ABT UI & Wind Power - Discussion of immense value on the Inpowerg Mailing List

ABT UI and Wind Power - Discussion in the Inpowerg mailing list

The discussion below, which has been organized based on the time at which these mails were posted to the mailing list is one of the most detailed and honest views expressed by some of the key participants in the ABT and Energy Trading space. This discussion would provide invaluable insight into the issues and options that the availability based tariff regime and the future trading scenario's holds in store with regards to non-conventional generation like Wind, and the many other sources of Non-Conventional generation and dispatching.

I don't know that you can "solve" ABT, or the UI pricing portion of ABT, which I mostly talk about. UI pricing ends up being a control mechanism, part of the negative feedback that gets the system back to where it is desired to be.

I think that the UI pricing needs a few tweaks or modifications. First, there should not be a ceiling. As frequency declines, the price should continue to increase. The importance of this is that it allows an investor to build a power plant and earn sufficient revenue during times of low frequency to pay for the investors capital cost. If there are enough periods of low revenue and the effective average price is high enough then more investors will build power plants. With more power plants the frequency will go up.

Second, the curve should be automatically changed based on time error. As synchronous clocks lag behind asynchronous clocks, the pricing curve should be increased. If the synchronous clocks are ahead of the synchronous clocks, the price curve should be lowered.

Third, the price for reactive power should be based on both the price for active power and on local voltage conditions. ABT has some voltage component in setting a payment for reactive power, but it needs to be refined.

The ABT should also have a geographic differentiation component. Some of the geographic differentiation will be part of the reactive power price.

I attach

“Reply Comments Of Mark B. Lively In Regard To Substituting Formulary Markets In Place Of Cost-Based Rate Schedules For Reactive Power,” Market-Based Rates for Wholesale Sales of Electric Energy, Capacity and Ancillary Services by Public Utilities, FERC Docket RM04-7-000, 2006 September 20.
“Better Pricing Of The Energy Balancing Market,” 27th USAEE/IAEE North American Conference, Houston, Texas, 2007 September 16-19.

Mark Lively on 12/4/2007 9:08 PM IST

I am not sure how people are defining the balancing market. I would tend to say that the UI (Unscheduled Interchange) market in India is a balancing market. But, based on the discussion, some people also say that a balancing market involves pre-arranged deals between two (or more) parties to meet their anticipated imbalances. The difference between these anticipated imbalances (which are now scheduled, and prearranged, and not quite imbalances any longer in my mind set) and the actual imbalances would be the UI market. This latter confusion is why I don't like to think of pre-arranged deals as including something called a balancing market. It gets too confusing. I want to just talk about the UI market.

Given that this discussion thread is about a UI market within Maharashtra, I am going to introduce some confusion by talking about two UI markets, the Maharashtra UI market (MUI) and the CERC regulated UI market (CUI) between Maharashtra and the rest of the grid. CERC has set the pricing plan for CUI. I have stated at various times and venues that the CERC pricing plan can be improved by making the pricing curve steeper and responsive to longer term market conditions. There also needs to be geographic differentiation and an improved payment for reactive power.

In reading the MERC guidelines for MUI, I disagree with the utilities that the price paid should vary directly with frequency. The correct driver is Area Control Error, which is Maharashtra's CUI with the rest of the grid biased by the frequency error. Yes, the MUI price should go down as the frequency goes up, but the MUI price should also go down as Maharashtra's CUI becomes increasingly positive. A high frequency and a positive CUI are both indicators of a surplus of electricity. Set the price for MUI using ACE, not just frequency.

In some respects, the existing CUI pricing can be considered to be SMP. Certainly CUI pricing is for the system and prices only marginal deliveries, since most non-marginal deliveries are priced in another manner. The MERC order discusses Ex Ante SMP, prices that the Maharashtra State Load Dispatch Center (MSLDC) produces ahead of time, as well as Ex Post SMP, prices that the MSLDC produces after the fact, at least as I read the order of 2007 May 17. I presume that the MSLDC produces a dispatch schedule associated with the Ex Ante SMP, such that participating parties have an obligation to delivery specific quantities at specific prices.

Most such Ex Ante SMP are internally consistent, such that the price at one generator relates to the price at another generator by marginal line losses and line constraints. With such an internally consistent Ex Ante SMP, a good way to produce Ex Post SMP for pricing MUI is to adjust the Ex Ante SMP by a formula based on Maharashtra ACE. The formula would be like the CUI pricing curve except that the price at 50 Hertz (actually at zero ACE) would be the Ex Ante SMP instead of being fixed. The time varying null price at 50 Hertz would be an improvement on the CUI pricing mechanism. A detriment to this time varying null price is that it is time varying, destroying some of the simplicity of CUI pricing.

Using a formula based on ACE to adjust the Ex Ante SMP can provide the market participants more confidence that the price they pay or receive for MUI is fair. CERC's creation of the pricing curve for CUI reduced the squabbling about which utility was leaning on the system and which utilities were being taken advantage of. If a party thought the price was too low, it could reduce production, reduce its internal marginal cost toward that too low price. This action of reducing production would reduce frequency and raise the price for UI. Using ACE to drive a formula converting Ex Ante SMP into an Ex Post SMP can similarly reduce the squabbling within Maharashtra.

Hi,

When there is an imbalance the frequency is expected to change from the normal of 50 Hz. What is the quantum of deviation of frequency dependant on and is it possible for the system operator to influence this quantum?

-rajarao

There are two different schools of thoughts on balancing mechanism. The first school or it is probably most widely used thought is that the frequency must be fixed and to maintain that fixed frequency the system operator will sale or purchase power in real-time to meet the balancing requirement. In such case you may find a difference in the volume of unscheduled off-take and unscheduled supply , as balancing power is being purchased in a separate market. This system is in operation in NETA, Nordpool and in many other countries. Here the cost of purchase of balancing power is raised from the grid participants in the form of system sale /buy price, where buying and selling price in most of the time has a difference. System buy or sale price is determined from the market clearing price but with an off set of the money spent for buying/selling the balancing power. So, the offset is more when the system is in highly shortage condition, the offset is low while there is low or no shortage.

The second school of thought says that the system operator does not buy or sale balancing power; the pool participants actually complement each others demand with a unique price signal which is frequency. In this case you will never find any difference between unscheduled off-take and unscheduled supply (barring the loss), because there is no separate mechanism to buy or sale balancing power. This is what is known ABT mechanism in India. ABT determines the system marginal price based on the frequency and the frequency is being determined by the system demand, because frequency may be allowed to vary within a margin.

It is very difficult to say that how the thing will move if both the school of thoughts start to coexist in the same market. In the first system the participant will have hardly any signal to take part in a balancing mechanism, the balancing is the sole responsibility of the system operator, and there is a structure of how the system operator can run such show. Here in the ABT mechanism the operator cannot really authorized to buy or sale any power. Even if you give that power to the system operator you need a real-time market place to buy the balancing power, how to create that, that will definitely take time. I am a little bit confused, how the market is going to be like in this multidimensional market where there are some power exchanges, there are bilateral contracts and normative contracts, multiple forms of balancing mechanism, on the other hand energy suppliers are distribution companies with open access freedom for the consumers( I feel it stupidity on the part of a distribution company if it ever let anybody manage an open access ), transmission system operator-system operator-power grid etc. Who knows what is next..

Prabuddha Banerjee

Sreekumar N on 12/3/2007 11:27 PM IST

Hello

A narrative commentary on the Andhra Pradesh Power Sector in the Nov 17 issue of the Economic and Political Weekly.

http://epw.org.in/uploads/articles/11229.pdf

Looking forward your comments.

Regards

Prasanth Gopalakrishnan on 12/3/2007 9:09 PM IST

http://mercindia.org.in/orders_2007.htm

In SMP, they calculate the cost of additional power drawn based on a Merit Order Rating (MOR) of the most costly power first.

There are possibilities where some of the participants depending on the scenario to pay a price for some-one else's problems.

Sincerely,

Prasanth Gopalakrishnan

Hi All,

The MERC guidelines for Intrastate ABT is based on System Marginal Pricing (SMP) rather than on frequency based UI charges?.

Any comments on issues related to practical implementation, and the overall impact in achieving the CERC objectives?.

Sincerely,

The 4th Annual meeting of Very Large Power Grid Operator (VLPGO) CEO meet held on 29 & 30th Oct 2007 at New Delhi was hosted by POWERGRID India.

Brazil, Korea, Russia, USA, China, Italy and Japan were the countries represented in this meet. The utilities from Spain, France, UK, California ISO USA and MISO USA are also part of the VLPGO.

In an international recognition for India, CMD POWERGRID was nominated the first President of VLPGO for the year 2007-08.

The VLPGO initiative aims to address the concerns of large power grids such as the reliability and economy of operations, efficient market operations, and interaction with other stakeholders besides the technological and human aspect of power system operation. It aims to exchange the technical expertise and best practices adopted by very large grid operators and build a roadmap for the next practices.

The VLPGO has recognized that the electricity grid of the 21st century would need to have a radical change in approach considering depletion of resources, environmental concerns, need for energy conservation and the increasing role of new and renewable energy resources in the grid. The Control Centre Energy Management System (EMS) architecture would also need to be open and accommodate the requirements of the competitive electricity market rather than being solely vendor driven.

Three Working Groups (WGs) on Synchrophasor technology, Prevention of cascading blackouts through a self-healing mechanism and Incentive mechanisms for new capacity addition was constituted at this meet. Workshops on SMART grid philosophy would be held later this year.

When most of the energy that we consume is from fossil fuel, a little improvement in that technology would really change the earth a lot, Other than CCGT technology (H technology - probably the most efficient till date) I feel there are a lot can be done in the basic area. Most of the heat spills through stack; which cannot be captured due to human knowledge deficiency. The stack temperature needs to be kept above certain value depending on sulphur content of the fuel(mainly coal).There are some technology which demand that it can reduce the stack temperature very close to atmosphere, this is called condensing heat exchanger or CHX. If that can be done in a Thermal power plant the efficiency can be improved to a great extent. I really don’t know whether anybody has implemented such technology in reality. If that can be done it can really change the world, because coal probably the most common fuel used in power plant and has a high Sulphur content.

I saw another analysis that described the trade off between wind generators, single cycle gas turbines, and combined cycle gas turbines. The premise was that the output of combined cycle gas turbines would be replaced by a combination of wind generators and single cycle gas turbines, the latter because they could ramp up fast enough when wind died, whereas combined cycle gas turbines could not. The relative efficiencies of combined cycle gas turbines and single cycle gas turbines were such that when combined with the relative hours of operation that the total fuel consumption was the same, that is, ramping up and down single cycle gas turbines to meet the wind outages used as much fuel as if combined cycle gas turbines were operated around the clock.

From what I saw of the numbers, the approximations came out very close, perhaps too close not to have been planned. But the heat rates looked plausible for the turbines and the capacity factor of the wind turbines were in line with what I had heard.

The green aspect of wind is overstated. If the subsidy given to wind, is instead given to thermal to step up efficiencies by even 6% the impact on carbon reduction is much greater and more sustainable. Thus the US initiative on the Advanced Turbine Project does more to reduce carbon emissions.

I would say the Wind energy is getting correct price in UI mechanism. That is the beauty of UI. Wind energy is a new participant in the ABT and even in power system itself. The approximate similar plant compared to wind energy is the run-off-the-river hydro power plants. They also generate when the water is available. Like wind in atmosphere, the discharge in the river controls their output.

The water discharge is not in control of the operator. But the forecast of river discharge is very precise. So wind power participants in power system also should make correct forecast. That is the part of the developers' job, not the system operator or the regulators job. As done by hydro plants, yes you are right they should maximize their benefits with carbon credit or other innovative ideas. For example, they can make provision for tourists to visit the top of the wind power generator with lifts, restaurants etc. I think no wind power plants have considered this idea. There could be tremendous revenue from tourist attraction. There could be so many other benefits with this mechanism.

In short, promoting wind power plants is the job of promoters. No additional benefits need to be given to any type of plants including wind power plants. Whatever UI provides is the actual price of the energy in real time. Suppose, the wind power plants gain benefits with tourist attraction, they will not share that benefit with the power system! Regarding fossil fuel plants, environmental regulations will bring them to competitive price.

In the end every type of plants has got some risk of getting projected benefits. After all it is business.

I wonder why such diminutive volume of (compared to the total Indian grid capacity) wind energy can have any big effect on the grid. I don’t think the % share of wind energy may change to a great extent in near future. If a good no.s of unit run on Free Gov. that is enough to pacify the effect of unpredictable wind energy. And in ABT regime that would be done in a very economical way. But to me the problem is elsewhere, do the wind firm get the correct price in the process (ABT)? Because wind does not know when the UI is high (whatever UI curve you impose on) so very often the wind firm may deliver energy at low cost and some other generator will make the profit out of it (by reducing generation). In my view a carbon levy needs to be imposed on the consumer to make such green energy economically viable. Because the only advantage the wind firm has in its side is carbon, it should get that price. Or else we have to wait for the fossil fuels to end.and then we will have only green energy and Negawatts.

With reference to Mark Lively's comments of October 3, I feel that Raghuram's apprehensions are misplaced.

As a load dispatcher, he should be happier when he is not required to schedule wind generation, which is so unpredictable.

Europeans have a major problem because tie line flows have to be maintained as per schedules. We have no such problem because we permit deviations.

I understand Raghuram's concern about forecasting the real time dynamics of wind generation, since it dramatically impacts his job at the Southern Region Load Dispatch Center. I asked my son who works for a weather agency here in the US. His reply We don't run models ourselves, its takes more computing power than we have. Plus getting good data out of models is requires good data in. I don't think there is radar coverage or upper air data or for that matter a good density of reporting stations across India.

I know that while a student at Carnegie Mellon in Mechanical Engineering, he had a summer job working on a Cray modelling fluid flows, so he knows about the computing power necessary for such real time models. As he says, a high density of reporting stations across India would be necessary to provide the quality data to do the real time forecasts necessary to alleviate some of Raghuram’s concern.

I believe it would be in the best interests of wind generators to develop such forecasts, in that knowledge of generation will allow the generators better access to standard markets for selling their output. Of course, if the wind generators are just selling their output to the local utilities at fixed prices set by the state regulatory agency, then the burden / best interests would fall on the local utilities, since they are the ones who are accessing the standard markets, including the UI market.

As far as my many comments on the UI market, getting better information on the pending change in wind generation will allow the RLDCs to mitigate the change in ways that end up mitigating the change in frequency and the change in UI price. This would be of great interest to whichever party has the job of marketing the wind power, most likely the local utilities.

But how big of a problem is the change in wind generation and its affect on frequency and the RLDCs? Are there studies of these effects? Are the wind generators sufficiently geographically dispersed in India that they have little dynamic impact generation wise? As I believe Ramachandra pointed out in regard to my comment about economic withholding, the India grid is large at 100,000 MW of peak demand. Are you experience rapid enough changes in wind power to have any impact?

If the problem is localized, such that you are overloading transmission lines, the that is a different concern, which as I have said at other times, requires geographic differentiation of UI prices.

So I guess I should summarize by asking how big of a problem exists in regard to sudden changes in the level of wind generation? What data exist on this subject? What analysis has been done?

I understand from the lit survey that in Europe the wind generators are participating in hourly market. Site http://anemos.cma.fr gives lot of details about the forecasting of wind in Europe

PR Raghuram on Mon Oct 1 10:16:08 IST 2007

We are able to predict the load. The reason for fluctuation in frequency is due to number of reasons. Constituents are reactive than proactive to the frequency variation .This is the main reason for fluctuation in frequency. Also during thermal predominate period due to absence of FGMO response of the generators the frequency is fluctuating.

Yes it is possible to forecast the wind energy in the short term time frame of 1 hour ahead with an error or less than 3%. The only difficulty in obtaining data of meteorological information and wind generation of the past years to fit a proper model.

As a response to Mr Raghuram's question I would like to pose another question. Today wind power all over the world is fairly substantial and maybe many times more than it is in India and in particular in the Southern Region (I hope I am right). What is the state of art in the rest of the world, particularly in Europe on this subject? Would anyone have any answers? Do system operators have reliable data or do they operate in a different manner?

With my limited knowledge, what I can say is it would be as easy or as complicated as predicting the Indian grid frequency. As grid frequency has number of influencers, I am sure you would agree that wind power generation also would also have many factors which influence the wind flow. I leave the table for academicians, as you desired; to answer your question.

The interest shown by the members of this group on the subject indicate that lot of people are thinking on the subject. Initially when I raised the subject I was putting my concern from the system operator point of view and it is still not answered. The question is not about what wind generator should get. Regulatory commissions will look in to this subject and governments may give concessions since it is a clean energy.

My request to this community was can academic members give us a method that suits our conditions and forecast the wind generation in short term fairly accurately so that the system operator can plan proper load generation and the grid is operated in a secured way. Such forecast will also help the wind generator to participate in open access and trade with the power which may get better remuneration.

Meters on the grid can't tell the difference between wind power and conventional power. And certainly meters at the interconnection point between the various utilities can't tell how much of the electricity that is flowing is wind power versus conventional power.

One of the very nice things about UI pricing is its administrative simplicity. Meters determine how much electricity flowed into/out of each utility every 15 minutes. There are pre-determined schedules. The difference is the UI. A meter determines the concurrent frequency. The pricing curve uses the concurrent frequency to set the price for the UI. About as simple a real time pricing plan as can be envisioned.

(I believe that the UI pricing curve needs to be geographically differentiated, so that a utility sees a different price at one location versus another location and thus can get paid for electricity flowing across its grid, but that is a complication for which few people are ready. It is most important when transmission lines are constrained, though it will also compensate the utility for losses incurred on the movement of electricity across its system.)

In regard to paying a fixed price to wind power, that is certainly a regulatory issue that some people endorse. I generally support abiding by contracts, and have testified about the correctness of doing so. Thus, if contracts/regulations suggest that wind power is more valuable and deserves a fixed priced tariff, that can be done. It is even consistent with UI pricing, in that one step of UI pricing is subtracting out the pre-determined schedules. Those contracts/regulations can be treated in the same way or a similar way. But generally, wind power should have nothing to do with UI payments. However, UI pricing can be used to evaluate what purchases under those contracts/regulations are costing the utility relative to some normative standard, with the normative standard being the UI pricing curve.

(But wind power can be bad environmentally. Yesterday, September 27, I participated in a workshop by Bonneville Power Administration (BPA) on their 2009 wind power pricing plan. A concern mentioned frequently by the operators during the workshop was night time hydro minimums. BPA is required to have so much water flow through its dams each and every hour [maybe even on an intra-hour basis]. The operators were concerned about wind becoming such a large night time energy source that balancing their system when there were large wind resources would cause them to violate their minimum flow requirements. Others are concerned about the visual impact of wind machines as well as the death of many birds and bats.)

I share the concern about "it becomes economically attractive for any distributing company to unschedule its share of power and draw from the UI pool. Hence, there is under scheduling and closure of generating units and increase in UI transactions." I have not seen any data on how much this is happening, but have thought that it might. My bigger concern in regard to the level of the UI price is that there is not sufficient incentive for merchants to build new power plants. Though merchants should not be expected to sell all of their electricity at the UI price, but instead have some long term contracts, the UI pricing curve can be used as a normative standard against which to evaluate the cost of a new power plant or the contract for the sale of power out of the new power plant. If the UI pricing curve doesn’t get high enough then part of the described "under scheduling and closure of generating units" will take the form of not building new generating units. The price ceiling on UI below 49.0 Hz is part of the problem.

As far as economic withholding, India's grid may indeed be so big that economic withholding cannot affect the UI pricing curve. I have not seen information on the dynamics of the Indian system. This concern may be like my transmission pricing issue, something to look at in the far future.

Hi, I was following the discussion on wind power for some time. What I fail to understand is why a clean power should not be priced over and above the conventional power. If we consider the societal cost of fossil fuel generation, it would be much cheaper to utilise the wind power even at higher price compared to conventional power.

To harness the benefits of such clean power, government may subsidise or cross subsidise this power. Then under such guaranteed return scenario investments will come in. Wind power in itself is uncertain and if financial return is also uncertain, when linked to UI price, I am apprehensive that there will be any takers to invest in wind power. The frequency even today varies from as low as 49.9 Hz to 50.2 Hz. The UI price varies from Re. 0 at 50.5 Hz to Rs. 5.70 (Not Rs. 7.45) at 49.0 Hz with a slope of Re 0.06 per block of 0.02 Hz in the range of 50.5 Hz to 49.8 Hz and at a higher slope of Re 0.09 per block of 0.02 Hz in the range of 49.8 Hz to 49.0 Hz. Initially when UI was introduced as a mechanism to curb indiscipline, it was envisaged that the highest UI rate would be set such that even the costliest generation also get dispatched before 49 Hz. With the present day low UI rate, it becomes economically attractive for any distributing company to unschedule its share of power and draw from the UI pool. Hence, there is under scheduling and closure of generating units and increase in UI transactions. Under such conditions, I think wind power tariff should be fixed instead of linking it to UI pricing. To ensure dispatch of wind power, as suggested by Mark, the UI rate needs an immediate steep upward revision to ensure that the available generation will not be bottled up.

At this juncture, I would like to comment on the economic withholding of generators, mentioned by Mark. This may be true with merchant power plants operating in west. In regulated environment to curb such practices, CERC has capped the UI generation at 1% of ISGS which will hardly account for less than 0.1% of the total generation.

Hence economic withholding is not possible at that low level of generation given the huge size of the national grid of around 100,000 MW of generation at any given point of time.

I liked Sanjay's summary of the ABT-UI curve as the marginal cost of diesel generation, in that it gets some of the ideas of marginal cost expressed. However, the summary is also misleading in that the ABT-UI curve only matches the marginal cost of diesel generation under some ideal situations.

Most marginal cost analyses include explicit information about the cost of fuel and the cost of installing new generators. Those costs are nowhere explicit in the ABT-UI curve. Those marginal costs may have been considered in setting up the ABT-UI curve, but are now lost in the operation of the ABT-UI curve.

Consider several different diesel generators with perfect knowledge of how the system will operate. The various generators will have different heat rates and different input fuel costs. Thus, we can rank them by the cost of operations. The cheapest will operate whenever ABT-UI price is above its cost of operations. Each will turn on as the ABT-UI exceeds its cost of operation. At the point that the generator turns on, one could say that the ABT-UI curve was equal to its marginal cost, but that is a point reached and passed. Perhaps to reflect the situation, we should look at the relation in the opposite direction, that the generator chooses to operate when the ABT-UI curve exceeds the generator's marginal cost. I slightly mince words, but there is a difference.

The ABT-UI curve can be considered to achieve a simplified economic dispatch of marginal generation on a distributed basis. Most economic dispatch programs include a central dispatch of generation, with a single computer telling all the generators how much each should run. ABT-UI eliminates the need to send operating cost data to a central computer. Instead, each generator decides its own level of generation based on forecasts of the ABT-UI curve.

But even referring to marginal cost in regard to the ABT-UI curve can be misleading. Consider someone owning two identical large generators, where large means big enough for its output to change the frequency of the system enough to change the ABT-UI price by one step. The owner may only want to run one generator since running two generators could reduce the owner’s profit margin, the Rs/MWH difference between the ABT-UI price and his marginal cost. This is called economic withholding. Conversely, if the owner is also a distribution company with a very large load, much greater than can be supplied by the two generators, the owner may decide to operate both units even when the ABT-UI price is below the marginal cost of the two units, since their operation

reduces the ABT-UI price enough on the rest of the electricity purchased by the utility. The added cost of generators relative to the ABT-UI price is less than the savings on the purchases. This over production issue is rarely discussed. However, both issues distort the concept of ABT-UI being marginal cost.

In North America, system frequency is generally considered to be a reliability issue and reliability issues are not sacrificed for fuel efficiencies, almost. At least there is generally not supposed to be a trade off between reliability and cost. Doing so is almost a heresy here. But I believe we need

to do so, such as with the ABT-UI curve. As the ABT-UI price gets higher, some utilities will operate their procedures for interrupting rural loads.

Nominally in North America, the interruption of feeders is only done for reliability purposes, not for economic purposes. ABT-UI pricing does a good job of tying the concepts of generation reliability and generation economics together. Someday it may even be change to tie in transmission reliability and transmission economics, but not yet. I have even written papers tying in distribution reliability and distribution economics, but that is way beyond India or any other country. Such distribution tie-ins would be very important to get very small independent power producers to work in specific locations.

The combination of reliability and fuel cost in ABT-UI should be extended by eliminating the price cap and making the curve steeper. I note that most of the changes to ABT-UI have been below 49.5 Hertz. The whole range needs to be more expensive.

I am learning from the discussions on wind power and pricing issue. Basically ABT-UI curve is the marginal cost of Diesel generation (Fix Variable (Fuel-diesel)) and it is envisaged that at 49 Hz, this cost must be paid by the drawee when system badly need generation. ABT-UI curve can be extended to wind power by additional consideration (bias) over and above UI rate (plus or minus) and not exactly the same way. This is necessary to get priority to wind power over UI availment by deviating from schedule.

Sometime ago it was in the news that there is coal and gas shortage in many power stations. Is it so now? In such a scenario, it will make probably make sense to back down coal plants a bit (even if they are cheaper) and allow costlier wind power injection when it is available? Coal can be saved for future use.

I thought that it may be useful to recap the discussion so far in respect of wind power.

1. Wind energy is available when the wind blows and not necessarily when needed. During a recent discussion on tariff petition filed by Bescom (Bangalore's distribution utility) they have said that wind generates maximum when Bescom does not require their power. However wind power is environmentally friendly and has to be consumed.

2. The regulator in Bangalore has 'fixed' the PLF for wind power as 26% and the installed capacity of wind power in the region is around 6% of the total installed capacity - this gives an idea of the contribution that wind can make.

3. At present the regulator has fixed a 'tariff' for wind power which is above the so called 'cost of supply' which is an average of the other sources of power.

Hence Bescom's complaint that they are having to pay too much. If I have understood correctly the proposal made would be to pay the wind generators the UI rate of intra-state power. I don't know whether this would be attractive enough since, as has already been pointed out, this is likely to be the 50Hz rate and not any higher figure - the frequency likely to be 50Hz only.

Although the ABT-UI pricing curve defines the marginal value of electricity in India, the fixed tariffs of the various states might be an expected average of the price that would be paid if ABT-UI were applied to a typical mix of the wind pattern and the ABT-UI pricing curve.

As I said a few days ago, it would be an interesting research project to compare the average price paid to a wind generator to the price that would be paid under ABT-UI.

I note that a shift in the pricing curve of ABT-UI, raising it to levels more appropriate in this time of higher fuel prices, would not be matched by an exact increase in the prices paid for UI. When ABT-UI was implemented in 2002/2003, the frequency distribution on the India grid changed in response to the imposition of ABT-UI. The average price paid in 2003 was much less than would have been paid in 2002 with the 2002 frequency distribution but priced at the 2003 ABT-UI curve, as I illustrate in some recent papers and speeches.

Then in that case it should be filed to concerned regulatory agency to make provision for operating wind generator in ABT-UI mode.

Though most people will agree that the ABT-UI pricing mechanism can be considered to be a balancing market, it can also meet many of the definitions for a spot market. The original definition of a spot market was a delivery on the spot out of inventory. Since electricity doesn't exist in an inventory, the closest we can get to a conventional spot market is to sell what has just been delivered, or to price the balancing market.

Considering the ABT-UI is a balancing market/spot market/whatever you want to call it market, each generator can be treated financially independently of the other generators. A contract to delivery 24 MW from a wind turbine might only be fulfilled at 16 MW. The turbine would have to buy 8 MW of UI at the price XX during that 15 minute period. If I have a gas generator that I can run to provide that 8 MW, that generation faces that same price of XX during that same 15 minute period. If the average fuel cost of the generator is above XX, the gas generator shouldn't run as 8 MW of back up to the wind mill or to sell all of its capacity at XX. It loses money doing so. Let the wind generator pay XX for the 8 MW. If instead, the average fuel cost of the generator is below XX, the gas generator should run full bore, not just to back up the wind generator but to make a profit on the differential between its fuel cost and the ABT-UT price of XX.

On despatchability of Wind power:
The dispatchability of wind power could be addressed if hybrid systems based on Wind + natural gas can be developed. Small/micro gas based turbines can help make up for the power generation loss if wind speed slows down to meet the dispatched kWs. Technically, a governor like mechanism can control firing of the gas turbines. One needs to investigate if its economics would be better than some storage option.

For a Wind-gas hybrid system, the response to change in wind speed would be real-time. This would call for additional investment, and gas SPA and gas storage issues that need to be addressed.

This also raises few financial issues. If one is investing in a small subsystem, there may be a tendency to utilise its capacity fully to reap financial benefits. This can be handled to some extent by appropriate regulatory steps. For e.g. such hybrid systems can be classified as 'Wind' as long as share of wind power remains above a pre-specified level. This would provide incentive not to consistently run gas based generation as a primary source. This, however, may raise monitoring cost for the regulator.

Short-term wind forecasting would still remain a challenge and may not alone adequately address dispatchability of the Wind power. Given that there needs to be a sufficient lead time (of a few hours) between submission of generation schedule to be applicable from 00 hours, maintaining forecasting accuracy would be a challenge. Change of schedule is possible within the day itself, but this would become a rule rather than exception for Wind power. To be on a safe side, wind generators would prefer to take a pessimistic view and declare low available capacity. There can be a significant difference between the scheduled generation and actual generation leading to allegations of gaming.

In the case of existing shortage scenario, UI charge is high and seems 'remunerative'. This may not be the case over a medium/long-term. Further, a perfect gaming is feasible if renewable energy generators are unscheduled but are paid on UI basis (technically, this cannot be ruled out in even existing circumstances). If wind power is scheduled, I do not think that Wind generators would like to bear risk of paying UI charges if wind speed turns out be unfavourable. (whether hedging financial instruments would start playing then). At present SERCs have exempted Wind energy etc from intra-state ABT regime.

In spite of various solutions, the 'protective' regulatory environment does not give incentive to adopt any one of these. There is no incentive to invest money to 'improve' dispatchability when one can sell an inferior product (in-firm electricity) at a lucrative price.

ABT/UI is not a spot market for electricity for various reasons. However, it serves the market very well at the moment to address imbalances. I feel that time is not yet ripe to abandon it. It can remain a part of a competitive market design but this is not a complete solution to competitive market itself.

While I favour renewable energy development, I tend to question the policies we use to 'promote' them. In the end we have given incentive for 'investment' in MWs of renewable energy, which contributes peanuts to the GWh. A lifecycle assessment should help identify 'better' renewables.

Interestingly, I find that Wind energy tariffs in some low wind speed states are higher tariff than others. Should the inefficiency/ resource inadequacy be promoted in such a way?

We need to promote 'kWh' rather than 'kW' of renewable energy. A market for tradable energy credits could be a potential regulatory/policy solution. (pl see link below for a related paper)

Apart from research on engg. aspects being conducted at IIT Kanpur as mentioned by Dr. SN Singh, the Dept. of Industrial and Management Engg. also has interests in economic, policy and regulatory aspects of renewable energy sources including Wind Energy.

Some of the recent works include a tradable credits market for electricity from renewable energy and institutional aspects of renewable energy application for rural electrification. The later one is a research project in collaboration with the University of Cambridge, UK.

I agree fully with the sentiment ecem to compete with controllable centralised plant. In the UK it is done by Registered power zone (RPZ) scheme where DNO is offered incentive to connect wind farm to the network. Other countries have similar renewable mandates.

The other suggestion on having large pumped storage and wind in the portfolio of a single commercial organisation could be good. ABT-UI is relevant tool for balancing market. The wind operators do not know what is expected in the next hour? How can they be expected to participate in the market then?

From a dispatcher’s point of view wind energy available to the grid at whatever time should be availed once a wind farm is allowed to set up as the variable component of the tariff from the plant is almost negligible as is the case for Run-of-the-River plants. Rao tariff committee suggested "to forget about the capital cost and be guided by the variable cost only while making schedules. The plants that are there are mostly on coastal areas of India and in my understanding are predominantly enriched with reservoir type Hydro stations and accommodating whatever capacity is available in the load curve is of no great difficulty as of now.

Tagging of all problems of the grid to ABT/UI is an area I want to be guarded against because in my understanding we need to be more responsible and sensitive enough to respond to the problem as a whole and not to react in a fashion to look after the interest of the utility one is representing. Of course the inherent strength of ABT is continuously projected to the operators in the form of grid frequency but at times we forget our responsibilities due to different "guiding forces" which dictates our actions. UI is a tool to discipline the indisciplined. Previously most of the bi-lateral agreements between utilities were bounded by two part tariff and lot of unwritten ethics, which were violated in grid operations and to control the madness, the grid operation has been leashed with this new mechanism .I do agree to the fact that scope of manipulation is there to logically and economically use the UI boundary conditions for achieving the ultimate economic despatch scheduling but that cannot be left to be achieved by one and all in the business.

If we are convinced and sincere in our effort to promote nonconventional / renewable energy sources in our grid a little bit of leeway has to be allowed in their operational modalities till we come up with technical solutions like wind flow forecasting.

Present tariff of wind generator is fixed and not ABT-UI. If it was so then there was no issue.

I like to create a thought problem as if the wind generator is owned by the entity (person or company) who is going to use the electricity. The user then has to buy more electricity from the grid at the ABT-UI price or from someone else at some negotiated price. The value of the wind generator to the user is thus the ABT-UI price, since that is the cost that the user would otherwise have to incur if the wind power was not there.

What is the cost of wind power? On a moment by moment basis, wind power is almost free. There is the maintenance cost associated with wearing out the wind machine, but the calculus of maintenance relative to usage is poorly defined except when explicitly covered in a maintenance contract. Over the life of the unit, there is the capital cost, which can be quite high.

The system operator is not dispatching wind on a cost minimization program, and is not interested in the types of costs identified above. The system operator just takes the electricity and supplies what is needed, at ABT-UI.

As to the relation between the wind generator and the constituents, that is a contractual matter. Some places would require the wind generator to pay the ABT-UI rate for energy not supplied by the wind generator. For instance, a contractual price of Rs 2.50 to 3.50 per KWH might include a guarantee of a specific MW level during certain hours. The wind generator would be required to buy any UI necessary to meet the guarantee and could sell surplus. But this is tied to a specific contract, not to the generic concept of UI pricing.

Wind generator pumping more power through UI will be OK as long as UI rate is more than the wind power generation cost. Similarly when the frequency is high and the generation from the wind generator comes down is also ok.

Presently wind generators gets paid between Rs 2.50 to 3.50 per unit. But when the wind generator is not generating as expected and the frequency is less the constituents has to unnecessarily pay for their overdrawal from the grid or to carryout load shedding for no fault of them.

I think ABT mechanism should be considered equivalent to spot-market since in the previous day schedule for the next day is finalised. UI should be considered equivalent to balancing market because constituents overdraw / underdraw depending on their generation/demand level in that block of time.

Some of the constituents who have major hydro do regulate their generation depending on wind generation and maintain their drawl from the grid. Since no ancillary service market is available in India other than balancing market (UI) it is difficult to use such generators for adjusting the wind generation variation in other states which predominantly have thermal generators. Neither the wind generator or the state is trying to sell its wind power in UI market. What is happening is the constituent schedule its own generation assuming certain level of wind generation and will be forced to overdraw from the grid or do the load shedding if wind generation is less than anticipated. Therefore a good forecasting tool which predicts the wind generation at least an hour before is required. This will help the constituents to reschedule its generation or plan proper load shedding by the time the wind generation is reduced.

I certainly agree that India's booming economy can only be sustained by the sustained capacity addition in the GWs. Most of that capacity addition should come in large blocks, such as coal or nuclear. But the economic system should be flexible enough to encourage smaller blocks, such as wind and solar.

One way to provide that encouragement is to allow the smaller blocks access to the same financial incentives that the larger blocks have. That access can be in the form of having all parties participate in ABT-UI pricing for their unscheduled flows.

I would say that the small blocks of power are irrelevant to driving the frequency and thus the ABT-UI price but am reminded of Mahatma Ghandi saying something to the contrary, that even if we as individuals might not be able to change the world we should nevertheless attempt to change the world and somehow it happens. I apologize for not having the exact quotation.

The same ABT-UI should be applicable to all transactions, since electricity is fungible at any location at any time. I don't know how much of the electricity being delivered to my home was generated 20 miles away or 1,000 miles away, since there are plants that distance connected electrically to my home.

I may have different contractual relations with each of these power plants, but where does the electricity actually come from. I can measure active and reactive power at my home right now, but I can't measure how much electricity came from the power plant 20 miles away versus 1,000 miles away. I can do some allocations, but I can't read the meter on my house and say which electricity is which.

I wrote about this fungibility concept 12 years ago in "Thirty-One Flavors or Two Flavors Packaged Thirty-One Ways: Unbundling Electricity Service" The National Regulatory Research Institute Quarterly Bulletin, Summer 1996. This article originally appeared as comments titled "31 Flavors or Two Flavors Packaged 31 Ways," Promoting Wholesale Competition Through Open Access Non-discriminatory Transmission Services by Public Utilities, FERC Docket RM95-8-000,1995 November 2.

If sellers of large blocks of power (owners of generating plants) have to settle up real time imbalances using ABT-UI, then the seller will have investment and operating incentives relative to their projection of ABT-UI prices.

If they believe the prices will be below their cost, then the sellers will refrain from incurring that cost and plan to buy UI at the ABT-UI price. That may mean reducing hourly production levels or refraining from building new power plants. Conversely, if they believe the prices will be above their

cost, then the sellers will incur that cost and plan to sell UI at the ABT-UI price. That may mean increasing hourly production levels or building new power plants.

Of course, the sellers' actions will cause the ABT-UI price to rise and fall, somewhat chasing the sellers' perception of what their costs are, which in turn the sellers' are using to chase the ABT-UI price. Truly a groping process. ABT-UI pricing allows this to happen on a real time basis. The limitation to the process is the limitation on the ABT-UI price, the ceiling on the ramp when frequency is below 49.0 Hertz. Removing that ceiling would give sellers a signal that it might be cheaper to build new capacity than to pay the ABT-UI price. When Alberta, Canada, allowed small generators easier access to their hot competitive market in 2001, some entrepreneurs installed Chevy engines to generate electricity. A utility manager from Alberta wrote me in August

As a result of this flurry of activity, another entrepreneur set up a manufacturing plant in Lethbridge which mounted car and truck (Chevy) engines on skids, matched up to a generator and some protection. These got shipped out and could easily be hooked up to the grid through a simple distribution padmount arrangement and the oil company was ready to bid their energy into the pool through agreements with the AESO.

This large number of small blocks of power helped ease the shortage and high prices in Alberta, but now, six years later, few of these Chevy engines are still around, since large blocks of generators have been built, the GWs suggested by others.

If we go through the NETA system of UK we may compare some of the terms like this:

ABT mechanism = real-time (Balancing mechanism)
UI = system buying and selling price

I think balancing mechanism may not be a simple penalty mechanism, if we observe how the buying and selling price is calculated in the UK, depending on whether the system long or short(demand and supply) , and market index etc. However that would create a long lasting discussion.

In case of wind - hydro, the Frequency of the electrical system can be used as a communication system between wind farm and a hydro-power plant, that is where the relevance of ABT comes. Once I suggested this in this forum.

I am not sure about the wind profile and its diurnal pattern in India. Certainly in UK and Germany it is high during night. If this is the case in South India and if frequency is high at night (low demand as usually the case) trading of MW from wind through ABT-UI does not appear to make much business sense. Wind and solar combination can do but not through ABT-UI (capacity charge and scheduled MW declared to be sold every day). I could not understand one thing: Why ABT-UI should be treated as a trading tool? It was imposed as financial penalty/rewarding mechanism on the central generation for not having FGMO on their own. That way it is a great success and that should be end of this. Having said all these, I must say I have very little knowledge about the daily and seasonal pattern of wind in India and so is the regional demand supply situation.

A trillion dollar economy growing at 9% can only be sustained through sustained capacity addition of GWs: More and more untapped hydro (mini and Mega) and large number of Nuclear Power plants are the cost effective action at this stage. How much wind potential remains to be untapped in the South? With storage, interface technology will it make much of commercial sense?

India's ABT pricing of unscheduled interchange (UI) offers a unique opportunity for both wind and storage. The UI price is for undispatched / unscheduled power, precisely what wind power is. Better forecasting programs may allow dispatchers to control other, non-wind generators in a way to improve system stability, but it such forecasts are unlikely to have much effect on the amount of wind power that is actually generated.

The result is much different for storage technologies. A good forecast will allow storage devices to generate when prices are expected to be high and to store when prices are expected to be low. Depending on the storage technology, these price differentials can pay the entire cost of the storage

facility, independent of any wind generator being associated with the storage facility. Some storage facilities, such as flywheels, are better served by pricing periods that are shorter than the 15 minutes used by ABT for UI pricing.

Pumped storage is probably better served by longer pricing periods. But the wind generator and the storage facility don't have to be hooked up as a pair. They can operate independently, as least under UI pricing.

"WIND POWER DEVELOPMENT IN INDIA", 2006. The details of the book are available on web site: http://www.wisein.org/books.htm

Last year a first dedicated conference was held at Pune on Wind Power. The conference was organised by WISE, Pune.

In European countries and U.S.A., there are technical regulations for the interconnections of wind farms to the grid. Do we have such regulations in India?

BTW, wind energy has been viable in India since over 10 years. India has the fourth largest wind turbine installations in the world. (over 7000 MW) and the wind power capacity is expected to grow. It is essential that the technical and dispatch problems need to be solved at the earliest. The development of energy storage technologies should overcome the problems caused by variability of wind power.

One can refer to www.windpowerindia.com website or www.mnes.nic.in to get the details of wind power generation state-wise.

Interesting discussion in "inpowerg". I agree entirely with Mark Lively and Soorya. Going by UI route, the generators would avoid the hassle of forecasting generation (which in any case is unpredictable), and would not have to worry about loss on account of actual generation differing from forecast.

System operator would not have to bother about scheduling every wind generator and frequent schedule changes

Regulator and utility would avoid the problem of judicious tariff fixation. Nobody would need to bother as to who has utilised the wind power. And all available wind energy would be absorbed, which is the first objective.

Another alternative which is being talked about a lot these days is to make 'not dispatchable' when required to 'dispatchable' when required for which the wind power generators will need to invest in some form of storage - I wonder how the economics works out in the Indian context.

By the way it would be pertinent to know what are the Installed capacities of wind generation in the country (may be statewise / regionwise).

Thank you very much for providing the link where we will be able to get more information on the subject.

The way wind blows in India is different from the way it blows in europe. we have very few passes. what we require is a solution to meet our requirement. Other issue is who has to invest in forecasting the system operator or the wind generator.

Since short term predictions are possible in Europe wind generators are participating in hourly market there. However here in India it is not the case.

In case wind generators want open access to sell their power across the country they should be in the market (that is participate in UI) prediction of generation in short-term is a must so that they will have some time to forecast their generation and modify their schedules. In view of this wind generators should encourage in developing a short-term forecasting model suitable to India.

Short Term forecasting of wind power generation, so that wind farms can participate in appropriate scheduling, appears to have been addressed in the technical literature. Found the following literature survey on the internet:

G. Giebel, R. Brownsword, and G. Kariniotakis. State of the art on short-term wind power prediction, ANEMOS Report D1.1, available online: http://anemos.cma.fr, 2003

In the 2006 disturbance in Europe, when the European grid islanded into 3 segments it was found that there were almost 7 - 9 GW of wind generation in two of the segments. The study has not blamed wind generation for the disturbance, however, when the grid was islanded and island frequency stabilized, the wind generator's re-connected to the islanded grid automatically (being non-dispatched), and this created lot of practical problems for the generation from wind was not minimal.

Another issue that really hurts from the current planning point of view is the incentive structure on wind-generation is based on the capital investment / depreciation benefit. However, this needs to be shifted to an actual generation / and need based on network requirement. A few things get addressed here (1) The wind corridor in India is not that big. The new generator's have higher capacity than most existing ones. So, it helps you generate more power, and incentivise generation compared to incentivising investment (With no interest in maintaining or even worrying about whether the whole thing is working). (2) UI based pricing, rather than a financial incentive / subsidy driven ROI will help the wind farms to invest in more technology, participate better in the grid stability etc.,

At a policy level I think still no one has really looked at the real issues the grid operator or the utility faces, and the cost / investment that he has to bear when renewables become a significant percentage of his generation. If there is a benefit it should go to the renewable generation companies, if there is a cost, then that is some-one else's head-ache.

Yes, better forecasting of wind patterns can help other generators plan their operations in ways that maximize the profitability/effectiveness of these other generators.

However, India is in the almost unique position of having a way to evaluate wind power on a financial basis through the UI pricing. An interesting study would be to price the output of a wind farm, or several wind farms, at the prevailing UI price from the ABT, and then to compare those results to the payments that are being made to the wind farms. These results should also be compared to similar study of other generators, such as those owned by the GOI, or however the central power plants are characterized, or independent power producers.

If each of these studies suggest that the actual payment is greater than the UI price from the ABT, that would support my contention that the UI pricing curve needs to be shifted upward/to the right. This would encourage higher frequencies at the same UI price or higher prices at the same frequencies.

In the morning I raised the issue of short-term forecasting of wind generation in inpowerg .The utilities some time have to pay more to the wind generator and get paid less in the UI market. If proper estimate is made in short term basis for wind generation then the utility can plan their other generation such that economy in power dispatch is achieved. the wind generation is so unpredictable and vary from 1000 MW to 150 MW in a very short period making the utility to overdraw from the grid at low frequency-High price. The wind generator who causes this goes scot free. Also some time the wind generation is high when the frequency is very high and above 50 hertz. the wind farms are not very much concerned in short-term forecasting since they get paid for what they generate. Also some time wind generators feel that the utility is not allowing them to generate full.

In case wind generators can predict their generation on short term in the time frame of Scheduling that is 4-6 time blocks of 15 minutes each they them self can participate in UI pool and sell their power either to the pool or trade their power to the power shortage region. therefore really some immediate solution for predicting the wind generation in short term is required and academicians should help the system operators in this regard.

The distribution utilities need not feel that they are forced to buy renewable at higher price, if as Mark pointed out to use UI pricing. The wind power plants should run as merchant plant. They can supply power to grid as per their availability getting prices fixed by the system. the risk of getting no return in case of higher frequency will be minimized when there is proper mix of the thermal plants and reservoir based hydro plants and pump storage plants and above all proper intermittent loads in the system.

As generally said priority is given to unfit, if the renewables are given higher price, then they are not fit. But I do not think renewables are unfit. They can very well compete with the other generators. The question is only on the level of profits expected.

In India, ABT pricing of UI power can be used to establish the value of non-dispatchable power, since any electricity bought from a wind generator is UI electricity that would not be bought under the ABT. For those distribution utilities with a contractual surplus of power, the electricity bought from a wind generator is sold as UI electricity under the ABT. A fixed price for wind power that is always greater than the ABT price for UI power thus results in a subsidy to the wind power generator at the expense of the distribution utility. This generally means that the retail customers of the distribution utility pay more for their power. The cost differential for retail customers will increase as the proportion of wind power in the generation mix increases.

My own impression is that the distribution utilities feel that they are being forced to buy renewables at a higher price despite its being not 'dispatchable' as required. In other words it is a pain in the neck. I strongly agree that it would be beneficial if Indian Academia can take up research of an appropriate type to help out in this situation.

More research are required in the short term estimation of wind generation to help the system operator to carryout required load generation balance and carryout economic load dispatch function and maintain quality of supply. This has become more important now since in some of the states the penetration level is more than 15% of their demand.

In IIT Kanpur, both Mechanical and Electrical Engineering Departments are working on Wind power with different angles.

In Electrical Engineering, the work related to wind power includes Wind power generation interconnection Issues, Reactive Power Management in new Grid code, Trading of Wind power in electricity Markets and Wind power converters and controls. We have a strong research interaction with German University and submitted a joint proposal in this area. A project on wind power is also awarded to IIT Kanpur by CPRI, Bangalore

It will be nice to know the research activities in academia in this area since India has excellent expertise in Machines, Power Electronics and Systems

The Kalyani Group, which controls the world's second-largest forging company, Bharat Forge, today, stepped up its presence in the fast-growing wind power sector with the acquisition of Germany's wind turbine maker RSBconsult GmbH.

A spokesperson declined to reveal the size of the deal or the investment vehicle, citing a non-disclosure agreement between the companies. "We are already present in the wind energy sector, both as a wind farm operator as well as a supplier of components. The group, therefore, is ideally positioned to further enhance its role in this sector as a wind turbine manufacturer," said B N Kalyani, chairman, Kalyani Group, about the acquisition. Shares of Bharat Forge, the flagship company of the Kalyani Group, closed 3.78 per cent higher at Rs 274.50 on the news. However, shares of BF Utilities, which caters to the windmill division and financial services of Kalyani Group, fell 4.07 per cent to Rs 2,035. The stock had gone up 15.44 per cent in the past week.

Wind is becoming one of the fastest-growing renewable energy sources. Other Indian wind power equipment companies like Suzlon Energy, which recently acquired German turbine maker RePower, are also leveraging the low costs in India to export equipment to the rapidly-expanding international market. There is growth of wind power in the domestic market too. India ranks fourth among the global producers of wind power. The countries with the highest installed wind capacity are Germany (20,621 MW), Spain (11,615 MW) and the US (11,603 MW).

To encourage wind power in the country, the government has introduced a package of incentives that includes tax holidays for generation projects, soft loans, customs and excise duty reliefs and liberalised foreign investment procedures. India is among the five countries that added more than 1,000 MW of wind power in 2006. Based in Muenster, Germany, RSBconsult GmbH was set up in September 2003 by experts from the wind energy sector as a design and consulting house.

The company has end-to-end design capability from components to wind turbine systems. It works on wind industry projects with customers across Europe as well as in China, Japan and India.

With the acquisition of RSBconsult, which has more than 150 man years of cumulative international experience with customers across the globe, the $2.1 billion Kalyani group will have a strong and experienced design and engineering team to take care of product technology. The group will bring in its global supply chain capabilities and engineering skills to drive the global business model and also manage the Asia Pacific market and operations from India.

Wind turbines require a number of forged, machined and other metal components and the acquisition will enhance the group's ability to create a global component supply system to original equipment manufacturers and other leading wind power companies. Initially, the group will focus on Europe and India and by 2010 expand to other key markets of the world such as the US and China.