Impact of frequency-based tariff in power market

Abstract

System frequency can be a useful signal in real–time power system operation to promote competition along with operational reliability. The commercial mechanism adopted in India, the availability–based tariff (ABT), defines a power tariff structure that allows recovery of capital cost and fuel cost as well as a condition–based price incentive to participants which help to minimise the real power imbalance. We propose a mathematical model for profit–based dispatch and a heuristic technique has been developed to determine the daily scheduling of declared capacity by maximising the profit. The main purpose of the paper is to look at the advocacy rules of ABT more strategically and to develop plans for generation scheduling. Comparative analysis with previously followed two–part tariff system is also carried out to expose the importance and role of incentive/penalty for self regulatory system.