Availability Based Tariff ABT has been under discussion since 1994 when M/s ECC, an ADB consultant,

first supported it. GOI constituted a National Task Force in February 1995. It had ten meetings till end 1998 where all the related issues were discussed. A draft notification was prepared for issue by government. With effect from May 15,1999 the jurisdiction was vested in the CERC. Papers were sent to the Commission in June 1999 by the MOP. The proceedings were held in the Commission from July 26 to 28, 1999. The ABT order dated January 4, 2000 of the Commission departs significantly from the draft notification as also from the prevailing tariff design. Why ABT? 1. India plans to have an integrated National Grid. This will assist in meeting demand with the least cost supply. Five Regional grids already exist. Some linkages between Regions are also in place. (1) The five Regional grids work at vastly varying operational parameters today. Frequency level is one such operational parameter. The target frequency prescribed by the Indian Electricity Rules is 50 Hz (2) Integrated grid operations require the normalisation of frequency across all five Regions. The alternative is to insulate each Regional Grid by Back to Back HVDC links. This is an expensive option. Normalisation of frequency requires proactive load management by beneficiaries and despatch discipline by generators. (3) There is currently no formal system of financial incentives to promote grid discipline. (4) The ABT provides this mechanism. 2. Chronic surpluses in the East and shortages in the South, have resulted in sustained functioning of these grids at frequencies which are far beyond even the normal band, liberally defined by the IEGC as frequency variation within 49.5 to 50.3 Hz (1) Continued functioning at non-standard frequency results in long-term damages to both generation and end use equipment This is a hidden cost which is borne by the customer in the long term. (2) The ABT will induce corrections in the prevailing frequency to bring it within the

permissible band. 3. Frequent fluctuations in frequency caused by short-term variations in the demand supply gap due to the tripping of load or outage of a generator or a transmission line impose substantial costs on generators and consumers. (1) The ABT will address this problem by inducing grid discipline. 4. Economic efficiency dictates that least cost power should be despatched in preference to more costly power (merit order despatch). This becomes difficult without a two part tariff for all stations. States tend to compare the total cost of central generators with the variable cost of their own stations 1 since for them the fixed costs of state level stations are sunk costs. This results in making central generation appear artificially more expensive than state level stations even though on variable cost basis the former may be cheaper. (1)The two-part tariff of the ABT by making the payment of fixed cost a fixed liability of the states converts it into a sunk cost thereby leveling the playing field between central generators and state level plants. 5. Currently beneficiaries are not liable for payment of the fixed cost associated with the share of capacity allocated to them. If a beneficiary decides not to draw any energy he can escape payment of the fixed charge, which then gets paid by the person drawing energy. This is unfair since it increases the cost of energy even for those beneficiaries who may be drawing energy within their entitlements. (1) The two-part tariff of the ABT assures that each beneficiary will be liable for payment of the fixed cost associated with its share of allocated generation capacity. 6. Currently generators have a perverse financial incentive to go on generating even when there may be no demand. This results in high frequency in the grid as is endemic in the East (1) The ABT will discourage such behaviour by pricing generation outside the schedule in relation to the prevailing frequency.

What Is ABT? It is a performance-based tariff for the supply of electricity by generators owned and controlled by the central government It is also a new system of scheduling and despatch, which requires both generators and beneficiaries to commit to day-ahead schedules. It is a system of rewards and penalties seeking to enforce day ahead pre-committed schedules, though variations are permitted if notified One and one half hours in advance. The order emphasises prompt payment of dues. Non-payment of prescribed charges will be liable for appropriate action under sections 44 and 45 of the ERC Act.

It has three parts: - A fixed charge (FC) payable every month by each beneficiary to the generator for making capacity available for use. The FC is not the same for each beneficiary. It varies with the share of a beneficiary in a generators capacity. The FC, payable by each beneficiary, will also vary with the level of availability achieved by a generator. - In the case of thermal stations like those of NLC, where the fixed charge has not already been defined separately by GOI notification1 it will comprise interest on loan, depreciation, O&M expenses, ROE, Income Tax and Interest on working capital. - In the case of hydro stations it will be the residual cost after deducting the variable cost calculated as being 90% of the lowest variable cost of thermal stations in a region. - An energy charge (defined as per the prevailing operational cost norms) per kwh of energy supplied as per a pre-committed schedule of supply drawn upon a daily basis. - A charge for Unscheduled Interchange (UI charge) for the supply and consumption of energy in variation from the pre-committed daily schedule. This charge varies inversely with the system frequency prevailing at the time of supply/consumption. Hence it reflects the marginal value of energy at the time of supply.

How is ABT different from normal proceedings to determine generation tariff? 1. The ABT proceeding has not attempted to consider most of the cost drivers like ROE , Operational Costs, depreciation rate, composition of the Rate Base, capital structure etc. Proceedings to redefine these norms are being held separately. Hence the ABT proceedings have been concerned more with tariff design rather than definition of tariff norms or determination of tariff levels. 2. It's incidence is a function not only of the behaviour of a generator but also of the behaviour of a beneficiary. Disciplined beneficiaries and generators stand to gain. Undisciplined beneficiaries and generators stand to lose. Broad features of ABT design. 1. It implements the long held view that electricity tariffs should be two-part comprising of a fixed charge and a separate energy charge. 2. It increases the target availability level at which generators will be able to recover their fixed costs and ROE from 62.79% deemed PLF at present to 80% (85% after one year) for all thermal stations, 85% for Hydro in the first year and 77% (82% after one year) for NLC. 3. Misdeclaration of availability entails severe penalties. 4. It rationalises the relationship between availability level and recovery of fixed cost. The draft notification provided for recovery of (annual fixed costs minus ROE) at 30% availability and recovery of ROE on pro-rata basis between 30% and 70% availability. This order provides for payment of capacity charges between 0% and target availability (as indicated in item 2 above) on pro-rata basis. 5. The draft notification had provided for payment of capacity charges for prolonged outages. This order disallows such payments. 6. It delinks the earning of incentive from availability and links it instead to the actual achievement of generation. Hence incentives will be earned by generators only where there is a genuine demand for additional energy generation unlike the prevailing situation, or the proposed draft received from the GOI, under which it is earned purely because the generator is available. 7. Draft notification linked incentives to equity. This order preserves the status quo of one paise per kwh per each 1% increase in PLF above target availability.

8. It increases the minimum performance criterion for the earning of an incentive from 68.5% deemed PLF at present to 80% (85% after one year) for all thermal stations, 85% for Hydro and 77% (82% after one year) for NLC. 9. It introduces severe financial penalties for grid indiscipline along with significant rewards for behaviour, which enforces grid discipline for both generators as well as beneficiaries. 10. The order permits market pricing for the trading of surplus energy by beneficiaries and generators. 11. The order urges the GOI to allocate the unallocated capacity a month in advance so that beneficiaries know their exact share in capacity in advance and can take steps to trade surplus power. 12. It will be implemented in stages from April 1,2000 starting from the South. The new norm for incentive will however be applicable from this date for all central stations. In the case of NPC, GOI to decide applicability of the order. COMPARISON OF EXISTING TARIFF SYSTEM AND AVAILABILITY BASED TARIFF
Sl. No. 1. Description of Item Capacity Charge / Fixed Existing System Annual Fixed Charge (AFC) include : a). Interest on loan b). Depreciation c). O&M d). Return on Equity e). Income-Tax f). Interest on Working Capital Recovered at 62.79% deemed PLF. 50% AFC at 0% PLF and full recovery at 68.49% deemed PLF. Draft ABT Proposal Fixed charges excluding ROE i.e. all other five items of the existing system. ROE treated separately ABT Order Capacity charge as per existing system

2.

Basis of recovery

FC excluding ROE recovered at 30% availability on prorata basis between 0% and 30% availability. ROE recovered on pro-rata availability between 30% and 70%

Pro-rata recovery of capacity charge for : i) NTPC stations: Between 0 to 80% availability in the first year and 0 to 85% availability in the second year ii) NLC Stations Between 0 to 77% availability in the first year and 0 to 82% availability in the second year iii) NHPC Stations

Between 0 to 85% availability in the first year and availability in the second year to be announced by the commission separately. 3. Incentives Above 68.49% deemed PLF, incentives at 1 paise/KWh for each 1% increase in PLF. Incentive beyond target availability of 70% is as follows: 70% to 85% - 0.4% of equity for each 1% increase in availability beyond 85%. Based on allocated capacity Based on Scheduled Energy Varying between 0 to 360 paise/kwh for the frequency range of 50.5 Hz to 49 Hz GOI Tariff notification Not specified 1 paise/KWh/each percentage increase in PLF of 80%/ 85% in the first/ second year for NLC and 85% in the first year for NHPC.. Based on allocated capacity Based on Scheduled Energy Varying between 0 to 420 paise/kwh for the frequency range of 50.5 Hz to 49 Hz GOI Tariff notification till such time Commission finalises its views Specified

4. 5. 6.

Sharing of fixed cost Recovery of variable cost Deviations from schedule UI charges Norms for determination tariff

Based on actual energy drawals Based on actual energy drawals No penalties for such deviation

7.

GOI Tariff notification

8.

9. 10.

Procedure for payment of capacity charge if ABT is introduced in the middle of a financial year Prolonged Outages Marketing of surplus energy Splitting up of capacity and energy charge for hydro stations.

Not applicable

Included in item (2) above Not applicable

Provided for payment of adjusted capacity charges Not specified

11.

Capacity charge covered depreciation and interest on loan. Energy covered ROE, income tax, O&M and interest on working capital.

Capacity charge covered depreciation and interest on loan. Energy covered ROE, income tax, O&M and interest on working capital.

Does not provide for payment of capacity charges Encouraged and will not require commissions approval Till such commission notifies peak and off-peak energy rates for hydro-stations, primary energy charge would be taken as 90% of the lowest variable charge of the thermal power station in the concerned region. The balance of total charges would be

12. 13.

Payment of dues to generators Applicability

As per agreements All central generating stations

As per agreements All central generating stations staggered regionwise

14.

PLF for incentives during interim period

Not applicable

Not specified

recovered as capacity charges. As per orders of the commission i). ABT implementation is staggered regionwise ii) Fixed charge recovery and basis for incentive payments revised from 1st April, 2000. iii) GOI to decide about ABT for automatic power stations. Till the introduction of ABT in other regions and after 1.4.2000, the actual PLF for incentive purposes for NTPC shall be 80% instead of deemed PLF of 68.49%. The PLF in the first year for incentive purposes for NHPC shall be 85%.

Note. 1. For lignite based power stations of Neyveli Lignite Corporation, the target availability/PLF shall be 77% for the year 2000-2001 and 82% for the year 2001-2002. 2. The target availability for hydro power stations shall be 85% for the year 20002001and for the year 2001-2002, the target availability will be notified by the Commission separately.

FICCI PUBLICATIONS GRID MANAGEMENT PROBLEMS & SOLUTIONS AND POWER TRADING Background The Regional Grid Management is a highly complex problem in India due to multiplicity of ownership of Power Supply Industry, loosely controlled through RLDC and REB. The wide variations of system frequency

on daily basis and continued under-frequency operation of the system has led to grid disturbances and plant damages on regular basis. Through passage of time, the grid management became more complex and specialized in nature. It was recognized that transmission is a separate entity under the Electricity Laws (Amendments) Act, 1998 that has attempted to keep things on track in our federal structure. A separation between Central Generation and Transmission, a step towards unbundling at Regional level, had taken place in 1991. Vertical unbundling of the State Electricity Boards has also been reconciled and the states are moving towards separation of Generation, Transmission and Distribution. In order to remove various anomalies and distortions, attempts have been made by amending the Electric Supply Act 1948 & Indian Electricity Act, 1910 in the year 1998. The Electricity Regulatory Commission Act has also been introduced and Regulatory Commissions have been formed at the Central & State levels. It has been mandated that each State shall have a State Government owned State Transmission Utility (STU) with specified responsibilities. Similarly, it has been mandated that there will be Central Transmission Utility (CTU) owned by Central Government. However, despite the changes in the organizational structure, the Regional Grid Operation is still not streamlined and voltage and frequency excursions could not be maintained principally due to gross grid indiscipline. The day-to-day problems of regional grid operation that continue to persist are as under: Very wide range of frequency excursions (48 HZ to 51 HZ) is a common feature having rapid variations in frequency profile (rise or drop of 1 HZ) within a time period of few minutes to ten minutes range. Wide variations in system voltages ranging from 300 KV (during peak load conditions) to 440 KV (during light load conditions) as a daily feature on 24 hours basis. The high as also low voltage levels persist for hours resulting in opening of 400 KV trunk lines leading to reduced security levels. Very frequent grid disturbances on regular intervals causing tripping of generating stations resulting in interruption of supplies to large blocks of consumers, transmission lines and disintegration of Regional Grids.

Defining the clarity of roles of various agencies There is multiplicity of agencies at regional levels; State Electricity Boards (SEBs) on one hand and Central Generating Stations like National Thermal Power Corporation, National Hydro Power Corporation, Nuclear Power Corporation etc., on the other end, with divergent interests of control and operation. POWERGRID operates the Regional Load Dispatch Centers (RLDCs) while Central Electricity Authority personnel man Regional Electricity Board (REB) Secretariat. The SEBs are in the process of unbundling under which there will be several generation and distribution companies. Then come the Central Electricity Regulatory Commission (CERC) and State Electricity Regulatory Commissions (SERCs), compounded by Central and State Governments for having some say or loose control over operation of the Regional Grids. From the above structure, it would be difficult to operate and manage the grid in an effective manner. It is, therefore essential that responsibilities and the roles of each of these utilities should be clearly demarcated and defined so as to avoid any confusion and delay in corrective and preventive action in managing the grid. Clarity of roles of RLDC versus reb Electricity Laws (Amendment) Act, 1998 has assigned the role of Apex Body to RLDC for integrated operation of regional power systems. However, as per the orders issued by Central Regulator, certain functions that are integral part of system operation have been assigned to REB. The role and functions of REB should be supplementary/complementary to RLDC for efficient system operation. It is, therefore essential that the duties and responsibilities of CTU as Grid Operator vis-a-vis REB, should be understood and interpreted as per the Apex Body status assigned to RLDC by the Electricity Laws (Amendment) Act, 1998. In view of multiplicity of agencies in the power sector, it is essential that all the stake holders have to clearly understand their roles and responsibilities and hierarchical structure to ensure smooth operation of the

grid for overall economics, clarity of function, above all accountability. CTU, Powergrid and ISO It has been prompted in various REB meetings that the POWERGRID should not operate RLDCs on the pretext of being a commercial undertaking. An Independent System Operator (ISO) should be assigned this activity. POWERGRID, in view of the fact that its tariff remains fixed irrespective of the quantum of power flow as per the present tariff mechanism, cannot derive any commercial advantage by being a system operator. It is to be noted that wherever vertical unbundling, i.e. separation of generation, transmission and distribution, is taking place, and one transmission organization is emerging, the system operation function is invariably clubbed in the scope of transmission organization. The simple logic for this is that in such a structure, transmission system is meant to facilitate competition in bulk power supply. The transmission agency, therefore, by itself has to be impartial and neutral to the bulk power supply agreements/ transactions. As such, there is no clash of interest between the transmission owner and the system operator, and there is no reason for a separation between the two. The clear examples of this arrangement are U.K., Norway, Sweden, Denmark, Finland and Netherlands. Korea and Malaysia are also proceeding towards this arrangement. It is only in the case of a system where a system operator is required to coordinate between two or more transmission owners that the question of his independence arises. The examples of this arrangement are various states of U.S.A. and Alberta in Canada. This arrangement has a historical background; a number of vertically integrated utilities operating in parallel, with a common power pool control centre. The restructuring in such cases has been with the prime objective of providing open access through the transmission system, which continues to be owned by number of agencies. It is only here that the system operator, in the new scenario, has to be independent of transmission ownership. However, in such cases, the urgent need for overall transmission planning and coordination is being felt, particularly after the California-like problems. Alberta State in Canada has a Transmission Administrator (TA) for coordinating transmission planning etc. In U.S.A., Federal Electricity Regulatory Commission (FERC) has recently mandated constitution of six (6) regional Transmission Organizations (RTOs) for necessary coordination between different agencies. Grid discipline through commercial mechanism Today, all our regional grids are operating in a very unsatisfactory manner. There are large and rapid frequency excursions from the nominal frequency of 50.0 Hz. The frequency during peak-hours goes down to 48.0-48.5 Hz and increases during the off-peak hours, to 51.0 Hz or even higher, especially in the Eastern Region. This is mainly caused due to under / over drawals by states and/or over/under generation by generators, in total disregard of grid parameters. This can be checked effectively either by backing down the generation during off-peak hours or by reducing the consumer load / enhancing the generation during peakhours. The pre-ABT (Availability Based Tariff) mechanism not only remains unconcerned towards maintaining grid parameters by means of providing suitable incentive / disincentive, but also encourages grid indiscipline. The Availability Based Tariff (ABT) would directly address these issues. Firstly, by providing incentive for enhancing the output capability of the power plants, it would enable more consumer load to be met during peak-hours. Secondly, backing down during off-peak hours would not result any financial loss to the generator and consequently, the present incentive for not backing down and raising the system frequency, would get neutralized. Thirdly, the shares of beneficiaries in the Central Generating Stations would be given a meaning, which has not been there so far. The beneficiaries would have well-defined entitlements, and they would be able to draw power upto their entitlement at normal rates of the respective power plants. In case of overdrawals, they would have to pay a higher rate linked to frequency, in line with the Tariff Notification that

would discourage them from overdrawing under low frequency condition. This payment would go to the beneficiaries who underdraw during the corresponding period. CERC has already issued an order for implementation of Availability Based Tariff in all the regions in a phased manner vide its order dated 15.12.2000 and 21.12.2000. However, some Central Generators i.e. NTPC & NLC and some constituents of Southern Region, have gone to the court and obtained stay on the implementation of ABT. The frequency profile of Eastern region and Northern region improved dramatically in the initial periods of implementation of ABT, which clearly indicates the capability of the commercial mechanism to enthuse grid discipline. The mechanism of implementing the fully empowered commercial arrangement i.e. Availability Based Tariff should not be delayed or deferred further in the interest of improving the quality of supply. It is, therefore felt that the Government should make all necessary efforts for early implementation of Availability Based Tariff to improve grid parameters and to avoid frequent grid disturbances. Energy management systems Electricity Bill 2001 envisages major structural changes in Indian Power Sector i.e. delicensing of generation, privatization, open access, competition etc. The Energy Management System (EMS), as an efficient tool, may be required to monitor and control the complex network under changed environment for secure and reliable system operation. The complexity of the control system hierarchy at the Regional and Central levels needs careful application. The Regional Level Control Centers will be self sufficient for the security and control of the Regional Grid. In the event of exchange of power between the regions, both the RLDCs would be coordinating through the information links. In view of fast rate of innovation, the updating of system hardware and software must be kept in view. The continuous programme of training of personnel on the simulators as a refreshing course and as an advanced c Electricity tariff based on the plant availability and frequency The country has been experiencing a severe deficit in terms of peak demand as well as energy during the past few years. Considering the requirement of better utilisation of existing capacity through most economic generation & in order to meet peak load demand through commercial signals, the Government of India, has recently decided to go ahead with implementation of plant availability and frequency linked new tariff structure in generation. The move is expected to achieve among others, the following objectives: Rational recovery of fixed costs from beneficiaries. It will provide a fiscal mechanism to encourage high availability of plants to meet the peak demand. Merit order and most economic generation will be encouraged as a result of which low cost power will get a priority in generation. Rationalisation of the contractual demand between the SEBs and the generators. Fiscal disincentives for overdrawl during low frequency conditions and underdrawl during high frequency conditions. Issues in implementing availability based tariffs in India: Some of those issues that need to be discussed in this regard, which are important in

realising the end objectives are: Applicability of the New Structure Norms for defining Target Availability Estimation of the Actual Availability Fuel Availability Constraints

New Tariff Structure The proposed structure is under the process of evaluation and is expected to be implemented in the coming months. Mock exercise to fine tune the system are currently being carried out in the Eastern and Southern Region. The proposed structure would essentially have two parts : First Part will be related to the recovery of the fixed cost linked to the MW availability of plant (and not related to the actual units generated). The second part will be related to recovery of the variable costs based on the energy drawn. It will have a modifying factor in case of power drawl at frequencies beyond predefined bands. Applicability of the New Structure - At present it is proposed that the new structure would be applicable to only the Central Sector stations, and IPPs selling power to more than one state. IPPs coming up in future are expected to sign the PPAs taking into account the new structure. In future, however, the scheme should also be made applicable to the state sector corporations. Norms for defining Target Availability - The target availability levels should be such they are realistically achievable. At the same time however, it should be such that it provides some incentive to the generators to try and overachieve them. Thus the broad norms for arriving at the target availability needs to be arrived at and also the conditions specified under which these norms will apply. The availability norms might have to be adjusted on yearly basis to take into account the variations in availability due to major capital maintenance programme being undertaken, and addition/retirement of units. Estimation of the Actual Availability - The estimation of actual availability is a

subjective evaluation and hence open to debates. In the mock exercise carried out in EREB, it was decided that if the peak actual availability was less than the schedule, then the payment to the generators will be on the basis of average of actual achievement during the evening peak period. However, there is no consensus on this issue as yet. Hence, there will be a need for regulatory mechanisms to undertake the random checks and to settle disputes between the parties. Fuel Availability Constraints - The generators till now do not have any firm tie-ups for the supply of fuel. So the issue of defining target availability in lack of firm fuel supply commitments need to be discussed. Further, in case of hydro plants the availability would be dependent on the supply of adequate water into the reservoir, which in most cases is beyond the control of the generator.

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NLC

Details of Existing Generating Stations and their performance Details of Generating Stations under construction

Table : Details of Existing Generating Stations and their performance.

S.No.

Name of Station

Location

Installed Capacity (No of UnitsXMW)

Date of commissioning

Fuel

Region

State / District

1 Thermal Power Station-I

Southern

Tamil Nadu / Neyveli Cuddalore

Unit - I 50 MW

23.05.62

Lignite

Unit - II 50 MW

29.01.63

Unit - III 50 MW

11.06.63

Unit - IV 50 MW

27.06.63

Unit - V 50 MV

29.04.64

Unit - VI 50 MW

24.08.65

Unit - VII 100 MW

28.03.67

Unit - VIII 100 MW

12.12.69

Unit - IX 100 MW

21.02.70

STATION - 600 MW

2 Thermal Power - II

Southern

Tamil Nadu / Neyveli Cuddalore (TN)

Unit - I 210 MW

17.01.88

Lignite

Unit - II 210 MW

06.02.87

Unit - III 210 MW

29.03.86

Unit - IV 210 MW

30.03.91

Unit - V 210 MV

30.12.91

Unit - VI 210 MW

30.10.92

Unit - VII 210 MW

19.06.93

STATION - 1470 MW

Table : Details of Generating Stations under construction

S.No.

Name of Station

Location

Installed Capacity (No. Of unitsXMW)

Fuel

Target date of commisioning

Region

State / District

1 TPS - Extension

Southern

Tamil Nadu

Unit - 1 210 MW

Lignite

Nov '01

Cuddalore

Unit - 2 210 MW

May '02

Note : The data as furnished by NLC has been reproduced. The Commission has not verified it. 1. Energy Generated (Mus) - Energy generated at the generatory terminals (gross energy). 2. Energy Sent Out (MUs) - Energy injected into the grid (energy generated - Aux. Consumption) 3. Plant Load Factor (PLF) %- The ratio of actual energy generated during the period and the max. energy generated. This could have been at rated installed capacity during the period. 4. Availability % - The ratio of capability of generating station in MW during the period and the installed capacity of the generating station.

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Supplement to CEA Operation Norms for Thermal Power Generating Stations

1. Para 1.1(5) of the operation norms states that specified norms shall apply to new and unused steam power stations, CCGT generating stations and diesel engine stations for the entire plant life. It is clarified that the intent was to discourage use of second hand power plant. It is clarified that the norms circulated would apply to both existing as well as new plants as already brought out in the advertisement of the Commission. However, in case of existing power plants where the Net Heat Rate as per the formula given in para B.1.12 is less than guaranteed Net Heat Rate multiplied by the appropriate degradation factor (1.05 for Steam Power Plant, 1.035 for CCGT Generating Stations and 1.0325 for SCGT Generating Stations), the guaranteed, Net Heat Rate multiplied by the degradation factor shall apply. 2. Annual Plant Load Factor of 75% for recovery of capacity charge or fixed charge specified at par 1.1.2.1.2 shall not apply in view of the Availability Based Tariff (ABT) Order issued by the Commission on 4th January 2000. Further, the term Availability Factor may be substituted for Deemed Plant Load Factor. 3. The calculations of fuel charges shall be for settlement period of 15 minutes for all types of Thermal Power Stations in line with the ABT order, as per the model calculations enclosed with the norms which takes into account the actual loading on

the units. -Sd/ (V.S.Verma) [Next Page]

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CENTRAL ELECTRICITY REGULATORY COMMISSION 5th Floor, Core-3, Scope Complex, 7 Institutional Area, Lodi Road, New Delhi 110 003 (Tele No:4361051/Fax No.4360010) *********** OPERATIONAL NORMS FOR THERMAL GENERATION TARIFF Till 15th May, 1999 tariffs of generating companies, owned or controlled by the central government, were determined by the Government of India under the provision of Section 43 A (2) of the Electricity (Supply) act, 1948 on the basis of operating and financial norms notified by it from time to time. The last such notification was issued on March 30, 1992. In 1997 the Central Electricity Authority (CEA) had drafted a proposal to revise these operational norms. However the matter remained under the consideration of the Government of India and on 15th May, 1999 vide notification No.25/24/99-R&R dated March 22, 1999 of the Government of India, Ministry of Power, the jurisdiction to regulate the tariff of such generating companies was vested in the Commission. The revised norms proposed by the CEA have been subsequently sent to the Commission. The Commission is in the process of prescribing the terms and conditions for determination of tariff of existing as well as new plants of generating companies, owned or controlled by the Government of India and in pursuance of the provisions of Regulation 78 of its Conduct of Business Regulations invites objections to the revised operational norms proposed by the CEA. The CEA proposal includes both operational norms and financial parameters. The

Commission is only considering the operational norms at this stage. It intends to consider revision of the prevailing financial norms separately. Accordingly, the provisions of para 1.2.1, 1.2.2.1, 1.2.2.2, the provisions in para 1.2.2.3 relating to escalation of O&M expenses, 1.2.2.4, 1.2.2.5 and 1.2.3 are not being considered at this stage since these relate to financial parameters. The Commission invites interested persons to file their objections or comments on the revised operational norms, proposed by the CEA, by February 2, 2000 at the office of the Commission in the manner prescribed in Chapter II of the Conduct of Business Rules of the Commission. A copy of the revised norms, proposed by the CEA as a draft gazette notification, can be collected from the office of the Commission from 10.30 A.M. to 4.30 P.M. on any working day. It can also be obtained by post by sending a selfaddressed, A-4 size envelope pre-stamped for Rs. 70/- to the office of the Commission. The revised norms proposed by the CEA as well as Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999 can also be down loaded from the Commissions web-site at http://www.cercind.org The Commission will hold hearings on dates to be announced later. Interested persons, desirous of being heard in person, may indicate so specifically, while filing their objections/comments. (Sd/-) (Sanjeev S. Ahluwalia) Secretary [Next Page]

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DRAFT (To be published in Part II, Section 3, Sub-section (ii) of Gaztte of India) MINISTRY OF POWER New Delh i,

the , 199 9 NOTIFICATION S.O.------------------- In exercise of the powers conferred by sub-section (2) of section 43A of the Electricity (Supply) Act, 1948 (54 of 1948), herinafter referred to as the said Act, the Central Government hereby makes the following further amendments to the notification number S. O. 251(E),dated the 30th March, 1992 of the Government of India, the then Ministry of power and Non-Conventional Energy Sources laying down the factors in accordance with which the tariff for sale of electricity by the Generating Company to the Board and other persons shall be determined, namely:In the said notification: The clause 1 shall be replaced by the following:1. THERMAL POWER GENERATING STATIONS The two-part tariff for sale of electricity from Thermal Power Generating Stations shall comprise (a) the recovery of annual fixed charges consisting of interest on loan capital, depreciation, operation and maintenance expenses (excluding fuel), taxes on income reckoned as expenses, return on equity and interest on working capital at a normative level of generation, and (b) energy (variable) charges primarily covering the fuel cost recoverable for each unit (kiloWatt hour) of energy supplied and shall be based on the following norms : 1.1 OPERATION NORMS The norms of Operation and Plant Load Factor as have been laid down by the Authority, for the time being, subject to modifications thereof, if any under sub-section (2) of section 43A of the said Act are as follows: Notes : (1) For abbreviations and definitions of various operating parameters refer Annexure A & B respectively. (2) For Table of Contents refer to Annexure D. (3) The norms laid down by the Authority are the ceiling norms only and this shall not preclude the Boards and Generating Companies from agreeing to accept improved norms. (4) Operation Norms have been laid down for Steam Power Stations (with and without Flue Gas Desulphurisation, Circulating Fluidized Bed Boilers), Combined Cycle Combustion Turbine (CCCT) Generating Stations and Diesel Generating Stations. (5) These specified norms shall apply for new and unused Steam Power Stations, CCCT

Generating stations and Diesel Engine Generating Stations for the entire plant life. (6) The norms for CCCT are based on the assumption that all blocks consisting of heavy duty industrial type (other than aero-derivative type) combustion turbines, Generator(s), associated Waste Heat Recovery Boiler(s) and associated Steam Turbine - Generator and Auxiliaries, are identical. (7) The norms do not take into account special requirements such as de-salination plant, sewage water treatment system and Selective Catalytic Reactor (SCR), which are site specifics. Further the norms for CCCT do not take into account inlet air cooling/heating system, the duct fring or steam injection for augmented power generation & LNG regassification Plant. The norms for D.G. sets do not take into account the flue gas desulphurisation (FGD) system. (8) Operation norms specified hereunder for CCCT generating station are primarily for combined cycle operation. Combustion turbine simple cycle operation is not envisaged except for the period between COD of the first combustion turbine and synchronisation of steam turbine generator of the Block ; and also on specific requirement of the Regional Electricity Board under grid emergency conditions. 1.1.1 INSTALLED CAPCITY 1.1.1.1 Steam Power Station The Installed Capacity of a Generating Station shall be the Rated Capacity or the sum of Demonstrated Capacity of Units in a generating station whichever is less and shall be maintained throughout the plant Life, provided that (a) the sum of Demonstrated Capacity of Units shall not fall short by more than 10.0 percent of the Rated Capacity, and (b) where the sum of the Demonstrated Capacity of Units falls short by less than or equal to 10.0 percent of the Rated Capacity, each of the debt and equity components of the capital cost of the project shall be reduced pro-rata. In case the shortfall in the capacity exceeds 10 percent of the Rated Capacity, the project shall stand rejected. In case the sum of the Demonstrated Capacity of Units is more than the Rated capacity, the Rated capacity shall be taken as the Installed Capacity. 1.1.1.2 Combined Cycle Combustion Turbine (CCCT) Generating Station The Installed Capacity of a CCCT Generating Station for the first year of plant operation shall be the Rated Capacity or the sum of the Demonstrated Capacities of the Blocks, whichever is less. For subsequent years of plant operation, the Installed Capacity shall be determined by multiplying the first year Installed Capacity by Capacity Degradation Factor for the corresponding year as given hereunder. YEAR OF OPERATION

CAPACITY DEGRADATION FACTOR Naphtha Natural Natural Gas / Gas Liquid (NGL) Liquefied

Natural Gas (LNG) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Explanation: 1. In case of dual fuel operation, the Installed Capacity shall be determined in proportion to heat input of the fuels used. 2. In case of dual fuel operation, the Capacity Degradation Factor in any year shall be determined based on the weighted average of the Capacity Degradation Factors for the corresponding year in proportion of the cumulative generation in the preceding years with respective fuels. 3. The sum of the Demonstrated Capacities of the Blocks shall not fall short by more than ten (10) percent of the Rated Capacity and where the sum of the Demonstrated Capacities of the Blocks falls short by less than or equal to ten (10) percent of the Rated Capacity, each of the debt and equity components of the capital cost of the project shall be reduced pro-rata. In case the shortfall in the capacity exceeds ten (10) percent of the Rated Capacity, the project shall stand rejected. In case the sum of the Demonstrated Capacities of the Blocks is more than the Rated Capacity, the Rated Capacity shall be taken as the Installed Capacity for the first year of the plant operation. 1.1.1.3 Diesel Engine Generating Station The Installed Capacity of the D.G. Generating Station shall be maintained at the level same throughout the plant life. The sum of the Demonstrated capacities of the Units shall not fall short by more than 10 1.0000 0.9925 0.9850 0.9775 0.9700 0.9950 0.9875 0.9800 0.9725 0.9650 0.9950 0.9875 0.9800 0.9725 0.9650 1.000 0.990 0.980 0.970 0.960 0.995 0.985 0.975 0.965 0.955 0.995 0.985 0.975 0.965 0.955

percent of the Rated Capacity and where the sum of the Demonstrated Capacities of the units falls short by less than or equal to 10 percent of the Rated Capacity, each of the debt and equity components of the capital cost of the project shall be reduced pro-rata of shortfall in capacity. In case the shortfall in the capacity exceeds 10 percent of the Rated Capacity, the project shall stand rejected. In case the sum of the Demonstrated Capacities is more than the Rated Capacity, the Rated Capacity shall be taken as the Installed Capacity. 1.1.2 PLANT LOAD FACTOR 1.1.2.1 Steam Power Station 1.1.2.1.1 Daily Plant Load Factor (DPLF) The Daily Plant Load Factor (DPLF) shall not be less than 50 percent for the purpose of economic despatch of a Generating Station. Note: (1) When any Unit is not available for the whole day, the daily PLF shall be calculated based on the number of Units in operation during the relevant day. Note: (2) The DPLF shall be taken as the loading of the Generating Station for the purpose of determining the Daily Net Heat Rate or Daily Gross Heat Rate and Auxiliary Energy Consumption during the relevant day. 1.1.2.1.2 Annual Plant Load Factor (APLF) The Annual Plant Load Factor shall not be less than 75.0 percent. In case of backing down, as ordered by the Regional Electricity Board, the Available Capacity shall be reckoned as power generated and the Deemed Annual Plant Load Factor shall be the criterion for the purpose of determination of incentive, provided that the Available Capacity shall not exceed the Rated Capacity. 1.1.2.1.3 Deemed Annual Plant Load Factor (DAPLF) The Deemed Annual Plant Load Factor shall be calculated as per the following formula : Deemed Annual plant Load Factor = (Sum of Deemed Daily Plant Load Factors) / 365 where the Deemed Daily Plant Load Factor (DDPLF) shall be determined by the following formula : DDPLF = (Sum of Available Capacity for each Settlement Period of a day) ------------------------------------------------------------(Installed Capacity x No. of Settlement Periods in the relevant day) 1.1.2.2 Plant Load Factor for CCCT Generating Station 1.1.2.2.1 Settlement Period Plant Load Factor (SPLF)

The Settlement Period Plant Load Factor (SPLF) for CCCT Generating Station shall not be less than fifty (50) percent for the purpose of economic despatch. Notes : 1. When any Block is not available for the whole settlement period, the SPLF shall be calculated based on the number of Blocks in operation during the relevant Settlement Period. When any Unit in a Block is not available for the whole Settlement Period, the SPLF shall be calculated after taking into account corresponding reduction in output of the Block. 2. When any Unit(s) operate(s) in simple cycle mode, the associated Block shall not be considered for determining SPLF of the Generating Station and the operational norms corresponding to simple cycle operation shall apply to such unit(s). 3. The SPLF shall be taken as the loading of the Generating Station for the purpose of determining the Net Heat Rate or Gross Heat Rate for the relevant Settlement period. 1.1.2.2.2 Annual Plant Load Factor (APLF) The Annual Plant Load Factor shall not be less than seventy five (75) percent. 1.1.2.2.3 Deemed Annual Plant Load Factor (DAPLF) For CCCT Generating Stations, the extent of backing down, as ordered by Regional Electricity Board shall be reckoned as power generated and the Deemed Annual Plant Load Factor (DAPLF) shall be calculated as per the following formula : Sum of Deemed Settlement Period Plant Load Factors DAPLF = ---------------------------------------------------------Number of Settlement Periods in a year Where, Deemed Settlement Period Plant Load Factor (DSPLF) shall be determined by the following formula : Available Capacity for a Settlement Period DSPLF = ------------------------------------------Installed Capacity Note : For determination of DSPLF in case of dual fuel operation, the Available Capacity and Installed Capacity shall be the weighted average corresponding to the fuel mix for the Settlement Period. 1.1.2.3 Plant Load Factor for Diesel Engine Generating Station 1.1.2.3.1 Annual Plant Load Factor (APLF)

The Annual Plant Load Factor shall not be less than 75.0%. 1.1.2.3.2 Deemed Annual Plant Load Factor (DAPLF) Deemed Annual Plant Load Factor shall be calculated as per the following formula : Sum of Deemed Daily Plant Load Factor Deemed Annual Plant Load Factor = -----------------------------------365 where the Deemed Daily Plant Load Factor (DDPLF) shall be determined by the following formula : Sum of Available Capacity for each settlement period of the ---------------------------------------------------------------Installed Capacity x No. of settlement periods in a day

day DDPLF =

1.1.3 NET HEAT RATE OF A GENERATING STATION The Net Heat Rate shall be determined as per formula given at Annexure Bunder the following clauses: (a). B- 1.12 for Steam Power Station (b). B- 2.5.2 for CCCT Station (c). B- 3.6.2 for Diesal Generating Station 1.1.4 GROSS HEAT RATE OF A GENERATING STATION 1.1.4.1 Steam Turbine Generator Cycle The Gross Heat Rate of the Steam Turbine-Generator cycle shall be the relevant value as per following table. Table : Gross Heat Rate for different loadings of Generating Station Steam Turbine Nominal Steam Parameter i. 170 Kg / cm2 (abs)/535 C/535 C ii. 150 kg/cm2 (abs)/535 C/535 C iii. 130 kg/cm2(abs)/535 C/535 C

Gross Heat Rate in kCal/kWh at loading of 100% 2000 2040 2080 80% 2040 2080 2120 60% 2100 2140 2180 50% 2135 2175 2215

Note : (a) The above specified Gross Heat Rate figures are for Turbine-Generator cycle with electric motor driven boiler feed pumps, and where steam turbine driven boiler feed pumps are used, the Gross Heat Rate shall be increased by 40kCal/kWh.

(b) The daily PLF shall be taken as the loading of the steam Turbine-Generator for the purpose of determination of Gross Heat Rate, for the relevant day. (c) The Gross Heat Rate for any loading between any two above specified adjacent loadings shall be interpolated on pro-rata basis. 1.1.4.1.1 Steam Generator Efficiency The Steam Generator Efficiency with coal or lignite or petroleum coke or vacuum residue fuels shall be determined by the following formula : [ 50 A + 630 (M + 9 H)] Steam Generator Efficiency = 92.5 - -------------------------------GCV Where, the Steam Generator Efficiency is based on GCV in percent. 'A' is the percentage ash content in the fuel, 'M' is the percentage moisture in the fuel and 'H' is the percentage hydrogen in the fuel. Notes : (i) The values of "GCV', 'A', 'M', and 'H' correspond to as fired basis. (ii) The 'GCV' value 'as received' basis shall be reduced by 100kCal/kg and the value of 'M' increased by one percent to take into account heat lost between coal as received and as fired basis. (iii) The values of 'GCV', 'A', 'M', and 'H' are the weighted average of all the consignments received during the month. (iv) The Steam Generator Efficiency based on GCV with 'Corex' gas from steel industry shall not be less than 87.5 percent. (v) Where a combination of fuels is used, the Steam Generator Efficiency shall be the weighted average figures based on the percentage of the fuels used. 1.1.4.2 Gross Heat Rate for a CCCT Generating Station 1.1.4.2.1 Combined Cycle Opertion The Gross Heat Rate of the CCCT Block or Generating Station using Natural Gas/ Liquefied Natural Gas (LNG) as fuel at standard reference conditions as per the latest versions of ISO - 2314 and ISO 3977 shall be the relevant value as per the following table :

Table : Gross Heat Rate for different loadings of CCCT Generating Station Categorisation based on ISO base rating of a CombustionTurbine (in Gross Heat Rate of CCCT Generating Station in simple cycle mode with Natural kCal/kWh at loading of Gas/LNG as fuel) in the CCCT Block 100% i. 50 MW and less 1800 ii. More than 50 MW and less than 1680 200 MW iii. 200 MW and above Notes: 1. In case of CCCT Generating Stations using Naphtha/ Natural Gas Liquid (NGL) as fuel, the above specified Gross Heat Rate figures shall be multiplied by a factor of 1.02. 2. In case of CCCT Generating Stations using conventional combustor (other than dry low NOx) and steam / water injection for NOx control, Gross Heat Rate shall be increased as under : Fuel NOx Emission Level Max. heat rate Degradation, In kCal/kWh, with i) Water injection ii) Steam injection 100 75 50 35 Natural Gas/LNG 50 ppm Naphtha /NGL 100 ppm 1580 80% 1850 1730 1630 60% 1980 1850 1740 50% 2080 1950 1840

In case NOx emission levels stipulated in Environmental Clearance are different from the above values, the heat rate degradation applicable shall be determined in proportion of the ratio of above stated NOx levels to the NOx levels stipulated in Environmental Clearance. If dry low NOx combustors are used in conjunction with water/steam injection, corresponding adjustment in heat rate shall be based on manufacturer's guarantees. 3) For the purpose of determination of Gross Heat Rate for the relevant Settlement Period, the SPLF shall be taken as the loading of the CCCT Generating Station. 4) Gross Heat Rate for any loading between any two above specified adjacent loadings shall be interpolated on pro-rata basis. [Next Page]

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1.1.4.2.2 Simple Cycle Operation The Gross Heat Rate of the Unit(s) in simple cycle mode of operation using Natural Gas/LNG as fuel at standard reference conditions as per the latest version of ISO2314 shall be the relevant value as per following table: Table : Gross Heat Rate for different loading of Unit(s)

Categorisation based on ISO based rating of Combustion Turbine (in Simple cycle mode with Natural Gas/LNG as fuel) 1. 50 MW and less

Gross Heat Rate in kCal/kWh at loading of

100% 2800 2. More than 50 MW and less than 2600 200 MW 3. 200 MW and above 2400

80% 2950 2750 2550

60% 3175 2975 2775

Notes : 1. In case of Unit(s) using Naphtha/NGL as fuel, the above specified Gross Heat Rate figures shall be multiplied by a factor of 1.01. 2. In case of Unit(s) using conventional combustor (other than dry low NOx) and water injection for NOx control, Gross Heat Rate shall be increased as under : Fuel NOx Emission Level Natural Gas/LNG 50 ppm Naphtha /NGL 100 ppm 50

Max. heat rate degradation, In kCal/kWh, 70 with Water injection

In case NOx emission levels stipulated in Environmental Clearance are different from the above values, the heat rate degradation applicable shall be changed in proportion of the ratio of above stated NOx levels to the NOx levels stipulated in Environmental Clearance. If dry low NOx combustors are used in conjunction with water injection, corresponding adjustment in heat rate shall be mutually agreed based on manufacturer's guarantees. 3) For the purpose of determination of Gross Heat Rate for the Settlement Period, average loading of the Unit during the Settlement Period shall be taken as the loading of the Unit. 4) Gross Heat Rate for any loading between any two above specified adjacent

loadings shall be interpolated on pro-rata basis. 1.1.4.3 Diesel Generating Station The Gross Heat Rate of the Diesel Generating Unit at standard reference conditions as per the latest version of ISO - 3046 shall be (a) the following values or (b) guaranteed heat rate corresponding to MCR, whichever is less : Type of D.G. Engine i. Medium speed 4 - stroke ii. Low speed 2 - stroke Gross Heat Rate in kCal/kWh 2000 1900

Note : The Gross heat rate indicated above shall remain applicable for various loading conditions of the station. Generally, the heat rate of DG unit does not vary significantly between 70% and 100%. In case, station load comes down to 70% or less, some D.G. unit(s) can be shut down maintaining higher loading of the working DG sets. 1.1.5 AUXILIARY ENERGY CONSUMPTION 1.1.5.1 Steam Power Station The Auxiliary Energy Consumption of the Generating Stations at the Rated Capacity with electric motor driven Boiler Feed Pumps (BFPs) shall not exceed the following values : Type of Steam Generator/Fuel

Auxiliary Energy consumption in p with once-through water cooling

Conventional Steam Generator (i) Domestic run of mine coal/Lignite 8.5

(ii) Domestic beneficiated coal 8.0 (iii) Imported beneficiated coal/ Petroleum coke/ Vacuum 7.5 residue (iv) Corex gas 6.5

Note : The Auxiliary Energy Consumption of Generating Stations with Steam Turbine driven boiler feed pumps shall be reduced by 1.5 percent.

1.1.5.1.1 Post Combustion Desulphurisation System The following values shall be added to auxiliary power consumption as specified at para 1.1.5.1 for Conventional Steam Generator with flue Gas Desulphurisation System : Process Wet Limestone Process Spray Dryer Process Maximum Additional Auxiliary Energy Consumption (%) 1.5 1.0

2. In- Combustion Desulphurisation System : The Auxiliary Energy Consumption of the Generating Station with Circulating Fluidised Bed Combustion Steam Generators at the Rated Capacity with electric motor driven Bioler Feed Pumps (BFPs) shall not exceed the following values. with once through water cooling a) High Sulphur coals (Sulphur content greater than 1%) b) Domestic coal washery rejects c) Imported beneficiated coal/ Petroleum coke/ Vacuum residue 10.5% 10.5% with closed cycle cooling using wet cooling tower 11.0% 11.0%

9.5%

10.0%

1.1.5.1.3 Part Load Operation The Auxiliary Energy Consumption at part load operation of the Generating Station shall be calculated by multiplying the above specified figures by the following multiplying factors : DPLF 100% 80% 60% 50% Multiplying Factor 1.00 1.08 1.20 1.30

Note : For sample calculation of coal and secondary oil consumption refer Annexure C.

1.1.5.2 CCCT Generating Station 1.1.5.2.1 Combined Cycle Operation The Auxiliary Energy Consumption (in percentage) of CCCT Generating Station shall not exceed the following values : Fuel Auxiliary Energy Consumption (%) With once-through water cooling system i. Natural Gas/LNG a. Without water/steam 2.50 injection b. with water/steam injection 2.60 2.75 2.85 3.00 Using wet cooling tower system

ii. Naphtha/NGL (with 2.75 water/steam injection) 1.1.5.2.2 Simple Cycle Operation

The Auxiliary Energy Consumption (in percentage) of Unit(s) operating in simple cycle mode shall not exceed the following values : Fuel i. Natural Gas/LNG : a) without water injection b) with water injection ii. Naphtha/NGL (with water injection) Notes : 1. In case of dual fuel operation, the AEC shall be determined in proportion to the heat input of the fuels used 2. For sample calculation of Fuel consumption for CCCT plant refer Annexure C 1.1.5.3 Diesel Generating Station The Auxiliary Energy Consumption of Generating Stations shall not exceed the following values: 1.25 1.35 1.50 Auxiliary Energy Consumption (%)

Type of D.G. Engine

Auxiliary Energy consumption in percentage

with radiator cooling a) Medium speed 4stroke b) Low speed 2stroke 4.5 3.5

using wet cooling tower 4.0 3.0

1.1.6 SPECIFIC SECONDARY FUEL OIL CONSUMPTION 1.1.6.1 Steam Power Station The Specific Secondary Fuel Oil Consumption for the purpose of start up-shut down and flame stabilisation shall not exceed the following values: Type of Fuel a) All type of coals, Petroleum coke and Vacuum residue b) Lignite Specific Secondary Fuel Oil Consumption in ml/gross kWh 1.0 3.0

Note : While calculating the consumption of primary fuel, the heat credit for the secondary fuel consumption at the above specified rate shall be given. 1.1.7 SPECIFIC REAGENT CONSUMPTION 1.1.7.1 In-combustion Desulphurisation System Specific Reagent Consumption, for Steam Generator Turbine Generating station with Circulating Fluidised Bed Combustion (CFBC) type Steam-Generator shall be a) guaranteed Specific Reagent Consumption or b) the value determined by the following formula, whichever is less : Specific Reagent Consumption kg/kg of fuel consumption

Fuel High Sulphur Coal/Lignite

Reagent

6.25 Limestone ----- X S P

7.8 Petcoke/Vacuum Limestone ----- X S Residue P Where, S is percentage sulphur content in primary fuel P is percentage purity of reagent 1.1.7.2 Post-combustion Desulphurisation System

Specific Reagent Consumption for Steam Power Stations with Flue Gas Desulphurization Sytem shall be a) guaranteed Specific Reagent Consumption or b) the value determined by the following formula, whichever is less: Sulphur Dioxide Removal Efficiency 90% and more Specific Reagent Consumption kg/kg of fuel consumption 3.28 ----- x S P 2.19 ----- x S P 2.45 ----- x S P 2.8 ----- x S P

Process

Reagent Limestone

Wet Limestone Process Spray Dryer Absorber Process

Lime

70% & more but less than 80% 80% & more but less than 90%

90% and more

Where, S is percentage sulphur content in the fuel. P is percentage purity of reagent. 1.1.8 LUBRICATING OIL CONSUMPTION 1.1.8.1 Diesel Generating Station Lubricating Oil Consumption shall not exceed the following values : Type of D.G. Engine a) Medium speed 4-stroke b) Low speed 2-stroke Lubricating Oil (incl. cylinder oil) Consumption in g/kWh (gross) 1.0 1.2

1.1.9 'Commercial Operation Date' or 'COD' 1.1.9.1 Seam Power Station Commercial Operation Date' or 'COD' - In relation to a Unit, date by which the Maximum Continuos Rating (MCR) or acceptable Installed Capacity is demonstrated by a Performance Acceptance Test as per international codes, after successful trial operation including stabilisation. The COD of the Generating Station shall be

reckoned from the COD of the last unit. Explanation: For energy generated upto COD of the Unit, fuel charges shall be payable to the Generating Companies as per actuals. 1.1.9.2 Combined Cycle Combustion Turbine (CCCT) Generating Station Commercial Operation Date' or 'COD' - In relation to a Unit or Block, date on which Maximum Continuos Rating (MCR) or acceptable Installed Capacity is demonstrated by Performance Acceptance Test as per latest versions of ISO -2314/ASME PTC-22 for Combustion Turbine and ASME PTC-6 for Steam Turbine after successful trial operation including stabilisation. The COD of the Generating Station shall be reckoned from the COD of the last Block. Explanation: 1. Till COD of a Unit, fuel charges shall be payable to Generating company as per actuals. On declaration of COD of the Unit, fuel charges shall be determined as per operation norms for simple cycle operation. 2. As and when the steam turbine generator is synchronised with the grid, the fuel charges for the Block shall be payable to the Generating company as per actuals till COD of the Block. After COD of the Block, the fuel charges shall be determined as per operation norms for combined cycle operation. 3. Till COD of the Generating Station, the fixed charges shall be payable corresponding to the capital cost of unit(s)/ Block(s) in Commercial Operation. 1.1.9.3 Diesel Engine Generating Station Commercial Operation Date' or 'COD' - In relation to a Unit, date on which the Maximum Continuous Rating (MCR) or acceptable Installed Capacity is demonstrated by a Performance Acceptance Test as per latest versions of ISO -3046 for Diesel Engine and IS : 4722, IS : 5422 & IS : 7132 and IEC-34 for Generator after successful trial operation including stablisation. The COD of the Generating Station shall be reckoned from the COD of the last Unit. Explanation: For energy generated upto COD of the Unit, fuel charges shall be payable to the Generating Company as per actuals. 1.2 FINANCIAL PARAMETERS 1.2.1 Capital Expenditure The capital expenditure of the project shall be financed as per the approved financial package set out in the techno-economic clearance of the Authority. The project cost shall include capitalised initial spares. The approved project cost shall

be the cost which has been specified in the techno-economic clearance of the Authority. The actual capital expenditure incurred on completion of the project shall be the criterion for the fixation of tariff. Where the actual expenditure exceeds the approved project cost the excesses as approved by the Authority shall be deemed to be included in the approved project cost for the purpose of determining the tariff: Provided that such excess expenditure is not attributable to the Generating Company or its suppliers or contractors. Provided further that where a Power Purchase Agreement entered between the Generating Company and the Board provides ceiling on capital expenditure, the capital expenditure shall not exceed such ceiling. Provided also that in case of multi-unit project, the percentage of capital cost as specified by the Authority in its techno-economic clearance shall be considered for fixation of tariff, on commercial operation of the progressive units but in case of delay in commissioning of the second or subsequent units from the scheduled date, the project cost, for the period of delay, shall be retrospectively considered for the tariff purpose in the ratio of proportionate allocation of units. Provided further that if the capital cost of the project increases, in comparison to the cost approved in the techno-economic clearance, on account of foreign exchange variation or change of law or any other reason not attributable to the Generating Company or its suppliers or contractors and approved by the Competent Government, the project developer may approach the Authority with the recommendation of the Competent Government, not more than once in a financial year, for the mid-term review of the Capital Cost. Provided further that the Authority may, for special reasons to be specified by the project developer, allow the mid term review of Capital Cost more than once in a financial year. 1.2.2 Fixed Charges The annual fixed charges shall be computed on the following basis: 1.2.2.1 Interest on loan capital shall be computed on the outstanding loans, including the schedule of repayment, as per the financial package approved by the Authority. Note: (1) In case a generating company takes land on lease, the leasing charges as determined by the Central Government or the State Government or any statutory body, as the case may be considered as a pass through item in the tariff in lieu of interest liability of the notional cost of the land. (2) Extra rupee liability towards interest payment and loan repayment actually incurred, in the relevant year shall be admissible, provided it directly arises out of

foreign exchange rate variation and is not attributable to Generating Company or its suppliers or contractors. 1.2.2.2 The rates of depreciation shall be applicable as notified by Central government, from time to time. 1.2.2.3 Operation and Maintenance (O&M) Expenses : 1.2.2.3.1 Steam Power Stations The annual Operation and Maintenance (O&M) expenses after the commercial Operation Date of the last Unit shall be determined as per the following formula : C (O&M)n = 0.025 x CC (0.7 WPn/WP1 + 0.3 CPn/CP1) Where, C (O&M)n is the annual Operation & Maintenance expenses in crores of Rupees for the nth year of operation CC is the actual capital expenditure in crores of Rupees as provided in clause 1.2.1 WPn is the wholesale price index during the nth year, and CPn is the consumer price index during the nth year. Note (1) Upto the Commercial Operation Date of the last Unit, the O&M Expenses for Units(s) in commercial operation shall be allowed in proportion to the allocation of the capital cost to the respective Unit as set out in the techno-economic clearance of the CEA or clearance of the competent authority approved by the State Government or the Power Purchase Agreement, as the case may be. (2) No escalation in O&M Expenses shall be allowed upto one year from the COD of the last Unit of the Generating Station. 1.2.2.3.2 Combined Cycle Combustion Turbine (CCCT) Station The annual Operation and Maintenance (O&M) expenses after the Commercial Operation Date (COD) of the last Block shall be determined as per the following formula: C (O&M)n = 0.025*CC* (0.7 WPn/WP1 + 0.3 CPn/CP1) Where, C(O&M)n is the annual Operation & Maintenance expenses in crores of Rupees for the nth year, CC is the actual capital expenditure crores of Rupees as provided in Clause 1.2.1

WPn is the wholesale price index during the nth year, and CPn is the consumer price index during the nth year. Note : (1) Upto the Commercial Operation Date of the last Block, the O&M Expenses for Units/Blocks in commercial operation shall be allowed in proportion to the allocation of the capital cost to the respective Units/Blocks as set out in the techno-economic clearance of the CEA or clearance of the competent authority approved by the State Government. (2) No escalation in O&M Expenses shall be allowed upto one year form the COD of the Generating Station. [Next Page]

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1.2.2.3.3 Diesel Engine Generating Station The annual Operation & Maintenance (O&M) expenses after the Commercial Operation Date of the last Unit shall be determined as per the following formula : C(O&M)n = OMP*CC (0.7 WPn/WP1 + 0.3 CPn/CP1) Where, C(O&M)n is the annual Operation & Maintenance expenses in cores of Rupees for the nth year, OMP is O&M percentage factor being 0.04 for plant based on medium speed 4stroke D.G. engines and 0.025 for plant based on low speed 2 stroke D.G. engines. CC is the the actual capital expenditure crores of Rupees as provided in clause 1.2..1 WPn is the wholesale price index during the nth year, and CPn is the consumer price index during the nth year. Note : (1) Upto the Commercial Operation Date of the last Unit, the O&M Expenses

for Units in commercial operation shall be allowed in proportion to the allocation of the capital cost to the respective Unit as set out in the techno-economic clearance of the CEA or clearance of the competent authority approved by the State Government. (2) No escalation in O&M Expenses shall be allowed upto one year from the COD of the Generating Station. 1.2.2.4 Tax On Income Tax on the following income streams, if any, of the Generating Company to be computed as an expense at actuals:i) Sixteen per cent return on equity; ii) The extra rupee liability on account of foreign exchange rate variation in computing the return on equity not exceeding 16 per cent in the currency of the subscribed capital; iii) The amount of grossed up tax that is payable and actually paid by the generating company under income streams mentioned at items (i) and (ii); Any under or over recoveries of tax shall be adjusted every year on the basis of a certificate of statutory auditors. Note: Tax on other income streams, if any, accruing to the Generating Company shall not constitute a pass through component in the tariff. Tax on such other incomes shall be payable by the Generating Company. 1.2.2.5 Return On Equity Return on equity shall be computed on the paid up and subscribed capital relatable to the generating unit, and shall be 16 per cent of such capital. Explanation - I : For the purpose of this paragraph, the Generating Company shall, in regard to subscribed equity brought in foreign exchange, have the option to compute the return on equity not exceeding 16 per cent in the currency of the subscribed capital. Explanation - II : Premium raised by the Generating Company while issuing share capital and investment or internal resources created out of free reserve of existing company, if any, for the funding of the project, shall also be reckoned as paid up capital for the purpose of computing the return on equity, provided such premium amount and internal resources are actually utilised for meeting the capital expenditure of the power generation project and forms part of the approved financial package as set out in the techno-economic clearance accorded by the Authority.

1.2.2.6 Interest on working capital 1.2.2.6.1 Steam Power Station For the purpose of calculations of interest on working capital, the working capital shall not exceed the following : (a) One and half months' expenses of the following items : i. Primary fuel consumption - coal, lignite or petroleum coke or vacuum residue at 75% PLF. ii. Secondary fuel oil consumption at 75% PLF. iii. Annual O&M Expenses. (b) Expenses of the following items of stock : i. half a month's consumption of primary fuel in case the source of fuel is within 100 km from the Generating Station or one month's consumption of primary fuel for other Stations at Rated Capacity. ii. half a months consumption of secondary fuel oil at Rated Capacity. iii. One year maintenance spares at 40 percent of annual O&M Expenses. Note (i) Consumption of fuels shall be calculated as per relevant operation norms. (ii) In case the source of primary fuel-coal or lignite linked mine or oil refinery in case of petroleum coke or vaccum residue is located within 100 km from the Generating Station, it shall be treated as pit-head station. (iii) In respect of one year maintenance spares, for each of the first 3 years of operation of the station, one third of capitalised spares cost shall be deducted form the cost of one year maintenance spares. (iv) In case the due date of payment of monthly bill is less than 15 days as per Power Purchase Agreement, the one and a half months expenses specified at item (a) above shall be limited to (30+n) days, where n is the number of days for due payment of monthly bill. 1.2.2.6.2 Combined Cycle Combustion Turbine (CCCT) Station For the purpose of calculation of interest on Working Capital, the Working Capital in respect of operational parameters shall not exceed the following :

(a) One and half months' expenses of the following items : (i) Fuel consumption at 75% PLF. (ii) Annual O&M Expenses. (b) Expenses of the following items of stock : (i) half a month's consumption of fuel at 75% of Installed Capacity in case of CCCT generating station using Naphtha /NGL. (ii) One year maintenance spares at 40% of annual O&M Note: (1) Consumption of fuel shall be calculated as per relevant operation norms. (2) In respect of one year maintenance spares, for each of the first 3 years of operation of the station, one third of capitalised spares cost shall be deducted from the cost of one year maintenance spares. (3) In case the due date of payment of monthly bill is less than 15 days as per Power Purchase Agreement, the one and half months expenses specified at item (a) above shall be limited to (30 +n) days expenses where 'n' is the number of days for due payment of monthly bills. 1.2.2.6.3 Diesel Engine Generating Station For the purpose of calculation of interest on working capital, the working capital in respect of operational parameters shall not exceed the following : a) One and half months' expenses of the following items : (i) Fuel consumption at 75.0% PLF. (ii) Lubricating oil including cylinder oil consumption at 75.0% PLF. (iii) Annual O&M Expenses. b) Expenses of the following items of stock : i) half a month's consumption of fuel at 75.0% of installed capacity. ii) Half a month consumption of lubricating oil including cylinder oil at 75.0% of Installed capacity. iii) One year maintenance spares at 40 percent of annual O&M Expenses. Note : (i) Consumption of fuel and lubricating oil including cylinder oil shall be

calculated as per relevant operation norms. (ii) In respect of one year maintenance spares, for each of the first 3 years of operation of the station, one third of capitalised spares cost shall be deducted from the cost of one year maintenance spares. (iii) In case the due date of payment of monthly bill is less than 15 days as per Power Purchase Agreement, the one and a half months expenses specified at item (a) above shall be limited to (30+n) days expenses where 'n' is the number of days for due payment of monthly bills. 1.2.3 Incentive Full fixed charges shall be recoverable at generation level of 75% Annual P.L.F. Payment of fixed charges below the level of 75% Annual P.L.F. shall be on prorata basis. There shall not be any payment for fixed charges for generation level above 75 % Annual P.L.F. For generation of above 75% Annual P.L.F., the additional incentive payable shall not exceed 0.7 percent of paid up and subscribed capital, for each percentage point increase of Plant Load Factor above the normative level of 75% PLF. While computing level of generation, the extent of backing down, as ordered by the Regional Electricity Boards or State Load Despatch Center, as the case may be shall be reckoned as generation achieved. The payment of fixed charges shall be on monthly basis, proportionate to the electricity drawn by the respective Boards and other persons. Necessary adjustment based on actual shall be made at the end of each year. Note: 1. The additional incentive of return on equity of 0.7 percent for each percentage increase above the normative level of 75% Annual PLF mentioned above shall be the maximum ceiling. It shall be open to the Generating Companies and Boards or other Power Purchasers to negotiate and fix a suitable lower additional incentive, within the above ceiling. Note: 2 For Naphtha/NGL based CCCT plants and Diesel Engine Genrating Units the extent of backing down, as ordered by Regional Electricity Boards or the State Load Despatch Center, as the case may be, beyond Plant Load Factor of 75% Annual P.L.F. shall not be reckoned as generation achieved for purposes of incentive. 1.2.4 Energy (Variable ) Charges 1.2.4.1 Energy (variable) charges shall cover generally fuel costs and its charges per kWh of energy supplies shall be computed based on landed cost of fuel, its calorific value and the following parameters subject to the stipulation of note (3) under Clause 1.1 : (a) Primary Fuel : Specific fuel comsumption based on the net heat rate formulae at as per clause 1.1.3 and calorific value of fuel. (b) Secondary Fuel Oil : Specific secondlary oil consumption as per clause 1.1.6

and (for steam power stations only)

Auxiliary Energy Consumption at clause 1.1.5.

In addition, the energy charges shall take into account following additional component where applicable. (a) Lubricating Oil: Auxiliary Energy (for Diesel Generating Station only) Specific lubricating oil consumption as per clause 1.1.8 and Consumption as per clause 1.1.5.3

(b) For Desulphurisation : Specific reagent consumption as per clause 1.1.7 and system if installed and operated. Auxiliary Energy Consumption as per clause 1.1.5.

1.2.4.2 Adjustment on account of variation in price or quality Initially the relevant Calorific Value of the fuel shall be taken as per actuals in the preceding three months. Any variation shall be adjusted on a month to month basis on the basis of the relevant Calorific Value of the fuel actually received and burnt and actual landed cost incurred by the Generating Company for procurement of the fuel. This method shall be adopted for the determination of the additional charges for the reagents for Desulfurisation and for the lubricating oil for diesel generating stations. [Next Page]

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ANNEXURE - A ABBREVIATIONS A-1. Units : (a) C - degree Celsius (b) Hz - Hertz or cycles per second

(c) kCal - kilo- Calorie (d) g - gram (e) kg - kilogram (f) kg/cm2 (abs) - kilogram per square centimeter (absolute) (g) kW - kilo Watt (h) kWh - kilo Watt hour (i) l - litre (j) ml - milli litre (k) Sm3 - cubic metre of gas at Standard temperature and pressure, namely 15 C and 1.03 kg/cm2 (absolute) A-2 Defined /Derived AEC APLF ASME - Auxiliary Energy Consumption - Annual Plant Load Factor - American Society of Mech. Engineers

CEA/Authority - Central Electricity Authority COD CCCT CFBC DG DPLF DAPLF DNHR DSPLF GCV - Commercial Operation Date - Combined Cycle Combustion Turbine - Circulating Fluidized Bed Combustion - Diesel Generator / Generating - Daily Plant Load Factor - Deemed Annual Plant Load Factor - Daily Average Net Heat Rate - Deemed Settlement Period Plant Load Factor - Gross Calorific Value

GHR IEC ISO LNG MCR MNHR NCV NGL NHR SPLF SGE SNHR

- Gross Heat Rate - International Electro-Technical Commission - International Standards Organisation - Liquefied Natural Gas - Maximum Continuous Rating - Monthly Average Net Heat Rate - Net Calorific Value - Natural Gas liquid - Net Heat Rate - Settlement Period Plant Load Factor - Steam Generator Efficiency - Settlement Period Net Heat Rate [Next Page]

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ANNEXURE-B DEFINITIONS
B-1 Steam Power Station B-1.1 Auxiliary Energy Consumption - In relation to any period, the ratio, expressed as a percentage, of (a) gross energy in kwh generated at Generator terminals minus net energy in kwh delivered at the Generating Station Switchyard to

(b) gross energy in kwh generated at the Generator terminals. B-1.2 Available Capacity - In relation to Settlement Period, the sum of (a) Power delivered or deemed to be delivered (in case of backing down) at the switchyard and (b) Auxiliary power consumption, Explanation (1) : Auxiliary power consumption shall be the average value based on Auxiliary Energy Consumption at the PLF or deemed PLF during the Settlement period. Explanation (2) : The available capacity shall not exceed the Installed Capacity B-1.3 Commercial Operation Date or COD - In relation to a Unit, date by which the Maximum Continuous Rating (MCR) or acceptable installed capacity is demonstrated by a Performance Acceptance Test as per international codes, after successful trial operation including stabilisation. The COD of the Generating Station shall be reckoned from the COD of the last Unit. B-1.4 Deemed Plant Load Factor In relation to any period of operation of the Generating Station, the ratio, expressed as a percentage, of a) The sum of Available Capacity for each Settlement Period to b) Installed Capacity multiplied by the number of Settlement Periods B-1.5 Demonstrated Capacity In relation to a Unit, the electric output at Generator terminals demonstrated at rated parameters during Performance Acceptance Test as per international codes such as ASME PCT 6, after successful trial operation including stabilisation. Explanation: The Demonstrated Capacity shall be corrected for 47.5 Hz grid frequency and worst circulating water inlet temperature for the purpose of arriving at the Installed Capacity. B-1.6 Generating Station - Unit and balance of plant B-1.7 Gross calorific Value or GCV - The heat produced in kCal by complete combustion of one kg. of solid fuel or liquid fuel or one standard cubic metre (Sm 3) gaseous fuel, as per IS: 1350 (Part-II) or IS:1448 (P : 6) as the case may be. Explanation : In case of coal or lignite fuel, the GCV of the fuel as received shall be reduced by 100 kCal/kg to arrive at the GCV of the fuel as fired for the purpose of

of

determination of the fuel consumption B-1.8 Gross Heat Rate or GHR - The heat energy in kCal input to Turbine Generator cycle to generate one kwh of electric energy at Generator terminals. B-1.9 Installed Capacity - In relation to a Generating Station, Rated Capacity or sum of the Demonstrated Capacity of the Units in the Generating Station, whichever is less. Explanation : Installed Capacity shall be maintained down to 47.5 Hertz (Hz) grid frequency, with worst circulating water inlet temperature and with worst fuel. B-1.10 Maximum Continuous Rating or MCR- In relation to a Unit, the maximum Continuous output at the Generator terminals, guaranteed by the manufacturers at rated parameters as per IEC-45 Explanation : MCR shall be maintained down to 47.5 Hertz (Hz) grid frequency, with worst circulating water inlet temperature and with worst fuel. B-1.11 Net calorific Value or NCV Gross Calorific Value minus the heat loss due to total moisture in complete combustion of one kilogram of solid fuel or liquid fuel or one standard cubic metre of gaseous fuel, expressed in kCal/kg or Sm3 B-1.12 Net Heat Rate or NHR The heat energy in kCal, input to a Generating Station to deliver one Kwh at the switchyard . B-1.12.1 Net Heat Rate Formulations The daily Net Heat Rate at any loading of the Generating Station shall be (a) guaranteed Net Heat Rate corresponding to the loading of the Generating Station multiplied by 1.05 or (b) the value determined by the following formulae, whichever is less DNHR = GHR X 100 100 -------------------- X ---------100-AEC SGE

Where, DNHR is the Net Heat Rate of the Generating Station during a day in Kcal/Kwh, GHR is the Gross Heat Rate of the Turbine Generator Cycle in kCal/kWh corresponding to the loading of the Turbine-Generator during the relevant day, as per para 1.1.4.1 of Operation Norms SGE is the Steam Generator Efficiency expressed in percentage , as per para 1.1.4.1.1 of Operation Norms. AEC is the Auxiliary Energy Consumption, corresponding to the loading of the Turbine Generator during the relevant day, expressed in percentage, as per para 1.1.4.1 of

Operation Norms. The monthly average Net Heat Rate shall be calculated by weighted average as per the following formula : MNHR = Sum of (DNHR x NkWh) during the month -------------------------------------------Sum of NkWh during the month

Where, MNHR is the monthly average Net Heat Rate in kCal/kWh, DNHR is the Net Heat Rate for a day in kCal/kWh NkWh is the net kWh delivered at the switchyard during the relevant day Note (1) : The guaranteed Net Heat Rate shall be at design cooling water inlet temperature corresponding to 90% duration and adjustment for ash, moisture and hydrogen content of primary fuel, except for Corex gas. Note (2) : In case the guaranteed Net Heat Rate is not available , the Net heat Rate shall be determined based on guaranteed Gross Heat Rate of Steam Turbine Generator Cycle at design cooling water inlet temperature corresponding to 90% duration, guaranteed Steam Generator Efficiency with adjustment for ash, moisture and hydrogen content except for Corex gas and Auxiliary Energy consumption and degradation multiplying factor of 1.05. B-1.13 'Operation and Maintenance Expenses' or 'O&M Expenses ' - In relation to a period, the expenditure incurred in operation and maintenance of the generating station including manpower, spares, consumables (including water), insurance and overheads. B-1.14 'Plant Life' - As per Government of India Gazette Notification No. 265 (E) dated 29th March, 1994, as amended from time to time. B-1.15 'Plant Load Factor' or 'PLF' - In relation to any period, the ratio, expressed as a percentage, of a) total kWh generated at Generator terminals to b) Installed Capacity, expressed in kilowatts (kW) multiplied by number of hours in the relevant period, B-1.16 'Rated Capacity' - In relation to the Generating Station, the Maximum Continuous Rating (MCR) of a Unit multiplied by number of Units in the Generating Station. B-1.17 'Settlement Period' - An hour or any other agreed period during which the

Available Capacity shall be taken as constant and equal to the average capacity during the period. B-1.18 'Steam Generator Efficiency' - The ratio, expressed as a percentage, of a) Gross Calorific Value (GCV) of the fuel fired minus the heat losses in the Steam Generator per unit quantity of fuel, as per international codes, but without heat credit. to b) Gross Calorific Value of the fuel fired. B-1.19 'Unit' - Steam Generator - Turbine - Generator and their auxiliaries. B-2 Combined Cycle Combustion Turbine (CCCT) Generating Station B-2.1 Auxiliary Energy Consumption In relation to any period, the ratio, expressed as a percentage, of (a) gross energy in kWh generated at Generator(s) terminals minus net energy in kWh delivered at the switchyard to (b) gross energy in kWh generated at the Generator(s) terminals, B-2.2 Calorific Value: B-2.2.1 Gross Calorific Value or GCV the heat produced in kCal by complete combustion of one kilogram (Kg) of liquid fuel expressed in kCal/kg as per latest version of IS: 1448 (P: 6) or one standard cubic metre of gaseous fuel expressed in kCal/Sm3 as per latest version of ASTM D 3588. B-2.2.2 Net Calorific Value or NCV Gross Calorific value minus the heat losses due to moisture in complete combustion of one kilogram of liquid fuel, expressed in kCal/kg, as per latest version of IS: 1448 (P : 6) or one standard cubic metre of gaseous fuel expressed in kCal/Sm3 as per latest version of ASTM D 3588. B-2.3 Capacity: B-2.3.1 Maximum Continuous Rating or MCR In relation to a Unit or Block, the maximum continuous output at the Generator(s) terminals, guaranteed by the manufacturer with Water/steam injection (if applicable) at ISO-2314 and ISO 3977 reference conditions and corrected to 50 Hz grid frequency and site conditions. Explanation : Site conditions refer to annual mean dry bulb temperature, annual mean relative humidity, site atmospheric pressure and worst circulating water inlet

temperature. B-2.3.2 Rated Capacity In relation to the Generating Station, the Maximum Continuous Rating (MCR) of Block multiplied by the number of Blocks in the Generating Station. B-2.3.3 Demonstrated Capacity In relation to a Unit or Block, the electric output at Generator(s) terminals demonstrated during Performance Acceptance Test as per latest versions of ISO-2314/ASME PTC- 22 for Combustion Turbine and ASME PTC 6 for Steam Turbine after successful trail operation and corrected to 50 z grid frequency and site conditions as at B-2.3.1 above. B-2.3.4 Installed Capacity In relation to the Generating station,

For the first year of plant operation reckoned from COD of the Generating Station : For subsequent years of plant operation :

Rated capacity or sum of the Demonstrated capacities of the Blocks in the Generating Station whichever is less. Installed Capacity of Generating station in any year is to be determined by multiplying the first year Installed Capacity by Capacity Degradation Factor for the corresponding year as given in Operation Norms

B-2.3.5 Available capacity In relation to any settlement period, the sum of a) Power delivered or deemed to have been delivered (in case of backing down) at switchyard and b) Auxiliary Power Consumption and corrected to average dry bulb temperature of the Settlement Period.

Explanation:

1.

Auxiliary Energy Consumption as per operation norms shall be taken as Auxiliary Power Consumption for this purpose. Available capacity, when corrected to site conditions as at B2.3.1 above, shall not exceed the Installed Capacity.

2.

B-2.4 Commercial Operation Date or COD In relation to a Unit or Block, date by

which the Maximum Continuous Rating (MCR) or acceptable installed capacity is demonstrated by Performance Acceptance Test as per latest versions of ISO2314/ASME PTC-22 for Combustion Turbine and ASME PTC-6 for Steam Turbine after successful trial operation including stabilisation. The COD of the Generating Station shall be reckoned from the COD of the last Block. B-2.5 Heat Rate: B-2.5.1 Gross Heat Rate or GHR The heat energy in kCal input to the Unit or Block or Generating station to generate one kWh of electric energy from the Unit or Block or Generating station at Generators terminals. B-2.5.2 Net Heat Rate or NHR - The heat energy in kCal. input to the Unit or Block Generating Station to deliver one kWh of electric energy at the switchyard. Explanation: The gross Heat Rate and a Net Heat Rate shall be based on NCV of fuel. B-2.5.2.1 Net Heat Rate Formulations A) The Net Heat Rate for a Settlement Period at any loading of the CCCT Generating Station shall be a) guaranteed Net Heat Rate at site ambient conditions corresponding to loading of the Generating Station multiplied by 1.035 or b) the value determined by the following formula, whichever is less: 100 SNHR = GHR X --------------100-AEC Where, SNHR is the Net Heat Rate of the Generating Station, in kCal/Kwh, during a Settlement Period in combined cycle mode. GHR is the Gross Heat Rate of the CCCT Generating Station in kCal/kWh corresponding to the loading of the Generating Station during the relevant Settlement Period as per para 1.1.4.2.1 of Operating Norms and corrected to site ambient conditions as per manufacturers correction factors to take into account the deviations from standard reference conditions of ISO-2314 and ISO-3977. AEC is the Auxiliary Energy Consumption of the Generating station in combined cycle mode expressed in percentage. The monthly average Net Heat Rate shall be calculated by weighted average as per the following formula: Sum of (SNHR x NkWh) during the month ----------------------------------------Sum of NkWh during the month

MNHR =

Where, MNHR is the monthly average Net Heat Rate in kCal/kWh,

SNHR is the Net Heat Rate for a Settlement Period in kCal/kWh. NkWh is the net electric energy in kWh delivered at the switchyard during the relevant Settlement Period. B) For Unit(s) operating in simple cycle mode, the Net Heat Rate for a Settlement Period at any loading shall be a) guaranteed Net Heat Rate at site ambient conditions corresponding to loading of the Unit multiplied by 1.0325 or b) the value determined by the following formula, whichever is less: 100 SNHR (SC) = GHR (SC) X -------------------100-AEC (SC) Where, SNHR (SC) is the Net Heat Rate of the Unit in kCal/kWh during a Settlement Period in simple cycle mode. GHR (SC) is the Gross Heat Rate of the Unit in kCal/kWh corresponding to its average loading during the relevant Settlement Period as per para 1.1.4.2.2 of Operating Norms for simple cycle mode of operation and corrected to site ambient conditions as per manufacturers correction factors to take into account the deviations from standard reference conditions of ISO-2314. AEC (SC) is the Auxiliary Energy Consumption of the Unit in simple cycle mode expressed in percentage Note: 1. Site ambient conditions, for the purpose of determining Gross Heat Rate to account for deviations from ISO conditions, refer to annual mean dry bulb temperature, annual mean relative humidity, site atmospheric pressure and condenser vacuum based on cooling water inlet temperature corresponding to 90% duration. 2. Where a combination of fuels (e.g. Natural Gas and Naphtha) is used, the respective net heat rate for a Settlement Period shall be calculated separately for each fuel. B-2.6 Operation and Maintenance Expenses or O&M Expenses In relation to a period, the expenditure incurred in operation and maintenance of the Generating Station including expenses towards manpower, spares, consumables (including water), insurance and overheads. B-2.7 Plant Life As per Govt. of India Gazette Notification No.265 (E) dated 29th March 1994, as amended from time to time. B-2.8 Plant Load Factor: B-2.8.1 Plant Load Factor or PLF In relation to any period, the ratio expressed as a percentage of (a) The sum of total kWh delivered at the switchyard and Auxiliary

Energy consumption as per operation norms to (b) Installed Capacity, expressed in KiloWatts (kW) multiplied by the number of hours in the relevant period. B-2.8.2 Deemed Plant Load Factor In relation to any period of operation of the Generating Station, the ratio expressed as percentage of a) The sum of Available Capacities for each Settlement Period to b) Installed Capacity multiplied by the number of Settlement Periods B-2.9 Plant Configuration: B-2.9.1 Unit In relation to CCCT Generating Station: Combustion Turbine-Generator and auxiliaries. B-2.9.2 Block In relation to CCCT Generating Station: Combustion turbine Generator(s), associated Waste Heat Recovery boiler(s), connected Steam Turbine Generator and auxiliaries. B-2.9.3 Generating Station In relation to CCCT Generating Station: CCCT Block(s) and balance of plant. B-2.10 'Settlement Period' - An hour or any other mutually agreed period during which the available capacity shall be taken as constant and equal to average capacity during the period. B-3 Diesel Generating Station B-3.1 'Auxiliary Energy Consumption' - In relation to any period, the ratio, expressed as a percentage, of (a) gross energy in kWh generated at Generator(s) terminals minus net energy in kWh delivered at the switchyard. to (b) gross energy in kWh generated at the Generator(s) terminals, B-3.2 Calorific Value: B-3.2.1 'Gross Calorific Value' or 'GCV' - The heat produced in KCal by complete combustion of one kilogram (Kg) of liquid fuel expressed in 'KCal/Kg' as per latest version of IS: 1448 (P:6). B-3.2.2 'Net Calorific Value' or 'NCV' - Gross Calorific value minus the heat losses

due to moisture in complete combustion of one kilogram of liquid fuel, expressed in 'Kcal /kg', as per latest version of IS:1448 (P:6). B-3.3 Capacity: B-3.3.1 ' Maximum Continuous Rating' or MCR' - In relation to a Unit the maximum continuous output at the Generator terminals, guaranteed by the manufacturer at ISO3046 reference conditions and corrected to 50 Hz grid frequency and site conditions. Explanation : Site conditions refer to annual mean dry bulb temperature, annual mean relative humidity and maximum charge air coolant temperature. B-3.3.2 'Rated Capacity' - In relation to the Generating Station, the Maximum Continuous Rating (MCR) of unit multiplied by the number of units in the Generating Station. B-3.3.3 'Demonstrated Capacity' - In relation to a Unit, the electric output at Generator terminals demonstrated during Performance Acceptance Test as per latest versions of ISO-3046 for Diesel Engine and IS:4722, IS:5422, IS:7132 and IEC-34 for Generator after successful trial operation and corrected to 50 Hz grid frequency and site conditions as at B-3.3.1 above. B-3.3.4'Installed Capacity' - In relation to the Generating station, Rated capacity or sum of the Demonstrated capacities of the units in the generating station whichever is less. B-3.3.5 'Available capacity' - In relation to any settlement period, the sum of a) power delivered or deemed to have been delivered (in case of backing down) at switchyard and b) Auxiliary power consumption and corrected to annual mean dry bulb temperature at site and 50 Hz grid frequency. Explanation: 1. Auxiliary Energy consumption shall be taken as Auxiliary Power consumption for this purpose. 2. Available capacity shall not exceed the Installed Capacity. B-3.4 'Commercial Operation Date' or 'COD' - In relation to a Unit, date by which the Maximum Continuous Rating (MCR) or acceptable installed capacity is demonstrated by a Performance Acceptance Test as per latest versions of ISO-3046 for Diesel Engine and IS:4722, IS : 5422, IS:7132 and IEC-34 for Generator after successful trial operation including stabilisation. The COD of the Generating Station shall be reckoned

from the COD of the last Unit. B-3.5 'Generating Station' - In relation to Diesel Engine Generating Station : DG units and balance of plant B-3.6 Heat Rate: B-3.6.1 'Gross Heat Rate' or GHR' - The heat energy in kCal input to the Unit to generate one kWh of electric energy at Generator terminals. B-3.6.2 'Net Heat Rate' or 'NHR' - The heat energy in kCal, input to the Generating Station to deliver one kWh at the switchyard. Explanation: In relation to, Diesel Engine - Generator (DG) Unit, the Gross Heat Rate and the Net Heat Rate shall be based on NCV of fuel. B-3.6.2.1Net Heat Rate Formulations The daily Net Heat Rate of the Generating Station shall be determined by the following formula: 100 DNHR = GHR X ---------------100-AEC Where, DNHR is the Net Heat Rate of the Generating Station during a day GHR is the Gross Heat Rate of the Diesel Generating Unit in kCal /kWh corrected to site ambient conditions to take into account the deviations from standard reference conditions of ISO-3046. AEC is the Auxiliary Energy Consumption, expressed in percentage, The monthly average Net Heat Rate shall be calculated by weighted average as per the following formula. Sum of (DNHR X NkWh) during the month ----------------------------------------Sum of NkWh during the month

MNHR =

Where MNHR is the monthly average Net Heat Rate in kCal/kWh, DNHR is the Net Heat Rate for a day in kCal/kWh NkWh is the net kWh delivered at the switchyard during the relevant day B-3.7 'Operation and Maintenance Expenses ' or 'O&M Expenses' In relation to a period, the expenditure incurred in operation and maintenance of the

generating station including manpower, spares, consumables (including water), insurance and overheads. B-3.8 'Plant Life' - As per Govt. of India Gazette Notification No. 265 (E) dated 29th March, 1994, as amended from time to time. B-3.9 Plant Load Factor: B-3.9.1 'Plant Load Factor' or 'PLF' - In relation to any period, the ratio, expressed as a percentage of (a) The sum of total kWh delivered at the switchyard and Auxiliary Energy Consumption as per operation norms to (b) Installed Capacity, expressed in kilo Watts (kW) multiplied by the number of hours in the relevant period, B-3.9.2 'Deemed Plant Load Factor' - In relation to any period of operation of the Generating Station, the ratio expressed as percentage, of (a) The sum of available capacities for each Settlement Period to (b) Installed capacity multiplied by the number of Settlement Periods B-3.10 'Settlement Period' - An hour or any other mutually agreed period during which the available capacity shall be taken as constant and equal to average capacity during the period. B-3.11 'Unit' - in relation to : Diesel Engine Generating Station : Diesel Engine Generator and auxiliaries B-4 In combustion and Post Combustion Flue Gas Desulphurisation System B-4.1 Specific Reagent Consumption Weight of reagent required in Kg per Kg of primary fuel fired in the steam generator. B-4.2 Sulphur Dioxide Removal Efficiency Ratio of number of moles of SO2 removed in the desulphurisation system to the number of moles of SO2 produced in the combustion process, expressed as percentage. [Next Page]

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ANNEXURE-C

C-1 SAMPLE CALCULATION FOR DETERMINATION OF FUEL CONSUMPTION FOR A TYPICAL DAY FOR STEAM GENERATOR TURBINE GENERATING STATION.
(A) DATA 1. Installed Capacity 2. Main Steam Parameters 3. Type of cooling 4. Primary fuel (a) Monthly weighted average Characteristics of coal as Received basis (i) Moisture content (ii) Ash Content (iii) Hydrogen content (iv) GCV 5. (a) GCV of secondary fuel oil (b) Density of Secondary fuel oil 6. Net Generation/day Guaranteed Net Heat Rate of Steam Turbine -Generator 7(a) Loading (%) 7(b) Guaranteed Net Heat Rate (kCal/kWh) (as per EPC contract) as per para B1.12.1 for ash, moisture and hydrogen content of primary fuel (B) CALCULATIONS 1. Installed capacity 2 x 130 MW 130 kg/cm (abs), 535C/535C Closed Cycle with cooling tower Domestic coal (run off mine)

10% 35% 2.86% 4200 kCal/kg 10,000 kCal/kg 0.9 kg/l 5 million kWh

100

80

60

50

2525

2565

2680

2760

2 x 130 MW = 260 MW

2. Normative Aux. Energy Consumption at 100% Installed Capacity 3. Net Installed Capacity 4. PLF based on net generation

9%

2x130 (100-9) = 236.6 MW 100 5 x 106 x 100 = 88.05% 236.6x103x24

5. PLF based on gross generation and auxiliary Energy consumption is to be calculated by iteration upto 3 : Iteration PLF 0 88.05 1 88.47 2 88.46

1.0+0.08(10088.05) AEC multiplying factor ---------------(from table at para 20 1.1.5.1.3 = 1.0478 AEC(%) (from table at 9x1.0478=9.4302 para 1.1.5.1 Gross Generation(kWh) 5x106 100-9.4302 100 =5.52x106 Revised PLF (%) 5.52x 106 260x24 = 88.47 6. Gross Heat Rate of Steam Turbine Generator Normative Gross Heat Rate from table at Para 1.1.4.1 7. GCV as 'fired' basis : GCV as received basis GCV on as fired basis (as per para -1.1.4.1.1) Moisture content on as received basis Moisture content on as fired basis (as per para -1.1.4.1.1) 8. Steam Generator Efficiency : Steam Generator Efficiency as per

0.08(1000.08(10088.46) 88.47) 1.0+---------------1.0+----------------20 20 = 1.0461 9x1.0461=9.4149 5x106 100-9.4149 100 =5.5197x106 5.5197x 106 260x24 = 88.46 = 1.04616 9x1.04616=9.4154 5x106 100-9.4154 100 =5.5197x106 5.5197x 106 260x24 = 88.46

2080+ (2120 - 2080) x 100-88.46 20 2103.08 kCal/kWh

4200 kCal/kg 4200-100 = 4100 kCal/kg 10% 10 + 1 = 11%

92.5-(50x35+630(11+9x2.86)

formula at para 1.1.4.1.1 9. Net Heat Rate Normative Gross Heat Rate Normative Aux. Energy Consumption Normative Steam Generator Efficiency Normative Daily Net Heat Rate (from formula at Para B- 1.12.1) Daily Net Heat Rate based on guaranteed value (from item 7 of Data) Daily Net Heat Rate based on guaranteed value with degradation factor of 1.05 Applicable Daily Net Heat Rate 10. Heat Credit of Secondary Fuel Oil : Fuel Consumption Specific secondary fuel oil consumption (as per para 1.1.6)

4100 = 92.5-6.07 = 86.43%

2103.08 kCal/kWh 9.415% 86.43% 2103.08 x 100 100 -------------- X ------ = 2686 kCal/kWh 100 - 9.415 86.43 2525 + (2565-2525) (100-88.46) 20 = 2548 kCal/kWh 2548 x 1.05 = 2675 kCal/kWh 2675 kCal/kWh

Allowable fuel oil consumption GCV of fuel oil Heat contribution of secondary fuel oil

1.0 ml/gross kWh 1.0 --------- =1.104 ml/net kWh 100-9.415 5 x 106 x 1.104 --------------------- = 5.52 kl/day 106 10,000 kCal/kg 5.52 x 10x 0.9x 10,000 kCal/day = 49.71 x 106 kCal/day or 0.0497 x 109 kCal/day 5x106x2675 kCal/day = 13.375 x 109 kCal/day (13.375 - 0.0497) x 109 kCal/day 13.3253x109 kCal/day

11. Heat input to generating station

12. Heat input by coal

13. Coal consumption GCV of coal on as fired basis

4100 kCal/kg 13.3253 x 109 ------------------ kg/day = 3.250 x 106 kg/day = 3250.0 tonnes/day 4100

Coal Consumption

14. Total fuel consumption

3250.0 t/day of coal + 5.52 kl/day of Secondary Fuel Oil

C-2 SAMPLE CALCULATIONS FOR DETERMINATION OF FUEL CONSUMPTION FOR A SETTLEMENT PERIOD FOR COMBINED CYCLE COMBUSTION TURBINE (CCCT) GENERATING STATIONS
CASE I : NATURAL GAS AS FUEL (FIRST YEAR OF OPERATION) A) DATA 1. First year Installed Capacity 2. Combustion Turbine rating at ISO with Natural gas 3. Type of cooling 4. a) Fuel b) NCV of fuel 5. NOx control measure (NOx emission level 50 ppm) 6. Settlement Period 7. Net generation during the Settlement Period 8. a) Loading b) Guaranteed Net Heat Rate (kCal/kWh) as per EPC contract for Natural Gas with 1800 water injection under site ambient conditions B CALCULATIONS 1. Installed capacity 2. Normative auxiliary Energy consumption 3. Gross Generation during the Settlement Period 350 MW 1860 1990 2100 350 MW (2 x 115 MW CT +1 x 120 MW ST) 123 MW Closed Cycle with cooling Tower Natural Gas 8500 kCal/SM

Water injection

1 Hour

270830 kWh

100%

80%

60%

50%

2.85%

270830 27830 --------- = -------- x kWh

100 = 278775

(100-2.85) ----------100

97.15

278775 X 100 = 79.65% 4. SPLF

--------

350X10 5. Net Heat Rate for the Settlement Period (SNHR) : 5.1 Normative Net Heat Rate for the Settlement period (a) Normative Gross Heat Rate (GHR) under ISO conditions as per para 1.1.3.2.1 corresponding to SPLF of 79.65% with Natural Gas as fuel. b) Adjustment for water injection as per Note 2 under 1.1.3.2.1 1730 + (1850 - 1730) X (80-79.65) 20 = 1732.10 kCal/kWh 100 kCal/kWh

c) Normative GHR under site ambient conditions (Refer B-2.5.2.1) (1732.10 + 100 x 1.025) (Assuming 1.025 as a factor based on = 1877.90 kCal/kWh manufacturer's curves for deviations of site ambient conditions (temperature, relative humidity, atmospheric pressure, condenser vacuum) from ISO conditions 1877.90 x 100 d) Normative Net heat rate for the Settlement Period

------100-2.85 = 1932.99 kCal/kWh

{ 1860 + (1990 1860) x (80-79.65)} 5.2 Net Heat rate for the Settlement 1.035 Period based on guaranteed value (Item 20 8 of data) = 1927.45 kCal/kWh 5.3 Applicable Net heat rate (SNHR) for the settlement period 1927.45 kCal/kWh

6. Fuel consumption during the Settlement Period 6.1 Heat input 6.2 NCV of Natural Gas item 4 (b) of data 270830 x 1927.45 kCal = 522.011 x 106 kCal 8500 kCal /Sm

6.3 Gas consumption during the Settlement Period

522.011 x 106 Sm 8500

0.061413 x 106

CASE II : NATURAL GAS AS FUEL (FOURTH YEAR OF OPERATION)

A) DATA 1. First year Installed Capacity 350MW(2x115MWCT+1x120 MW ST)

2. Combustion Turbine rating at ISO with 123 MW Natural Gas 3. Type of Cooling 4. a) Fuel b) NCV of fuel 5. NOx control measure (Nox emission level 50 ppm) Closed Cycle with cooling Tower Natural Gas 8500 kCal/SM

Water injection

6. Settlement Period 7. Net generation during the settlement period 8. a) Loading

1 hour

264570 kWh

100%

80% 1860

60% 1990

50% 2100

b) Guaranteed Net Heat rate (kCal/kWh) as per EPC contract for Natural Gas with 1800 water injection under site ambient conditions

B CALCULATIONS 1. a)Installed capacity b) Capacity degradation factor for 4th year c) 4th year Installed Capacity 350 MW 0.9775 350 x 0.9775 = 342.125 MW

2. Normative auxiliary energy consumption

2.85%

3. Gross Generation during the Settlement Period

264570 264570 --------- = -------- x 100 = 272331 kWh (100-2.85) 97.5 ----------100 272331 X 100 = 79.60% 342.125X10

4. SPLF 5. Net Heat Rate for the Settlement Period (SNHR) 5.1 Normative Net Heat Rate for the Settlement period (a) Normative Gross Heat Rate (GHR) under ISO conditions as per para 1.1.4.2.1 corresponding to SPLF of 79.60% with Natural Gas as fuel b) Adjustment for water injection as per Note 2 under 1.1.4.2.1

1730 + (1850 1730) x (80-79.6) 20 = 1732.40 kCal./kWh 100 kCal/kWh

c) Normative GHR under site ambient conditions (Refer B-2.5.2.1) (1732.40+100)x1.025 (assuming 1.025 as a factor based on = 1878.21 kCal/kWh manufacturer's curves for deviations of site ambient conditions (temperature, relative humidity, atmospheric pressure, condenser vacuum) from ISO conditions c) Normative Net heat rate for the Settlement Period 1878.21 x 100 100-2.85 = 1933.31 kCal/kWh { 1860 + 1990 - 1860 x (80-79.60) } 1.035 20 = 1927.79 kCal/kWh

5.2 Net Heat rate for the Settlement Period based on guaranteed value (Item 8 of data)

5.3 Applicable Net Heat Rate (SNHR) for 1927.79 kCal/kWh the settlement period 6. Fuel consumption during the Settlement Period 6.1 Heat input 6.2 NCV of Natural Gas item 4 (b) of data 6.3 Gas consumption during the Settlement 264570 x 1927.79 kCal = 510.035 x 106 kCal 8500 kCal /Sm 510.035 x 106 8500

Period

= 0.060004 x 106 Sm

CASE III : NAPHTA AS FUEL (FIRST YEAR OF OPERATION)

A) DATA 1. First year Installed Capacity 2. Combustion Turbine rating at ISO with Natural Gas 3. Type of Cooling 4. a) Fuel b) NCV of fuel Once through system Naphtha 10500 kCal/kg 680MW(2x225MW CT+1x230 ST) 240 MW

5. NOx control measure (NOx emission level 75 ppm) 6. Settlement Period

Water injection

1 hour

7. Net generation during the Settlement Period 8. a) Loading

562370 kWh

100%

80%

60%

50%

b) Guaranteed Net Heat rate (kCal/kWh) 1700 as per EPC contract for Naphtha with water injection under site ambient conditions B CALCULATIONS 1. a)Installed capacity 2. Normative auxiliary energy Consumption 3. Gross Generation during the Settlement Period 680 MW 2.75%

1750

1850

1950

562370 562370 --------- = -------- x (1002.75) 97.25 ---------100

100 =578272 kWh

4. SPLF

578272 X 100 = 85.04% 680X10

5. Net Heat Rate for the Settlement Period (SNHR) 5.1 Normative Net Heat Rate for the Settlement Period (a) Normative Gross Heat Rate (GHR) under ISO conditions as per para 1.1.4.2.1 corresponding to SPLF of 85.04% with Natural Gas as fuel. (b) Normative Gross Heat Rate (GHR) under ISO conditions with Naphtha as fuel 1580 + (16300 - 1580) X 100-85.04 20 = 1617.40 kCal/kWh

1617.40 x 1.02 = 1649.75 kCal/kWh

50 kCal/kWh for emission level 100 ppm (c) Adjustment for water injection as per = 50x100 kCal/kWh for emission level Note 2 under para 1.1.4.2.1 75 of 75 ppm = 66.67 kCal/KWh d) Normative GHR under site ambient Conditions (Refer 1.1.4.2.1) (Assuming 1.025 as a factor based on (1649.75 + 66.67) x 1.025 manufacturer's curves for deviations of = 1759.33 kCal/kWh site ambient conditions (temperature relative humidity, atmospheric pressure, condenser vaccum) from ISO conditions e) Normative Net Heat Rate for the Settlement Period 1759.33x100 100-2.75 = 1809.08 kCal/kWh {1700 + (1750-1700) x (100- 85.04)} 1.035 20 = 1798.21kCal/kWh

5.2 Net Heat Rate for the Settlement Period based on guaranteed value (Item 8 of data)

5.3 Applicable Net Heat Rate (SNHR) for 1798.21 kCal/kWh the Settlement Period

6. Fuel Consumption during the Settlement Period 6.1 Heat input 562370x1798.21 kCal

= 1011.259x106 kCal 6.2 NCV of Naphtha (Item 4(b) of data) 6.3 Naphtha consumption during the settlement period 10500 kCal/Sm3 1011.259 x 106 10500 = 0.096310x106 Kg = 96.310 tonnes

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ANNEXURE C (Contd.) CASE IV: DUAL FUEL (NATURAL GAS AND NAPHTHA) - 1 ST YEAR OF OPERATION
A) DATA 1.a) First Year Installed Capacity on Natural Gas b) First Year Installed capacity on Naphtha 2 Combustion Turbine rating At ISO with Natural Gas 3. Type of cooling 4. a) Fuel b) NCV of fuel 105 MW (2x35 MW CT + 1x35 MW ST) 102 MW

39 MW

Closed Cycle with cooling Tower Natural Gas + Naphtha 8500 kCal/Sm3 for Natural Gas and 10,500 Kcal/kg for Naphtha

5 a) Natural Gas consumption as measured during the settlement period b) Naphtha consumption as measured during the settlement period

12000 Sm3

6.48 tonnes

c) Ratio of Heat input with Natural Gas (12000x8500) : (6.48x103x10500) & Naphtha during the settlement period = 60:40 6. NOx control measure (NOx emission level 50 ppm with Natural Gas & 75 ppm with Naphtha) 7. Settlement Period

Water injection

1 hour

8 Net generation during the Settlement Period 9. a) Loading b) Guaranteed Net Heat Rate (kCal/kWh) as per EPC contract for

83330 kWh

100% 1940

80% 2000

60% 2120

50% 2230

Natural Gas with water injection under site ambient conditions c) - do for Naphtha B) CALCULATIONS 1.(a) First Year Installed capacity on Natural Gas (b) First Year Installed capacity on Naphtha (c) Installed Capacity with dual fuel operation for the Settlement Period 2. Normative Auxiliary Energy Consumption (AEC) a) Natural Gas b) Naphtha c) Duel Fuel Operation 2.85% 3.00% 2.85 x 0.6 + 3.00 x 0.4 = 2.91% 105 MW 102 MW 105 x 0.6 + 102 x 0.4 = 103.8 MW 1960 2020 2140 2250

3. Settlement Period Plant Load Factor (SPLF) 83330 kWh Gross Generation during the settlement (100-2.91) period 100 = 85828 kWh SPLF 85828 x 100 103.8 x 103 = 82.69%

4. Net Heat Rate for the settlement period with Natural gas: 4.1 Normative Net Heat Rate for the settlement period a) Normative Gross Heat Rate (GHR) 1800 + (1850 - 1800) X (100-82.69) under ISO conditions as per para 20 1.1.4.2.1 corresponding to SPLF 82.69% = 1843.28 kCal/kWh with Natural Gas a fuel b) Adjustment in Gross Heat Rate for water injection for NOx control as per Note 2 under para 1.1.4.2.1 c) Normative GHR under site ambient

100 kCal/kWh (1843.28 + 100) x 1.025 = 1991.86 kCal/kWh

conditions (Refer B-2.5.2.1) (Assuming 1.025 as a factor based on manufacturer's curves for deviations of site ambient conditions (temperature, relative humidity, atmospheric pressure, condenser vacuum) from ISO conditions ) d) Normative Net heat rate for the settlement period 1991.86 x 100 (100-2.85) = 2050.29 kCal/kWh {1940 + (2000 - 1940) X (10081.69)}1.035 20 = 2061.65 kCal/kWh

4.2 Net Heat Rate for the Settlement Period based on guaranteed value (item 9 of data)

4.3 Applicable Net heat rate (SNHR) for 2050.29 kCal/kWh the settlement period 5. Net Heat Rate for the Settlement Period with Naphtha 5.1 Normative Net Heat Rate for the Settlement Period a) Normative Gross Heat Rate (GHR) 1800+ (1850-1800) X (100-82.69) under ISO conditions as per para 20 1.1.4.2.1 corresponding to SPLF 82.69% = 1843.28 kCal/kWh with Natural Gas b) Normative GHR under ISO conditions 1843.28 x 1.02 with Naphtha as fuel (as per para = 1880.15 kCal/kWh 1.1.4.2.1 Note 1) 50 kCal/kWh for NOx emission of 100 ppm = 50 x 100 k Cal /kWh for NOx emission 75 of 75 ppm = 66.67 kCal/kWh (1880.15 + 66.67) x 1.025 =1995.49 kCal/kWh

c) Adjustment in Gross Heat Rate for water injection for NOx control as per Note 2 under para 1.1.4.2.1)

d) Normative GHR under site ambient conditions (Refer B -2.5.2.1) (Assuming 1.025 as a factor based on manufacturer's curves for deviations of site ambient conditions (temperature, relative humidity, atmospheric pressure, condenser vacuum) from

ISO conditions) 1995.49 x 100 100 -3.00 = 2057.21 kCal/kWh

e) Normative Net Heat Rate for the Settlement Period

[1960+ (2020-1960) x (1005.2 Net Heat Rate for the Settlement 82.69)]1.035 Period based on guaranteed value (Item 20 9 of data) = 2082.35 kCal/kWh 5.3 Applicable Net Heat Rate (SNHR) for 2057.21 kCal/kWh the settlement period 6. Fuel Consumption during the Settlement period : 6.1 a) Total Net Generation b) Net Generation with Natural Gas c) Net Generation with Naphtha 83330 kWh 83330x 0.6 = 49998 kWh 83330x0.4 = 33332 kWh 49998x2050.29 kCal 6 =102.510 x10 kCal

6.2 a) Heat input through Natural Gas

b) NCV of Natural Gas (item 4 (b) of data) c) Gas consumption during the settlement period

8500 kCal/Sm3

102.510x106 8500

= 0.012060x106 Sm3

6.3 a) Heat input through Naphtha

33332x2057.21 kCal = 68.571 x 106 kCal 10500 kCal/kg 68.571 x 106 10500 = 0.006531 x 106 Kg = 6.531 Tonnes

b) NCV of Naphtha (Item 4(b) of data)

c) Naphtha consumption during the Settlement Period

6.4 Total Fuel Consumption during the Settlement Period

0.012060 x 106 Sm3 of Natural Gas +

6.531 Tonnes of Naphtha

CASE V: DUAL FUEL (NATURAL GAS AND NAPHTHA)- 4TH YEAR OF OPERATION)
A) DATA 1.a) First Year Installed b) First Year Installed Capacity on Naphtha 2. Combustion Turbine rating at ISO with Natural Gas 105 MW (2 x 35 MW CT +1x35 Capacity MW ST) 102 MW

39 MW

3. Type of Cooling

Closed Cycle with cooling Tower Natural Gas + Naphtha

4. a) Fuel

b) NCV of fuel

8500 kCal/Sm3 for Natural Gas and 10,500 Kcal/Kg for Naphtha

5. a) Natural Gas consumption as measured during the settlement period b) Naphtha consumption as measured during the settlement period

12000 Sm3

6.48 tonnes

c) Ratio of Heat input with Natural Gas (12000x8500) : (6.48x103x10500) & Naphtha during the settlement period = 60:40 6. Ratio of Cummulative generation in the preceding 3 years with Natural Gas and Naphtha 7. Settlement Period

55 : 45

1 hour Water injection (NOx emission level 50 ppm with Natural Gas & 75 ppm with Naphtha)

8. NOx control measure

9. Net generation during the settlement 83330 kWh period 10. a) Loading 100% 80% 60% 50%

b) Guaranteed Net Heat Rate (kCal/kWh) as per EPC contract for Natural Gas with water injection under site ambient conditions c) - do - for Naphtha B) CALCULATIONS 1.(a) First Year Installed capacity

1940

2000

2120

2230

1960

2020

2140

2250

105 MW

(b) Capacity degradation factor for 4th year of operation (Weighted average of 0.9775 x 0.55 + 0.970 x 0.45 = 0.9741 degradation factors with Naphtha & Gas) ( c ) 4th year Installed Capacity on Natural Gas

105 x 0.9741 = 102.2805 MW

(d) -----on---- Naphtha

102 x 0.9741 = 99.3582 MW

(e) 4th Year Installed Capacity with dual 102.2805 x 0.6 + 99.3582 x 0.4 operation for the Settlement Period = 101.11158 MW

2.0 Normative Auxiliary Energy Consumption (AEC) a) Natural Gas b) Naphtha c) Dual Fuel Operation 2.85 % 3.00 % 2.85 x 0.6 + 3.00 x 0.4 = 2.91 %

3.0 Settlement Period Plant Load Factor (SPLF) Gross Generation during the Settlement 83330 Period ------------ kWh (100-2.91) -----------100

= 85828 kWh SPLF 85828 --------------------- X 100 101.11158 X 103 = 84.88 %

4.0 Net Heat Rate for the Settlement Period with Natural Gas : 4.1. Normative Net Heat Rate for the Settlement Period a) Normative Gross Heat Rate (GHR) under ISO conditions as per para 1.1.4.2.1) corresponding to daily plf of 84.88% with Natural Gas as fuel b) Adjustment in Gross Heat Rate for water injection for NOx control as per Note 2 under para 1.1.4.2.1 (1850-1800) 1800 + ---------------- x (100-84.88) 20 = 1837.80 kCal/kWh

100 kCal/kWh

c) Normative GHR under site ambient Conditions (Refer B-2.5.2.1) (Assuming 1.025 as a factor based on (1837.80 + 100) x 1.025 manufacturers curves for deviations of = 1986.25 kCal/kWh site ambient conditions (temperature, relative humidity, atmospheric pressure, condenser vacuum) from ISO conditions) 1986.25 x 100 -----------(100-2.85) = 2044.52 kCal/kWh { (1940 +(2000-1940) x (100-84.88)} 1.035 4.2 Net Heat Rate for the Settlement 20 Period based on guaranteed value (Item = 2054.85 kCal/kWh 10 of data) 4.3 Applicable Net Heat Rate (SNHR) for 2044.52 kCal/kWh the Settlement Period 5. Net Heat Rate for the Settlement Period with Naphtha :

d) Normative Net heat rate for the settlement period

5.1 Normative Daily Net Heat Rate a) Normative Gross Heat Rate (GHR) under ISO conditions as per para 1.1.4.2.1) corresponding to SPLF of 84.88% with Natural Gas Kcal/kWh 1800 + (1850-1800) x (100-84.88) 20 = 1837.80

b) Normative GHR under ISO conditions 1837.80 x 1.02 with Naphtha as fuel (as per para = 1874.56 kCal/kWh 1.1.4.2.1 Note 1) 50 kCal/kWh for NOx emission of 100 ppm = 50 x 100 kCal/kWh for NOx emission 75 of 75 ppm = 66.67 kCal/kWh

c) Adjustment in Gross Heat Rate for water injection for NOx control as per Note 2 under para 1.1.4.2.1)

d) Normative GHR under site ambient conditions (Refer B-2.5.2.1) (Assuming 1.025 as a factor based on manufacturers curves for deviations of (1874.56 + 66.67)x1.025 site ambient conditions (temperature, =1989.76 kCal/kWh relative humidity, atmospheric pressure, condenser vacuum) from ISO conditions)

e) Normative Net heat rate for the Settlement Period

1989.76 x 100 (100 - 3.00) = 2051.30 kCal/kWh

[1960 + (2020-1960) x (100-84.88)] 1.035 5.2 Net Heat Rate for the Settlement 20 Period based on guaranteed value (item = 2075.55 kCal/kWh 10 of data) 5.3 Applicable Net Heat Rate (SNHR) for 2051.30 kCal/kWh the Settlement Period

6. Fuel Consumption during the Settlement Period 6.1 a) Total Net Generation b) Net Generation on Natural Gas 83330 kWh 83330 x 0.6 = 49998 kWh

c) Net Generation on Naphtha

83330 x 0.4 = 33332 kWh 49998 x 2044.52 kCal = 102.222 x 106 kCal 8500 kCal/Sm3 102.222x106 8500 = 0.012026 x 106 Sm3 33332 x 2051.30 kCal = 68.374 x 106 kCal

6.2 a) Heat input through natural gas b) NCV of Natural Gas (Item 4(b) of data) c) Gas consumption during the settlement period

6.3 a) Heat input through Naptha

b) NCV of Naphtha (Item 4(b) of data) c) Naphtha consumption during the settlement period 6.4 Total Fuel Consumption during the settlement period

10500 kCal/kg 68.374x106 10500 = 0.006512 x 106 Kg = 6.512 tonnes = 0.012026 x 106 Sm3 of Natural Gas + 6.512 tonnes of Naphtha [Next Page]

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Annexure-D Table of Contents 1. 1.1 1.1.1 Thermal Power Generating Stations Operation Norms Installed Capacity

1.1.1.1 1.1.1.2 1.1.1.3 1.1.2 1.1.2.1 1.1.2.1.1 1.1.2.1.2 1.1.2.1.3 1.1.2.2 1.1.2.2.1 1.1.2.2.2 1.1.2.2.3 1.1.2.3 1.1.2.3.1 1.1.2.3.2 1.1.3 1.1.4 1.1.4.1 1.1.4.1.1 1.1.4.2 1.1.4.2.1 1.1.4.2.2 1.1.4.3 1.1.5

Steam Power Station Combined Cycle Combustion Turbine (CCCT) Generating Station Diesel Engine Generating Station Plant Load Factor Steam Power station Daily Plant Load Factor (DPLF) Annual Plant Load Factor (APLF) Deemed Annual Plant Load Factor(DAPLF) CCCT Generation Station Settlement period plant load factor (SPLF) Annual Plant load factor(APLF) Deemed annual plant load factor (DAPLF) Diesel Engine generating station Annual Plant load factor (APLF) Deemed Annual Plant load factor (DAPLF) Net Heat Rate of a Generating Station Gross heat rate for a Generating Station Steam Turbine cycle Steam Generator efficiency CCCT generating station Combined Cycle operation Simple cycle operation Diesel generating station Auxiliary energy consumption

1.1.5.1 1.1.5.1.1 1.1.5.1.2 1.1.5.1.3 1.1.5.2 1.1.5.2.1 1.1.5.2.2 1.1.5.3 1.1.6 1.1.6.1 1.1.7 1.1.7.1 1.1.7.2 1.1.8 1.1.8.1 1.1.9 1.1.9.1 1.1.9.2 1.1.9.3 1.2 1.2.1 1.2.2 1.2.2.1 1.2.2.2

Steam Power Station Flue gas desulphurisation (FGD) system Circulating fluidised bed combustion type boilers Part load operation CCCT generating station Combined cycle operation Simple cycle operation Diesel Generating Station Specific secondary fuel oil consumption Steam power station Specific reagent consumption In-combustion desulphurisation system Post combustion desulphurisation system Lubricating oil consumption. Diesel Generating Station Commercial operation Date or COD Steam Power Station Combined cycle combustion turbine (CCCT) generating station Diesel engine generating station Financial parameters Capital expenditure Fixed charges Interest on loan capital Rates of depreciation

1.2.2.3 1.2.2.3.1 1.2.2.3.2 1.2.2.3.3 1.2.2.4 1.2.2.5 1.2.2.6 1.2.2.6.1 1.2.2.6.2 1.2.2.6.3 1.2.3 1.2.4

Operation & Mdaintenance (O&M) expenses Steam Power Station Combined Cycle Combustion Turbine (CCCT) Station Diesel engine generating station Tax on income Return on equity Interest on working capital Steam power plant Combined cycle combustion ;turbine (CCCT) Station Diesel engine generating station Incentives Energy (Variable) charges

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