PGCIL
Since last year’s blackout there has been much closer management of supply and demand of power in India
Credit: PGCIL

The shortcomings of India’s electricity infrastructure were thrown into sharp focus by last year’s blackouts. Twelve months on, Jeremy Bowden discovers that multi-billion programmes have been initiated to ensure the country’s lights stay on.

A year after the world’s most extensive blackout, India has avoided a repetition and can claim to have addressed many of the issues that led to it.

The blackouts last July occurred in the northern and northeastern regional grids and affected an estimated 600 million people, although the widespread use of backup generators in a country familiar with rolling blackouts did soften the impact.

The outage resulted from an unanticipated imbalance between regions, caused by a combination of extreme weather, human error, underinvestment and poor regulation and system management.

“The power grid failure reflected an extreme situation created by drought, which resulted in very heavy electricity demand for agricultural irrigation pumps combined with low hydro power production, as well as poor power demand management for the states linked to the grid,” says Rajiv Biswas, Asia chief economist at consultancy IHS Global. The result was to expose weak links such as inadequate fail-safe systems for preventing cascading failures and a lack of proper outage planning – all in a cash-strapped transmission system that has historically been at a disadvantage to generators in competing for already scarce funds.

Since then, according to Harish Agarwal, chief executive of Supreme & Co, a Kolkata-based power infrastructure supplier, the government has been tackling these issues with a variety of measures, including a “tightening of the grid frequency band to ensure states don’t overdraw, auditing protection systems to improve grid health, power ‘islands’ and demand management”.

Biswas says since the blackout, there had been “much closer management of supply and demand for power by Power Grid Corp of India Ltd (PGCIL) together with the states in line with planned schedules”, which had so far helped avert another grid collapse. Attention has also been paid to the financial health of distributors, which have frequently been squeezed by political considerations and upon which the sector depends for income.

In addition, considerable funds are being pumped into grid development. “Power Grid is undertaking a large-scale investment programme over the current five-year plan period ending in 2017, with an estimated $18 billion of new investment planned to double its transmission capacity and upgrade its existing transmission networks,” says Biswas.

By early next year, the southern grid – which is currently connected to the rest of India’s grid by HVDC links – will be fully connected at AC level. And India is upgrading nearly 1700 critical electricity transmission stations and is installing high-voltage lines to transmit power over long distances.

“One of the key investments PGCIL is undertaking to deal with peak load capacity shortages is to create a national energy transmission grid by linking the grid for southern India with the four regional grids in the north, which are already connected,” said Biswas. This is intended to better manage peak load shortages and is expected to be implemented by early 2014, according to India’s Power Minister, Jyotiraditya Scindia. Inter-regional power transmission capacity is estimated to increase from 27,750 MW in 2012 to 65,550 MW by 2017, along with almost 140,000 km of transmission lines.

MERC
Mumbai: the city avoided the July 2012 blackout thanks to its use of ‘islanding’
Credit: MERC

According to Suba Arunkumar at consultancy Frost & Sullivan, PGCIL is planning on spending “one trillion rupees on improving the infrastructure and grid system to ensure such blackouts do not happen in future”. The company is developing 11 high-capacity transmission corridors to connect power from various projects across India’s electricity producers to the network. However, it is politically difficult to secure right-of-way for new transmission lines, so power utilities have focused on upgrading existing corridors.

Rohit Pandit, director of the Indian Electrical & Electronics Manufacturers’ Association (IEEMA), says the focus for power sector investment over the years has typically been in the generation segment, and more money needs to go to the grid to keep pace.

Generating capacity is expanding rapidly, despite coal shortages and other constraints. In the last fiscal year, the target was 16,500 MW, which at 20,450 MW was exceeded by a third, according to Power Minister Scindia, who forecasts a rise from a 228 GW demand now to 400 GW by 2022 and 800 GW by 2032. This will be driven by increases in per capita consumption, which is currently very low at around 600 kWh – compared to a world average of 2700 kWh – as well as expanding to include 300 million unconnected citizens.

In July 2012, there was a gap of about 9 per cent between the country’s energy requirement and the amount available, according to India’s Central Electricity Authority (CEA). “Based on the statistics as of 31 March 2013, the gap remains stable, and not growing,” notes Arunkumar.

However, increasing network capacity will be critical, because most of India’s demand is growing in the western states, while most of the suitable locations for new plants are in the east. PGCIL has embarked on a significant financing programme for the new investment, including new debt issuance, as well as new equity raising, according to Biswas.

Pandit notes that what is being achieved is currently ahead of schedule: “From April 2012 to June 2013, the actual achievement has been a total of 20,009 km of transmission lines against a target of 19,118 km for this period. Similarly, from April 2012 to June 2013, the actual achievement has been a total of 72,700 MVA of sub-stations against a target of 33,319 MVA.”

Balancing state grids

According to Biswas and Agarwal, since the July 2012 grid failure, there has been much more careful management by PGCIL of power supply and demand by individual states linked to the grid, to avoid situations where states are either supplying or drawing power significantly different to planned power schedules.

To help manage demand more effectively at state level, larger penalties under the availability based tariff (ABT) system, known as unscheduled interchange (UI) rates, have been introduced by the Central Electricity Regulatory Commission (CERC) for state distribution companies that inaccurately estimate their daily call on the grid.

In addition, states must also make those estimates more accurate, narrowing the required frequency band – which is an indication of how close a grid is to balancing supply and demand – to to 49.7-50.2 Hz from the existing 49.5-50.2 Hz. If power is overdrawn, then band volatility rises. CERC has also been pushed to cap market prices to ensure no one can take advantage of system vulnerabilities.

“India plans to have an integrated national grid. The target frequency prescribed by the Indian Electricity Rule is 50 Hz”, says Agarwal. All states are now participants in the central ABT scheduling mechanism.

These changes had been proposed in draft form in March before the blackouts, and now that they are implemented, should provide strong financial incentives to discourage states from providing the sort of flaky estimates that led to the mismatch in supply and demand last year.

To ensure accurate estimates and a narrow frequency band, states must be able to quickly react to changes in supply and demand within their area by changing power output or shedding load, rather than just increasing their call on the wider grid. India’s power minister has authorised the national transmission authorities to shut down power flow to states which deviate too far from their estimated grid call. So far this year the government says states are responding well to the new financial discipline.

However, transmission and distribution losses in the Indian power sector remain high, at levels estimated to be around 26 to 28 per cent of total electricity generated, compared to a range of around 4 to 8 per cent in most developed economies, according to Biswas.

India’s electricity grid reform programme – R-APDRP – has committed $3.7 billion to strengthen the distribution system and mitigate losses. Under the programme, if a utility cannot reduce inefficiency losses by 15 per cent, its grant will be reduced.

PGCIL power pact

Every year PGCIL signs an agreement with the Ministry of Power, indicating its role, and state utilities make arrangements with PGCIL, which is steadily increasing its share of the transmission network, as state distribution companies (Discoms) fail to make required investments.

“PGCIL is planning to boost its market share to 70 per cent from the existing 50 per cent by 2017, by increasing spending on strengthening infrastructure,” says Arunkumar. Revenue is also expected to rise sharply according to senior PGCIL management, who claim a doubling of expenditure on transmission projects in the five years to March, 2017, will quadruple income once completed.

PGCIL continues to be dependent on India’s state generators and distribution companies (discomms) for business. Should producers fail to meet expansion targets, as has been the case for the last 50 years, PGCIL could fall short of its investment target, according to local observers.

Chetan Varma, general manager of PGCIL, says that the present state of distribution companies “is due to high losses, old and unreliable distribution network and inefficient metering, billing and collection efficiency”.

To improve the picture, he explains “central government schemes like APDRP and R-APDRP for urban and semi-urban area and RGGVY for rural areas were envisaged and are under implementation” and they are all “aimed to improve the technical and financial conditions of the distribution companies”.

Pandit says: “The poor financial state of state discoms is a major hindrance in up gradation of the power infrastructure at the state level.”

Politically-motivated electricity pricing has lowered rates and dried up revenue, thereby limiting funds to invest in the grid. “Clearly, coal shortage and the poor financial health of discoms have slowed down the sector. There has been financial shortage for key projects, resulting in less investment,” says Biswas.

MERC
The India Smart Grid Task Force is trying to get 14 polot schemes off the ground
Credit: MERC

Recently, indexation of coal prices and reforms steps have been announced to make discoms financially viable, he adds. The central government is also helping state governments with over $5 billion in finance to expand distribution.

Arunkumar says funding had not been a major constraint on transmission investments in the last year, although Pandit cautions that projects often failed to be completed. Help has also come from outside India, with, for example, the Asian Development Bank planning a second loan to upgrade state power grids in India to help solar plants sell electricity. Such intervention can speed capacity development as it saves developers the cost of connecting to the grid individually.

Smart grid roll out

The R-APDRP electricity reform programme should help pave the way for a successful smart grid rollout. India’s Ministry of Power has invested in smart grid projects, but so far a mix of power theft, supply shortfalls, and inefficiency in metering and bill collection are making it rather pointless.

Despite this, the India Smart Grid Task Force is seeking government approval for 14 smart grid pilots to develop a proven blueprint that can be rolled out nationally, says Varma. He says PGCIL is developing a consumer-utility interactive pilot smart grid/city project in Pondicherry. “A smart grid control centre has been established. Under this pilot, already 650 consumers are covered under advanced metering infrastructure solution, which will enable demand management.”

While smart grids could play a part in the future, without more peak-load plants, India’s immediate need is for demand-side management (DSM) to offset peak demand and load growth.

“The 12th Five Year Plan targets a reduction in the energy consumption of small and medium enterprises [SMEs] by 5.75 per cent in energy intensive manufacturing process,” says Arunkumar. “Efforts to implement energy efficient manufacturing process are enforced in these energy intensive SMEs.”

However, many of the DSM initiatives are from IPPs. For example, Tata Power in Mumbai has launched thermal energy storage and DSM initiatives that has supported peak load shifting by high end consumers. “These initiatives have helped the participating industries to reduce electricity consumption by 30 to 40 per cent,” says Arunkumar.

Greater use of HVDC will also help strengthen India’s national grid. Varma says: “HVDC systems have always been known for their higher efficiency and improved economics for long distance bulk power transmission. In addition, they also provides controllability of power flow, enhancing system stability, maintaining grid parameters, and facilitating integration of renewables from different resource areas.”

He adds HVDC will “play a major role” in the growing interconnections and envisaged synchronisation of the southern region.

The blackouts have shown that even within India’s large, interconnected grid, it is useful to have some local generation in case of emergency, and this is major driver of distributed generation. “Large companies have started introducing micro-grids due to the persistent power outages in most urban areas. The proliferation of micro-grids in both rural communities and new urban developments could therefore play a significant role in addressing India’s electricity shortages over the next decade,” says Biswas.

Mumbai avoided the 2012 blackout and uses a scheme called “islanding” to avoid large outages, by ensuring it has enough local generation to allow it to disconnect from the grid and keep essential services running. Now Delhi is considering a similar islanding scheme.


ELECRAMA 2014

While India has set aside huge investments to upgrade to new technology in its T&D segment, the forthcoming ELECRAMA 2014, to be held 8-12 January next year in Bangalore, will offer major opportunities to visitors to experience firsthand wide-ranging, world-class domestic electrical products at competitive prices.

ELECRAMA is India’s largest T&D Power Sector equipment exhibition and IEEMA’s biennial flagship event.

The concurrent events at ELECRAMA 2014 will also allow stakeholders from the global power, transmission and distribution sectors to participate and present their views.

The TRAFOTECH 2014 event will provide transformer designers, manufacturers, users and consultants with a common platform to review the latest advances and future trends, share operational experiences and discuss the requirements of transformers for smart grid systems.

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