The Indian medicine

This paper discusses an unconventional concept- tariff linked to frequency. This new concept has been introduced in India at the inter-state level, starting from mid 2002, through the three-part tariff for central generating stations, the so called availability based tariff (ABT). In this scheme overdrawals are costly when the grid is short on generation, and are cheap when the grid has surplus generating capacity. Similarly any oversupply is paid for at a high rate when frequency is below 50.0 Hz and at a low rate when the frequency is above 50.0 Hz. Underdrawal and undersupply also get the same treatment.