:
• There is a lot of diversity in the country in topography, daily peak
due to day time differences, annual peak load timings (winter or
summer) & resources in the various regions. Hence five electricity
regions have been established. The economic argument in support of
regional coordination is –
Advantages,
• Such coordination allows joint planning & operation of facilities,
• It makes the exchange of economical energy easier.
 National and Regional Planning
• It prevents the constructions of unnecessary facilities by isolated
systems & increases reliabilities.
• More specifically, as a result of transmission interconnections,
coordination offers distinct economic & the non-coincidental
occurrence of the peak of the participation systems.
• It might be possible to reduce the total generating capacity
requirements that would otherwise apply if each utility system were
to fully meet its needs.
• By combining the existing capacity of generation in the region & to
make economic use of the generating resources such as hydro &
fossil fuels etc…
National and Regional Planning

Disadvantage
• One of the problems in regional planning relates to coordination
among the various utilities in the region with respect to tariff and
backing down Of generating units in merit order.

• HVDC links for transfer of power between various regions is

desirable in order to utilize surplus power in some regions and for
stable grid operation.
National and Regional Planning:
INTEGRATED RESOURCES PLANNING

INTEGRATED RESOURCES PLANNING

• This is an aspect of least cost planning.

• The utilities have to evaluate all the Supply side and demand
side options like energy conservation programmes, direct load
control, interruptible or time of use pricing and system
improvement.
National and Regional Planning: INTEGRATED RESOURCES PLANNING
SUPPLYSIDE OPTIONS
• The technology related to conventional fossil fuels is predominant
at present. Many utilities have turned to combustion turbines
fueled with natural gas with new capacity which are highly
efficient, have low emission, and are well adapted for intermittent
use.
• Better technology
• Increasing role of renewables
• Increasing availability of generating stations
• Efficient operation of regional and national grid
• Strengthening of existing T & D systems to reduce loss and improve voltage
profiles.
National and Regional Planning: INTEGRATED RESOURCES PLANNING
Demand side options :
• Taking energy conservation methods
• Maintaining consumer PF should be made mandatory
• Load management /staggering
• improving generating stations load factor
• Time of day tariff – peak / night / other time
• Reducing theft
National and Regional Planning: LEAST COST UTILITY PLANNING

Short comings of traditional planning :

• Demand forecasting and investment planning are considered sequential instead
of interdependent
• Resource planning is inefficient

Demand forecasting :
• Mere extrapolation of trends
• Does not consider the unmet demand nor scale of growth
National and Regional Planning: LEAST COST UTILITY PLANNING
Least cost utility planning :
• To provide reliable electrical services at the lowest cost
• Apply supply and demand side resource management
• End use efficiency
• Load management
• T & D options
• Plant rehabilitation
• Loss reduction programmes
• Alternative tariff options
• Decentralized power generation-non conventional sources
• Centralized generation – conventional sources
National and Regional Planning: LEAST COST UTILITY PLANNING
Least cost utility planning :
◦Diversity of resources are considered
◦Public involvement in planning
◦Cooperation between parties

◦Merits : Benefits consumers and suppliers

• Affordable acquisition of resources
• Low in cost
• Environmentally benign
• Acceptable to public
• Reduced risk faced by utilities
National and Regional Planning: LEAST COST UTILITY PLANNING

 Investments on power systems :

◦ Capital cost
◦ Interest on capital
◦ Fuel cost
◦ Operational and maintainance cost – loss dependent
National and Regional
Planning: LEAST COST
UTILITY PLANNING
National and Regional
Planning: LEAST COST
UTILITY PLANNING • Evaluation :

• All options should be assessed in a consistent

manner for a full cycle.

• Once initial evaluation is complete, environmental ,

economic factors should be studied – avoids losing
out on options with high impact.

• Non cost factors should be evaluated – variability

of factors, alternative solutions based on factor
variation.
Enterprise resource
planning )
(https://www.sap.com/india

What is ERP?
• Enterprise resource planning
(ERP) is a software system that
helps you run your entire
business, supporting automation
and processes in finance, human
resources, manufacturing, supply
chain, services, procurement, and
more.
Enterprise resource planning
Enterprise resource
planning
Enterprise
resource
planning
Planning tools
Planning tools
Planning tools
 1. Electricity is a concurrent subjects in the
constitution of India.
2. Development lies b/w State & Central Govt.
3. CEA under National Policy direction of central
govt is doing the planning at national and regional
level for generation and interstate lines and state
Planning power utilities or power departments.
organiza 4. Entrusted at state level under the direction of state
tion govt for generation transmission/sub
transmission and distribution network.
5. Electricity act 2003 stipulates the notification once
in a 5 years.
6. Nuclear power plants are planned under direction
of the Dept of atomic energy.
 7. At present most of the public sector is inefficient
and lacks accountability .
8. The private sector is being encouraged in the
competitive environment.
9. The power industry in the world in the process of
Re-Eng and Striving for dramatic level improvement
Planning
organiza
with real vision and good values.
tion 10. The criteria related to Demand forecasts
,Investment, Generating Plant requirements,
transmission and substation requirements, sub
transmission and substation requirements ,sub-
transmission and distribution and various system
developments should be brought out.
Planning organization
Planning
organiza
tion
 • Popular tool.
• Times of uncertainty.
• Important Present fast changing world and globalization.
• Testing the robustness.
• Scenarios enables new ideas.
• Modeling of the future.
Scenar • Desired change.
io
Planni • At least 2 scenarios.
ng • Stories helps adopt the changing aspects of our present
environment.
Scenario
Planning
Scenario
Planning
Scenario
Planning
 PSP_Module 01_Part-B
Electricity Forecasting:
1) Load Requirement.
2) System Load.
3) Electricity Forecasting.
4) Forecasting Techniques.
5) Forecasting Modelling.
6) Spatial Load Forecasting.
7) Peak Load – Forecast.
8) Reactive Load Forecast.
9) Unloading of a System.
 Load
Requireme
nt.
 Load Requirement.
Load Requirement.
Load Requirement.
 Load Requirement.
Load Requirement.
Load Requirement.
 Load Requirement.
Load Requirement.
Load Requirement.
 Load Requirement.
Load Requirement.
Load Requirement.
 Load Requirement.
Load Requirement.
Load Requirement.
Load Requirement.
Load Requirement.
Load Requirement.
 Load
requirem
ent
 Load
requirem
ent
 Load
requirem
ent
 Load
requirem
ent
Load
requirem
ent
System load
System load
Electricity forecasting
Forecasting of electric load basically consists of :
1. Long term: load growth and supply/demand side resource
management adjustments.
2. Mid term/short term: Seasonal or weather in yearly, weekly or daily
load forecast.
3. The planning for the addition of new generation, transmission &
distribution facilities is based on long term forecasts & must begin 2-
25 years in advance of the actual in service.
4. Forecast at the National, Regional and State levels are prepared by
the annual power survey committee under the CEA.
5. Forecasting techniques must be used as tools to aid the planner along
with good judgments' and experience.
6. The various techniques are deterministic and statistical.
Electricity forecasting
The former are the types of extrapolation,End use method,
trend method.
1. Extrapolation: The rate of growth of power generation will be
reduced by half.
Electricity forecasting
2. End use method:

3.Trend Method:
Forecasting Horizon:
Forecasting techniques
Forecasting techniques
• The proper use of forecasting techniques has increased as
computing capability.
• Trends identified now a days are
1. Industrial to information society.
2. National to worlds economy.
3. Short to long term thinking.
4. Centralizations to decentralization.
5. Either to multiple options.
Forecasting techniques
1. Time series:
Forecasting techniques
2. Moving average:
Forecasting techniques
• Trend projection:
Forecasting techniques
• Regression model.
• Econometric model.
• Strategic forecasting.
Forecasting Modeling
• There are many factors which influence the prediction of load and
their influence vary from areas to areas & from country to
country.
• The factors found to affect a variety of utility load are time
dependent, weather dependent, random and other.
Forecasting Modeling
Time dependent:
• Power system exhibits a time dependent pattern of electric load
demand at times, these factors regular ,irregular or random in
nature.
• Regular pattern –time of day, week,year and yearly growth .
• Irregular pattern – Holidays,weekends,special days etc.
Forecasting Modeling
Weather dependent:
• Principle cause of load variations as it affects domestic load, public lighting, commercial
loads etc.
• Principal weather variables found to affect the power consumption include temperature,
cloud cover and visibility.
Random factors:
• These include School holidays, factory strikes and influence of popular TV programmes.
Other factors:
• Effects of DGs.
• Effects of tariff.
• Change over to winter time (or) summer time.
Spatial Load Forecasting:
• Distribution planning requires a feeder by feeder load forecast over
the period under consideration.
• The first requires reinforcement of existing feeder, the second is
more likely to be associated with expansion of the system due to
peri-urban or ribbon development.
• Development plans for suburban, peri-urban and rural areas will most
probably already determined by the authorities over the period under
consideration planner targets for development of respective areas.
Spatial Load Forecasting:
Peak load forecast:
• With major categories of energy sales forecast.
• Total requirement of energy is obtained by adding certain minor
items of consumption.
• Total losses and supply/demand side energy saving measures.
• Highest load factors – great economic activity.
• lowest load factors – low economic activity.
Peak load forecast:
Reactive power forecast:
• Forecasted reactive loads are adopted with current reactive
requirements of n/w including VAr Devices.
• Are used for security analysis, Vtg/Reactive power scheduling
etc.
• To have good chances of meeting demand, control of the
system must be able to handle those limit condition well.
PSP_21EE731

Thank you
 Power system planning
Module 02
Power system Economics
Prof. Arjun Joshi
Asst. Professor
EEE,VVIET-Mysore
 Module 02
Power system Economics
• Power-System Economics: Financial Planning, Techno
Economic Viability, Private Participation, Financial Analysis,
Economic Analysis, Transmission, Rural Electrification
Investment, Total System Analysis, Credit - Risk Assessment.

• Generation Expansion: Generation Capacity and Energy,

Generation Mix, Clean Coal Technologies Renovation and
Modernization of Power Plants.
Power system Economics
• Capacity addition is a Highly capital-intensive investment.
• Every year the Indian power Sector needs 2.5% of GDP( Gross domestic
product.).(India's GDP in 2024 is estimated to be $3.95 trillion in nominal
terms).
• Annual costs to industry in India due to electricity shortages are currently 1to3 % of
the GDP.
• Public funds are in deficit.
• Public-Private partnership can help boost investment.
• The role of the private sector in the electric power segment has great potential for
mobilization of capital for power development.
• No longer service G-T-D ,Now required to facilitate fair and comitative access to all
generators across the network.
• Ensure secure and reliable electricity supply expected by consumers achieved at the
least cost.
Power system Economics
The three main arguments makes project finance attractive
• Risk sharing
• Improvement balance sheet.
• Taxation advantages.

• The delivered cost of 1MW of power works out to approximately Rs.120Million.

• With breakup as Rs.60-80 Million for generation.
• Rs.60 Million for T&D Infrastructure.
Power system
Economics
Financial Planning
• Investment requirement of the power sector has increased exponentially
over the years.
• To meet huge requirement by way of foreign investment ,public funding,
private capital, public borrowings and internal resource generation.
• The central govt, ministry of power provides funding to national schemes
for power projects.
• State power utilities and central sector power utilities are expected to
generate at least 20% of their total investment as internal resources.
• The capital structure of the state power utilities is built up with loans
from the state govt.
• Financial institutions like LIC(Life Insurance Corporation of India),PFC(
Power Finance

),REC(or Rural Electrification Corporation Limited) Etc.

Corporation
Financial Planning
• Financial planning ensures right amount of finances at right time at
lowest cost.
• The capital cost is required for fixed capital for land, building, machinery
materials, constructions etc.
• The innovative approach by various financial institutions has made
funding a complicated process. The broad options are....
The
broad
options
are....
Techno economic viability:
• PSP is generally carried out over relatively long time horizons.
Financial Analysis
• Evaluation of risk & rate of return are 2 objectives of financial analysis.
• Determines whether properly estimated and funding ensured &
financially viable.
• The capital and operating costs are workout at market prices.
• For the generation of the project, cash flow is prepared for the
projected cost and generation of energy in each year of their
occurrence covering the entire economic in each year of their
occurrence covering the entire economic life of the project.
• For a transmission project the costs and units transmitted are
discounted similarly to workout the unit cost of transmission.
Financial Analysis
• In financial analysis the average cost of capital for the proposed is calculated on
the basis of debt to equity ratio, loan interest rates, repayment periods and
required return on equity investment.
• The capital structure of the project should be such that cost of capital is
minimum for the project.
• The cost of capital 1. cost of debt
2.cost of equity.
Transmission
• G-T-D:Overall effectiveness in power sector of the country.
1. New Connections: substation.
2. Improved efficiency and security of existing transmission lines.
3. Interconnection: pool
Rural electrification
• Socio economic advantage: Increase food production
• Rural employment.
• Rural industries.
• Avoid migration.

1.https://www.youtube.com/watch?v=arPNpceWY3c
2.https://www.youtube.com/watch?v=o-ZYsfNuh7M
Total system analysis
• The essence of total system analysis is simulation of system
operation with respect to both reliability and economy of electric
power supply.
• The fixed charges are calculated for each year as the product of each
unit capital cost and fixed charge rate.
• The sum of production costs and fixed charges is the total system
cost of the expansion case defined by the original list of future units.
Total system analysis
System Costs: The major elements of cost in the electric utility
industry are the following:
1.Cost of fuel:
• Fuel supply for the plant is a critical feature affecting plant
reliability.
• The fuel is a significant component in power generation cost.
2. Cost of capital: For generation equipment plus for transmission
equipment plus for distribution.
3.Cost of operations and maintenance.
4. Cost of auxiliary consumption of generation plant, T&D Losses.
Economic analysis
• Economic analysis usually starts with financial accounts,
converting these into economic measures by creation adjustments.
• It is to evaluate the total economic effects on society by extending
the criteria of financial profitability.
• This process involves removal of taxes and duties from the costs as
they are not the costs to the society.
• Similarly, subsidies are also not allowed as they are only transfer
payments.
• The coal, fuel, oil or other liquid fuel oils have to be valued at their
resources cost which may be economic cost of production plus
transportation cost and international prices in case of gas or
petroleum fuels.
Economic analysis
• The lifetime cost of the system consists of the capital cost(cost
of land, building, machinery, installation) working capital
plus the operating cost(cost of the electrical losses and
maintenance) plus interest during construction insurance.
• The truly optimized project is one in which the total lifetime
cost is minimized.
• For example: in case of overhead transmission lines,condctor
selection,bundling,tension,effect of terrain, structure
configuration and design –all have grate potential for cost
saving.
Credit risk assessment
Module 02_Part B: Generation Expansion
Introduction
• Deregulation has come into the electric power Industry.

• As per Electricity act 2003, no license is required for generating power.

• Open access to consumer allowed as per section 42 of the act is a major incentive for investment to IPP,
distributed energy and renewable developers in the country.

• The integrated generation planning involves centralised generation along with distributed generation
for least cost of supply.

• As a policy, the government of India is now developing power-generation projects on a fast track-bid,
win, and start.
Generation Capacity and Energy

• In India, an installed capacity is of about 150 percent of the peak demand , against 121% in the united
kingdom, 114% in the southern African power pool of 12 countries and 115% in the united states, 120 -
130% in Japan, 120% in Canada, and 120-130% in Australia.

• Types of Generation capacity are the following:

Base load capacity

Intermediate load capacity

Peak load capacity

Generation Capacity and Energy
Base load capacity:

is designed to operate for most hours of the coal fired steam cycle power plants, nuclear plants, hydro electric
plants.

The output of the base load type plants cannot be rapidly decrease/increase to follow load i.e. adjusted to
changes in the amount of power needed.

Intermediate load capacity:

• Provide power during periods when demand is higher than minimal levels. Technologies for Intermediate
load plants include gas turbine combined cycle plants and large hydroelectric plants.

Peak load plants :

• Provide power when demand is highest, & may operate only few percent of the hours in the year, this type
peak power plants includes gas turbine combined cycle plants, pumped storage hydroelectric facilities and
wind,solar,theram and PV systems.
Generation Mix
• The Generation mix is decided on the basis of load-curve duration peak,

Intermediate and base loads.

• The base load is created by high-inertia turbo generators such as nuclear thermal plants and thermal
based on coal.

• The intermediate load which is normally about 25% of the year is catered by low-inertia thermal plants
such as gas-turbine combined –cycle plants, hydro –generators, renewable resources power etc.

• The peaking capacity is well maintained by the hydro-generation pump-storage hydro, open cycle gas
turbines, diesel generators, etc.
• The essential features of these stations is that they are able to switch off and on easily and quickly.

• A delicate balance has to be maintained for providing energy in the most environmental friendly
manner at optimal cost.

• Reducing and increasing the fuel in a continuous cycle will have a damaging effect on the equipment in
coal, thermal, or nuclear plants.

• Adding the base load stations only will require backing down of thermal plants during night at much
higher level. This will lower the PLF of thermal stations.
• Excess power available during night can be used to pump water up in case of hydro plants i.e, called as
Pumped storage system and are called ideal peaking stations. Using water thus stored to produce power
during peak period is a feasible method of energy storage.

• https://www.youtube.com/watch?v=E-m7Psbuup0

• https://www.youtube.com/watch?v=ZINc-fOmCIE
Region No. Of schemes Capacity MW
Northern 7 13,065
Western 25 38,220
Southern 8 16,650
Eastern 6 9,085
North-Eastern 10 16,900
Clean Coal Technologies
• CGCC/IGCC:
In the Coal gas combined cycle(CGCC) system, coal is gasified in a gasification plant to produce fuel
gas –carbon monoxide and hydrogen are the most important ingredients which is fired.
Typical gas composition is

CO+H2 >85 vol. %

CO2 2-4 vol. %
CH4 < 0.1 vol. %
The hot gas is the used in a gas turbine to generate power in the first stage.
In the next step, the hot exhaust gases from the gas turbine are fed to a heat recovery steam boiler to
produce steam.
This in turn drives a turbine to generate power in the second stage.
The net result is a higher thermal efficiency.
IGCC plants use gasifier to convert coal to syngas which drives a combined –cycle turbine.

Coal is combined with oxygen and steam in the gasifier to produce the syngas which is mainly H2 and
Carbon monoxide(CO).

The gas is then cleaned to remove impurities such as sulphur and the syngas is used in a gas turbine to
produce Electricity.

Waste heat from the gas turbine is recovered to create steam which drives a steam turbine, producing
more electricity- hence a combined cycle system.

By adding a Shift reaction , additional hydrogen can be produced and the CO can be converted to CO2
which can then be captured and stored.

IGCC plant efficiency of 50% is achievable.

The 582MW thermal station at kemper country, Mississippi is one of the latest IGCC plant in the US.
• Washed coal:
Indian coal contains 30 to 50% ash.
The coal –washing process reduces the cost of coal by about 10% as washed coal burns longer and
provides more energy.
• Circulating Fluidised Bed Combustion(CFBC):
Circulating fluidised bed combustion in boilers at atmospheric pressure is particularly useful for high-
ash coals as Indian coal.
Relatively coarse particles at around 3 mm size are fed into the combustion chamber.
CFBC is clean firing technology with boiler having the quantities of burning of low-grade fuels.
The advantages of CFBC technology are:
 High-combustion efficiency
 Low NOx emission
 Low SO2 emissions
 Ability to burn low-grade fuels
 Fuel flexibility.
Renovation and Modernisation of power plants
• Large equipment in service in power plants age and lead to decline in output and increase in tendency
to breakdown.

• The magnitude, frequency, and duration if outages increase with time, thereby reducing the availability
of the plant, progressively, diminishing the average output and raising the maintenance and repair costs.

• Economic appraisal is necessary to compare the costs of rehabilitation or upgrading with an equivalent
capacity of the new plant.
 Residual life Assessment studies-life extension
There is need to undertake residual life assessment (RLA) studies of power plants and concentrate on
renovation and modernisation for increasing efficiency.

To check up the ageing properties of the equipment in service it is necessary to carry out that diagnostic
testing.

 example: partial-discharge testing, gas chromatographic testing of transformer oil to see the service/
ageing condition of power transformer.

Non –contact partial-discharge testing equipment is available which can evaluate transformers,
capacitors, and cables without any shutdown.
The gas-chromatography test on power transformer oil in service can be very useful to know the service
condition of the transformer.

The gas-chromatographic testing facilities are available with CPRI, Bangalore , and BBMB, Bhakra.

Low-cycle fatigue tests, thermal stress analysis, ultrasonic sensing microstructure analysis of various
components of thermal and hydro plants are necessary to estimate the residual life and life-extension
studies.
• Thermal plants:
1. Steam –Turbine Rehabilitation:
 Modern steam turbines are designed for a life of 19,00,00-21,00,00 operating hours.

 Condition assessment of turbine critical components is of primary importance.

 The typical critical components are turbine rotors, high temperature castings, valve castings, entry
nozzles, and steam piping.

 The various life –assessing techniques are

1. Component integrity test, ultrasonic testing, borosonic testing, dye-penetrate testing, wet fluorescent
magnetic particle testing.

2. Metallurgical tests like microstructure studies, material-composition test, hardness test, spectrum
electron microscopy and

3. Finite-element method for thermal stress analysis made workstations.

2. Material life consumption behaviour:

Creep components due to steady state stresses caused by pressure, steady-state temperature difference
and external loads.

Low-cycle fatigue component due to transient stress due to thermal stress during transient operating
conditions like start-up, shut down and large load and temperature changes.

High cycle fatigue mechanisms expose the components to greater stress than for which it is designed.
Many blade failures have been associated with high-cycle fatigue caused by abnormal vibrating
stresses.

It is very essential to have reliable material data from material testing in the laboratory for new
materials and in-service material.
Boiler Renovation:
A boiler is the weakest link in a thermal plant.

The cost of building a new power- plant boiler, including the necessary equipment to comply with pollution
control laws is approximately Rs 5000 per kw (2012).

The cost of carrying out extensive life-extension programmes to regain the lost MW and obtain reliable
operation for another twenty or more years is typically a fraction (10% to 20%) of the cost for new
equipment.

A well organised life-extension programme should consist of the following phases of work:

Evaluation and planning

Outage inspection , testing condition assessment

Post outage testing and studies

Report , recommendations, implementations of recommendations.

Up rating and Modernisation of Hydro plants:
1. Up rating:

• Hydropower stations can accommodate higher available water potential at site i.e., discharge and
head of enhanced power generation.

• Generally 10 to 15% higher generation is possible because of hydraulic and mechanical margins
without any changes in mechanical components.
• Systematic analysis of available water potential , operational data , major operating problems,
hydraulic and mechanical design, and dynamic behaviour of the machine is required to ascertain the up
rating capability of machines conforms to the following.

 Actual hydraulic potential at site and extent of up rating required.

 Operational data of the machine

 Operational loads on various machines with duration of operation

 Capability of Water path system

 Stress analysis of Shaft- coupling bolts and other mechanical assemblies

 Analysis of operating data

 Analysis of hydraulic design of the runner with respect to its limiting discharge
• In addition , the following parameters should be recorded to establish the up rating of a machine.

 Pressure pulsation of different frequencies and locations such as spiral casing, turbine top cover, draft-
tube cone and crown portion of the runner.

 Vibration in displacement, velocity and acceleration modes at different frequencies on the turbine guide
bearing, top cover and draft tube cone.

 Noise level

 Temperature of guide bearings and thrust bearings

 Speed rise and pressure rise

 Guide-vane opening and runner-blade opening at up rated load conditions.

Nuclear plants
• Most nuclear power plants originally had a nominal design lifetime of 25 to 40 years, but engineering
assessments of many plants have established that many can operate longer.

• A reactors life is 40 to 60 years.

PSP_21EE731

Thank you
 Module-4
Chapter 6-Distribution
 Introduction
• Distribution system are the part of electricity delivery infrastructure which
serves the load.

• It includes Sub-transmission(less than 132KV) and distribution lines,

power lines including low-voltage electrical sub-stations and pole –
mounted transformers, low-voltage lines(less than 1000KV) and electricity
meters.

• The objective of distribution system is to bring electricity network near the

point of consumption and distribute it.
 Distribution Deregulation
• The National power policy emphasises high-voltage distribution system as
an effective method for reduction of technical losses, prevention of theft,
improved voltage profile and better consumer premises.

• As per the Electricity Act 2003, electric utilities have moved to unbundled
model of generation companies(GENSCOs) , transmission companies
(TRANSCOs), Distribution companies(DISCOs), energy service
companies (ESCOs) and Electricity franchisees.

• As per Electricity Act 2003, Section 42 , open access growth , segregating

carriage distribution network from content Electricity supply business will
be in operative stage with enactment of Electricity Amendment Bill 2014.
 Planning Principles
• The following are the basic principles of distribution network:

1. It is more economical to transport power at high voltage.

2. Electricity travels as per Kirchhoff's Current and Voltage laws.

3. Electricity follows the least resistance /impedance path in the network.

4. Every network has two basic ingredients-nodes and connections.

5. Power must be delivered in relatively small quantities at service voltage

e.g., 400/230v level.

In Urban areas- Three –phase 11/0.415 kV and

Rural areas-Three-phase, 11/0.433 kV are used.

6. Voltage drop occurs from the source point to other locations.

7. In power grid Electricity moves by displacement.
8. Line Losses
9. Losses in power and incurred , creating a cost.
10. The equipment and labour have cost.
11. Operation and maintenance of service incur cost.
12. Future load growth is accounted for , during horizon year.
13. Nominal rated system voltage is the most efficient voltage for equipment
operation.
14. Demand response management is a step towards economy and supplying
power at low cost to consumers.
15. Electricity Market.
16. When the power is used by the consumer for any purpose the responsibility
lies on the consumer to share the degradation of environment on this account.
 Electricity-Supply Rules
• As per Electricity Act 2003, Section 50, the rules or distribution code is
notified by the State Regulatory Commission.

1. Administrative Information for grant of connections, billing connected

load, contract demand, disconnection, recovery of dues from defaulting
consumers and dealing with theft of energy cases etc

2. The system of supply and requirements for balancing Single-phase loads

on a three phase system.

3. The limitations placed on Water heaters, Air Conditioners, Welders,

Electric motors, Steel rolling mills, arc furnace etc

4. Information regarding service lines, point of attachment of supply and

fuses, changeover switches etc.
5. Provision necessary for all metering including the location, accessibility
and protection.

6. Requirements for consumer Installations such as compliances with the

wiring rules, inspection and testing of an Installation.

7. System of Earthing prescribed and any special earthing requirements.

8. Special requirements such as limits to low power factor, limits on

capacitor installations, harmonics limits and rules regarding high-voltage
installations.

9. Information of demand, load and diversity factors of various types of

consumers and plants.
10. Tariff application for different categories of consumers

11. Settlement of Consumer disputes, appeals etc

12. Guaranteed services standards

13. Distributed generation rules

14. Open –access rules

15. Demand-side management rules

16. Schedule of general consumer charges

17. Standard cost data for Estimation.

 Sub-Transmission
• The sub-Transmission designates the circuits which deliver energy from the
transmission system to the primary distribution system.
• Voltages from 220kV down to 33kV are found in sub-Transmission system.
• A distribution sub-station consists of four elements: Its sub-Transmission,
the sub-station itself, the feeder system and the consumers.
 Sub-Stations:
 A distribution sub-station consists of four elements: Its sub-Transmission,
the sub-station itself, the feeder system and the consumers.
 The 66/11 or 33/11kV siting should be on the basis of spatial load forecast,
demographic factors, existing network configuration etc.
• The other main criteria for selection of site are the following:
1. Proximity of load
2. Outgoing Feeder space
3. Geographic Conditions
4. Site preparation
5. Cost of land
6. Weather Exposure
 Feeders:
• These are the lines/cables supplying power in bulk to a selected number of
points called feeding points.
• The feeders run along streets, either overhead or underground and power
the distribution transformers at or near the consumer premises.
• Networks are normally fed by feeders originating from one sub-station
bus.
 Ring main system:
• In this system various sub-stations are interconnected, thus forming a
closed or open ring.

• The ring main system can be closed or open.

• Open ring main is more common and is cheaper providing isolating switch
or circuit breaker as a link for alternative supply.

• In Open-ring or open-loop main the load switch or circuit breaker is used as

sectionaliser.

• For main industrial cities or important security areas a 33 or 66 or 132 or

220 kV closed –ring main system is desirable.

• In closed-ring main system, the sectionalising load switch or circuit breaker

is normally closed.
 Distributors:
• Distributors are used for current tapping.

• A ring distributor is a distributor arranged to form a closed circuit and is

fed at one or more than one point.

• For voltage distribution series of open distributors are fed at both ends.

• There are three types of power distributors namely loop, network, and
radial.

• Service mains are the small cables teeing off from the distributors and
taken into premises of the various consumers. These are low-tension cables.
 High-Voltage Distribution:
• High voltage distribution system is adopted on the basis of cost-benefit
analysis.

• Types of High-voltage distribution systems(HVDS) are the following:

1. Single-phase 1 neutral( continuous neutral from the sub-station)

2. 2-phase 2 Wire( solidly earthed natural system)

3. 3-phase, 3-Wire.
 Basic Networks
1. Sub-Transmission circuits in voltage ratings usually between 33kV and
220kV deliver energy to distribution sub-stations.

2. The distribution sub-stations convert the energy to lower primary system

voltage for local distribution and usually improve facilities for voltage
regulation of the primary voltage.

3. Primary circuits of feeders, usually operating in the range of 11kV to

22kV , supply the load in well defined geographical areas.

4. Secondary Circuits of 240/415 V at Utilisation voltage carry energy from

the distribution transformer along the street etc.

5. Service lines deliver the energy from secondary circuits to the consumer
premises by service lines at 400/230 V.
• The six basic distribution systems used by utilities are:
1. Radial:
• A radial system is connected to only one source of supply .

• It is exposed to many Interruption possibilities. The most are due to overhead

lines, underground cable failure, or transformer failure.
• This system is suitable for small loads.
2. Primary Loop:
• A great improvement over a radial system is obtained by arranging a
primary loop which provides power from two feeders as shown in fig
below:
3. Primary Selective:
• It uses the same basic components as in the primary loop.
• Each transformer can have supply from two sources as shown in below
fig.
4. Secondary Selective:
• This system uses two transformers each from a separate primary feeder
and with low-voltage switching as shown in below fig:
5. Spot Network:
• Maximum services reliability and operating flexibility for most loads are
obtained by use of the network using two or more transformer units in
parallel.
• Automatic disconnection of any unit is obtained by sensitive reverse power
relays in the protection as shown in fig below:
6. Grid Network:
Voltage regulation is improved since power flow to the consumer is
through several transformers operating in parallel as shown in below fig:
Selection of Voltage levels:
The economy of electrical power supply is determined essentially by
the selection of the voltages in the distribution and transmission system.
 Up gradation of Existing lines and sub-stations
1. Several alternative approaches are available to help increase the capability
of existing lines.

• The most obvious method of increasing the capability of an existing line is

to increase the operating voltage.

• Some commonly used practices are the following:

a) Use of high-temperature conductors or aluminium alloy conductors which

have low weigh-to-strength ratio for minimization of sag or tension as
compared to ASCR.

b) Use of V-string assembly or polymer insulators to prevent conductor

swing and here by maintain required electrical clearances.
c) Introduction of additional panels in the tower structure to increase ground
clearance.

d) Replacement of the X-arm by specially shaped arms and reduction in the

number of circuits for upgrading the system voltage followed by re-
conductoring .

2. Another method of making more efficient use right-of-way involves

“compaction” of transmission lines.

3. It is feasible to upgrade any existing 11kV line to a 33kV line to 66 or

132kV lines as a compact line.

4. Load leveling in time and area domains is effective for improving the
utilization factor of a power utilities network.
• New Lines:
The dimensions of a distribution line can be compared by restraining
the movement of the conductor at the point of attachment to the insulators
by certain arrangements and by installing ZnO arresters as given below:

1. Arrangement of Insulators:

• V-string: Suspension strings in ‘V’ configuration in all types of structures

up to 765kV.

• Horizontal Line post: The use of line-post insulators horizontally.

• Strut-Suspension Combination: The strut remains in tension or

compression depending upon the direction of wind.

• Horizontal V: The insulator assembly is able to pivot about an axis which

is at angle with the vertical.
• Oscillation Cross-arm: It is an improvement on the horizontal V-assembly
in the sense that it employs a single insulator which is free to oscillate
about an axis.

• Insulator Cross-arm: The insulator cross-arms permit a more compact

support design and can carry higher mechanical loads.

2. ZnO arrester(MOV) Installation:

These can eliminate the need of shield wires and offer satisfactory phase to
ground protection against lightning.
 Multi-Circuit lines:

• One solution to the increasing pressure for mere compact right-of-way is to

restring existing low-voltage lines on to new towers with new high-voltage
circuits.

• Close coupling of lines of different voltages on the same transmission

tower may cause problems with voltage unbalance , residual voltage , ferro-
resonance, breaker –recovery voltage, ground –switch duty and line-
maintenance.

• The design engineer must aim for an optimum combination of mitigating

measures at minimum cost.
 Network Development
• About 30% of the total power-system investment is made in distribution
including sub-transmission systems.

• The distribution system differs from a transmission system in the following

aspects:

 It is typically radial or weakly meshed.

 Distribution lines usually have a larger R/X ratio.

 There may be significant three-phase unbalance including unbalanced and

single-phase or two phase loads.
• Service –Area Location:
The consumer should be served from the nearest sub-station to reduce
losses, costs, and service interruption exposure. To apply this concept the
following steps are considered.
1. Draw a straight line between the proposed
substation site and each of its surrounding
near by existing sub-stations.
2. Then draw a perpendicular bisecting
each of these lines.
3. The area enclosed by a perpendicular bisectors
around the proposed sub-station will be the service area.
4. The Shifting of load of nearby sub-stations can be from the area falling
within the polygon.
5. So, the optimal site for new sub-station is determined by an iterative
process.
• Feeder System:

A feeder is a part of a distribution system tailored to load locations and needs.

Voltage drop, power flow , power quality, reliability, routing and cost are
important points of consideration.

The types of feeders are the following:

1. Radial Feeder: Radial circuits are low cost and easy to analyse and operate.

2. Loop feeder: To obtain high degree of security, the sub-transmission system is

operated in closed-loop or closed ring main and no open-point switch is
provided.

3. Closed –Loop primary feeders: Normally a closed-loop primary feeder will

noticeably improve the continuity of power supply and overall service quality.
 Urban Distribution
• Modern underground distribution system provide superior service required
in urban areas.
• Overhead distribution requires frequent tree trimming and insulator
cleaning/washing, also increasing weather conditions more ongoing storms
and accident cause outages.
• Distribution planners look at underground distribution which usually has a
higher reliability compared to overhead because
1. Material and manufacturing science has provided underground technology
with low failure rates.
2. Underground cables are not susceptible to insulator contaminations,
falling trees, ice, drunk drives, gunshots and other urban above-ground
drama and trauma.
• It is estimated that underground distribution has reliability up to ten times
better than overhead distribution.

• Of course , Underground systems are not outage proof. They can be

knocked out by flooding , severe earth-quakes, and careless constructing
digging.

• Cities should be planned for undergrounding programmes under where

urban renewal schemes in urban areas are sanctioned by the government of
India.

• Life cycle cost analysis is in favour of underground distribution to provide

modern distribution systems.
• Dry- type transformers are preferred in metropolitan cities for security
reasons.

• Cast-resin technology transformers have an operating temperature of 110

degree C.

• Dry- type transformers up to sub-transmission allow safe and simple indoor

installations of up to 72.5kV.
 Rural Electrification
• Rural Electrification has two primary objectives-

o First, to improve the economic stature of the rural population by increasing

the productivity of human and animal labour, and

o To promote rural welfare by providing an environment equal in comfort

and convenience to that enjoyed in urban areas.

• The rural electrification programme is mainly funded by the Rural

Electrification Corporation of India since 1969.

• The Rajiv Gandhi Grammena Vidyutikaran Yojana and Deen Dayal

Upadhyaya Gram jyoti Yojana focus on rural electrification for all round
development of village life, agriculture and village Industries.
• The National Rural Electrification Policy was notified on 21 August 2006
as below:
1. Micro/Mini-grids will be constructed for isolated villages , integrating
wind, solar energy, and in some case, diesel generators and /or storage
systems to more than a village.
2. Standalone wind, solar(SPV), biomass-based engines, mini- and micro-
hydro power to more than one village to be encouraged with community
ownership
3. As per Section 13 of the Electricity Act 2003, the local bodies in rural
areas may be exempted from licensing by the State Electricity Regulatory
Commission on the recommendation of the State government of local
distribution in rural areas through
a) Panchayat Institutions
b) Users association
c) Cooperative societies
d) Non-governmental organisations
e) Franchisees
• The main components are the following:

1. Village Electrification

2. Pumpset Electrification

3. Load development

4. System Improvement
Chapter-7: Reliability and Quality
Introduction
• Reliability is the probability that an item or collection of items will perform
satisfactorily, under specified conditions during a given period.
• Reliability defines the number of interruptions in a supply ,their duration and
frequency.
• Deterministic or probabilistic methods are used.
• Complementary methods are applied to deterministic reliability measurements,
for example the ability to operate within applicable limits and ratings for an N-
1 contingency events for transmission, and SAIFI and CAIDI for distribution
systems.
• Probabilistic methods are usually applied to generation systems to predict the
likelihood that demand will be served.
• Grid reliability is vital in a digital economy to ensure competitiveness and
efficiency.
Reliability Models
• A power grid is planned and operated in a coordinated manner to perform
reliably under normal and abnormal conditions as per the grid code.

1. For reliable power system operation, the two monitoring systems

(SCADA and WAMS) are necessary.

2. Personal responsible for planning and operating interconnected bulk

power systems are trained , qualified, and have the responsibility and
authority to implement actions in the form of an independent body.
3. Cost-effective demand response resources have the potential to enhance
electric-system reliability while also increasing the systems ability to
absorb intermittent renewable resources.

4. Energy efficiency, in addition to energy savings can reduce peak demand

and defer the need for new investments. This increases system reliability.

5. The energy system will be more reliable and resilient because energy
storage, distributed and modular renewable systems are less prone to
large-scale failure.
System Reliability
• The reliability of supply to consumers is judged from the frequency of interruptions, the
duration of each interruptions, and the value a consumer places on the supply of
electricity at the time that service is not provided.
• To increase the reliability, it is necessary to understand the causes of outages and types
of equipment failures.
• The most typical causes of outages are:
1. Power-utility equipment failure
2. Consumer equipment failure
3. Dig-in-for cables
4. Trees
5. Pollution
6. Storm
7. Flood
8. Lightening
9. Ageing
10. Accident
11. Power shortage
12. System Inadequacy
13. Theft of power
• The tropical environment (high temperature, dust, high humidity, heavy
rainfall, high wind velocities, severe thunderstorms, etc.) in most parts of
country during a year accounts for the major outages.

• Individual reliability of equipment, circuit length and loading , network

arrangement, consumer values, etc, determine the total reliability.
• System Adequacy and Security:

• Adequacy is defined as the capability of the system to meet the system

demand in case of scheduled and unscheduled outages of generation,
transmission, and distribution facilities.

• The system security is defined as its ability to avoid or limit major outages
which entail the collapse of entire parts of the system

• The basic aim of every electric power system utility is to serve various
demand of energy and power at the lowest possible cost to the consumers
while maintaining acceptable levels of quality and continuity of supply.
Reliability and Quality Planning
• To increase consumer willingness to pay for a greater level of reliability ,
there are two ways:

• Provide more redundancy of supply to one consumer than to another.

• In the event of a disturbance or insufficient capacity, disconnect or interrupt

the consumer who doesn’t pay a premium rate of electricity.

• Reliability levels are inter-dependent with economics, since more

investment is necessary to increase reliability or even maintain it at current
and acceptable levels.

• This concepts creates the incremental reliability characteristics as shown in

fig.
• Because of the changes in technology, consumer needs and lifestyles,
economic factors, etc, reliability preferences can also shift over time.

• This may require periodically revising the reliability standards.

• Thus reliability planning can be greatly enhanced if a mechanism can be

initiated to measure consumer preferences for reliability, monitor shifts in
these needs and use such information to appropriately revise the standards
periodically if conditions so warrant.

• In contrast, the total-cost-minimisation approach seeks to establish the

trade-off that is conceptually depicted in fig.
Functional Zones
• The Three basic functional zones are generation, transmission and
distribution.
• Another fundamental subdivision of an electric power system is that
obtained by combining the functional zones into hierarchical levels.
• Three hierarchical levels(HL) are the following:
1. HLI consists of the generation facilities alone. The total system generation
is examined to determine its adequacy to meet system load demand.
2. HLII includes both generation and transmission facilities in order to assess
the system adequacy to meet system load demand.
3. HLIII studies are not usually done directly because of the enormity of the
problem in a practical system.
• The reliability performance of a network can best be expressed by
appropriate indices.

• The primary adequacy indices at HLI are loss of load probability(LOLP),

the loss of load expectation(LOLE), the loss of energy expectation(LOEE)
or expected energy not supplied(EENS), the frequency of loss of load and
its duration.

• Two sets of adequacy indices are Individual load-bus indices and system
indices.

• The load bus indices indicates the adequacy at major load points.

• The system indices provide an overall indication of the performance of the

bulk generation and transmission system and do not provide information
about adequacy of individual buses in the system.
 Generation Reliability Planning Criteria
• Generation capacity requires regular maintenance which means during periods
of the year , they are not available to serve the load.

• Capacity margin (difference between capacity and peak load) is a better

measure of reliability of service.

1. Reserve margin:
• The required capacity reserves are determined using probabilistic approach
that examines the probabilities of simultaneous outages of generating units
and compares the resulting remaining capacity with system peak load.

• Reserve generating capacity is also needed to supply any unexpected growth

in the peak needs of electric utility consumers that might exceed the forecast
peak demands.
• Margin can be
a. Percent reserve
b. Loss of the largest generating unit method
c. Loss of load probability
d. Spinning reserve is the use of generating equipment that is online synchronised to the
grid.
2. Loss-of-Load Expectation(LOLE):
• The Loss of Load Expectation (LOLE) is a reliability index that identifies the
likelihood that generation will be insufficient to meet peak demand during a part or all
of a year.
• Loss of load probability characteristics the adequacy of generation to serve the load on
the system.
• It is obtained by calculating the probability of daily peak demand exceeding the
availability capacity for each day and adding these probabilities for all the days in the
year.
• LOLE also is commonly referred to as Loss-of-load-probability(LOLP).
• The common practice was to plan the power system to achieve an LOLP of
0.1 days per year or less, which was usually described as “One day in ten
years”.
3. Energy Not Supplied:
• Any outage generating capacity exceeding the reserve will result in
curtailment of system power. Therefore another power related reliability
index known as expected power not served in MWh per year is also used
to complement the LOLE and is given by
 Transmission reliability Criteria
1. N-1 criterion is used in transmission planning. This is single contingency.

2. As a national approach N-2 criteria may be adopted for large generating

complexes(3000MW or above ) and multiline corridors (3 D/C lines or
more) on case-to-case basis.

3. Any congestion in transmission i.e., energy not supplied(ENS) MWh/year.

• CEA Reliability Planning Criteria:
• The Central Electricity Authority (CEA) uses the following reliability criteria
on deterministic basis.
1. Lines
Loading under Normal operating conditions for lines:

2. Generation
• For the transmission system configurations transmission planning studies are
carried out depending on the generation scenarios carried out by CEA.
• The peaking capacities and energy generation capabilities of power plant on
which the power and energy balance studies are based are determined on the
basis of the following norms:
3. Scheduled Maintenance:
The periods of scheduled maintenance in the year for hydro, thermal and
nuclear units is assumed as follows:
 Distribution Reliability
• Distribution fault immediately affect the consumer. Distribution systems
account up to 90% of all consumer reliability problems.

• Key to improving supply reliability and quality is better design (e.g., 11kV
line on suspension disc insulators is more reliable than on pin insulators)
and better maintenance(e.g., diagnostic maintenance).

• Distribution Indices for reliability are SAIDI, SAIFI, CAIDI, ASAI,

MAIFI. Distribution automation improves reliability.

1. System Average Interruption Duration Index(SAIDI) is the average total

duration of interruptions of supply per annum that a consumer experiences
in the period.
2. System Average Interruption Frequency Index(SAIFI) is the average
number of interruptions of supply in the year for consumers who
experiences interruption of supply in the period.

3. Consumer Average Interruption Duration Index (CAIDI) is the average

duration of an Interruption of supply in the year for consumers who
experience interruption of supply in the period.

4. MAIFI is the average number of momentary interruptions that a consumer

would experience during a giving period( typically a year).
• System Configuration:
System configuration plays a large impact on system reliability.
 Reliability Evaluation
• The power system reliability studies are conducted for two purposes:
1. Long-term reliability evaluation may be performed to assist in long-range system
planning.
2. Short –term reliability predictions may be undertaken to assist in day-to-day operating
decisions including system security.
The main steps in reliability studies are the following:
a. Define the system: List the components and collect the necessary component failure
data from field surveys available.
b. Define the criteria for system failure.
c. List the assumptions to be used.
d. Developing the system model.
e. Perform failure –effects analysis and compute the system reliability indices.
f. Analyse and evaluate the results.
 System Reliability Analysis
• The essence of total system analysis is simulation of system operation with
respect to both reliability and economy of electric power supply.
• Fig shows the flow diagram of the total system analysis process.

• Alternate cases to be studied are defined by the types and sizes of proposed
generating units listed in the sequence in which they are to be added.
• The reliability calculation then determines the timing of additions as
required to maintain a stipulated reliability, considering the magnitude of
the load for each year of the system expansion.

• The production-cost calculation determines how the total system should be

operated for adequate reliability and maximum economy, calculating costs
of fuel, losses, and operation and maintenance costs.

• The fixed charges are calculated for each year as the product of each units
and line capital cost and fixed charge rate.

• The sum of production, loss costs, and fixed charges is the total system cost
of the expansion case defined by the original list of future units.
1. Generation: There are two basic methods to evaluate generation
reliability.

a. Reserve Capacity:

• The basic quantity to be determined is the amount of installed reserve

capacity required for keeping the risk of not being able to supply the load
at any time below a predetermined level.

• In most capacity-reserve studies, the generating units are represented y a

two-state model.

• The failure probability of a generating unit is given by its

unavailability(A) ,
• Probability of Capacity Deficiency:
• The overall probability that the load demand will not be met is called the Loss-of-load
Probability(LOLP) and is given by

• The LOLP technique is a probabilistic measurement of the expected number of days per
year on which the availability capacity cannot meet the load demand.

• The LOLP provides a consistent and sensitive measure of generation system reliability.

• The cost of unused energy (EUE) is a necessary parameter to provide rational for the
selection of a standard EUE for practical use in generation expansion planning.
• Generation Expansion Planning:

• An important application of generation reserve studies is the planning for

unit additions in the future.

• Several schedules can be derived based on different projections for the

capacities risk levels and the best of these is then selected by the
consideration of economy.

• Uncertainties in the unit availability and uncertainty in the forecast peak

load are evaluated and the product evaluated as a resulting probability.
• Transmission :
• Transmission planning studies may involve one or more issues that have a
bearing on system reliability.
a. Determining how many circuits will be required.
b. Selecting the voltage level.
c. Selecting the route(s) for new lines.
d. Selecting the type of tower.
e. Selecting the location of switching stations.
f. Selecting the single-line diagram for all affected stations.
g. Selecting the type of relaying to be used.
h. Selecting the communication facilities.
i. Selecting the number of circuits on right-of-way.
j. Determining how many auto-transformers will be required.
k. Use the special protection schemes.
l. Up-rating of circuits.
m. Reinforcement of transmission interfaces.
n. 400/220 kV transformer stations.
Power system planning
Module-4
Distribution

Prof. Arjun Joshi

Asst. Professor
EEE,VVIET-Mysore
 Module-4
Distribution: Distribution Deregulation, Planning Principles, Electricity –
Supply Rules, Criteria and Standards, Sub – Transmission, Basic Network,
Low Voltage Direct Current Electricity, Upgradation of Existing Lines and Sub
– Stations, Network Development, System Studies, Urban Distribution, Rural
Electrification.
Reliability and Quality: Reliability Models, System Reliability, Reliability and
Quality Planning, Functional Zones, Generation Reliability Planning Criteria,
Transmission Reliability Criteria, Distribution Reliability, Reliability
Evaluation, Grid Reliability, Quality of Supply.
Single Line Diagram of AC Power Transmission

`
 Introduction
• Distribution system are the part of electricity delivery infrastructure which
serves the load.
 Introduction
• It includes Sub-transmission(less than 132KV) and distribution lines,
power lines including low-voltage electrical sub-stations and pole –
mounted transformers, low-voltage lines(less than 1000KV) and electricity
meters.
 Introduction

• The objective of distribution system is to bring electricity

network near the point of consumption and distribute it.
 Distribution Deregulation
• The National power policy emphasises high-voltage distribution system as
an effective method for reduction of technical losses, prevention of theft,
improved voltage profile and better consumer premises.
 Distribution Deregulation
• As per the Electricity Act 2003, electric utilities have moved to unbundled model of
generation companies(GENSCOs) , transmission companies (TRANSCOs), Distribution
companies(DISCOs), energy service companies (ESCOs) and Electricity franchisees.
Distribution Deregulation

• As per the Electricity Act 2003, electric utilities have moved to

unbundled model of generation companies(GENSCOs) ,
transmission companies (TRANSCOs), Distribution
companies(DISCOs), energy service companies (ESCOs) and
Electricity franchisees.
• As per Electricity Act 2003, Section 42 , open access growth ,
segregating carriage distribution network from content Electricity
supply business will be in operative stage with enactment of
Electricity Amendment Bill 2014.
 Planning Principles
• The following are the basic principles of distribution network:

1. It is more economical to transport power at high voltage.

2. Electricity travels as per Kirchhoff's Current and Kirchhoff's Voltage laws.

3. Electricity follows the least resistance /Impedance path in the network.

 Planning Principles

• Every network has two basic ingredients-nodes and

connections.
• Power must be delivered in relatively small quantities at
service voltage e.g., 400/230v level.
• In Urban areas- Three –phase 11/0.415 kV and
• Rural areas-Three-phase, 11/0.433 kV are used.
• Voltage drop occurs from the source point to other
locations.
7. In power grid Electricity moves by displacement.
8. Line Losses
9. Losses in power and incurred , creating a cost.
10. The equipment and labour have cost.
11. Operation and maintenance of service incur cost.
12. Future load growth is accounted for , during horizon year.
13. Nominal rated system voltage is the most efficient voltage for equipment
operation.
14. Demand response management is a step towards economy and supplying
power at low cost to consumers.
15. Electricity Market.
16. When the power is used by the consumer for any purpose the responsibility
lies on the consumer to share the degradation of environment on this account.
 Electricity-Supply Rules
• As per Electricity Act 2003, Section 50, the rules or distribution code is
notified by the State Regulatory Commission.

1. Administrative Information for grant of connections, billing connected

load, contract demand, disconnection, recovery of dues from defaulting
consumers and dealing with theft of energy cases etc

2. The system of supply and requirements for balancing Single-phase loads

on a three phase system.

3. The limitations placed on Water heaters, Air Conditioners, Welders,

Electric motors, Steel rolling mills, arc furnace etc

4. Information regarding service lines, point of attachment of supply and

fuses, changeover switches etc.
5. Provision necessary for all metering including the location, accessibility
and protection.

6. Requirements for consumer Installations such as compliances with the

wiring rules, inspection and testing of an Installation.

7. System of Earthing prescribed and any special earthing requirements.

8. Special requirements such as limits to low power factor, limits on

capacitor installations, harmonics limits and rules regarding high-voltage
installations.

9. Information of demand, load and diversity factors of various types of

consumers and plants.
10. Tariff application for different categories of consumers

11. Settlement of Consumer disputes, appeals etc

12. Guaranteed services standards

13. Distributed generation rules

14. Open –access rules

15. Demand-side management rules

16. Schedule of general consumer charges

17. Standard cost data for Estimation.

 Sub-Transmission
• The sub-Transmission designates the circuits which deliver energy from the
transmission system to the primary distribution system.
• Voltages from 220kV down to 33kV are found in sub-Transmission system.
• A distribution sub-station consists of four elements: Its sub-Transmission,
the sub-station itself, the feeder system and the consumers.
 Sub-Stations:
 A distribution sub-station consists of four elements: Its sub-Transmission,
the sub-station itself, the feeder system and the consumers.
 The 66/11 or 33/11kV siting should be on the basis of spatial load forecast,
demographic factors, existing network configuration etc.
• The other main criteria for selection of site are the following:
1. Proximity of load
2. Outgoing Feeder space
3. Geographic Conditions
4. Site preparation
5. Cost of land
6. Weather Exposure
 Feeders:
• These are the lines/cables supplying power in bulk to a selected number of
points called feeding points.
• The feeders run along streets, either overhead or underground and power
the distribution transformers at or near the consumer premises.
• Networks are normally fed by feeders originating from one sub-station
bus.
 Ring main system:
• In this system various sub-stations are interconnected, thus forming a
closed or open ring.

• The ring main system can be closed or open.

• Open ring main is more common and is cheaper providing isolating switch
or circuit breaker as a link for alternative supply.

• In Open-ring or open-loop main the load switch or circuit breaker is used as

sectionaliser.

• For main industrial cities or important security areas a 33 or 66 or 132 or

220 kV closed –ring main system is desirable.

• In closed-ring main system, the sectionalising load switch or circuit breaker

is normally closed.
 Distributors:
• Distributors are used for current tapping.

• A ring distributor is a distributor arranged to form a closed circuit and is

fed at one or more than one point.

• For voltage distribution series of open distributors are fed at both ends.

• There are three types of power distributors namely loop, network, and
radial.

• Service mains are the small cables teeing off from the distributors and
taken into premises of the various consumers. These are low-tension cables.
 High-Voltage Distribution:
• High voltage distribution system is adopted on the basis of cost-benefit
analysis.

• Types of High-voltage distribution systems(HVDS) are the following:

1. Single-phase 1 neutral( continuous neutral from the sub-station)

2. 2-phase 2 Wire( solidly earthed natural system)

3. 3-phase, 3-Wire.
 Basic Networks
1. Sub-Transmission circuits in voltage ratings usually between 33kV and
220kV deliver energy to distribution sub-stations.

2. The distribution sub-stations convert the energy to lower primary system

voltage for local distribution and usually improve facilities for voltage
regulation of the primary voltage.

3. Primary circuits of feeders, usually operating in the range of 11kV to

22kV , supply the load in well defined geographical areas.

4. Secondary Circuits of 240/415 V at Utilisation voltage carry energy from

the distribution transformer along the street etc.

5. Service lines deliver the energy from secondary circuits to the consumer
premises by service lines at 400/230 V.
• The six basic distribution systems used by utilities are:
1. Radial:
• A radial system is connected to only one source of supply .

• It is exposed to many Interruption possibilities. The most are due to overhead

lines, underground cable failure, or transformer failure.
• This system is suitable for small loads.
2. Primary Loop:
• A great improvement over a radial system is obtained by arranging a
primary loop which provides power from two feeders as shown in fig
below:
3. Primary Selective:
• It uses the same basic components as in the primary loop.
• Each transformer can have supply from two sources as shown in below
fig.
4. Secondary Selective:
• This system uses two transformers each from a separate primary feeder
and with low-voltage switching as shown in below fig:
5. Spot Network:
• Maximum services reliability and operating flexibility for most loads are
obtained by use of the network using two or more transformer units in
parallel.
• Automatic disconnection of any unit is obtained by sensitive reverse power
relays in the protection as shown in fig below:
6. Grid Network:
Voltage regulation is improved since power flow to the consumer is
through several transformers operating in parallel as shown in below fig:
 Urban Distribution
• Modern underground distribution system provide superior service required
in urban areas.
• Overhead distribution requires frequent tree trimming and insulator
cleaning/washing, also increasing weather conditions more ongoing storms
and accident cause outages.
• Distribution planners look at underground distribution which usually has a
higher reliability compared to overhead because
1. Material and manufacturing science has provided underground technology
with low failure rates.
2. Underground cables are not susceptible to insulator contaminations,
falling trees, ice, drunk drives, gunshots and other urban above-ground
drama and trauma.
• It is estimated that underground distribution has reliability up to ten times
better than overhead distribution.

• Of course , Underground systems are not outage proof. They can be

knocked out by flooding , severe earth-quakes, and careless constructing
digging.

• Cities should be planned for undergrounding programmes under where

urban renewal schemes in urban areas are sanctioned by the government of
India.

• Life cycle cost analysis is in favour of underground distribution to provide

modern distribution systems.
• Dry- type transformers are preferred in metropolitan cities for security
reasons.

• Cast-resin technology transformers have an operating temperature of 110

degree C.

• Dry- type transformers up to sub-transmission allow safe and simple indoor

installations of up to 72.5kV.
 Rural Electrification
• Rural Electrification has two primary objectives-

o First, to improve the economic stature of the rural population by increasing

the productivity of human and animal labour, and

o To promote rural welfare by providing an environment equal in comfort

and convenience to that enjoyed in urban areas.

• The rural electrification programme is mainly funded by the Rural

Electrification Corporation of India since 1969.

• The Rajiv Gandhi Grammena Vidyutikaran Yojana and Deen Dayal

Upadhyaya Gram jyoti Yojana focus on rural electrification for all round
development of village life, agriculture and village Industries.
• The National Rural Electrification Policy was notified on 21 August 2006
as below:
1. Micro/Mini-grids will be constructed for isolated villages , integrating
wind, solar energy, and in some case, diesel generators and /or storage
systems to more than a village.
2. Standalone wind, solar(SPV), biomass-based engines, mini- and micro-
hydro power to more than one village to be encouraged with community
ownership
3. As per Section 13 of the Electricity Act 2003, the local bodies in rural
areas may be exempted from licensing by the State Electricity Regulatory
Commission on the recommendation of the State government of local
distribution in rural areas through
a) Panchayat Institutions
b) Users association
c) Cooperative societies
d) Non-governmental organisations
e) Franchisees
• The main components are the following:

1. Village Electrification

2. Pumpset Electrification

3. Load development

4. System Improvement
 Low voltage DC (LVDC) Electricity

• There is rebirth of DC power & it has the potential to

change the world again.
• Many of the gadgets & conveniences of modern life.
• LED lights, variable speed motors, computers, televisions &
countless other forms of consumer electronics demand dc
power.
• DC micro grids.
• Limited size, local power generation, Avoid T&D losses,
energy wasted on the conversion from ac to dc.
MODULE-5-CHAPTER-9-
ELECTRICITY MARKET
 Department of Electrical & Electronics Engineering

INTRODUCTION
HISTORY OF ELECTRICITY SUPPLY INDUSTRY (ESI)
• For almost a century, each sector in the electricity supply industry (ESI) which is
generation, transmission and distribution were thought to be a natural monopoly.
• It is also has been vertically integrated within a utility and can be either, investor-
owned and state-regulated or owned by the local municipality
• If the utilities were vertically integrated, this means that the utility generated the
electrical energy, transmitted it from the power plants to the load centers and
distributed it to individual consumers.
• In other cases, the utility from which consumers purchased electricity was
responsible only for its sale and distribution to local area.
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Fig 1.1 Vertically Integrated Market

• In early 1980s, some economics started arguing that the monopoly status of electric utilities
had removed the incentive to operate efficiently and encouraged unnecessary investments.
• Later on, the electricity supply industry (ESI) had undergone a major transition worldwide,
as new technology and attitudes towards utilities is being developed and changed.
• Basically, the objectives of these restructuring are to enhance efficiency, to promote
competition in order to lower costs, to increase customer choice, to assemble private
investment, and to merge public finances.
• Changes in the ESI structure had introduced a number of electricity market models which
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KEY PRINCIPLES OF ELECTRICITY MARKET

• The principles of electricity market are given below:
1. The markets mission is growth.
2. Electricity is by its nature difficult to store ad has to be available on demand.
Demand and supply wary continuously.
3. Electricity is a commodity with a highly seasonal, inelastic demand. This is
combined with weather dependent generation and demand, is prone to short
time price volatility.
4. In theory electricity markets provide generators with incentives to reduce
cost and increase productivity and thereby induced expectations to lower
electricity prices to consumers.
5. Electricity flows from the power plant to the consumer at 200,000 km/sec.
Some power plants must constantly change their output.
6. The power markets operate on the basis of long term, short term, day ahead
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7. Markets bring efficiency in usage of transmission capacity by economic dispatch

and congestion management.
8. Markets encourage investment signals to investors in generation and transmission.
9. There is daily and weekly cyclic variation in cost and price of electrical energy.
10. Marginal cost varies over the course of the day.
11. Electricity is the only network with price that change every 15 or 30 minutes.
12. Peaking power must be viable by applying time of the day tariffs.
13. There is a physical requirement (as per the Electricity Act 2003) for an independent
transmission system operator to coordinate and dispatch of generating units to meet
the expected demand of the system across the transmission grid.
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POOL ELECTRICITY MARKETING

• The Indian power market is a power-pool model. The power-pool model
envisages different generators selling to a pool and distributors, power
exchanges, traders, and large consumers buying from it.
• These pools are designed to maximize competition in generation; compete on
price, not cost; and remain open to all market participants.
• An electricity pool is not a physical location; rather, it is a set of rules and
procedures managed by the load-dispatch centre as per the grid code.
• Typically, pool rules require generating and supply companies to submit day-
ahead bid packages and demand reservations for each half-hour period during
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• The pool price paid to generating companies generally comprises.

1. The system marginal cost
2. Start-up and no-load adjustment
3. Ancillary services payment black-start capability and spinning reserve
4. Pool price needs to be hedged or capped; the pool price paid by a supplier
generally comprises
a) Price paid to generating companies
b) An adjustment for transmission losses
c) Pool- or power-exchange administration charges

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d) Uplift, (e.g., for constrained-on units) 27/04/2023
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Fig 2.1 Pool Electricity Marketing

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INDEPENDENT SYSTEM OPERATOR (ISO)

• In the pool structure, the ISO is responsible for both market settlement including
scheduling and dispatch, and transmission-system management including transmission
pricing and security aspects.
• POSOCO is an independent system/transmission system operator (ISO). It controls the
National Load Dispatch Centre and five regional load dispatch centres and is the central
entity.
• The ISO has the following basic functions:
1. POSOCO must assure that the power system continues to operate in a stable,
economical manner.
2. Security standards that reflect the nature of the market and the manner of dispatch must
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3. Islanding for metropolitan cities must be planned rigorously.

4. Metering standards ensure that injections and withdrawals of energy can be
accurately metered every half-hour.
5. A software for power-market settlement has to be developed. Some
commercial packages are also available internationally, which need to be
modified for particular use.
6. Power Delivery
7. Transmission Pricing
8. Service-Quality Assurance

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DISTRIBUTION SYSTEM OPERATOR (DSO)

• With the large expansion target in the country of distributed/renewable generation, the
DSO has a pivotal role in managing the Renewable Energy Management Centres
(REMCs).
• The DSO’s function is to keep control of the distribution system:
1. Manage voltage and reactive power.
2. Adhere to connection rules and protection schemes.
3. Actively manage distribution system (SCADA) for distributed generation.
4. Contribute to system stability.
5. Prevent harmonic voltage distortion.
6. Allocation of Line Losses in Case of RetailingCoordinate with the respective load
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• The REMC may have the following functions:

1. Forecasting of RE generation in jurisdiction area on day-ahead, hour-ahead,
week-ahead, and month-ahead basis
2. Real-time tracking of generation from RE sources
3. Geo-spatial visualisation of RE generation
4. Close coordination with respective LDC for RE generation and control for
smooth grid operation
5. Cluster-wise, state-wise forecasting of power flows on intra-state network.

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POWER – EXCHANGE MARKETS

• The power- exchange market is a market where buyers, sellers, electricity
traders, open-access consumers, and members of power exchange transact on
standardized contracts.
• Here the power exchange or clearing corporation, is a counter-party to such
contracts and further, scheduling is done by regional load dispatch centers or
the National Load Dispatch Centre
• The norms require a Clearing Corporation (CC) for setting up a power
exchange.
• There are, at present three power exchanges approved by CERC has given
below
1. The Indian energy exchange (IEX)
2. Power Exchange India Limited (PXIL)
3. National Power Exchange Limited (NPEL)
• The exchange is on the pattern of the National Stock Exchange.
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WHOLESALE MARKET
• The wholesale market is open to anyone who, after securing the necessary contracts with
the counter-party willing to buy their output as per contract, can generate power and
connect to the grid.

Fig 3.1 Wholesale Market

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BILATERAL TRADING
• Depending upon the time available and quantities to be traded, buyers and sellers can resort
to different forms of bilateral trading based on agreement reached. The bilateral market
aims for common price through a negotiated approach and transactions can be on short-
term, medium-term, or long-term contracts.
(a) Customised Long-Term Contracts These usually involve large amounts of power
over different periods of days and weeks, generally one to 25 years.
(b) Customised Short-Term Contracts These usually involve power over different
periods of days and weeks, 3 months to I year period through inter-state trading licensees
(only inter-state part), directly by the distribution licensees (distribution companies),
through power exchanges, and the Unscheduled Interchange (UI).
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TRADING OVER THE COUNTER (OTC)

• These transactions usually involve a small amount of power (hundreds of MW)
over long periods of time (several months to several years).
• Buyers and sellers transact directly or through an electricity trader.
• The price and terms of the contract are determined through negotiations as
agreed between the parties or through a competitive bidding process

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RENEWABLE ENERGY CERTIFICATES MARKET

• The Central Electricity Regulatory Commission Regulations 2010 introduced the

modalities of REC in the Indian electricity sector. The Renewable Energy Certificate
(REC) mechanism is a market-based instrument to promote renewable energy and facilitate
Renewable Purchase Obligations (RPO).
• RECs are issued to those generators who have generated electricity through renewable
sources like solar, wind, biomass, small hydro, municipal solid waste, etc.
• There are two types of RECS available: solar and non-solar. To ensure the RECs are truly
reflecting the green or environmental attributes of power, CERC has issued regulations
giving how these generators are accredited and registered, and issued certificates.
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• The certificate once issued remains valid for three hundred and sixty-five days
from the date of its issuance. The REC is issued to RE generators only.
• Grid-connected RE technologies approved by MNRE would be eligible under
this scheme.
• RE generations with existing power-purchase agreements on preferential tariffs
are not eligible for REC mechanisms.
• SERC would define open-access consumers and captive consumers as obligated
entities along with distribution companies. SERC is to designate the state
agency for accreditation for RPO compliance and REC mechanism at the state
level.
• CERC has designated the National Load Dispatch Centre (NLDC) as the central
agency for registration, repository, and other functions for implementation the
REC framework at the national level.
• Only accredited projects can register for REC at the central agency.
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RETAIL MAKET
• A retail electricity market exists when end-use consumers can choose their supplier from
competing electricity retailers.
• Failure or incompetence in the execution of one or more of the following has led to some
dramatic financial disasters:
1. Billing
2. Credit control
3. Consumer management via an efficient call centre
4. Distribution use-of-system contract
5. Reconciliation agreement
6. "Pool" or "spot market" purchase agreement

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 Department of Electrical & Electronics Engineering

• In theory, competition in the retail market can motivate low prices as well as
the development of products (e.g., different forms of payment conditions,
customer services, billing, and product bundles) for all end-users.
• However, to date, this development has not been realised and the majority of
end- users have stayed with their historical supplier.

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Fig 3.2 Retail Market

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REAL-TIME MARKET
• A real-time market is the ultimate mature market where the price represents the system's
capability to balance generation and consumption in real time.
• Real-time market development is needed to bring costs of electricity to affordable levels.
• The real-time market is run in advance of the dispatch period and gives ex-ante prices so
that all participants are able see the market prices before the event.
• It is very unlikely that the outcome of the dispatch period will be exactly as predicted or
scheduled.
• However, generators and load face the ex-ante market prices irrespective of the outcome,
unless there were errors in the information used to determine the real-time market.
• In such a case, a re-run would be conducted to obtain revised prices.
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GENERATION CAPACITY MARKET

• The capacity markets are contracts designed to ensure sufficient reliable capacity is
available to ensure reliability and security of electricity supply in times of system
stress, for example, during a hot summer period.
• Earlier, the electricity-market reform utilities were responsible for ensuring security
of supply by providing adequate generating capacity to meet demand.
• POSOCO has the responsibility of ensuring momentary balance, but the provision of
sufficient generating capacity is a function of the market determined through price
signals to investors.

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• The generators payment was done through capacity payments, the price level of
capacity payments is generally set by a regulator and is often based on
administrative estimates of the cost of building and maintaining a peaking
plant.
• Capacity payment systems can be broadly classified as either price-based or
quantity-based.
• This can either be done through internal or bilateral agreements with generators
or through the capacity market where generators sell a recall right to the system
operator to call on their capacity in the case of shortages.

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RESERVATION MARKET
• Reserve capacity is unused capacity that is available on a stand-by basis to
supply energy in an emergency.
• The percentage of reserve margin depends upon the economic value of
reliability as well as the opportunity cost of energy, which, in turn, depend on
the overall economic development of a country.
• There is an interaction between the spot market and the regulating power
market, and the reservation market is used to ensure sufficient resources to the
regulating power market.
• For example, with high spot prices, it can be so attractive to produce for the
spot market that a reservation price is needed to maintain capacity for up-
regulation in the regulating power market-and vice versa for low spot prices.
• The reservation price is established based on the amount needed by POSOCO
and bids from potential suppliers.
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DEMAND RESPONSE MARKET

• Demand Response (DR) is the consumers' ability to reduce electricity consumption at their
locations when wholesale prices are high or the reliability of the electric grid is threatened.
• Demand response is important because it is another competitive resource that can be used
to maintain demand and supply in balance for grid operations and the associated wholesale
markets.
• Historically, the balancing of electricity supply and demand was performed only by
increasing or decreasing the electrical output of power plants, but this often requires large
investments in capital-intensive facilities.
• Demand response was originally developed by electric utilities in order to increase
flexibility on the demand side by temporarily shifting or reducing peak energy demand,
thereby avoiding costly energy procurements and capacity investments for a small number
of hours of need.

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• With the shift toward competitive electricity markets, demand response has become an
important tool used by many utilities and system operators to enhance grid reliability and
market outcomes in western countries.
• The DR programmes for electricity markets can be grouped by objective or type of
response the program is designed to achieve, as follows:
1. Price response (e.g., dynamic pricing)
2. Reliability response (e.g., emergency DR programmes)
• DR management can stimulate demand when there is an excess of power, and, therefore,
improve the generation profitability and security of supply.

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MARKET RULES
• The Central Electricity Regulatory Commission (Power Market) Regulations
2010 has framed the rules and the procedures of price offering by generators
and the pool-price determination to ensure adequate production of energy to
meet the demand.
• The market operation will be in the form of both forward market and real-time
operation, which can be on an hourly, or half-hourly, or 15-minute basis.
• Generally, in the pool-pricing system, the offered price of the generator with
the highest price bid, which has received the dispatch order, will be considered
the System Marginal Price (SMP).
• Pool prices will change in line with the demand/supply relationship.
• However, most consumers wish to have more stable prices while a number of
generators also want to sell generated energy at fixed prices. As a result,
generators and power utility may execute a power purchase contract with a
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BIDDING AND SETTLEMENT SYSTEM

1. OPTIMAL BIDDING

• For a generation company (GENCO) to survive in the competitive environment,

it has to operate very efficiently
• But only efficient operation sometimes may not suffice because in the energy
auction, it has to sell its products at competitive prices to get the maximum
profit out of it. Several factors affect the profitability of a generation company
like its own bids, bids placed by its competitor, total energy demands among
others, etc.
• A bid is called highly risky if it can yield large profit but its probability of being
selected is low, so more often than not it will not be selected leading to regret.
A low-risk bid is a bid which may have lower profit earning capability but high
probability of being selected, so there is no regret.
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• The optimal bidding problem is solved by any of the following methods

1. Game theory
2. Dynamic programming
3. A genetic-algorithm based method
4. Optimisation-based bidding strategies
5. Markov decision process

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2. SETTLEMENT SYSTEM

• All power/energy measurements are logged and a weekly cycle of settlement is carried out.
All the transactions between the participants must take place using a digital platform.

• Transmission can be done directly to the recipient's letterbox, if all the "address details" are
known, or via an electronic post office that takes care of sorting and transmission. In the
latter case, all traffic goes via an electronic letterbox at the post office.

• There are set of procedure/steps to be followed i.e.,

1. Procurement Phase
2. Metered Data Reporting
3. Settlement Phase
4. Invoicing Phase

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MERCHANT POWER
• A 10-15% merchant capacity in generating plants as per the National Electricity
Policy may be useful for providing liquidity in the electricity market.
• Merchant power plants differ from traditional rate-based power plants as to
1. how they are financed, and
2. where they sell the electricity, they generate.
• A merchant power plant is funded by investors and sells electricity in the
competitive wholesale power market. Since a merchant plant is not required to
serve any specific retail consumers, consumers are not obliged to pay for the
construction, operations, or maintenance of the plant.
• Independent Power Producers (IPPS) who opt for this route will have to do so
at their own risk. Setting up a merchant plant would necessarily mean balance-
sheet financing by the developer, as financial institutions/ lenders may as a rule,
not be comfortable with projects that don't have long-term PPA’s.
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• The Ministry of Power said, "merchant power plants fill different niches in the market;
some provide steady supplies to a power grid, while others fire up only when demand is
highest and meet peak loads." Merchant power plants operating competitively help assure
that power is produced with efficiency and supplied to locations where it is needed most.
• Merchant plants, by definition, do not have pre-identified consumers. This would mean that
these plants would have to depend on redundancies in the existing transmission system to
evacuate power.
• The ministry is working on a via media where a merchant plant of 500 MW to 1000 MW
capacity can be accommodated in the national grid, which would have redundancies. The
Ministry of Power believes that a limited number of merchant plants will enable the
development of an electricity market.
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SMART MARKET
• Increasing power-market efficiency requires new set up of tools and processes to fully
enable consumers' dynamic participation.
• With the shift toward competitive electricity markets, integrating renewable power and
demand response has become an important.
• The evolution of the smart grid will be particularly relevant in the development of
distributed generation, end-use efficiency, and load management including demand
response.
• A possible further development is that a distributor agrees with the consumer to install
equipment for automatic control of some appliances, and simultaneously agrees with the
local power-utility company about the ability to disconnect or connect some demand on
request during a certain period of time.
• The aim of Electricity Market Reforms is to meet the significant long-term challenge of
decarbonisation and to deliver our renewable energy targets, while maintaining secure and
affordable electricity supplies. The future market needs to absorb renewables in the spot
market.
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CONCLUSION
• The set-up of power markets is as per Section 66 of the Electricity Act 2003.

• The Indian power market is a power-pool model. The power-market mechanism has been

approved by the Central Regulatory Commission.

• The Power system Operation Corporation (POSOCO) is an independent system operator.

• The Central Electricity Regulatory Commission (Power Market) Regulations 2010 has

framed the rules and procedures of price offering by generators and the pool-price

determination to ensure adequate production of energy to meet the demand.

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• Optimal bidding problem is done generally by any method, e.g., game theory, dynamic
programming, a genetic algorithm-based method, optimization based bidding strategies,
Markov decision process, etc.
• All the settlement transactions between the participants must take place using a digital
platform.
• The Central Regulatory Commission fixes transmission tariffs from time to time
• Ancillary services are support services required for improving power quality, and
enhancing the reliability and security of the electrical power system.
• Finally discussed in this chapter is smart power market, particularly relevant in the
development of distributed generation.

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REFERENCES
[1] A S Pabla, Electric Power Planning, McGraw Hill, 2nd edition 2015

[2] K V S Baba, Sushil Kumar Soonee, Indian electricity market,2018

[3] Jovana Forcan, Miodrag Forcan, An Overview of Local Electricity Market Designs,2022

[4] https://www.researchgate.net/profile/Georgios-Tsaousoglou

[5]https://www.researchgate.net/publication/367618566_Simple_Electricity_Market_Eq

uilibrium_Models

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