International Journal of JOURNAL Electrical Engineering and Technology (IJEET), ISSN 0976 INTERNATIONAL OF ELECTRICAL ENGINEERING 6545(Print), ISSN

N 0976 & 6553(Online) Volume 4, Issue 3, May June (2013), IAEME TECHNOLOGY (IJEET) ISSN 0976 6545(Print) ISSN 0976 6553(Online) Volume 4, Issue 3, May - June (2013), pp. 220-229 IAEME: www.iaeme.com/ijeet.asp Journal Impact Factor (2013): 5.5028 (Calculated by GISI) www.jifactor.com

IJEET
IAEME

CONSIDERATION OF REACTIVE ENERGY IN THE TARIFF STRUCTURE

Prof. Dr.T.Ananthapadmanabha#1, Parthasarathy L#2 Professor, Department of Electrical & Electronics Engineering, The National Institute of Engineering, Mysore, India #2 Associate Professor, Department of Electrical & Electronics Engineering, ATME College of Engineering, Mysore, India
#1

ABSTRACT A great many loads consume not only active but also reactive power. The electric network itself both consumes and produces reactive power. Transmission and distribution of electric power involve reactive power losses due to the series inductance of transformers, overhead lines and underground cables. The generation of power also contains reactive components. Hence it is important to monitor and control reactive power resources and reactive power consuming elements to maintain proper voltages in the grid within safe and secure limits [1]. In this deregulation era of power system operation, the reactive power ancillary service is to be suitably remunerated by the transmission & distribution companies. The allocation method throws light to discuss on the remuneration for the reactive power ancillary service based on: reactive power relieved by the generators (during the process of buying reactive power as ancillary service) and on the recovery of Lost Opportunity Cost (LOC) of the generator [2]. It is indeed an obligation on transmission & distribution companies to recover the cost spent on procuring reactive power ancillary service. This paper proposes a framework for the consideration of the cost for reactive energy in the existing structure of active energy tariff charged to domestic consumers by transmission & distribution companies. Keywords: Cost of Active energy (Cp), Cost of Reactive energy (Cq), Grid Code, Indian National Rupees (INR).

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International Journal of Electrical Engineering and Technology (IJEET), ISSN 0976 6545(Print), ISSN 0976 6553(Online) Volume 4, Issue 3, May - June (2013), IAEME I. INTRODUCTION

The Federal Energy Regulatory Commission (FERC), USA mentions that: The recent history of reactive power pricing begins with the Commissions Order No. 888, its Open Access Rule, issued in April 1996. In that order, the Commission concluded that reactive supply and voltage control from generation sources is one of six ancillary services that transmission providers must include in an open access transmission tariff. The Commission noted that there are two ways of supplying reactive power and controlling voltage: (1) installing facilities as part of the transmission system and (2) using generation facilities. The Commission concluded that the costs of the first would be recovered as part of the cost of basic transmission service and, thus, would not be a separate ancillary service. The second (using generation facilities) would be considered a separate ancillary service and must be unbundled from basic transmission service [3]. The deregulation of electric power industry has progressed in the world. The distribution companies serve as an agent to buy active and reactive powers from generating companies and sell electric power to consumers. The duty of the distribution company in turn is to provide a rational tariff structure for the power supply distributed by them to different category of consumers in line with the rational tariff structure generated by generating company under ABT mechanism. The electric generating stations are aimed at structuring a rational tariff structure for the power supply rendered from them to customers. The term Availability Based Tariff (ABT), stands for this rational tariff structure for giving power supply to customers such as transmission and distribution companies, on a contracted basis. The power plants have fixed and variable costs. The fixed cost elements are interest on loan, return on equity, depreciation, O&M expenses, insurance, taxes and interest on working capital. The variable cost comprises of the fuel cost, i.e., coal and oil in case of thermal plants and nuclear fuel in case of nuclear plants. In the Availability Tariff mechanism, the fixed and variable cost components are treated separately. The payment of fixed cost to the generating company is linked to availability of the plant, that is, its capability to deliver MWs on a day-by-day basis. The total amount payable to the generating company over a year towards the fixed cost depends on the average availability (MW delivering capability) of the plant over the year. In case the average actually achieved over the year is higher than the specified norm for plant availability, the generating company gets a higher payment. In case the average availability achieved is lower, the payment is also lower hence the name Availability Based Tariff. This is the first component of Availability Tariff, and is termed capacity charge. The second component of Availability Tariff is the energy charge, which comprises of the variable cost (i.e., fuel cost) of the power plant for generating energy as per the given schedule for the day. It may specifically be noted that energy charge (at the specified plantspecific rate) is not based on actual generation and plant output, but on scheduled generation. In case there are deviations from the schedule (e.g., if a power plant delivers 600 MW while it was scheduled to supply only 500 MW), the energy charge payment would still be for the scheduled generation (500 MW), and the excess generation (100 MW) would get paid for at a rate dependent on the system conditions prevailing at the time. If the grid has surplus power at the time and frequency is above 50.0 cycles, the rate would be lower. If the excess generation takes place at the time of generation shortage in the system (in which condition the frequency would be below 50.0 cycles), the payment for extra generation would be at a higher rate.
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International Journal of Electrical Engineering and Technology (IJEET), ISSN 0976 6545(Print), ISSN 0976 6553(Online) Volume 4, Issue 3, May - June (2013), IAEME To recapitulate, the Indian version of Availability Tariff comprises of three components: (a) capacity charge, towards reimbursement of the fixed cost of the plant, linked to the plant's declared capacity to supply MWs, (b) energy charge, to reimburse the fuel cost for scheduled generation, and (c) a payment for deviations from schedule, at a rate dependent on system conditions. The last component would be negative (indicating a payment by the generator for the deviation) in case the power plant is delivering less power than scheduled [4]. Reactive power/voltage control plays an important role in maintaining secure operation of power system and energy trading in power market, but the action has not been reflected definitely in economy up to the present, which results in an high deviation between value and price of reactive power. Reactive power needs to be provided locally, and hence, the worth of one megavolt- ampere (MVAr) of reactive power is not the same everywhere in the system. Thus, reactive power price should not be determined only based the cost (investment cost or opportunity cost) like a real power market. In essence, reactive power value measures the relative importance of the var sources. They relate to the system configuration and operation conditions, location of each source etc, and have no direct relationship with the cost of the sources. A var source could have a high cost yet have a low value. In this case, it may not be profitable for the source to offer reactive support service. Therefore, reactive power pricing methods need to take into account both offer prices and location of the resource in order to offer a correct price signal to providers and ensure secure operation of power system [5]. Thus for the Transmission & Distribution companies, there arises a need to charge for reactive energy to cover up the cost of purchase that is arrived at, as mentioned in [5]. Presently some of the distribution companies in India have a tariff structure that attracts charges only for active demand and active energy charges assuming unity power factor for domestic loads. No provision is in place to charge for the violation of unity power factor. It is an established fact that reactive demand arises for the violation of unity power factor which is to be addressed rationally. The normal operation of the distribution system demands a disciplined way of consuming power by all the categories of the consumers. The word discipline can be recognized as observing reference value of Power Factor, non- violating the KVA or KW demand etc., The distribution company issues Grid Code such as: value for Power Factor, KVA or KW demand on their tariff structure. This is aimed to ensure not to attract high charges on a distribution company for unscheduled interchange under ABT mechanism. Violating Grid Code by the consumers of the distribution company should be addressed to cover the penalties for the company. The distribution company in Karnataka State of India mentions that the billing is only for active energy at unity power factor and the cost for the active demand is mentioned too. The tariff structure to be framed by the company should consider the Grid Code issued by them to consumers. Violation of the Grid Code by the consumers automatically should invite a tariff structure that penalizes the consumer. This penalty should be structured such that it is rational and economically compensates for active power and reactive energy purchase agreement of the distribution company with generating company. Rendering the demand to the consumer violating the Grid discipline is to be considered as an extra ordinary service and certainly, the costs of these services should be reflected in the penalty structure. The concern is how fairly the distribution company can allocate the costs becomes an important issue. The Grid Code violation by the consumer is
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International Journal of Electrical Engineering and Technology (IJEET), ISSN 0976 6545(Print), ISSN 0976 6553(Online) Volume 4, Issue 3, May - June (2013), IAEME mainly due arrival of the demand of reactive power which is confined to mainly local consumption. A fair and adequate method for fixing the costs may help the market participants make appropriate and efficient investments for reactive power sources, which include static capacitors, flexible ac transmission system (FACTS) devices, and synchronous condensers. All of these can offer system operators more tools and can strengthen the system security. This paper mainly discusses on presenting a hypothesis for the framing of a tariff structure for domestic consumers that reflects the penalty charges for the consumers violating grid discipline. On the other hand the tariff structure encourages those consumers who are under the grid discipline. The mechanism shall allow more users to participate in the observation of Grid Code while they draw their regular powers. Power drawls violating Grid Code naturally demand additional reactive energy for every ferrying of active energy. As for the matter of cost of active and reactive energy the authors would like to treat only the consideration of reactive energy and its tariff fixation during the violation of Grid Code which is the focus of this paper. The authors will be concerned of fixing the price for reactive energy for all the transactions of the consumer by the company. On the other hand the concern is on tagging the reactive energy which is responsible for Grid Code violation by the consumer. Focus is on to frame the tariff structure in line with ABT mechanism as: (a) capacity charge, towards reimbursement of the fixed cost of the company for installing service to generate reactive power, linked to the availability of the declared capacity to supply MVARs, (b) active energy charge and reactive energy charge to reimburse the fuel cost for scheduled generation, and (c) a payment for deviations from Grid Code power factor dependent on system conditions. [3]. II. GENERAL DEFINITION OF THE PROBLEM

Let us consider the distribution company selling power to all categories of the consumers. The substations managed by the distribution company will have the knowledge of the drawls of the distinguished consumers at different points of time in a routine day and also on regional special days. The tariff structure issued to the consumers mainly reflects fixed cost and variable cost and thus the normal charges for active energy under Grid Code of say unity power factor, and Active demand. The cost of active energy and Grid Codes stands as a reference for our discussion on presenting the hypothesis for framing of a tariff structure that reflects the penalty charges for the consumers violating grid discipline and encourages those consumers who are under the grid discipline. The node that violates the Grid Code of say unity power factor is the point of interest. The node starts demanding reactive power while drawing the active demand. This newly drawn reactive power is occupying the place of active demand. There is a violation of Grid Code and demands the addressing of this reactive energy. A criterion for the cost of reactive energy is needed to be developed that allow us to price the cost of reactive energy. This stands similar to the component c of ABT mechanism for energy purchase of Transmission & Distribution company from generating plants. Once the reactive energy is drawn in violation of grid code then the overall cost having both fixed and running charges varies. A reference is derived from the data of discipline of Grid Code and the existing tariff for active demand is used to arrive at the cost of reactive power and hence reactive energy.
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International Journal of Electrical Engineering and Technology (IJEET), ISSN 0976 6545(Print), ISSN 0976 6553(Online) Volume 4, Issue 3, May - June (2013), IAEME III. ANALYTICAL MODEL FOR EVALUATION The following steps are used to arrive at the criterion to find the cost of reactive energy using the existing tariff structure of Karnataka State is a two part tariff. The two part tariff components are charges for active demand coming under fixed charges and charges for active energy under running charges. Grid Code is derived from the available criteria for the existing tariff structure. The Grid Code is: operating power factor used for billing (Unity Power factor), charges for active demand, and average cost for active energy. Practical distribution systems are too difficult and seldom to operate at unity power factor. Majority of the consumers loads are designed for lagging power factor close to unity. Therefore the consumer nodes are subjected to violation of the Grid Code of unity power factor. Observing the operating power factor as unity appears to be subjective and not definitely with the actual power system operating conditions. Violation of power factor at any point on the distribution system should invite charging the consumers through appropriate method of and should be discouraging the consumers for such violation. Thus there exists a demand for a criterion to develop to charge for any violation of power factor. NOMENCLATURE Pf1 Pd Qd S0 S1 Ca Cr Load Power factor Grid Code Active load demand Reactive demand arriving out of Grid Code violation Grid Code KVA Load KVA arriving after violation of Grid Code Average Cost per KW [INR/KW] Average Cost per KVAR [INR/KVAR] Cost per Unit of Active Energy [INR/KWh] Cost per Unit of Reactive Energy [INR/KVARh] Active energy in KWh Reactive energy in KVARh Conventional ratio of reactive energy to active energy Actual ratio of reactive energy to active energy Cost of fixed charges Total cost of running charges Total cost for Grid Code power factor violation

Cq Pe Qe Qe_Pe Qea_Pea Cfc Crc Ct

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International Journal of Electrical Engineering and Technology (IJEET), ISSN 0976 6545(Print), ISSN 0976 6553(Online) Volume 4, Issue 3, May - June (2013), IAEME The following steps are used to propose a new tariff structure for Grid Code violation by a node:
i.

The KW demand is nothing but KVA demand for a Grid Code of unity power factor.

ii.

The KVAR demand arising out of change in Grid Code power factor can be found.

Where

iii.

Increase in KVA demand is identified as a direct relationship for arrival of KVAR demand. Cost for additional KVA demand which is considered directly proportional to KVAR demand can be estimated on similar lines of cost for KW demand.

iv.

v.

It is assumed that as per the Grid Code of unity power factor the demand of KVAR is replacing the active demand and therefore the cost of active demand is used to arrive at cost of reactive demand Cost for KVAR demand can be arrived using the following relation.

vi.

vii.

This increase in KVAR demand is attributed to the fact of change in total fixed cost as:

viii.

For a given power factor the ratio of cost of active demand to reactive demand is:

ix.

The cost of reactive energy can be estimated using the above relation ship

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International Journal of Electrical Engineering and Technology (IJEET), ISSN 0976 6545(Print), ISSN 0976 6553(Online) Volume 4, Issue 3, May - June (2013), IAEME
x.

The reactive power content depends on the power factor violated from the reference value, and therefore there exists the requirement of reactive energy for every unit of active energy. The present conventional practice is to use:

xi.

The total running cost component now can be reframed considering the services rendered for reactive energy. Therefore or

xii.

Thus we find change in both fixed cost and running cost and the therefore the total cost is fixed and running charges. This total cost that to be enforced on the customer violating the Grid Code.

Step (x) of new tariff structure uses the common relationship of reactive energy for every unit of active energy (conventional) that is supported by all relevant literatures at present. The authors wish to place an actual ratio for reactive energy for every unit of active energy as explained below. The fundamental equation for instantaneous power after it is split up into instantaneous active power and instantaneous reactive power the variation of them is shown in fig.1a & fig.1b respectively.

Fig.1a

Fig.1b
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International Journal of Electrical Engineering and Technology (IJEET), ISSN 0976 6545(Print), ISSN 0976 6553(Online) Volume 4, Issue 3, May - June (2013), IAEME The area under instantaneous reactive power for a period of 5ms for a supply frequency of 50Hz gives active energy for the mentioned period and is obtained using the following equation:

Also the area under instantaneous active power for a period of 5ms for a supply frequency of 50Hz gives active energy for the said period and is obtained using the following equation:

The ratio of actual reactive to active energy is given as:

Fig.2 shows the variation of ratio of reactive energy to active energy for both conventional and actual value. The values obtained are used to find the cost of running charges. It is seen that in fact the actual reactive energy to active energy ratio is of lower values when compared to the conventional ratio of reactive energy to active energy for variation in power factor. The running cost directly depends on this ratio.
Reactive energy per Active energy for different power factors 1.6 1.4 1.2 1 Qe/Pe 0.8 0.6 Actual 0.4 0.2 0 0.5

Conventional

0.55

0.6

0.65

0.7 0.75 0.8 Power Factor

0.85

0.9

0.95

Fig.2 IV COMPARISON AND DISCUSSIONS To demonstrate the proposed method for the tariff structure for domestic loads that are not maintain unity power factor, the information (Grid Code) available in the tariff structure is used. Power factor as per Grid Code is Unity Power Factor (UPF), KVA demand of the load is 3KW, because of UPF, average cost per active energy is INR3.84, Average
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International Journal of Electrical Engineering and Technology (IJEET), ISSN 0976 6545(Print), ISSN 0976 6553(Online) Volume 4, Issue 3, May - June (2013), IAEME demand cost: INR31.66, and total active energy is 193units. These values slightly differ for another domestic consumer. Fig.3 shows the arrival of cost per KVAR (Cr) for UPF violation and its values for fall in values of power factor from unity value. This Cr approaches to zero for UPF. The present tariff structure allows only Ca to act as fixed charge for all power factor values. The proposed tariff structure considers both Ca and cost due to changes in demand as variable charges.
Cost of Active Demand & Cost of Reactive Demand versus Power factor 35

30 Average Cost per KW (Ca) 25

20 INR 15

Cost per KVAr (Cr)

10

0 0.5

0.55

0.6

0.65

0.7 0.75 0.8 Power Factor

0.85

0.9

0.95

Fig.3 Fig.4 shows the arrival of cost per KVARh (Cq) for UPF violation and its values for fall in values of power factor from unity value. This Cq approaches to zero for UPF. The present tariff structure allows only Cp to act as variable charge for all values of power factor. On the other hand the proposed tariff structure considers both Cq and Cp as variable charges.
Cost of per unit Active Energy & Reactive Energy Versus Power factor 4 3.5 3 2.5 INR/Unit 2 1.5 1 0.5 0 0.5

Cost of Active Energy/Unit (Cp)

Cost of Reactive Energy/Unit (Cq)

0.55

0.6

0.65

0.7 0.75 0.8 Power Factor

0.85

0.9

0.95

Fig.4 Fig.5 shows the fixed, variable and total cost for all values of power factor for the present tariff structure of the distribution company for an active energy of 193 units. Also seen is the arrival of fixed, variable and total cost as per our proposed tariff structure. These cost values are obviously greater than the present costs.
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International Journal of Electrical Engineering and Technology (IJEET), ISSN 0976 6545(Print), ISSN 0976 6553(Online) Volume 4, Issue 3, May - June (2013), IAEME
Proposed & Existing Charges Versus Power Factor 1800 1600 1400 1200 IN RC harges 1000 800 600 400 200 0 0.5 Existing running Cost Proposed fixed Cost (Cfc) Existing fixed Cost Proposed Total Cost (Ct) Proposed running Cost (Crc)

Existing Total Cost

0.55

0.6

0.65

0.7 0.75 0.8 Power Factor

0.85

0.9

0.95

Fig.5 V CONCLUSIONS An adequate effort in a rational way is made to consider the reactive energy and its cost in the tariff structure. A frame work is developed to bring them by considering the information available in the present tariff structure. Violation of UPF Grid Code may definitely invites additional penalties for seeking reactive power ancillary service for the distribution companies from plant operators in the present tariff structure. Derivation of cost for reactive energy certainly paves way for companies to introduce them for loads violating UPF. Needless to say that the charges are more for loads not observing UPF. The charges for loads with UPF go on as it is with the existing charges. Thus the proposed method encourages loads with UPF and discourages the load violating UPF. The method also helps to recover cost to be spent on reactive power ancillary service. An actual ratio for reactive energy for every unit of active energy can be replaced for conventional ratio to get new values for the tariff structure which is slightly less than the one discussed above for same data. VI REFERENCES
[1] Powersystem Operation Corporation Ltd (POSOCO, India) - NLDC Reactive Power Management- A Resource Handbook 2012. [2] T.Ananthapadmanabha, Parthasarathy L, Participation of Reactive Power Service on Demand Side Management International Journal on Power System Optimization and Control, pp.1-5, vol-4, Issue no.1, 2012. [3] The Federal Energy Regulatory Commission (FERC), USA, Principles for Efficient and Reliable Reactive Power Supply and Consumption, Staff Report February 4, 2005. [4] Bhanu Bhushan, A Primer on Availability Tariff Power Grid Corporation of India PGCIL, June 2005. [5] J.Wang, R.G. Yang and F.S.Wen, On the Procurement & Pricing of Reactive Power Service in the Electricity Market Environment, IEEE Power Engineering Society General Meeting, Vol. 1, pp. 1120-1124, June 2004. [6] Mohd Abdul Lateef, Syed Maqdoom Ali and Dr.Sardar Ali, Reactive Power Aspects in Reliability Assessment of Power Systems, International Journal of Advanced Research in Engineering & Technology (IJARET), Volume 4, Issue 2, 2013, pp. 124 - 131, ISSN Print: 09766480, ISSN Online: 0976-6499.
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