Management of power supply to consumers in the most optimal manner is the real challenge for discoms in the present scenario. Although sufficient power generation capacities are available, due to limited financial capability and liquidity, most of the discoms are not in a position to procure round-the-clock (RTC) power as per their requirement and hence, there remains a gap in demand and supply. With better power management, this gap can be mitigated. Uttar Pradesh has a generation capacity of 18,134 MW, comprising 14,161 MW of thermal, gas and nuclear, 3,016 MW of hydro and 958 MW of renewable capacity. During the summer season, demand during peak hours (7-11 p.m.) goes up to 22,500 MW, whereas in the day time, it comes down to 16,500 MW. In contrast, in the winter months, the peak demand goes up to 16,500 MW on average and during the daytime it is 10,500 MW. This creates a demand gap of about 6,000 MW. Maintaining the requisite power supply in this scenario has been a challenge for Uttar Pradesh. A typical pictorial representation of power availability and demand in a day is shown in the accompanying graph.
Typical seasonal demand patterns for Uttar Pradesh
The challenge before Uttar Pradesh was to arrange for additional power of about 3,000 MW over and above the available generation capacity of 18,134 MW during peak hours and to avoid extra power generation of about 3,000 MW during the lean period. Hence, with a vision to manage power in the best possible manner, the Power Management cell (PMC), Uttar Pradesh Power Corporation Limited (UPPCL), was created with the primary aim of optimising power purchase cost, and has been actively functioning since May 2018. The functions allocated to the PMC are as follows:
- Short-term, day-ahead and intra-day demand projection/load forecasting.
- Computation of day-ahead merit order despatch (MOD)-backed drawal schedule, etc.
- Daily/Weekly/Monthly and current year’s monitoring of system demand, power availability and shortage/surplus, and supply hours.
- Estimation of power procurement cost for day-ahead and intra-day activities.
- Optimal disposal of excess power available in different time blocks.
- Coordination with discoms and grid operator for efficient demand-side management (DSM) in a disintegrated manner for the minimisation of DSM and other commercial parameters, that is, congestion and compensation.
- Follow availability-based tariff (ABT) and DSM rules for secured grid operation as well as to avoid penalty.
- Monitoring and facilitating coal supply to thermal power generators.
To arrange additional power during the peak hours, the PMC adopted broadly three recourses.
- Intra-day/Day-ahead power purchase from the market.
- Short-term power through banking contracts.
- Short-term power through the Discovery of Efficient Electricity Price (DEEP) e-bidding and e-reverse auction portal.
The PMC does intra-day, day-ahead and short-term demand forecasting for power supply within Uttar Pradesh. Considering power availability, demand-supply gap assessment is done. Accordingly, arrangement of power is made through banking contracts, short-term agreements and intra-day/day-ahead market. For banking arrangements, the PMC undertakes an analysis to estimate the duration and quantum of power, can be spared and simultaneously collects information as to which discoms of any other state have a requirement of that power quantum in that period. That state should also have excess power during that period when Uttar Pradesh’s discoms have a power shortage. For example, Uttar Pradesh has surplus RTC power during November to February, whereas hilly states have surplus power in the rainy months of June to September. Since Uttar Pradesh has power shortage during June-September, it has gone ahead with power banking on an RTC basis with hilly states during November to February, which is returned by the hilly states from June to September.
The power banking arrangement during the same period may be done considering the fact that different states may have different hourly requirements. Based on an assessment and by identifying the discoms whose demand curves complement each other, an hourly banking arrangement may be adopted.
For mitigating the deficit in peak hours, Uttar Pradesh has also entered into short-term power purchase contracts through DEEP, the e-bidding portal. Further, to avoid extra power generation during the lean period, it was necessary to take certain measures. The challenge was to avoid additional power generation, which was not required in lean hours but needed in peak hours. It was observed that:
- Merely to ensure availability in peak hours, generating units were required to run to their technical minimum in lean hours.
- Even after thermal backing of the generating units to their technical minimum in lean hours, there were extra capacities left.
- Although this extra capacity was for sale in the market, most of the time it could not be sold either due to a lack of buyers or due to a higher variable cost of the generated power than the prevailing market price.
- It was found that generating units having higher variable costs were run to their technical minimum in lean hours just to make the required power available in peak hours as per the demand.
Hence, the option of keeping the higher variable cost generating stations in reserved shutdown with the provision to purchase equivalent power from the day-ahead market/short-term agreements was contemplated. The cost-benefit analysis was done and it was found to be a more cost-effective proposition. Some other remarkable actions taken by the PMC are as follows:
- Earlier, monthly MODs were prepared. The PMC suggested that in order to capture power purchase cost in a better manner, MODs should be made fortnightly.
- Generation from hydro plants was rescheduled to match their supply with the state’s peak requirement.
- On DSM, monitoring of the progress of separation of independent agricultural feeders is regularly done by the PMC.
- Uttar Pradesh was not able to get the full benefit of allocated hydropower from central plants, for which peak hours are declared by the Northern Regional Load Despatch Centre (NRLDC), due to non-matching of allocated hydropower schedule with Uttar Pradesh’s peak hour requirement. The PMC has highlighted this issue in Northern Regional Power Committee (NRPC) meetings and also referred it to the Ministry of Power (MoP). The matter is under consideration with the NRPC.
- Raised the issue for allowing intra-day banking for allocated hydropower from central hydro generating plants envisaging that different states may have different peak power requirements and hence, if there is provision for intra-day banking, then it would suffice for their needs.
- Raised the issue of declared capacity (DC) by generators based on the available coal stock at the MoP and NRPC levels. It was observed that on many occasions generators were giving their DCs in critical coal stock condition during lean periods, knowing that there would be no power requirement; and in contrast, not giving DCs even reasonable coal stock during their peak requirement period when they would need it for generation.
- Closely monitored to reduce DSM for discoms by suggesting measures for correction of RTUs and time drift in boundary meters in the transmission system and avoiding overdrawal (OD) by the railways (an open access consumer) by bringing them in through an additional agreement.
- The PMC has also brought forward the issue of 12 per cent or 150 MW, whichever is less, limitation for OD/underdrawal (UD) across the sector. As per the Central Electricity Regulatory Commission DSM Regulations, deviations up to 150 MW have been allowed for generators having a capacity of up to 400 MW, whereas at the state periphery, this limit is fixed at 12 per cent or 150 MW, whichever is less. As a result, all small generators having capacities below 400 MW are practically out of the ambit of DSM. The issue has been brought before the state regulator with the request to consider permissible deviation of 12 per cent or 150 MW, whichever is less, across the sector. This has been done with the purpose of bringing cogenerators and other small generators of the state under the ABT mechanism and also to avoid undue burden of DSM on discoms due to deviations by small generators.
- Recently, the PMC has also highlighted a similar issue of relaxation from penalty under the DSM Regulations, Fifth Amendment, wherein +/- 20 MW has been allowed, which actually creates a situation where small generators are free from following the grid discipline and on their part, discoms are liable to pay a penalty at the state periphery.
- UPPCL uses an optimisation and dispatch scheduling model, which provides the least-cost generation schedule, considering all system constraints and costs.
- The demand forecast module is framed using state-of-the-art machine learning and artificial intelligence, which have a self-learning ability, based on the historical and real-time data sets of the factors that influence day-to-day demand behaviour.
Summing Up
Through proactive measures for optimising power purchase costs, PMC UPPCL, along with consulting firm Mercados, has, within a year of its inception, helped in the recovery of about Rs 1.1 billion in terms of a fixed cost being paid to generators only. UPPCL has also saved a substantial amount by optimising the schedule of hydropower and taking decisions for purchasing power for a short duration instead of reviving the reserve plants based on cost optimisation. PMC UPPCL monitors the daily availability and demand in the state. Based on merit order, a daily schedule is provided to the SLDC. The PMC also monitors the drawal of discoms so as to minimise the charges under DSM. The PMC works to reduce the overall power procurement cost for the state’s discoms and at the same time tries to ensure RTC power supply to consumers.