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Basics of Tariff Calculation

This document discusses the calculation of levelized tariff for electricity generation from a thermal power plant. It provides the key inputs and steps to calculate the fixed cost per kWh, variable cost per kWh, and the overall levelized tariff. The fixed cost includes return on equity, interest on loans, interest on working capital, depreciation, and O&M expenses. The variable cost depends on the cost of primary and secondary fuels used. The levelized tariff is calculated as the total fixed cost plus total variable cost per kWh of electricity generated, which for the example thermal plant works out to Rs. 1.86/kWh.

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pintu ram
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222 views

Basics of Tariff Calculation

This document discusses the calculation of levelized tariff for electricity generation from a thermal power plant. It provides the key inputs and steps to calculate the fixed cost per kWh, variable cost per kWh, and the overall levelized tariff. The fixed cost includes return on equity, interest on loans, interest on working capital, depreciation, and O&M expenses. The variable cost depends on the cost of primary and secondary fuels used. The levelized tariff is calculated as the total fixed cost plus total variable cost per kWh of electricity generated, which for the example thermal plant works out to Rs. 1.86/kWh.

Uploaded by

pintu ram
Copyright
© © All Rights Reserved
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 27

Thermal Power Plant

Kwh (Unit) generated by a plant =

MW * 1000 * Days of operation * Hrs of


Operation * PLF * Availability Factor

MU (Million Units Generated) =

MW * 1000 * Days of operation * Hrs of


Operation * PLF * Availability Factor/1000000
How much generation is required to
generate 1MU of electricity.
(In terms of
Plant capacity and Time)
 Nominal Tariff – Tariff calculated for each year.
NT = FC+VC (The exercise done every as the
variable cost keeps on changing or tariff may be
increased using escalation factor )
 Discounted Tariff – Present value of future Tariffs.
Discount rates are notified by CERC.
 Levelised Tariff – Tariff for entire life of the plant
and in a single part tariff with no components. It is
weighted mean which weighted w. r. to
Discounting Factor ( Based on Discounting Rate).
 Capital Cost
 Debt Equity Ratio
 ROE
 Interest on Loan
 Working Capital

• 2 months of fuel cost


• Maintenance spares
• Receivable equivalent to two months
• O & M Expenses for one month
 Interest on Working Capital

 Depreciation Rate

 O & M Expenses
 Primary fuel

 Secondary Fuel
 PLF

 Plant Availability Factor

 Specific Oil Consumption

 Station Heat Rate

 Auxiliary Power Consumption


 Capacity of Plant = 1000 MW

 Capital Cost/MW = 4 Crores/MW

 Total Project Cost = 1000 * 4 = 4000 Crores

 Debt = 70% of 4000 Cr = 2800 Cr

 Equity = 30% of 4000 Cr = 1200 Cr


Energy Generated in MU with given data =

1000 * 1000 * 365 * 24 * 85% * 100 %

1000000

= 7446 MU ----------------------------------A
 ROE
15.5% of Equity Component
15.5% of 1200 Crore= 186 Cr. ----------------------1.

 Interest on Loan
10% of Loan Component
10% of 2800 Crore= 280 Cr. ------------------------2.
 Working Capital = 10% of total project cost

Working Capital = 10% of 4000 Cr = 400 Cr.

Interest on Working Capital = 10%

Interest component on W.C. = 10% of W.C.


= 40 Cr. -------------------3.
 Depreciation = 5.28% per yr. of project cost

Depreciation = 5.28% of 4000 Cr = 211.2 Cr. ------------4

 O & M Expenses = 10 Lakhs/MW


Total O&M Expenses = 10 * Plant Capacity
= 10 * 1000 =10000 Lakhs
= 100 Crores -----------------------5.
 Total Fixed Cost = 1+2+3+4+5

= ROE + Intt on Loan + Intt on W.C. + O&M


Expenses + Depriciation

= 186 + 280 + 40 + 211.2 + 100

= 817.2 Crores -------------------------------------6.


 Total Fixed Cost / Total Units generated

i.e. equation 6 /equation A

= 817.2 * 107 / 7446 * 106 Rs/Kwh

= 1.0975 Rs/Kwh --------------------------- 7.


 Specific Oil Consumption = 2ml/Kwh
= 2 * 10-3 L/Kwh

Cost of Oil (Secondary Fuel) =


Oil Consumption (ltr/ kwh) * Cost of oil/
Kiloltr * 10-3

= 2 * 10-3 * 10000 * 10-3 = 0.02 Rs/ Kwh ------8.


 Calorific Value of Oil = 10000 Kcal/Ltr
 Total oil consumption = 2 * 10-3 L/Kwh
Heat Contribution of oil =
Calorific Value of oil * Total oil consumption
(Kcal/Kwh)
=
10000 Kcal/Kwh* 2 * 10-3 L/Kwh =20 Kcal/Kwh
-------------------------9
 Station Heat Rate =

Heat Contribution from Oil + Heat Contribution


from Coal

2425 = x + 20
X = 2405 Kcal/Kwh (Heat Contribution
Required from Coal)
 Calorific Value of Coal = 4000 Kcal/Kg

 Total Coal Requirement for 1 Kwh of electricity


generation =
Total heat required by coal for 1 Kwh generation
(Kcal/Kwh) (Eqn 9)
Calorific Value of Coal (Kcal/ Kg)

= 2405/4000 Kg/Kwh= 0.60125 Kg/Kwh


 So
Coal Required for 1 Kwh Generation = 0.60125 Kg

 Unit price of Coal = Rs 1000/ Tonne


 Cost of Coal Required for Generating 1 Kwh
of Electricity =
(0.60125 /1000) Tonne/ Kwh * 1000 Rs/Tonne =

0.60125 Rs/kwh --------------------------------10.


 V.C. = Cost of Oil + Cost of Coal

V.C = Equation 8 + Equation 10

V.C. = 0.02 +0.60125 = 0.62125 Rs/ Kwh


-------11.
 Auxiliary Consumption = 7.5%

 This power is not available for sale and the cost


of the generation of this power has to be loaded
on the power which is sold in market so…….

 Variable Cost = Equation 11/ (1-7.5%)


= 0.62125/(1-7.5%) = 0.67162 Rs/ Kwh---12.
 RS. 1.0975
 Fixed Cost = ------------------- = Rs. 1.186
 1- 0.075
= Total F.C/ Unit + Total V.C./Unit

= Equation 7 + Equation 12

= 1.186+ 0.67125

= 1.857 Rs/KWh =Rs. 1.86/KWh


Thank You

For Patient Listening……….

Queries Are Welcomed!!!!!!

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