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GOVERNMENT POLYTECHNIC, JALGAON

(0018)
Program Name and Code : EE 5I
Course Name and Code : Energy Conservation & Audit( 22525 )
Academic Year : 2024-25
Semester : Fifth

A MICRO PROJECT
On
TO PREPARE A TECHNICAL PRESENTATION ON
DIFFERENT TYPES OF TARIFF

Submitted by the group of __3__ students


Sr. Roll Name of student Enrollment Seat No.
No. No. No.

1. 31 PATIL MAYUR RAVINDRA 2200180618

2. 32 PATIL NILESH SANJAY 2200180619

3. 33 PATIL PRATIK SATISH 2200180620

Guided By
Shri N. S. Varade sir
( Lecturer in Electrical Department )

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MAHARASHTRA STATE BOARD OF TECHNICAL
EDUCATION
Certificate

This is to certify that Master.MRP,NSP.PSP. Roll No. 31,32,33 of …5th… Semester of


Diploma in Electrical Engineering of Institute, Government Polytechnic, Jalgaon
(Code: 0018) has completed the Micro Project satisfactorily in the Subject : :
Energy Conservation & Audit( 22525 ) for the Academic Year 2023-2024 as
prescribed in the curriculum.

Place: Jalgaon Enrollment No: 220018068,19,20

Date: / /2024 Exam Seat No:

Subject Teacher Head of the Department Principal

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GOVERNMENT POLYTECHNIC

JALGAON

-SUBMISSION-

We MRP,NSP.PSP Roll No 31,32,33 as a student of 5th Semester of the


Programme Electrical Engineering humbly submit that I have completed from time to
time the Practical/Micro-Project work as described in this report by my own skills and
study as per instructions/guidance of .

And that following students were associated with me for this work, however,
quantum of my contribution has been approved by the Lecturer.

And that I have not copied the report on its any appreciable part from any other
literature in contravention of the academic ethics.

Date: / /2024 Signature of Student


31

32

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ANNEXTURE II

Evaluation Sheet for the Micro Project

Academic Year: 2024-25 Name of Faculty: N.S.Varade


Course : Energy Conservation & Audit Course Code: 22525 Semester: Fifth

Title of the Project: To prepare a technical presentation on different types of tariff


COs addressed by the Micro Project: Use cogeneration and relevant tariff for reducing losses
facility

Major Learning Outcomes achieved by students by doing Project: Understand the structure
of different tariff system

Practical Outcomes: Suggest suitable tariff to conserve electrical energy


a. Unit Outcomes in Cognitive domain: Outcomes in Affective Domain: Work as team
member. Follow ethical practices.

Comments/Suggestions about team work/ leadership/inter-personal communication (if any):


We successfully completed our Microproject by taking point of view of all participants
as reference.

Student Name Marks out of 6 for Marks out of 4 for Total out of
performance in performance in 10
group activity oral /
Roll (D5 Col.8) presentation
No. (D5 Col.9)

31 Patil Mayur Ravindra

32 Patil Nilesh Sanjay

33 Patil Pratik Satish

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WEEKLY PROGRESS REPORT

WEEK ACTIVITY PERFORMED DATE

1 Selection of Topic

2 Discussion and finalization of topic

3 Gathering information

4 Framing the structure

5 Working on ppt

6 Working on ppt

7 Final touch to ppt

8 Framing structure of report

9 Working on report

10 Final touch to report

11 Editing and proof visualizing of report

12 Editing and rectifying of report

13 Checking of ppt

5
14 Seminar

15 Viva voce

16 Final submission of Microproject

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ACKNOWLEDGEMENT

I wish to express my sincere gratitude to Dr. P. M. Patil Sir, Principal

Government polytechnic Jalgaon for providing us an opportunity to do

that project. I sincerely thank to N. S. Varade Sir for their guidance and

encouragement in carrying out this project work. I also wish to express

my gratitude to the officials and other staff members of Electrical

department who rendered their help during the period of my project work.

I also thank the Maharashtra State Board Technical Education (MSBTE)

for providing us the opportunity to embark on this project.

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INDEX

Serial No. Name Page No.

1. INTRODUCTION

2. NEED OF TARIFF

3. LIST OF VARIOUS TYPES


OF TARIFF

4. DESCRIPTION OF ALL
TYPES OF TARIFF

5. CONCLUSION

6. REFERENCES

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INTRODUCTION

In electrical energy, a tariff system refers to the method by which


electricity providers charge consumers for electricity consumption. It
involves a structured set of pricing rules, including rates, charges, and
payment conditions for different categories of consumers (e.g.,
residential, commercial, industrial). The purpose of an electricity tariff
system is to fairly allocate the costs of electricity production,
transmission, and distribution while encouraging efficient energy usage.

Need or Importance of Tariff System :

1. Cost Recovery:

Electrical systems, including generation, transmission, and distribution,


involve significant investments in infrastructure, maintenance, and
operations. Tariffs ensure that utility companies can recover these costs
and maintain financial sustainability.

2. Fair Distribution of Costs:

Tariff structures help distribute the costs of electricity generation and


distribution fairly among different types of consumers (residential,
commercial, industrial). It ensures that each category pays according to
its consumption and demand on the grid.

3. Encouragement of Efficient Energy Use:

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Properly designed tariffs, such as time-of-use or block rate tariffs,
encourage consumers to use energy more efficiently. For instance, higher
rates during peak demand times can motivate users to shift usage to off-
peak periods, reducing strain on the grid and lowering overall energy
costs.

4. Promotion of Equity:

Tariff systems can help ensure that vulnerable populations have access to
affordable electricity. Special rates for low-income households or
subsidies can be part of the tariff system to make electricity more
accessible while preventing overconsumption.

5. Management of Demand:

By using tariffs that reflect the cost of electricity at different times or


levels of demand (e.g., peak pricing), utilities can manage electricity
demand more effectively. This helps prevent overloading the grid and
reduces the need for additional, costly infrastructure to meet peak
demand.

6. Revenue Generation for System Upgrades:

Tariffs help generate revenue for future investments in the electrical


grid, including modernization, maintenance, and expansion of power
plants, renewable energy integration, and grid resilience projects.

7. Encouragement of Renewable Energy:

Some tariff systems are designed to promote the use of renewable


energy sources by providing incentives, such as lower rates or credits,

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for consumers who use or generate electricity from renewable sources
(solar, wind, etc.).

8. Sustainability:

Well-structured tariffs help balance supply and demand, encourage


sustainable energy usage, and ensure that energy providers can continue
to meet growing consumer demand while maintaining environmental
goals.

Various types of tariff system :

 Time-off-day tariff
 Peak- off-day tariff
 Power factor tariff
 Maximum Demand tariff
 Load factor tariff
 Availability Based Tariff (ABT)

Discription of Various types of tariff system :

1. Time-off-day tariff :

The Time-of-Day (ToD) Tariff System in the electrical field is a


pricing mechanism where the cost of electricity varies
depending on the time of day when it is consumed. It typically
divides the day into peak, off-peak, and sometimes mid-peak
periods, with different rates applied to each. The idea is to
reflect the actual cost of electricity generation and demand

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during different hours, encouraging consumers to shift their
usage to off-peak times when demand is lower and electricity is
cheaper.

Structure of ToD Tariff System:

Peak Hours: When electricity demand is highest, often in the


evening or late afternoon. Prices are higher to reflect the strain
on the grid.

Off-Peak Hours: When demand is lowest, typically at night or


early morning. Prices are lower, encouraging energy use during
these times.

Mid-Peak Hours (optional): Moderate demand periods where


prices fall between peak and off-peak rates.

Advantages of Time-of-Day Tariff System:

1. Reduces Peak Load: By charging higher rates during peak


hours, the ToD tariff encourages consumers to shift energy-
intensive activities (e.g., running washing machines, charging
electric vehicles) to off-peak periods, reducing the overall
demand on the grid during peak times.

2. Encourages Energy Efficiency: Consumers become more


conscious of their electricity usage and can plan their

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consumption to take advantage of lower rates, reducing overall
energy waste.

3. Improves Grid Stability: By spreading out energy


consumption throughout the day, the ToD system helps prevent
overloading the grid during peak hours, leading to more stable
electricity supply and reducing the need for backup power
plants.

4. Promotes Use of Renewable Energy: Renewable energy


sources like solar power may align with off-peak periods (e.g.,
daytime), and a ToD tariff system can encourage consumers to
utilize electricity during times when renewable energy is more
available.

5. Cost Savings for Consumers: Households or businesses that


can shift their energy use to off-peak times can save money on
their electricity bills by paying lower rates.

Disadvantages of Time-of-Day Tariff System:

1. Inconvenience for Consumers: Many activities, such as


cooking or heating, occur during peak hours, and shifting them
to off-peak periods may be impractical. Some consumers may

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find it difficult to adapt their schedules to take advantage of off-
peak rates.

2. Unpredictable Cost for Consumers: Consumers who cannot


adjust their usage patterns may end up paying higher bills during
peak times, especially if they require electricity during those
hours.

3. High Initial Setup Costs: Implementing a ToD tariff system


often requires the installation of smart meters to monitor real-
time energy consumption. This can be costly for both utility
companies and consumers.

4. Limited Benefits in Some Regions: In areas with relatively


flat electricity demand curves or without significant variation in
supply costs, the benefits of a ToD system may be less
pronounced.

5. Potential for Disparity: Consumers with less flexibility in


their energy usage (e.g., low-income households with less access
to energy-efficient appliances) might be disproportionately
affected by higher peak rates.

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2. Peak of Day Tariff System :
The Peak-of-Day Tariff System in the electrical field, often called
Peak Pricing or Peak Load Pricing, is a form of electricity pricing
where higher rates are charged during the periods of the day when
demand for electricity is at its highest. This peak period usually
occurs in the late afternoon or evening when residential and
commercial electricity use overlaps. Outside of these peak hours,
the electricity rates are lower.

How It Works:

Peak Hours: The utility company identifies specific hours during


the day when electricity demand is at its highest (typically early
evening). During these hours, the cost of electricity is
significantly higher to reflect the increased demand and strain on
the electrical grid.

Off-Peak Hours: During times of low demand (often at night or


early morning), lower rates are charged to encourage energy use
during these periods.

Shoulder or Mid-Peak Periods (optional): Some systems also


include mid-peak periods with moderate rates between the peak
and off-peak times.

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The main goal of the Peak-of-Day tariff is to encourage
consumers to use electricity more efficiently and reduce usage
during peak periods, helping to alleviate pressure on the power
grid and avoid the need for additional generation capacity.

Advantages of Peak-of-Day Tariff System:

1. Reduces Peak Load on the Grid:

By charging higher rates during peak times, this tariff encourages


consumers to shift their electricity usage to off-peak hours,
helping to smooth demand and reduce stress on the power grid
during high-demand periods.

2. Encourages Efficient Energy Use:

Peak pricing motivates consumers to adopt energy-saving


measures, such as running appliances during off-peak hours,
using energy-efficient devices, or even generating their own
energy with solar panels, thus reducing overall consumption.

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3. Reduces the Need for Additional Power Plants:

By decreasing demand during peak periods, utilities can avoid


investing in additional infrastructure like power plants that would
only be needed for a few hours a day. This helps reduce capital
and operational costs, which can benefit consumers in the long
run.

4. Promotes Sustainable Energy Behavior:

The system incentivizes consumers to shift their energy usage to


times when renewable energy sources like solar or wind might be
more available, encouraging the use of cleaner energy and
reducing reliance on fossil fuels.

5. Cost Savings for Consumers Who Adapt:

Consumers who adjust their habits to avoid using electricity


during peak hours can save on their electricity bills by taking
advantage of lower off-peak rates.

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Disadvantages of Peak-of-Day Tariff System:

1. Inconvenience for Consumers:

Many essential activities (e.g., cooking, heating, and cooling)


typically take place during peak periods, making it difficult for
some consumers to avoid high-cost times. For families and
businesses with inflexible schedules, this can lead to higher costs
without the ability to shift usage.

2. Potential for Higher Bills:

Consumers who are unable to shift their electricity usage from


peak periods may face significantly higher electricity bills. This
can be particularly challenging for those who depend on
continuous energy use during peak hours, such as businesses or
households with heating or cooling needs.
3. Requires Smart Meters:
The implementation of a Peak-of-Day tariff system often
requires the installation of smart meters to monitor real-time
electricity usage. The initial cost of deploying and maintaining
these meters can be high for both the utility and consumers.

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4. Impact on Vulnerable Consumers:

Low-income households or those with specific needs (like


medical devices requiring constant electricity) may find it harder
to adjust their consumption patterns, and they could be
disproportionately affected by higher peak-time rates.
5. Limited Flexibility for Some Industries:

Businesses that rely heavily on electricity during the day (such as


factories, offices, or hospitals) may have little flexibility to shift
their operations, leading to increased operational costs.

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3.Power factor Tariff System :

The Power Factor Tariff System in the electrical field is a pricing


mechanism that incentivizes consumers to maintain a higher
power factor. It penalizes consumers with a low power factor and
rewards those with a higher power factor. This system is primarily
applied to large commercial or industrial consumers whose
electrical equipment may cause inefficiencies in power delivery.

Understanding Power Factor:

Power factor (PF) is the ratio of real power (used to perform


work) to apparent power (the total power supplied). It indicates
how efficiently electrical power is being used.

Ideal Power Factor = 1 (or unity): All power is being used


effectively.

Low Power Factor < 1: A portion of the supplied power is wasted,


often due to inductive loads like motors, transformers, and HVAC
systems.

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Utilities prefer a high power factor because it reduces losses in
transmission and distribution systems and improves overall
energy efficiency.

How Power Factor Tariff System Works:

1. Penalties for Low Power Factor: If a consumer's power factor


drops below a specified threshold (often 0.85 or 0.90), they are
charged a penalty. This reflects the extra burden on the grid
caused by their inefficient energy use.

2. Incentives or Discounts for High Power Factor: Some utilities


provide discounts or lower tariffs for consumers who maintain a
power factor close to unity, as they impose less strain on the
electrical system.
[9:33 pm, 13/10/2024] Mayur Ravindra Patil: Advantages of
Power Factor Tariff System:

1. Improves System Efficiency:

A higher power factor means less energy is wasted in the form of


reactive power. This improves the efficiency of both the

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consumer’s equipment and the utility’s transmission system,
reducing energy losses.
2. Reduces Strain on the Grid:
By encouraging a higher power factor, the tariff system reduces
the load on power plants, transmission lines, and transformers,
leading to fewer voltage drops and improved stability of the
electrical grid.
3. Incentivizes Energy Management:
Businesses are encouraged to install equipment like capacitors or
power factor correction devices to improve their power factor,
which can reduce their electricity bills in the long run.
4. Lower Demand Charges:
Consumers who maintain a high power factor are typically
charged less in demand-based tariffs (based on kVA demand), as
they are using energy more efficiently.

5. Environmental Benefits:
By improving energy efficiency and reducing the need for
additional power generation, the power factor tariff system
indirectly helps lower greenhouse gas emissions and reduces the
need for new power plants.

Disadvantages of Power Factor Tariff System:

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1. High Initial Costs for Power Factor Correction:
Consumers may need to invest in expensive power factor
correction equipment (e.g., capacitor banks) to avoid penalties,
which can be a significant upfront cost, especially for small or
medium-sized enterprises.
2. Complexity in Monitoring and Implementation:
Monitoring the power factor requires specialized metering
systems. Installing, maintaining, and reading these meters can
add complexity and costs for both utilities and consumers.
3. Unavoidable for Some Industries:
Certain industries with heavy inductive loads (e.g.,
manufacturing plants, steel mills) naturally have low power
factors, and improving the power factor may be technically
challenging or expensive for them, leading to unavoidable
penalties.

4. Potential for Higher Costs:

For consumers with poor power factors, the additional charges


and penalties can significantly increase their energy bills,
especially if they do not have the capital to invest in corrective
measures.

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5. Limited Relevance for Small Consumers:
The power factor tariff system is mainly relevant to large
industrial and commercial consumers. For smaller consumers,
such as residential users, power factor penalties are usually not
applicable as they have minimal impact on the overall grid
efficiency.

4.Maximum Demand Tariff System :

The Maximum Demand Tariff System in the electrical field is a


billing mechanism used by utility companies to charge consumers
based not only on the amount of energy consumed (in kilowatt-
hours, kWh) but also on their maximum demand during a billing
period (measured in kilovolt-amperes or kVA). Maximum
demand refers to the highest level of electrical power a consumer
requires at any point during the billing period. This system is
typically used for large commercial or industrial consumers who
have significant power demands.

How Maximum Demand Tariff Works:

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1. Energy Charge: This component is based on the total energy
consumed during the billing period, calculated in kilowatt-hours
(kWh).

2. Demand Charge: This is based on the consumer’s highest level


of electricity demand (in kVA or kilowatts) recorded during the
billing period, typically measured over 15 to 30-minute intervals.
A high demand requires the utility to maintain sufficient
infrastructure and generation capacity, even if it only happens for
a short time.

3. Fixed Charges: In some cases, a fixed charge is also included


to cover administrative or service costs.

The system incentivizes consumers to manage and reduce their


peak electricity demand, which helps utilities optimize their
infrastructure and power generation capacity.

Advantages of Maximum Demand Tariff System:

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1. Promotes Efficient Energy Usage:

Consumers are encouraged to manage their peak demand and


spread out their electricity usage throughout the day. This avoids
sharp spikes in demand, reducing the overall burden on the grid.

2. Reduces Infrastructure Strain:

By charging for maximum demand, utilities discourage sudden,


short-term spikes in consumption, which helps to reduce strain on
power plants, transmission lines, and transformers. This
contributes to the stability of the grid.

3. Better Planning for Utilities:

Utilities can better anticipate and manage their required


generation and transmission capacity, as the maximum demand
charge reflects the need for consistent power supply to meet peak
usage.

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4. Cost Savings for Consumers with Efficient Demand
Management:

Consumers who can manage their peak demand or distribute their


load over time (e.g., by using energy-intensive processes during
off-peak hours) can lower their maximum demand and,
consequently, reduce their demand charges.

5. Encourages Investment in Energy Management Systems:

This system encourages businesses to invest in energy-efficient


technologies and demand management strategies, such as load
shifting, installing energy storage, or using backup generators
during peak times.
Disadvantages of Maximum Demand Tariff System:

1. Complexity for Consumers:

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Large commercial and industrial consumers must monitor and
manage their maximum demand closely, which can be
complicated and require additional metering and energy
management systems.
2. High Initial Costs for Demand Management:
To manage or reduce their peak demand, consumers may need to
invest in equipment like demand controllers, energy storage
systems, or load-shifting technologies, which can be costly,
especially for smaller businesses.
3. Potential for Higher Costs:
Consumers who cannot control their maximum demand
effectively, either because of the nature of their business (e.g.,
manufacturing plants with large machinery) or operational needs,
may face significantly higher charges compared to a standard
tariff system.
4. Difficult to Avoid for Certain Operations:
Some industries, such as heavy manufacturing, mining, or
hospitals, cannot easily shift their loads to off-peak periods or
reduce peak demand without impacting their operations, leading
to unavoidable high demand charges.
5. Metering Infrastructure:
Implementing a maximum demand tariff system requires precise
metering infrastructure, often in the form of smart meters that can
record real-time usage and demand. Installing and maintaining
this infrastructure adds costs for both utilities and consumers.

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4. Availability Based Tariff System :

The Availability-Based Tariff (ABT) System is a pricing


mechanism used in the electrical field to encourage grid stability
and efficient power generation and consumption. It is primarily
used in bulk power markets, particularly for large power
producers and grid operators. The ABT system is designed to
incentivize both producers and consumers to adhere to planned
generation and consumption schedules, thereby improving the
reliability and efficiency of the electrical grid.

The system consists of three key components:

Components of the Availability-Based Tariff System:

1. Capacity Charge (Availability Charge):

This charge is paid by consumers to generators based on the


agreed capacity (MW) that the generator has committed to make
available, regardless of actual usage. It ensures that adequate
generation capacity is available to meet demand.

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2. Energy Charge:

This is the cost of the actual energy consumed, measured in


kilowatt-hours (kWh), and is based on the scheduled generation
and consumption. It ensures that generators are compensated for
the energy they deliver according to the pre-scheduled plan.

3. Unscheduled Interchange (UI) Charge:

This is the most critical component of the ABT system. If a


generator or consumer deviates from their scheduled generation
or consumption, the UI charge is applied based on frequency
deviations from the grid's standard operating frequency (usually
50 Hz). The charge becomes higher for greater deviations,
penalizing participants who cause grid instability by producing or
consuming more or less than their scheduled amounts.

When the grid frequency is low (indicating high demand),


consumers are penalized for overdrawing power, and generators
are rewarded for supplying more than scheduled. Conversely,
when grid frequency is high (indicating low demand), generators

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are penalized for over-supplying, and consumers are incentivized
to use more energy.

Advantages of Availability-Based Tariff System:

1. Improves Grid Stability:

The ABT system discourages large deviations from scheduled


power generation and consumption, helping to stabilize the grid
frequency. By aligning generation and demand, it reduces the risk
of power outages or grid collapse due to imbalances.

2. Encourages Efficient Energy Use:

Consumers and generators are incentivized to closely follow their


schedules, promoting more efficient use of power and minimizing
wastage. The UI mechanism penalizes erratic power use, which
can lead to inefficiencies and grid instability.

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3. Encourages Optimal Generation:

Power plants are incentivized to operate closer to their optimal


capacity since the capacity charge rewards them for maintaining
availability. This ensures that the grid has enough power to meet
demand, particularly during peak periods.

4. Promotes Fair Pricing:

Since the tariff is based on availability and actual usage, it


promotes fairer pricing for both producers and consumers. Those
who deviate from schedules or cause grid disturbances are
penalized, while those who maintain grid stability are rewarded.

5. Reduces the Need for Standby Generation:

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With more predictable demand and supply patterns, utilities can
reduce the reliance on standby or backup generation, leading to
overall cost savings in power generation and grid operation.

6. Incentivizes Renewable Energy:

ABT can be beneficial for integrating renewable energy sources


(like wind and solar) into the grid. Generators of renewable
energy are rewarded for providing power when the grid needs it
most, and the system helps balance intermittent renewable
generation.

Disadvantages of Availability-Based Tariff System:

1. Requires Accurate Forecasting:

To benefit from the ABT system, both consumers and generators


need accurate demand and generation forecasting. Deviations

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from the schedule can lead to significant penalties, which can be
challenging for industries with variable demand or renewable
energy generators affected by weather conditions.

2. Complexity in Implementation:

The ABT system requires sophisticated infrastructure, including


smart meters and real-time monitoring systems, to track and
measure deviations from scheduled generation or consumption.
This can be costly to implement, especially in regions with
underdeveloped electrical grids.

3. Penalizes Renewable Energy Producers:

Since renewable energy sources like wind and solar can be


unpredictable and vary depending on weather conditions,
renewable energy producers may face difficulties in adhering to
their generation schedules and could be penalized more
frequently under the ABT system.

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4. Increased Administrative Costs:

Managing the ABT system involves significant administrative


overhead, including monitoring deviations, calculating penalties,
and ensuring timely payments. This adds complexity to the
overall energy management process for both utilities and
consumers.

5. Unpredictable UI Charges:

The UI charge can fluctuate significantly depending on grid


conditions, which can make it difficult for consumers and
generators to predict their total electricity costs. This
unpredictability can lead to financial risks, especially for smaller
players in the market.

6. Not Suitable for Small Consumers:

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The ABT system is generally more applicable to large consumers
(like industries) and power producers. Small consumers, such as
households, typically do not have the resources to forecast their
energy usage or adjust to the penalties and incentives of the ABT
system.

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Reference

WWW.CHATGPT.COM

WWW.ELECTRICAL4U.COM

https://electrical-engineering-portal.com/download-center/books-and-
guides/power-substations/transformer-differential-protection-scheme

WWW.AXCONTROL.COM

37

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