A Project on

Improving Marginal Contribution

By
K.V.RAO
003725
AGM(EMD)
NTPC Simhadri

Page 1 of 28
 CONTENTS
1. ABSTRACT ....................................................................................................... 4
1.1 Objectives ............................................................................................. 4
1.2 Methodology ........................................................................................ 4
1.3 Deliverables.......................................................................................... 4
2. EXECUTIVE SUMMARY .............................................................................. 5
3. A VIEW ON MARGINAL CONTRIBUTION IN NTPC ......................... 7
4. STUDY OF MARGINAL CONTRIBUTION MECHANICS................. 10
4.1 ECR normative .................................................................................. 10
4.2 Marginal Contribution ..................................................................... 10
4.3 Influence of individual elements on marginal contribution ....... 12
4.4 Impact of Parameter variation on HR............................................ 15
5. STRATEGIES FOR IMPROVING MARGINAL CONTRIBUTION ... 16
5.1 Develop strategies for managing individual elements ................. 16
5.1.1 Internal Factors management strategies:.................................... 16
5.1.2 External Factors management strategies:................................... 16
6. SENSITIVITY ANALYSIS ............................................................................ 17
6.1 Sensitivity comparison ..................................................................... 18
6.2 Sensitivity with APC ........................................................................ 19
6.3 Calculated Tables for “What If “ Scenarios:................................ 19
6.4 Coal Landed cost optimization (..................................................... 20
6.4.1 Coal Source Optimization to minimize ECR actual ................ 20
6.4.2 Coal Source Optimization to achieve a given ECR actual: .... 22
7. MC VARIATION WITH % LOADING ..................................................... 24
7.1 HR & APC normative variation with % Loading as per CERC 24
7.2 MC with load at corrected normative APC for various HRs +ve, -ve
25
7.3 MC with load at corrected normative HR with various APC +ve, -
ve 26

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 7.4 MC with load at corrected normative HR & APC for different %
variation. (HR & APC) .............................................................................. 27
8. CONCLUSIONS ............................................................................................. 28

TABLES
Table 1: NTPC Station wise Marginal contribution ................................................................................ 8
Table 2: Profitability with MC & FC......................................................................................................... 9
Table 3: Impact of Parameter variation on HR ...................................................................................... 15
Table 4: Impact of Equipment deterioration on HR .............................................................................. 15
Table 5: Sensitivity of ECR actual with variation of HR, APC and Coal Price:
(yellow colour indicated generally found variation in the parameters) ............................................... 18
Table 6: what-if-analysis of ECR with reference to change in Heat Rate and APC for a coal price
....................................................................................................................................................................... 19
Table 7: what-if-analysis of ECR actual with variation in Coal price for a given HR & APC. ...... 20
Table 8: Coal Source Optimization to minimize ECR actual ............................................................... 21
Table 9: Coal Source Optimization to achieve a given ECR actual .................................................... 23
Table 11: MC with load at corrected normative APC for various HRs +ve, -ve ............................... 25
Table 12: MC with load at corrected normative HR with various APC +ve, -ve ............................. 26
Table 13: MC with load at corrected normative HR & APC for different % variation. (HR & APC)
....................................................................................................................................................................... 27

FIGURES/ PLOTS
Figure 1: ECRact with Coal Price (Rs./1000kcal) (with constant HR & APC) ................................ 12
Figure 2: ECRact vs APC (for various HR and constant Coal Price/kCal) ...................................... 13
Figure 3: ECRact vs HR (for various APC and constant Coal Price/kCal) ....................................... 13
Figure 4: Comparison of sensitivity of HR, APC, Coal price .............................................................. 17
Figure 5: Coal Source Optimization to minimize ECR actual ......................................................... 21
Figure 6: Coal Source Optimization to achieve a given ECR actual ................................................... 23
Figure 7: HR & APC normative variation with % Loading as per CERC............................................ 24

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 1. ABSTRACT

1.1 Objectives

• Study of marginal contribution mechanics

• Influence of individual elements on marginal contribution

• Develop strategies for managing individual elements

• To visualize “ what if “ scenario of marginal contribution Vis a Vis individual

influencing elements

1.2 Methodology

• Identifying key elements effecting marginal contribution

• Study trend of Simhadri / trends of stations

• Analysis of individual variable effects

• Deployment of soft skills

1.3 Deliverables

• Enable understanding of marginal contribution

• Bringing cognizance to available strategies and implement modern methodologies for

optimization

• “What if “ scenario tool for development of a practical strategy

• Enabling stations to ensure positive marginal contribution in a year’s time

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 2. EXECUTIVE SUMMARY

Marginal Contribution is the difference between Normative Energy Charge Rate and Actual
Energy Charge Rate. This should be positive for successful operation of the plant. Otherwise
it will eat into the fixed cost recovered amount in the present tariff regime.
Marginal Contribution arises only when station gets schedule and produces power.
For achieving positive marginal contribution one has to strategize on following factors
1. Running the unit at better than normative Heat Rate and Auxiliary power
consumption, with minimum start up instances
2. Sourcing the coal with minimum landed cost for ensuring schedule
3. Optimizing the coal stock
4. Preservation of stocked Coal GCV
5. Ensuring the weight measurement of coal
6. Ensuring the correct sampling and testing of GCV

1. Point number one is much understood and improvement measures have been
practiced for over four decades the effort to sustain the efforts should be kept on day to
day basis through Daily planning meeting review.
Ensuring operating parameters, maintaining Equipment health and chemical
parameters, optimisation of auxiliaries at part loads, ensuring leak free systems (water
& steam) will bring out best heat rate and least auxiliary power consumption.

2. Sourcing of coal with minimum landed cost ensures good schedule as it improves
merit order and gives us marginal contribution as higher loading factors improves
Heat rate and APC.
3. Though norms exists for coal stock, optimisation (reduced stock level from normative)
of the stock gives security for DC as well as reduces losses in the form of GCV loss in
storage, reduced power consumption in the form of stacking and reclaiming etc.

4. Proper preservation of stacked coal by carpeting, covering etc. will protect its GCV
from deterioration.

5. Periodic calibration of weigh bridges at strategic locations will reduce losses

attributable to weight.

6. Ensuring Proper sampling and determination of GCV will bring out discrepancies in
grade and rate for the coal supplied
The points related to weighing and sampling for GCV etc. are well emphasised in the recent
past with serious attempts to streamline them for better precision, these attempts should
continue in the light of Coal cost being the major contributor for deciding Energy Charge
rate.

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The efforts to minimise landed cost of coal results in better merit order rating and the
efforts to run the units better than normative parameters ensures positive marginal
contribution.
This project brings out the influence of different factors (internal and external) on marginal
contribution and shows the soft methodologies (look up tables and What if scenario
simulations) for optimisation of coal landed cost, and the sensitivity of Heat rate and APC on
MC

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 3. A VIEW ON MARGINAL CONTRIBUTION IN NTPC

In the current CERC regulated tariff regime a station has to achieve 85% declared capability
to get full fixed cost recovery, this mean the station to have declared capability on average
85% when calculated for the year and also produce power as declared when schedule, is
given, otherwise station has to pay lot of UI (unscheduled interchange) and if this is frequent
it is stamped as gaming.
The station will get return for its existence and production of power in two ways
1. Fixed cost
2. ECR ( Energy Charge Rate)

The first one will come out of DC and the second one will come out of actual production
The topic of our project is the second one which produces marginal contribution.
As per CERC norms every station ( and in turn stages/units) have been specified certain
parameters for calculating their ECR i.e. Unit Heat rate(HR), specific oil consumption and
Auxiliary power consumption(APC) along with landed cost of coal and Gross calorific value
as received.
Marginal Contribution (MC)
The difference between normative ECR calculated with CERC normative HR, APC etc. and
actual ECR calculated with achieved Unit HR, Sp. Oil Consumption and APC gives
Marginal Contribution.

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 NTPC Performance data
Normative Fin Yr 16-17 Fin Year 17-18 (till Feb '18)
Actual HR CONTR Actual HR CONTR** (Rs
Norm APC APC(%) APC(%)
STATION Norm HR (Kcal/Kwh) (Rs in (Kcal/Kwh) in crores) Feb
(%)
LF corrected crores) LF corrected '18
SINGRAULI 2413 6.88 2448 7.82 -25.0 2480 7.67 -2.37
RIHAND STG-I 2335 7.75 2397 8.41 -22.7 2377 7.73 5.88
RIHAND STG-II 2375 5.75 2391 6.23 2.8 2371 5.85 12.49
RIHAND STG-III 2402 5.75 2365 5.54 14.5 2357 5.44 19.03
UNCHAHAR STG-I 2450 9 2468 9.17 -4.8 2480 9.40 -4.44
UNCHAHAR STG-II 2450 9 2379 9.00 2.4 2399 9.25 -0.31
UNCHAHAR STG-III 2450 9 2350 8.83 2.7 2364 9.12 0.58
UNCHAHAR STG-IV 2347 5.75 6.89 -4.20
TANDA 2750 12 2667 11.47 -2.5 2645 11.45 7.97
BADARPUR 2750 8.5 2568 11.00 -2.3 2578 9.95 3.11
DADRI COAL STG-I 2450 8.5 2399 8.53 0.8 2449 8.45 -30.73
DADRI COAL STG-II 2378 5.25 2388 4.95 -11.8 2416 5.05 -52.66
MOUDA STG-I 2401 5.75 2389 6.70 -19.9 2380 6.61 -46.48
MOUDA STG-II 2229 5.75 7.35 -32.81
SOLAPUR-I 9.08 -30.08
KORBA STG-I+II 2396 6.68 2445 6.35 10.0 2429 6.13 12.87
KORBA STG-III 2391 5.75 2386 5.73 4.8 2382 5.55 3.55
VINDHYACHAL STG-I 2450 9 2509 9.15 -20.2 2499 8.56 10.42

VINDHYACHAL STG-II 2375 5.75 2431 6.33 -27.5 2412 5.69 5.79

VINDHYACHAL STG-III 2375 5.75 2399 5.69 -8.6 2362 5.38 10.13
VINDHYACHAL STG-
IV 2375 5.75 2400 5.87 -15.7 2351 5.43 10.88

VINDHYACHAL STG-V 2351 5.75 2376 5.58 -7.0 2331 5.49 9.33
SIPAT STG-I 2306 5.75 2273 5.19 34.5 2245 5.20 32.09
SIPAT STG-II
RAMAGUNDAM STG- 2375 5.75 2317 5.40 14.8 2297 5.64 12.26
I+II 2396 6.68 2452 6.44 46.0 2449 6.42 41.42
RAMAGUNDAM STG-
III 2375 5.75 2324 5.31 7.7 2375 4.89 12.95
SIMHADRI STG-I 2375 5.25 2398 5.42 -18.2 2401 6.06 -44.30
SIMHADRI STG-II 2380 5.25 2371 5.55 -1.0 2389 5.98 -42.54
KUDGI STG-I 2211 5.75 6.75 -4.81
FARAKKA STG-I+II 2403 6.47 2483 7.54 -92.6 2466 7.37 -46.70
FARAKKA STG-III 2437 5.75 2389 6.22 -1.8 2469 6.50 -14.00
KAHALGAON STG-I 2450 9 2483 9.25 -3.2 2486 9.22 -1.52
KAHALGAON STG-II 2425 5.75 2404 5.45 22.7 2421 5.66 11.48
BARH STG-II 2248 5.75 2354 5.75 -146.9 2267 5.11 -59.11
TALCHER (KH) STG-I 2375 5.75 2531 7.80 -85.2 2476 8.06 -50.99
TALCHER (KH) STG-II 2375 5.75 2440 5.70 -85.2 2413 5.66 4.77
TALCHER(OLD) 2850 10.5 2632 10.41 4.3 2804 10.34 3.75
BONGAIGAON 2362 9 8.79 -4.0 6.59 -12.78
NTPC COAL 2400 6.56 6.68 -440.7 6.58 -245.87
Value higher than Normative is in red colour
** figure till Jan'18

Table 1: NTPC Station wise Marginal contribution

Above shown table gives a glimpse of Marginal contribution of all NTPC stations for FY 16-
17 and FY 17-18(till feb). It may be observed that NTPC has made Negative marginal
contribution to the tune of Rs.440 crores during FY 16-17 and of Rs.246 crores during 17-18
(till feb).

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And also, it may be observed that Simhadri also incurred loss of Rs.19 crores and Rs. 86
crores respectively during FY 16-17 and FY 17-18(till feb).
If MC is positive we get profit through production and if this is negative we will get operating
loss.
Suppose if we get full FC recovery and positive MC we are on the right path, but if full FC is
recovered and MC is negative it will take away the money earned n FC.

Poor Excellent

Fixed
Cost(FC) Worst Bad
RECOVERY

Marginal Contribution(MC)

Table 2: Profitability with MC & FC

Every station has 1) internal factors (HR, APC) and 2) External factors (Coal cost and GCV)

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 4. STUDY OF MARGINAL CONTRIBUTION MECHANICS

CERC regulations 2014-19 formula for calculating ECR

(GHR − SFC * CVSF .) * ( LPPF / CVPF .)

ECR =
(1 − APC )
where,
ECR = Energy charge rate, in Rs./kWh sent out.
GHR = Gross station heat rate, in kCal/kWh.
LPPF = Weighted average landed price of primary fuel, in Rs./kWh
CVPF = Gross calorific value of primary fuel as fired, in kCal/kWh
SFC = Specific fuel oil consumption, in ml/kWh.
CVSF = Calorific value of secondary fuel, in kCal/ml.
APC = auxiliary energy consumption in %.

4.1 ECR normative

(GHRn − SFCn * CVSF .) * ( LPPF . / CVPF .) (2375 − 0.5 * CVSF .) * ( LPPF . / CVPF .)
ECRn = =
(1 − APCn ) (1 − 5.25.%)

4.2 Marginal Contribution

Marginal contribution is gain or loss of a power plant’s ECR over the normative
eligible price allowed by CERC.

MC =ECRn−ECRa
If the Marginal contribution is +ve, we can infer that the power plant is making profit
and if it is –ve, we can infer that the power plant is making loss in terms of ECR.

Since marginal contribution whether positive or negative depends on actual operating

parameters and normative parameters station / company as a whole has to strive to
achieve performance parameters better than normative at all loads considering
compensation given by the regulator for part loads.

As we have seen in the history of power generation various tariffs have been
advocated depending up on the phase of the industry in India and the world and the

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 market mechanisms taking shape and with the evolution of the industry. We have
evolved from some how we produce power to we produce green power and
economically affordable power with lots of emphasis on clean power, 100% utilisation
of ash, and efficient operations etc.

In this backdrop it is very pertinent that to survive and sustain we have to find ways
and means to achieve positive marginal contribution with creativity, leap frog
innovation along with cognisance to environmental and social requirements.

The major factors influencing marginal contribution are

1. Landed cost of coal

2. GCV
3. Unit Heat rate
4. Unit Auxiliary consumption
5. Specific Oil consumption

Coal Landed cost varies from Pit head to Rail /ship fed stations giving edge to pit head
stations. Though there are weighbridge issues, sampling and GCV measuring issues which
have been attacked with approaches like periodic weighbridge calibration, supervision of
sampling by senior executives, third party sampling etc. and expected to alleviate all these
concerns to a larger extent and will only have a considerable impact by deployment of fully
automated and reliable systems.

Unit performance at different loads as per schedule has to be tuned to better normative
parameters to achieve positive marginal contribution, this depends on effectiveness of
overhauls, maintenance of healthy systems, operator confidence, stability of the unit with
reduced auxiliaries at part loads, monitoring of system parameters and chemistry.

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4.3 Influence of individual elements on marginal contribution

For getting MC we have to produce power for which schedule from LDC is must, this is
ensured by competitive merit order in ECR.
The main important and high impact parameter for minimising ECR is Landed cost of coal
per 1000 Kcal. With the graph presented it can be seen clearly that ECR (actual) varies
sharply with landed cost of coal / 1000 Kcal. and hence determining factor for occupying a
merit order rating in a region or on all India basis which in turn decides the schedule offered
by load dispatch centre.

ECRact with Coal Price (Rs./1000kcal)

(with constant HR & APC)
500
450
400
350
300
ECR actual
250
(paise/kwh)
200
150
100
50
-
0.70 0.85 1.00 1.15 1.30 1.45 1.60 1.75
Sp.Coal price (Rs./1000KcaL)

Figure 1: ECRact with Coal Price (Rs./1000kcal) (with constant HR & APC)

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 ECRact vs APC
(for various HR and constant Coal Price/kCal)
320
E
310
C
R 300
2,225
290
A 2,300
280
c
2,375
t 270
u 2,450
260
a 2,525
l 250
4.75 5.00 5.25 5.50 5.75 6.00 6.25 6.50 6.75 7.00
APC

Figure 2: ECRact vs APC (for various HR and constant Coal Price/kCal)

ECRact vs HR
(for various APC and constant Coal Price/kCal)
350

340

330
E 4.75
C 320 5.00
R
310 5.25
A 5.50
300
c 5.75
t 290
6.00
u
a 280 6.25
l 270 6.50
6.75
260
7.00
250
2,225 2,300 2,375 2,450 2,525 2,600 2,675 2,750
HR

Figure 3: ECRact vs HR (for various APC and constant Coal Price/kCal)

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The effect of landed cost of coal, Heat rate and APC on ECR is presented above for various
situations and in simple manner shows the effect of variation one parameter with others.

Though a unit can achieve good DC keeping ECR competitive but cannot earn any profit
through positive MC if the ECR actual is not better than ECR Normative.

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4.4 Impact of Parameter variation on HR

Parameter variation on HR for various sizes of Generators is given below.

Table 3: Impact of Parameter variation on HR

Equipment deterioration on HR for various sizes of Generators is given below.

Table 4: Impact of Equipment deterioration on HR

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 5. STRATEGIES FOR IMPROVING MARGINAL
CONTRIBUTION

5.1 Develop strategies for managing individual elements

5.1.1 Internal Factors management strategies:
A) Unit Heat rate
a. Maintaining PG tested efficiencies for Boiler, Turbine cylinders,
condenser, CT etc.
b. Completely arresting leakages in water and steam circuits
c. maintaining water & steam chemistry
d. Equipment health monitoring and maintaining rated performance
e. Attending to recirculation valves passing, attemporation valves passing,
high energy drains passing, air preheater seals maintenance, flue gas
ducts air ingress, bottom ash seal trough maintenance, monitoring and
attending to mill grinding abnormalities, proper oxygen percentage in
flue gas etc.
B) Unit Auxiliary consumption
a. Running designated number of drives such as Mills, ECW, ARCW,
CEP, BCW, BFPs etc. in related to load
b. Monitoring energy consumption of various equipment such as Mils,
Draft system etc. and attending to cause of energy excursions
c. Optimising common auxiliaries such as ash evacuation, coal handling
plant for minimising auxiliary consumption
d. Using energy efficient and automatic lighting management systems
e. VFD drives for major load varying equipment like FD fans, CEP pumps
etc.
C) Specific Oil consumption
a. Minimising unplanned outages
b. Minimising start up and initial loading delays after synchronisation
c. Minimising partial loading
d. Efficient and stable firing environment in boilers

5.1.2 External Factors management strategies:

A) Landed cost of coal
a. Balanced sourcing of coal mix
b. Coal weighing systems
c. Coal stack yard maintenance
B) GCV
a. Sampling and GCV measuring systems
b. Automatic coal GCV measurement
c. Automatic calibration and cross checking of weigh bridges at both ends

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 6. SENSITIVITY ANALYSIS

ECR and Marginal contribution are mainly depending upon Landed cost of coal,Heat
coal, Rate,
Coal Price and APC. In this chapter, the sensitivity of ECR and MC with variation of HR,
Coal Price and APC is studied and results are depicted.

Comparison of sensitivity of HR, APC, Coal price

with ECR actual
550 500
500 450
450 400
400 350
350 300
ECRact
300 250
(paise/kwh) ECRa with HR
250 200
ECRa with APC
200 150
ECRa with Coal Price
150 100
100 50
50 -

% variation of HR, APC, Coal Price

Figure 4:
4 Comparison of sensitivity of HR, APC, Coal price

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6.1 Sensitivity comparison

Sensitivity of ECR actual with variation of HR, APC and Coal Price are calculated and
compared as tabulated below.

Variation ECRa with HR ECRa with APC ECRa with Coal Price

50% 144 (1188 ) 280 (2.63 ) 144 (0.58 )

55% 158 (1306 ) 281 (2.89 ) 158 (0.63 )

60% 172 (1425 ) 281 (3.15 ) 173 (0.69 )

65% 187 (1544 ) 282 (3.41 ) 187 (0.75 )

70% 201 (1663 ) 283 (3.68 ) 201 (0.81 )

75% 216 (1781 ) 284 (3.94 ) 216 (0.86 )

80% 230 (1900 ) 285 (4.2 ) 230 (0.92 )

85% 244 (2019 ) 285 (4.46 ) 245 (0.98 )

90% 259 (2138 ) 286 (4.73 ) 259 (1.04 )

95% 273 (2256 ) 287 (4.99 ) 273 (1.09 )

100% 288 (2375 ) 288 (5.25 ) 288 (1.15 )

105% 302 (2494 ) 288 (5.51 ) 302 (1.21 )

110% 317 (2613 ) 289 (5.78 ) 316 (1.27 )

115% 331 (2731 ) 290 (6.04 ) 331 (1.32 )

120% 345 (2850 ) 291 (6.3 ) 345 (1.38 )

125% 360 (2969 ) 292 (6.56 ) 360 (1.44 )

130% 374 (3088 ) 293 (6.83 ) 374 (1.5 )

135% 389 (3206 ) 293 (7.09 ) 388 (1.55 )

140% 403 (3325 ) 294 (7.35 ) 403 (1.61 )

145% 417 (3444 ) 295 (7.61 ) 417 (1.67 )

150% 432 (3563 ) 296 (7.88 ) 432 (1.73 )

Table 5: Sensitivity of ECR actual with variation of HR, APC and Coal Price:
(yellow colour indicated generally found variation in the parameters)

It is observed that ECR actual is more sensitive with variation in HR and Coal price and is
less sensitive with variation with APC.

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And also, it is observed that sensitivity of HR and Coal Price is mostly same, as both are
directly proportionate to ECR actual. It may be noted here that Oil HR (=SFC*CVSF) is
much smaller to Gross HR and hence can be treated as negligible.

6.2 Sensitivity with APC

Sensitivity of ECR actual with variation of HR and APC and constant Coal Price is
calculated and compared as tabulated above.

6.3 Calculated Tables for “What If “ Scenarios:

This table gives what-if-analysis of ECR with reference to change in Heat Rate and APC for a
coal price.

Sensitivity Analysis of ECR-act with HR & APC (with

constant Coal Price of 1.15 Rs./1000 kCal)
HR (kCal/kWh)

2,225 2,300 2,375 2,450 2,525 2,600 2,675 2,750

4.75 269 278 287 296 305 314 323 332

5.00 269 278 287 297 306 315 324 333

5.25 270 279 288 297 306 316 325 334

5.50 271 280 289 298 307 316 326 335

5.75 271 281 290 299 308 317 326 336

APC
6.00 272 281 290 300 309 318 327 336

6.25 273 282 291 300 310 319 328 337

6.50 274 283 292 301 311 320 329 338

6.75 274 284 293 302 311 321 330 339

7.00 275 284 294 303 312 321 331 340

Table 6: what-if-analysis of ECR with reference to change in Heat Rate and APC for a coal price

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The following table gives what-if-analysis of ECR actual with variation in Coal price for a
given HR & APC.

Sensitivity Analysis of ECRact with Coal Price (Rs./kcal)

(with Normative HR & APC)
Sp.Coal price (Rs./1000KcaL)
0.70 0.85 1.00 1.15 1.30 1.45 1.60 1.75
177 215 253 291 329 367 405 443

Table 7: what-if-analysis of ECR actual with variation in Coal price for a given HR & APC.

6.4 Coal Landed cost optimization (COAL SOURCE OPTIMIZATION)

6.4.1 Coal Source Optimization to minimize ECR actual
An EXCEL application with Solver tool has been developed to optimize coal schedule
from various sources, subject to the following constraints so as to minimize ECR actual.
Input (highlighted in Yellow color):
1. Total coal requirement for plant/annum
2. Coal prices for various sources in Rs./1000kcal

Output (highlighted in Green color):

1. Optimize coal schedule from various sources
2. Allocate coal schedule based on ranking of coal price in Rs./1000kcal
3. Minimize Avg. Weighted Coal price and thereby minimize ECR actual
4. Meet coal requirement corresponding to Load Factor of Generator.
Constraints:
1. Subject to FSA limits of minimum & maximum coal supply agreements and other
constraints.

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 LF (Generated/Rated) MW/MW 50%
Total requirement of coal @500MW/unit LMT/a 52.50

Avg. Coal price

Rank of Coal Price FSA limit FSA limit Coal schedule
Source average (Rs./1000
(Rs./1000kCal) (Min) (Max) Optimized
Kcal)
TAL 0.74 1 10.00 40.00 10.00
CCL 1.13 3 5.00 60.00 5.00
IB 0.82 2 40.00 100.00 40.00
ECL 1.32 4 5.00 100.00 5.00
Total 60.00 300.00 60.00
Avg. Weighted Coal price (Rs./1000Kcal) 0.87

Description Unit Normative Actual

SFC (Sp.Oil consumption) mL/kWh 0.50 0.50
CVSF (GCV of oil) kCal/L 9,526
Heat Rate of OIL kCal/kWh 4.76
Gross HR kCal/kWh 2,375 2,372
Coal Heat Rate kCal/kWh 2,367
APC % 5.25 6.42
ECR norm piase/kWh 218
ECR actual piase/kWh 221

Table 8: Coal Source Optimization to minimize ECR actual

Coal Rate (Rs./1000Kcal) Coal schedule

1.50 (optimized)
1.00 5.00 10.00
Avg. Coal price TAL
average
0.50 (Rs./1000 5.00 CCL
Kcal) IB
-
40.00 ECL
TAL CCL IB ECL

Figure 5: Coal Source Optimization to minimize ECR actual

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6.4.2 Coal Source Optimization to achieve a given ECR actual:
An EXCEL application with Solver tool has been developed to optimize coal schedule
from various sources, so as to achieve a given value of ECR actual.
Input (highlighted in Yellow color):
1. ECR actual to be achieved.
2. HR & APC actual
3. Total coal requirement for plant/annum
4. Coal prices for various sources in Rs./1000kcal

Output (highlighted in Green color):

1. Optimized coal schedule from various sources
2. Meet coal requirement corresponding to Load Factor of Generator.
3. Allocate coal schedule based on ranking of coal price in Rs./1000kcal.
4. ECR actual minimum to be achieved.
Constraints:
1. ECR actual to be achieved
2. Subject to FSA limits of minimum & maximum coal supply agreements and other
constraints.

Page 22 of 28
Description Unit Normative Actual
ECR actual piase/kWh Desired 200
SFC mL/kWh 0.50 0.50
CVSF (GCV of oil) kCal/L 9,526
Heat Rate of OIL kCal/kWh 4.76
Gross HR kCal/kWh 2,375 2,372
Coal Heat Rate kCal/kWh 2,367
APC % 5.25 6.42
Sp.Coal price Rs./1000KcaL 0.79
LF (Generated/Rated) MW/MW 100%

Total requirement of coal @500MW/unit LMT/a 105.00

Avg. Coal price average

Rank of Coal Price Coal schedule
Source (Rs./1000 FSA limit (Min) FSA limit (Max)
(Rs./1000kCal) Optimized
Kcal)
TAL 0.74 1 10.00 300.00 99.32
CCL 1.13 3 5.00 60.00 5.00
IB 0.82 2 40.00 50.00 40.00
ECL 1.32 4 5.00 50.00 5.00
Total 60.00 460.00 149.32
Avg.Weighted Coal price (Rs./1000Kcal) 0.79

Description Unit Normative Actual

SFC (Sp.Oil consumption) mL/kWh 0.50 0.50
CVSF (GCV of oil) kCal/L 9,526
Heat Rate of OIL kCal/kWh 4.76
Gross HR kCal/kWh 2,375 2,372
Coal Heat Rate kCal/kWh 2,367
APC % 5.25 6.42
ECR norm piase/kWh 198
ECR actual piase/kWh 200

Table 9: Coal Source Optimization to achieve a given ECR actual

Coal Rate (Rs./1000Kcal) Coal schedule

1.40 (optimized)
1.20
1.00 5.00
0.80 Avg. Coal price TAL
0.60 average 40.00
(Rs./1000 CCL
0.40
Kcal) IB
0.20 5.00 99.32
- ECL
TAL CCL IB ECL

Figure 6: Coal Source Optimization to achieve a given ECR actual

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 7. MC VARIATION WITH % LOADING

7.1 HR & APC normative variation with % Loading as per CERC

% loading % Increase in SHR HRnc % increase in APC APCnc

85-100 NIL 2,375 NIL 5.25

75-84.99 2.25 2,428 0.35 5.27

65-74.99 4.00 2,470 0.65 5.28

55-64.99 6.00 2,518 1.00 5.30

2,550 5.31
2,518
5.30
2,500 5.29
2,470
5.28
2,450 2,428 5.27
HRn
5.30 5.26
2,400 APCnc
2,375 5.28 5.25
5.27
2,350 5.24
5.25
5.23
2,300 5.22
85-100 75-84.99 65-74.99 55-64.99

Figure 7: HR & APC normative variation with % Loading as per CERC

With above two inputs, Marginal contribution with various % loading is computed and depicted in
the following graphs.

Page 24 of 28
 7.2 MC with load at corrected normative APC for various HRs +ve, -ve

% variation in HRn
-15% -10% -5% 0% 5% 10% 15%
0 45.86 30.57 15.29 - (15.29) (30.57) (45.86)
10 45.86 30.57 15.29 - (15.29) (30.57) (45.86)
20 45.86 30.57 15.29 - (15.29) (30.57) (45.86)
30 45.86 30.57 15.29 - (15.29) (30.57) (45.86)
40 45.86 30.57 15.29 - (15.29) (30.57) (45.86)
%Loadin
50 45.86 30.57 15.29 - (15.29) (30.57) (45.86)
g
60 45.86 30.57 15.29 - (15.29) (30.57) (45.86)
70 44.98 29.99 14.99 - (14.99) (29.99) (44.98)
80 44.22 29.48 14.74 - (14.74) (29.48) (44.22)
90 43.24 28.83 14.41 - (14.41) (28.83) (43.24)
100 43.24 28.83 14.41 - (14.41) (28.83) (43.24)

MC with load
at corrected normative APC for various HRs +ve, -
ve
60.00

40.00

-15%
20.00
-10%
-5%
-
5%
0 10 20 30 40 50 60 70 80 90 100
10%
-20.00
15%

-40.00

-60.00

Table 10: MC with load at corrected normative APC for various HRs +ve, -ve

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 7.3 MC with load at corrected normative HR with various APC +ve, -
ve

% variation in APCn
-15% -10% -5% 0% 5% 10% 15%
0 2.54 1.70 0.85 - (0.86) (1.72) (2.58)
10 2.54 1.70 0.85 - (0.86) (1.72) (2.58)
20 2.54 1.70 0.85 - (0.86) (1.72) (2.58)
30 2.54 1.70 0.85 - (0.86) (1.72) (2.58)
40 2.54 1.70 0.85 - (0.86) (1.72) (2.58)
%Loading 50 2.54 1.70 0.85 - (0.86) (1.72) (2.58)
60 2.54 1.70 0.85 - (0.86) (1.72) (2.58)
70 2.48 1.66 0.83 - (0.84) (1.68) (2.53)
80 2.43 1.63 0.82 - (0.82) (1.65) (2.48)
90 2.37 1.59 0.79 - (0.80) (1.60) (2.41)
100 2.37 1.59 0.79 - (0.80) (1.60) (2.41)

MC with load
at corrected normative HR with various APC +VE, -
VE
3.00

2.00

-15%
1.00
-10%
-5%
-
5%
0 10 20 30 40 50 60 70 80 90 100
10%
-1.00
15%

-2.00

-3.00

Table 11: MC with load at corrected normative HR with various APC +ve, -ve

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 7.4 MC with load at corrected normative HR & APC for different %
variation. (HR & APC)

% variation in HRn & APCn

-15% -10% -5% 0% 5% 10% 15%
0 48.02 32.10 16.10 - (16.19) (32.46) (48.83)
10 48.02 32.10 16.10 - (16.19) (32.46) (48.83)
20 48.02 32.10 16.10 - (16.19) (32.46) (48.83)
30 48.02 32.10 16.10 - (16.19) (32.46) (48.83)
40 48.02 32.10 16.10 - (16.19) (32.46) (48.83)
%Loading 50 48.02 32.10 16.10 - (16.19) (32.46) (48.83)
60 48.02 32.10 16.10 - (16.19) (32.46) (48.83)
70 47.10 31.48 15.79 - (15.87) (31.84) (47.89)
80 46.29 30.94 15.52 - (15.60) (31.29) (47.07)
90 45.25 30.25 15.17 - (15.25) (30.59) (46.01)
100 45.25 30.25 15.17 - (15.25) (30.59) (46.01)

MC with load
at corrected normative HR & APC for different %
variation. (HR & APC)
60.00

40.00

20.00 -15%
-10%
-5%
-
5%
0 10 20 30 40 50 60 70 80 90 100
10%
-20.00 15%

-40.00

-60.00

Table 12: MC with load at corrected normative HR & APC for different % variation. (HR & APC)

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 8. CONCLUSIONS

1. Marginal contribution (MC) results when station is able to produce power with
parameters better than normative
2. Negative marginal contribution eats into the Fixed charges recovered through DC (
declared Capacity)
3. Optimising landed cost of coal ensures merit order thereby ensuring schedule
4. Efficient generation of power with better HR and APC generates MC
5. Inefficient operation of units with good merit order and schedule results in negative
MC eating into the returns realised through Fixed charges.
6. Pit head stations with low landed cost of coal are prone to large negative MC if
they are not efficient.
7. Rail fed stations can optimise landed cost by proper sourcing of coal and earn MC
through efficient generation of power vis-a-vis normative parameters.
8. Parameters influencing inefficient operation ( HR and APC) are well established
and hence needs continuous monitoring and improvement of practices to generate
positive MCR
9. Effect of various factors on MC as well as landed cost are brought out and soft
skills deployed for optimisation of coal sourcing to establish optimised landed cost
to visualise different scenarios
10. Through the “what if” tables (attached EXCEL sheets) one can build scenarios and
visualize the MC of a station almost instantaneously and establish measures to
come out of negative MC situation.

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