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Challenges and Opportunities in the Indian Transmission Sector

Devendra ChaudhryAdditional SecretaryMinistry of Power, GOI

Major Challenges / Opportunities

• Challenges / Opportunities in Transmission Planning

• Challenges / Opportunities in Construction, Development & Technology

• Challenges / Opportunities in Implementation

Bureaucrats like to play Sudoku with words (read policy statements) in a scheming manner (don’t‘ miss the pun), economists like labour-capital-profit brew, lawyers - rules and agreements and Power sector players – power and profit at lightning speed; But none of them can succeed at their chosen tasks unless they work together in designing sustainable solutions.”

Structure of Indian Electricity Sector

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Mother of all Challenges

Ensure adequate, secure, reliable and efficient operation of the national grid

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Clearing & Settlement Organisation CTU System

Operator Market

Operator

RPC CERC Financial Regulator

STU SLDC

OA Customer

Transmission Licensees

Generator Power Exchanges/

Trader

Ministry of Power

Money Flow

Information Flow

TRANS CHALLENGE

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Open Access, Market Administration, Automation, Large fund handling (10s of Billions), Single window clearance, taxation etc.)

TRANS SYSTEM

DEVELOPER-BUILDERFREE PLAY

FREE PLAY

Your friendly Electricity Act’03• Promotion of competition and market mechanisms

as contained in the Preamble of the Act:– taking measures conducive to development of electricity

industry,– promoting competition therein, – protecting interest of consumers and supply of electricity

to all areas, – rationalization of electricity tariff, – ensuring transparent policies regarding subsidies, – promotion of efficient and environmentally benign policies

• Federal Structure of Governance - Electricity a Concurrent Subject

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Challenges in Planning

Uncertainty in generation – Free Play dominated – lack of firm scheduling. Butter to Fire: Procurement (State Players – hedging / hawing )

Beneficiaries uncertain Intent for MTOA / STOA - rather than Long-term Access IPPs apply for connectivity/Access with target beneficiaries. When

time comes for firming up of beneficiaries, many of them change their drawal points- Leads to either under utilisation of some of the corridors or congestion in other

Hydro power development in North-eastern Region

10TH PLAN 11TH PLAN 12TH PLAN

Pvt. Cap addition MW 7,120 23,012 46,825

Private share at end of plan % / MW

12.9% / 17,113 27.2% / 54,276 31.8% / 101,101

Challenges in Planning …contd

Most of the drawee utilities do not know want to actually plan their

drawal requirement….. YA KHUDA…. Intra State generation time schedule gets deferred leading to increase

in drawl requirement from the grid – e.g, Punjab, Southern Region constituents etc.

Integration of large scale renewable generation into the grid high volatility – intermittency & variability : needs large balancing areas

through interconnections, flexible generation, smart grid application etc.

System planned for peak requirement. Due to wide variation on generation and drawal, loading on the lines reduces load to high voltage situations – dynamic reactive compensation required to address operational issue

STILL WANT ADEQUACY, SECURITY, STABILITY AND TOTAL FLEXIBILITY Strong Grid before Smart Grid

Challenges / Opps. in Construction, Development & Technology

• Right-of-way: Development of 11 high capacity transmission corridors – 80,000MW 765kV double circuit corridors (> 50% increase in length in 12P), 1200kV

UHVAC technology. ±800kV 6000MW long distance HVDC system (world’s longest; > 2000 ckm)

• Reduction in land for substation – Gas Insulated Substation(GIS)• Flexibility in line loading and regulation of power –Wide variation in

demand on a daily/seasonal basis, there is increased need to regulate power flow on the network for grid security and optimisation – application of Flexible AC Transmission (FACT) devices, dynamic compensating devices

• RE Blessings! Coming to a Grid near you (12P end: 54,504 -17.1%)

PLAN VI VII VIII IX X XI XII

CKM 52,034 79,455 117,376 152,269 196,407 257,481 364,921

MVA 46,621 75,322 125,042 181,943 257,439 409,951 692,301

% CHG. 52.7/61.6 47.7/66 29.7/45.5 30.3/41.5 35/56 41.6/69.2

Challenges in Construction / Development• Tight time schedule for commissioning of Transmission System

• Difficult terrain – hilly, North-eastern region, forest• Statutory clearances

• Land acquisition Long procedures of Land Acquisition Act / Resistance by land owners Non-acceptance of rates fixed by State Govt./demand for higher rates

• Right-of-Way Resistance by villagers for installation of towers in their land / Demand for higher

compensation• Forest Clearance

Requirement of NoCs from various Deptts (Revenue, Irrigation, highways, PWD, etc.) Requirement of various certificates (FRA, minimum forest involvement) Land scheduling & Digitization of maps Long procedures of clearance in case of involvement of sanctuary/ National Park (SBWL,

NBWL, Supreme Court). Forest proposal is considered only after clearance of Supreme Court.

Compliance of conditions of Stage I approval at state level

• Skilled manpower – limited gang availability

Key factors going forward…• Need for a re-visit of the current provisions for

Connectivity and Access

• Concept of ‘General Network Access’ or GNA to be explored

• Challenge is to put in place a market friendly transmission service product

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Key factors…. (contd.)

• Availability, dependability and reliability • The following factors affect the reliability of the

power system:– More than a certain number of trippings per year.– Faults causing more than one element tripping due to

undesirable operation of the protective systems.– Multiple tripping of lines and/or generating units leading

to loss of generation and/or load.

THE OLCHALLENGE OF GRID DISCIPLINE

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Challenge of Grid Discipline

• Grid Security is Paramount - Adherence to E A 2003- Grid Standards, Grid Code and Regulations by all

• Transmission capacity Vs Transfer capability• Tightening of frequency band : 49.95 – 50.05 Hz.• Congestion charges for any outage• UI LIMITS• Frequency response – GOVERNOR MODE• Penal realisations for Non – compliance – big issue –

operational vs financial • SLDCs – RING FENCING REQUIRED

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Protections Systems / Islanding• Key to the safe and secure of the grid - Essential to isolate the

fault portion of the grid and limit the spread of the impact• Protection operations in an un-intended manner leads to

tripping- a security hazard for the grid – ZONE 3 • Need for ensuring that the defense mechanisms such as

Under Frequency Load Shedding & Protection Systems EXIST AND OPERATE WHEN NEEDED - Third party audit

• Islanding to ensure supply to essential loads / isolate power plants with major load centers

• Delhi islanding scheme under implementation• All states to implement islanding schemes/SPS in consultation

with the CEA, CTU, RPCs.• NPC / TASK FORCE CONSTITUED AND FUNCTIONING

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Strengthening & Capacity Building of SLDCs• Load Despatch Centers the nerve centers• Institutional re-engineering required• Key to successful system operation – Ring fencing and “Soft Skills”• State Load Despatch Centers must be manned by trained and competent

personnel. • Basic Level Power system Operator Certification has been introduced in

the country and more than 500 operators have been certified. Suitable incentive schemes for these certified operators are also being implemented.

• Specialist Level Certification Examination in “Regulatory Affairs” has been conducted in March 2013

• Specialist Level Certification Examination in “Reliability” has been planned for March 2014

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Telemetry & Communication Challenge • Telemetry and Communication is a mission critical

resource for effective visualization of the Power System

• Important role of telemetered SCADA data in decision making at any Load Despatch Centre.

• Data modelling, simulation , analysis capabilities at the Load Despatch Centers are to be developed

• New Technology – Phasor Measurement Units (PMU) are to be integrated and used for the benefit of the system operator

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Market Challenge • Competition is key to a successful electricity market• Vibrant ? Electricity Market at inter-state level exists in

different market segments: Bilateral , Day ahead / 2 Xchanges• Proof of Govt’s success – reflects high degree of public-private

partnership• Going forward Operationalisation of Intra State Open Access -

Top agenda of Ministry of Power– Intra State open access implemented in Gujarat, Delhi and

West Bengal– Issue of CUSTOMER ESCAPE AND VIABILITY

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International Market Models

• VIU: Vertically Integrated Utility • LTSO: Legally unbundled Transmission

System Operator• ITSO: Independent Transmission System

Operator• ISO: Independent System Operator

Shallow ISO / Deep ISO

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Global Trends in Electricity Transmission System Operation: Where does the future lie? -- Mallika Chawla1 and Michael G. Pollitt2 http://www.eprg.group.cam.ac.uk/wp-content/uploads/2013/05/Draft-Project-2.pdf

System Operator structure worldwide

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• Multiple operators in each country – 249 total• North America, Australasia and Africa have VIU, in fact maximum in numbers. • The two biggest operators – PJM and MISO are ISOs• Independent system operator in only 38 countries – all EU (12) and some states of USA (14)• In analysis in terms of Giga Watt of generation capacity connected to the transmission system it emerges that

out of about 4200 GW generation capacity: 2000 GW is VIU, 1200 GW is ISO, LTSO and ITSO add up together to another 1100 GW

ISO Models:Balancing, Operational & Deep ISOs

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Organization Types

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Sr. No. Countries Operation model Organization type 1 China VIU Government Company2 South Africa 3 South Korea 4 Brazil Private Company5 Japan Public Company6 Belgium ITSO Government Company

7 UK 8 Italy Private Company9 Spain Public Company10 Australia ISO Government Company

11 Russia 12 USA (PJM, CALISO, MISO) Private Company13 France LTSO Public Company

Electric Reliability Organization (ERO) in USA• Focus on Reliability post disturbance in 1965 and 2003• North American Electric Reliability Council (NERC) established in

1967 with Voluntary Compliance of Reliability Standards• Electric Reliability Organization

– Mandated by Electric Power Act of 2005– Mandatory Compliance of Reliability rules– Primary Role is in framing Standards, Compliance Monitoring &

Enforcement

• Compliance Monitoring & Enforcement– Self Certification, Self Reporting, Periodic Data Submission, Exception

Reporting– Compliance Audits, Spot Checking– Complaints

• North American Electric Reliability Corporation (NERC) designated ERO in 2008 (Council was Corporatized)

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Dancing with the Elephants

Building the Network and using it…

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CEA 24

Statutory provisions: Tariff Policy – RULES OF THE GAME

• Ensuring optimal development to promote efficient utilization of generation and transmission assets.

• Attracting investments in transmission sector and providing adequate returns.

• Implementation of transmission projects through competitive bidding at appropriate time.

CEA 25

Existing Transmission Products• Connectivity: No charges & no commitment to provide

access – no strengthening

• LTA - 25 years commitment to pay PoC injection and drawal charges. / MTOA: 3 months to 3 years. / STOA: up to 3 months in advance and on the same day.

CEA 26

Issues in existing approach

• CERC regulations allow system strengthening (fresh investment) on the basis of commitment to pay i.e. LTA. No system strengthening can be done against connectivity, MTOA or STOA.

• Existing philosophy - long term PPAs predominant. Short term market shall be catered through available margins.

• There is no clear formulations in CERC regulation on when drawal capacity for the states would be created.

• Historically, additional drawal capacity for the states was created whenever new central/ISGS power projects came up with know beneficiaries.

• LTA (target region) is an onerous financial liability without commensurate benefits to the generators.

CEA 27

Issues in existing approach: Drawal above LTA 2011-12

(All India)State

Max. Peak Demand Met (MW)

Max Drawl from ISTS (MW)

LTA Quantum

(MW)

Difference (MW) of Max Drawl and Allocation (MW)

UP 12048 8217 4688 3529Maharashtra 16765 7343 3963 3380Punjab 8751 6027 3095 2932Madhya Pradesh 8505 5000 2689 2311Haryana 6725 4735 2554 2181Tamilnadu 11053 4315 2739 1576Rajasthan 7690 3975 2483 1492West Bengal 7249 2694 1302 1392Andhra Pradesh 11972 3618 2453 1165Orissa 3792 1955 1023 932Delhi 5642 4295 3376 919Kerala 3337 2024 1312 712Karnataka 8549 2722 2067 655DVC 2470 797 154 643Uttrakhand 1620 1217 723 494Jharkhand 1052 866 469 397Chattisgarh 3134 1356 984 372

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CEA 28W

est Ben

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PunjabOris

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Madhya

Pradesh

Haryan

a

Mahara

shtra

Jharkhan

d UP DD

Uttrakhan

d

Rajasth

an

Tamiln

adu

Kerala

Andhra Prad

esh

Chattisga

rh

Karnata

kaDelh

iBihar

Mizoram

Nagala

ndAssa

m

Tripura

Chandiga

rh

Meghala

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Gujarat Goa

Arunach

al J&K

DNH

Manipur

Pondicherr

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Sikkim

*0.00%

50.00%

100.00%

150.00%

200.00%

250.00%

% Drawl above LTA quantm

CEA 2929

UP

Punjab

Haryana

Rajasthan

Andhra PradeshDelhi

Karnataka

Uttrakhand

ChattisgarhBihar

Assam

Chandigarh

Meghalaya

Tripura

Arunach

al

Manipur

Pondicherry-500

0500

1000150020002500300035004000

Drawl Pattern of StatesDifference (MW) of Max Drawl

and Allocation (MW)

CEA 30

Issues in existing approach: Growing short term trade

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CEA 31

Towards an all India

mesh???????

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Rs. 75,000 Crore already underway involving 11 nos of High Capacity Corridors – no PPA known!

CEA 32

What should be the new approach?• Planning must and that too with a fair degree of certainty• Catch 22: without prior knowledge of pairs of injection and

drawal. • A GNA agreement with generators could become the driver

for investment ?.• How about a GPA – General Purchase Agreement with the

procurers / traders for the long term?

CEA 33

Possible Benefits• Market friendly transmission service product• More accountability of planners to anticipate

and remove congestion / improve system reliability

• Generators get all India access with flexibility• States empowered to determine their GNA

requirement and get the ISTS built for it.• ++++++++++++

CEA 34

GNA : Features• Entities availing GNA shall have to commit to pay such POC charges

(injection or drawal) for 25 years as may be prescribed by CERC

• Charge rate ? – 1 lac INR / month / MW?

• GNA holder shall have the option to be scheduled as preferred customer provided the counter party is also having GNA under ?????: – LTA category– MTOA category– STOA category– Access through PX

GNA holders having PPAs of more than three years could be entitled under LTA category. They may seek reservation under MTOA / STOA category. Similarly for GPAs?

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CEA 35

GNA/GPA: Planning & Implementation• Import/export requirement to be assessed at least

with 4-5 years in advance - STUs TO ENSURE• For grant of GNA / GPA

– Generator will not have to specify drawal points– Drawee entity will not have to specify injection points

• Entities seeking GNA / GPA shall have to sign agreement, furnish BG etc. for enabling implementation of the transmission system

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CEA 36

the path difficult to travel….

1) CERC to modify regulations on Connectivity, LTA & MTOA to introduce GNA concept- CERC

2) The planning procedures pertaining to GNA to be incorporated in Grid Code- CERC

3) CTU along with CEA & POSOCO to workout present GNA capability - CTU

4) States shall have to sign the GNA with CTU to be treated as preferred customer- States/ CTU

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We delight at the beauty of the Butterfly but rarely appreciate the changes it has

gone through….

We have great challenges but should we overcome them our butterfly will be the

most beautiful in the world!!!!!

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Thank Youand Enjoy the Sea

There are no transmission system issues there !!!!!!!!!!!

and the Beach….