Power Station and Substation Practice (PEC-EE 801/PE19)

Module 1: Power Station Engineering

Power Station Engineering: Thermal power station: thermodynamic cycle, Fuels, surface-to-
volume ratio, process flow diagram, different subsystems, operation of equipment: furnace,
superheater, reheater, LP heater, HP heater, boiler, feed pump, condenser, turbine, condensate
pump, deaerator, ID, FD and PA fan. Unit control room, a few automatic control loops. Nuclear,
hydel and Nonconventional power station: principle of operation and layout.
Module 2: Substation Engineering
Substation Engineering: Substation classification, equipment's, layout, busbar arrangement,
busbar material, use of current limiting reactors, Grounding: types, grounding practice,
Substation automation: metering and protection. UPS used in substations. Overhead line
insulators: materials, types, insulators in strings, string efficiency. Protection against surges:
lighting arrester.
Module 3: Power System Economics and Management
Power system Tariff: Its need and structure, block rate, two part and multirate tariff, Availability
Based Tariff (ABT), basic principle, areas of use and achievements in restructured power system,
demand and maximum demand, tri-vector meter; digital metering: active, reactive and apparent
energy, introduction to SMART metering, economics of power factor improvement; instruments
and techniques.
Basic Pricing Principles: Generator cost curves, utility functions, power exchanges, spot pricing,
electricity market models, demand side-management, transmission and distributions charges,
ancillary services, regulatory framework.
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Text/Reference Books
1. Nagrath & Kothery, "Power System Engineering" , Tata McGraw Hill
2. Elements of power system analysis, C.L. Wadhwa, New Age International.
3. Power System Analysis, John Grainger, William Stevenson Jr., McGraw Hill
4. Power System Analysis and Design, J. Duncan Glover, Mulukutla S. Sarma, Thomas Overbye,
Cengage Learning.
5. Electrical Power System, Subir Roy, Prentice Hall
6. Electric Power transmission & Distribution, S.Sivanagaraju, S.Satyanarayana, Pearson
Education.
7. A Text book on Power system Engineering, Soni, Gupta, Bhatnagar&Chakrabarti, DhanpatRai&
Co.
8. Electric Power distribution system Engineering, T. Gonen, CRC Press.

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 Tariff
Definition
 The rate at which electrical energy is supplied to a consumer is known as tariff.
 The tariff should be framed in such a way that it should recover the total cost of
producing electrical energy and it should provide marginal profit on the capital
investment.
Objectives of Tariff or Parameters guide of tariff of an electrical utility
 The tariff should be farmed in such a way that it should include the following objectives:
1. Recovery of cost of capital investment in generating equipment, transmission and
distribution system.
2. Recovery of the cost of operation, supplies and maintenance.
3. Recovery of the cost of material, equipment, building and collection coast as well
as for miscellaneous services.
4. A net return on the total capital investment must be ensured.
Cost of Electrical Energy
 The cost associated with the electrical energy can be divided into three parts
1. Fixed cost
2. Semi fixed cost
3. Running cost
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1. Fixed Cost
 This is the cost which is independent of the maximum demand and the units which are
generated.
 It is the cost which must be spent for purchase of assets such as land and equipments
required for plant.
 It also consists of annual cost of organization, interest on capital cost of land and
salaries of high officials.
 The capital investment on land and rate of interest is also fixed.
2. Semi Fixed Cost
 The cost which is not dependent on the number of units generated but depends on
maximum demand is called semi fixed cost.
 It is proportional to maximum demand and is due to annual interest and depreciation
on capital investment of buildings and equipments, different types of taxes, insurance
charges along with salaries of management and clerical staff.
 The size and the cost associated with installation of plant is determined from the
maximum demand.
 With increase in maximum demand, the size and cost of installation of plant is greater.
 With increase in size, the taxes and clerical staff will also be large.

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3. Operating or Running Cost
 It is defined as the cost which is dependent on the number of units generated.
 It consists of following costs :
1. Fuel cost
2. Cost associated with lubricating oil and water
 Maintenance and repairing cost of the equipment in generation, transmission and
distribution sections.
 The salaries of operating and supervising staff.

 All these costs are dependent on output energy from the plant.
 The running cost is always proportional to number of units generated by the station.
 High running cost indicates that the number of units generated by station is high.

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Important Terms and Factors
Connected load :
 It is the sum of continuous ratings of all the equipments which are connected to the
system of supply.
 The sum of connected loads of all the consumers is the connected load to the power
station.

Maximum demand :
 It is the highest demand of the load on the power station for a given period.
 The load on the station goes on changing from time to time.
 The maximum of all the demands that have occurred during a given period is the
maximum demand.
 The connected load is greater than the maximum demand as all the consumers do not
switch on their connected loads simultaneously.
 The installed capacity of the station can be determined by knowing the maximum
demand.

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Demand factor :
 The ratio of maximum demand to the connected load is called the demand-factor. Its
value is less than 1.
 The capacity of plant equipment can be decided by using demand factor.
Average load :
 It is defined as the average of loads occurring on the power station at a specified period
which may be a day or a month or a year.
Load factor :
 It is defined as the ratio of average load to the maximum demand during a specified
period.
Units generated in given period
Load factor 
Maximum demand  Time of operation of plant
 The load factor may be daily, monthly, or yearly depending on time period considered.
 It is less than unity.
 The total cost per unit generated is obtained with the knowledge of load factor.
 If load factor is high then it indicates that maximum demand is less which in turn
indicates that the plant capacity is low which reduces the cost of plant and hence the
cost per unit generated.
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Diversity factor :
 It is defined as the ratio of the sum of individual maximum demands to the maximum
demand on power station.
Sum of individual consumer's Max. demand
Diversity factor 
Station maximum demand for the whole load

 The load associated with various types of consumers will not have their maximum
demands occurring the same time.
 Sum of individual maximum demands is always greater than maximum demand on
power station and the diversity factor is always greater than 1.
 With greater diversity factor, the cost of generation of power is less.
Capacity factor :
 It is the ratio of actual amount of energy that is produced to the maximum possible
energy which could be produced during a specified period.
 It represents reserve capacity of the plant. There must be some reserve capacity for a
plant to meet increased load demand.
Plant use factor :
 It is defined as the ratio of energy produced to the product of plant capacity and
number of hours for which the plant was in operation.

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Requirements of a Tariff
 It should be easier to understand
 It should provide low rates for higher consumption
 It should be uniform over large population.
 It should encourage the consumers having high load factors.
 It should take into account maximum demand charges and energy charges.
 It should provide incentive for using power during off-peak hours.
 It should provide less charges for power connection than lighting.
 It should be have a provision of penalty for low power factor.
 It should have a provision for higher demand charges for high loads demanded at
system peaks.
 It should apportion equitably the cost of service to be different categories of
consumers.
 The profit must be marginal.

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 Different Types of Tariff
 The commonly used types of tariffs are as follows
1. Simple tariff
2. Flat rate tariff
3. Block rate tariff
4. Two part tariff
5. Maximum demand tariff
6. Power factor tariff
7. Three part tariff
8. Availability Based Tariff

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 1. Simple Tariff
 This tariff is the simplest form of tariff.
 When there is a fixed rate per unit of energy consumed, it is called a simple tariff or
uniform rate tariff.
 The simple tariff is defined as
annual running ch arg es  Annual fixed ch arg es
Simple Tariff 
Total number of units supplied to the consumers

 All the consumers are shining equal burden of capital investment.

 The price charged pet unit is constant i.e. independent of number of units
consumed.
 The consumption of electrical energy at the consumer’s terminals is recorded by
means of an energy meter.

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 Advantages:
1. Simplest method.
2. Easily understandable and easy to apply.
3. Each consumer has to pay according to his utilization.

Disadvantages:
1. There is no discrimination according to the different types of consumers.
2. The cost per unit is high.
3. There are no incentives (an attractive feature that makes the consumers use
more electricity).
4. If a consumer does not consume any energy in a particular month, the
supplier cannot charge any money even though the connection provided to
the consumer has its own costs.

Application:
1. Generally applied to used for irrigation purposes.

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2. Flat Rate Tariff
 In this tariff, different types of consumers are charged at different rates of cost
per unit (1kWh) of electrical energy consumed.
 Different consumers are grouped under different categories.
 Then, each category is charged money at a fixed rate similar to Simple Tariff.
 The different rates are decided according to the consumers, their loads and load
factors.

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Advantages:
1. More fair to different consumers.
2. Simple calculations.

Disadvantages:
1. A particular consumer is charged at a particular rate.
2. But there are no incentives for the consumer.
3. Since different rates are decided according to different loads, separate meters
need to be installed for different loads such as light loads, power loads, etc.
4. This makes the whole arrangement complicated and expensive.
5. All the consumers in a particular “category” are charged at the same rates.
6. However, it is fairer if the consumers that utilize more energy be charged at
lower fixed rates.

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3. Block Rate Tariff
 In this tariff, the first block of the energy consumed (consisting of a fixed number of
units) is charged at a given rate and the succeeding blocks of energy (each with a
predetermined number of units) are charged at progressively reduced or increased
rates. The rate per unit in each block is fixed.
OR
 Energy consumption is divided into fixed price per unit blocks. The price per unit in
the first block is the highest (or lowest) according to the provider’s necessities and
priorities; accordingly, it is progressively reduced (or increased) for the succeeding
blocks of energy.
 For example, the first 50 units (1st block) may be charged at 3 rupees per unit; the
next 30 units (2nd block) at 2.50 rupees per unit and the next 30 units (3rd block)
at 2 rupees per unit.

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Advantages:
1. Only one energy meter is required.
2. Incentives are provided for the consumers due to reduced rates.
3. Hence consumers use more energy.
4. This improves load factor and reduces cost of generation.

Application:
1. Generally applied to domestic consumers and small commercial consumers.

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4. Two Part Tariff
 When the rate of electrical energy is charged on the basis of maximum demand of
the consumer and the units consumed, it is called a two-part tariff.
 The total costs charged to the consumers consist of two components: fixed
charges and running charges.
 The fixed charges will depend upon maximum demand of the consumer and the
running charge will depend upon the energy (units) consumed.
 It can be expressed as:
Total Cost = Rs. [A (kW) + B (kWh)]
Where, A = charge per kW of max demand (i.e. A is a constant which when
multiplied with max demand (kW) gives the total fixed costs.)
B = charge per kWh of energy consumed (i.e. B is a constant which when
multiplied with units consumed (kWh), gives total running charges.)
 This type of tariff is mostly applicable to industrial consumers who have
appreciable maximum demand .

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 Advantages of two port tariff
1. It is simple and can be easily understood by the consumers.
2. It recovers the fixed charges which depend upon the maximum demand of
the consumer but are independent of the units consumed.
Disadvantages of two port tariff are
1. The consumer has to pay the fixed charges irrespective of the fact whether
he has consumed or not consumed the electrical energy.
2. There is always error in assessing the maximum demand of the consumer.

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5. Maximum Demand Tariff
 It is similar to two-part tariff with the only difference that the maximum demand
is actually measured by installing maximum demand meter in the premises of the
consumer.
 This removes the objection of two-part tariff where the maximum demand is
assessed merely on the basis of the rateable value.
 This type of tariff is mostly applied to big consumers.
 However, it is not suitable for a small consumer (e.g., residential consumer) as a
separate maximum demand meter is required.

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6. Power Factor Tariff
 The tariff in which power factor of the consumer’s load is taken into consideration
is known as power factor tariff.
a. kVA maximum demand tariff
b. Sliding scale tariff
c. kW and kVAR tariff

a. kVA maximum demand tariff

 It is modified form of two part tariff.
 The fixed charges are made on the basis of maximum demand in kVA and not in
kW.
 As kVA is inversely proportional to power factor, therefore, a consumer having low
power factor has to contribute more toward the fixed charges.
 It encourage the consumer to operate their appliances at improved power factor.

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b. Sliding Scale Tariff
 In this type of tariff scheme, an average power factor (generally 0.8 lagging) is
taken as reference.
 Now, if the power factor of the consumer’s loads is lower than the reference, he is
penalized accordingly.
 Hence, a consumer having low power factor load will have to pay more fixed
charges.
 Also, if the pf of the consumer’s load is greater than the reference, he is awarded
with a discount.
 This gives incentives to the consumers. It is usually applied to large industrial
consumers.
c. kW And kVAR Tariff
 In this type, both active power (kW) and reactive power (kVAR) supplied are
charged separately.
 A consumer having low power factor will draw more reactive power and hence
shall have to pay more charges.
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7. Three Part Tariff
 When the total charge to be made from the consumer is split into three parts viz.,
fixed charge, semi-fixed charge and running charge, it is known as a three-part tariff.
Total charge = Rs ( A + B × kW + C × kWh)

where,
A = fixed charge made during each billing period. It includes interest and
depreciation on the cost of secondary distribution and labor cost of collecting
revenues,
B = charge per kW of maximum demand,
C = charge per kWh of energy consumed.

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8. Availability Based Tariff (ABT)
 Availability Based Tariff (ABT) stands for a rational tariff structure, for supply of
electricity from generating station to beneficiaries on a contracted basis.
 It is a system of scheduling and dispatch, with rewards and penalties seeking to enforce
day-ahead pre-committed schedules for both generators and beneficiaries.
 Availability Based Tariff (ABT) is a frequency based pricing mechanism for electric power.
ABT tries to improve the quality of power and curtail the following disruptive trends:
1. Unacceptable rapid and high frequency deviations causing damage and
disruptions.
2. Frequent grid disturbances resulting in generators tripping, power outages and grid
instability.

Objectives of ABT
 The main objectives of introduction of ABT mechanism at regional level have been:
1. Promote trade in energy and capacity
2. Economic load dispatch
3. Encourage higher generation availability
4. To encourage grid discipline.

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ABT includes:
1. Scheduling and load dispatch (current day, day ahead scheduling).
2. Tariff structure (fixed charges, schedule or energy charges and unscheduled
interchange).

Availability Based tariff components (Features)

 ABT splits the existing monolithic energy charge structure into three basic
components. By treating both fixed and variable cost components separately.
a) Capacity charges (fixed): Towards reimbursement of the fixed cost of the plant,
linked to the plant’s declared capacity to supply MWs, it is linked to availability of
the generating station. That is, its capability to deliver MWs on a day-by-day basis.
At zero availability, no capacity charges shall be payable.
b) Energy charges (variable): Energy charge is the fuel cost for scheduled generation.
Energy charges or variable charges shall be payable by every user on the scheduled
energy irrespective of actual drawl.
c) Unscheduled interchange (UI) charges: It is a payment for deviations from
schedule at a rate dependent on system conditions (frequency) at that time. The
deviation from schedule is technically termed as unscheduled interchange (UI) in
Availability based Tariff terminology. This component would be negative in case the
power plant is delivering less power than scheduled.
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Benefits of ABT
 Benefits of ABT are listed below:
1. Enforce grid discipline by maintaining frequency in prescribed band (49.5-50.5
Hz) and control frequency excursions
2. By bifurcating the method of charging capacity charges (fixed) and energy
charges (variable), the incentive for trading in power is enhanced.
3. The beneficiaries have a claim on the capacity, which they can trade either within
or outside the region.
4. By isolating the variable charge, a beneficiary can again trade such power
depending upon its needs, market demand and the economics of power in the
home state.
5. More relevant incentives and disincentives encourage better performance by
giving scope for encouraging competition among generators.
6. Improved scheduling by all the participants, generators and beneficiaries and
ensures the optimum utilization of available generation capabilities.
7. High quality metering and on line connectivity enabling the system operator to
know the actual flows and taking appropriate action.
8. Commercial and operational disputes resolved.
9. Faster settlement process.
10. Voltages improved, Transmission losses reduced, Transmission capacity increased.
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 Example-1: A consumer has a maximum demand of 200 kW at 40% load factor. If the
tariff is Rs. 100 per kW of maximum demand plus 10 paise per kWh, find the overall
cost per kWh.

Solution:
Units consumed/year = Max. demand × L. F. × hours in a year
= 200 × 0.4 × 8760
= 7,00,800 kWh
Annual charges = Annual M.D. charges + Annual energy charges
= Rs. (100 × 200 + 0.1 × 7,00,800)
= Rs. 90,080
Overall cost/kWh = Rs. (90,080/7,00,800)
= Rs. 0.1285
= 12.85 paise.

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 Example-2: The maximum demand of a consumer is 20 A at 220 V and his total
energy consumption is 8760 kWh. If the energy is charged at the rate of 20 paise per
unit for 500 hours use of the maximum demand per annum plus 10 paise per unit
for additional units, calculate : (i)annual bill (ii) equivalent flat rate.
Solution:
Assume the load factor and power factor to be unity.
Maximum demand = (220 × 20 × 1)/1000 = 4.4 kW
(i) Units consumed in 500 hrs = 4.4 × 500 = 2200 kWh
Charges for 2200 kWh = Rs. (0.2 × 2200 = Rs. 440
Remaining units = 8760 – 2200 = 6560 kWh
Charge for 6560 kWh = Rs. (0.1 × 6560) = Rs. 656
Total annual bill = Rs. (440 + 656 ) = Rs. 1096
(ii) Equivalent flat rate = Rs. (1096/8760)
= Rs 0.125
= 12.5 paise
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