Concept of Capacity Index

The concept of Capacity Index ensures use of storage type hydro generating stations during peak hours and discourages spillage of water in case of run of the river hydro generating stations.

The notional variable charge for the hydro generating station is the average least variable cost of the thermal generating stations in the region. This facilitates full despatch of hydro generating stations in merit order.

Under the current tariff system, actual operation of the plant is necessary to recover a capacity charge, whereas under the previous tariff, availability of capacity was used to determine the capacity charge. This meant that, under the previous system, the capacity charge recovered by a power generating station was tied to the amount of capacity available rather than based on the
actual operation of the plant. As such, even if there was insufficient water to enable a power station to operate at maximum capacity, the power station could still recover a capacity charge commensurate with the amount of energy that it would have been able to generate through operation had there been a sufficient water supply.

With NAPAF being used to determine the capacity charge under the current system, availability of capacity will no longer have the same impact on capacity charge. Instead, actual production will affect the capacity charge.

The Commission has decided to implement the concept of Capacity Index in place of 'Availability'. The basic criteria for Capacity index are :
a) Water spillage must be minimized
b) As far as possible, the peak capAvailability of a hydro station for any period shall be based on the
Capacity Index (CI) declared for the day. It is defined as follows :
Declared Capacity (MW)
Capacity Index = ------------------------------------------------ x 100
Maximum Available Capacity (MW)acity of each plant must be available when most required by the system.

http://cercind.gov.in/2612/operational.pdf

LNG Vs RIL - A good article

Poor infrastructure -- that bane of existence for most Indians and perpetually the weakest link in the country's chain of progress and development -- looks all set to also cut short its honeymoon with natural gas.

While the past year has been kind to the country's gas consumers, thanks to major new pipeline flows from Reliance's D6 block at agreeable rates and spot LNG prices falling back to the ground from their brief perch above $20/MMBtu in the winter of 2008/2009, disaster might be lurking just round the corner.

Why, you would ask, should the country be wanting for gas in today's global supply glut? The answer is simple: its pipeline network is maxed out.

Sure, some new transmission capacity will come up in 2011 with the addition of compressors and a parallel pipeline along the Hazira-Vijaipur-Jagdishpur arterial route serving the west and the north, but all of that is expected to be swallowed up by incremental flows from D6.

And sure, there is lots of new transmission capacity planned with billions of dollars in investment over the coming years. But nobody is holding his breath for it, what with the lack of clear policy on a national gas grid, in addition to regulatory opacity and financing hurdles.

D6 output, currently restricted to around 60 million cu m/day, is only waiting for next year's transmission capacity creep to leap to 90 or even 120 million cu m/day, according to sources. Yes, that's far higher than the 80 million cu m/day "peak" rate Reliance has been talking about.

There is talk of a game plan by the producer to flood and capture the market with its gas, even if that means a reduced plateau period and faster reservoir depletion. The government mandating fertilizer producers to move away from imported LNG to D6 gas helps, no doubt.

News reports mid-March of India courting its old friend Qatar and asking for up to 4 million mt/year of additional term supplies by 2013 over the current 7.5 million mt/year look very well on paper. The reality on the ground is there will be no pipeline capacity to evacuate that amount of gas.

Certainly not if Reliance gas continues to be available until 2014 for under $7/MMBtu at customer gate. Can term LNG, benchmarked to world crude prices, compete with freight, import taxes and regas costs stacked on?

No matter how much surplus Qatar has. Will it sell term cargoes at $5/MMBtu FOB to enable importers to compete with D6, notwithstanding the songs of friendship sung during oil minister Attiyah's March visit to India?

Probably not. So here's what we might see 5-6 years down the line: D6 is exhausted, there are no major new domestic gas sources on the horizon, the country's LNG importers have been all but snuffed out, and new import terminal projects have fallen by the wayside. Worse, world oil and gas markets have resumed their ascent to historic highs, while India is still struggling to accept market pricing for gas. Scary. And potentially disastrous.

The author is Asia News Director – Oil & Gas, Platts, a McGraw-Hill company. 

Vandana Hari article from Business standard