Availability-Based Tariff (ABT)
Introduction:
Availability-Based Tariff (ABT) is a mechanism introduced to address technical and
commercial challenges in grid operations. It was first proposed in the 1980s and 1991,
accepted by the Government of India in 1994, and implemented between 2002-2003. It sets
tariffs for central generators and handles deviations in State Electricity Boards (SEBs) based
on grid frequency and availability.
Need for ABT:
- To ensure beneficiaries pay for the actual energy drawn at the pool rate while generators
receive their share.
- Resolves issues like:
- Lack of merit order operation.
- Non-utilization of surplus power.
- Inefficient dispatch of generation as per grid needs.
- Frequency fluctuations.
Components of ABT:
1. Capacity Charge:
Fixed charges based on the station's declared capacity, covering fixed costs like loan
repayment and operational expenses.
2. Energy Charge:
Variable cost based on fuel usage, payable according to scheduled generation, not actual
drawals.
3. Deviation Charge:
Charges for deviations in scheduled vs. actual energy injections or withdrawals, linked to
grid frequency (average in a specific time block).
Key Features:
- Frequency-linked operation.
- Deviation charges increase with lower grid frequency (UI rates highest at 49 Hz and lowest
at 50.5 Hz or higher).
Benefits of ABT:
- Maintains grid discipline and power balance.
- Encourages strategic energy utilization and avoids over/under-drawals.
- Optimizes resource usage and fosters bilateral trading.
- Facilitates intra-regional energy trading and merit-based scheduling.
Introduction:
Availability-Based Tariff (ABT) is a mechanism introduced to address technical and
commercial challenges in grid operations. It was first proposed in the 1980s and 1991,
accepted by the Government of India in 1994, and implemented between 2002-2003. It sets
tariffs for central generators and handles deviations in State Electricity Boards (SEBs) based
on grid frequency and availability.
Need for ABT:
- To ensure beneficiaries pay for the actual energy drawn at the pool rate while generators
receive their share.
- Resolves issues like:
- Lack of merit order operation.
- Non-utilization of surplus power.
- Inefficient dispatch of generation as per grid needs.
- Frequency fluctuations.
Components of ABT:
1. Capacity Charge:
Fixed charges based on the station's declared capacity, covering fixed costs like loan
repayment and operational expenses.
2. Energy Charge:
Variable cost based on fuel usage, payable according to scheduled generation, not actual
drawals.
3. Deviation Charge:
Charges for deviations in scheduled vs. actual energy injections or withdrawals, linked to
grid frequency (average in a specific time block).
Key Features:
- Frequency-linked operation.
- Deviation charges increase with lower grid frequency (UI rates highest at 49 Hz and lowest
at 50.5 Hz or higher).
Benefits of ABT:
- Maintains grid discipline and power balance.
- Encourages strategic energy utilization and avoids over/under-drawals.
- Optimizes resource usage and fosters bilateral trading.
- Facilitates intra-regional energy trading and merit-based scheduling.
