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Feature | April 2014

Way ahead for Smart Grids in India

Smart Grids have been touted as a panacea for all of the power industry´s problems. Janaki Krishnamoorthi does a reality check
India's energy demand is expected to increase three-folds in the next decade. To meet this demand as also to counter several existing problems plaguing the power sector like shortage of power, poor access to electricity in rural areas, power thefts, huge losses in the grid etc., India needs a major revamp of the aging power system from generation, transmission and distribution. The evolution towards Smart Grids, a next-generation electrical power system, is considered the panacea for resolving all these issues. Several measures have been initiated in this direction by the government like the formation of the National Power Grid in 1981, National Power Transmission Corporation Limited in 1989 which was changed to Power Grid Corporation of India Limited in 1992, launching of the Restructured Accelerated Power Development and Reforms Programme (R-APDRP) and Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) during the XI Five year Plan and setting up of the India Smart Grid Forum (ISGF) in 2010. ISGF, a public private partnership initiative, was set up to provide a mechanism through which all stakeholders could participate in the development of Indian Smart Grid systems. ISGF was involved in formulating the Smart Grid Vision and Roadmap for India released by the government in 2013. However, the pace of development is yet to accelerate. Apart from 14 pilot projects identified all over the country for implementation by the Ministry of Power, very little has been delivered till date. This is not really surprising as there are several barriers and stumbling blocks to surmount.

The Challenges
One of the major challenges for implementing Smart Grids is raising huge funds as it requires substantial capital investment. Naturally the utilities, who are in poor financial health, find it difficult to raise the monies. ´The biggest problem with almost all utilities is that they are cash strapped. India´s utility companies lose Rs. 100,000 crore every year. Their ability to fund innovation is restricted. Change management and capacity building are big issues. Hence APDRP should be first implemented before Smart Grids can be put in place,´ says CN Raghupathi, Vice President and Head, India Business Unit, Infosys Limited which is involved in the entire value chain of transmission, distribution, trading and generation.

Industry pundits also aver that one should not look at the investment but at the benefits in the long run. ´ It is not right to see only the capex while looking at the cost of new technology. We in India must look at the cost benefit for the various options in a holistic manner,´ says RK Chugh, Chief Executive Officer Smart Grid Division, Infrastructure and Cities Sector, Siemens India Limited. ´One of the major constraints for growth of our economy is the unreliable power supply to the industry. We seldom calculate the financial impact of non-availability of power due to outages to the consumer. The investments made in improving the reliability of the power supply through technologies such as Advanced EMS, Distribution Automation and Data Management System are recovered by avoiding perhaps a single outage. The transparency provided by advanced metering solutions like MDMS (Meter Data Management System) is invaluable to pinpoint and control the source of T&D losses for the utility. For a sustainable business model, utilities need to invest in Smart Grid technologies and the governments, both State and Central, need to allocate sufficient funds for these projects. This business model is generally followed across the globe,´ adds Chugh.

Siemens has handled several Smart Grid projects both in the transmission and distribution sector in India. For example, in the Transmission Utility space Siemens is providing new EMS (Energy Management System) applications for the Load Despatch and Control in the Northern Region and has executed a pilot project with PMUs (Phasor Measurement Unit) in the Eastern Region. In the distribution sector Siemens is implementing advanced Smart Grid technology in the distribution management systems for 8 towns in Maharashtra. It recently commissioned a state-of-the-art facility at Goa for development and production of new products in the Smart Grid arena for Indian and other markets.

The next paramount issue is the regulatory framework that is reportedly out of sync with today´s industry needs and has little incentive for private sector investment. ´The regulatory framework plays a key role in introduction and widespread implementation of the Smart Grid technologies in any country, including India,´ states Chugh. ´Certain new regulations like Time of Use tariffs are gradually coming in place. The regulators are realising the importance of investment in Smart Grid technologies. There is a need to proactively engage the consumer and encourage their participation in the newer energy programs such as Demand Response. With the possibility of widespread installation of decentralised generation through renewable sources in the near future the consumer is likely to take up the new role as a ´prosumer´. This will involve taking a relook and suitably amending the existing frameworks and policies,´ he adds.

Lack of interoperability standards is another major issue as evinced by Raghupathi. ´Yes this is an issue. Infosys is chairing LITD-10, a BIS initiative to bring out ´Interoperability standards in the Power Sector´. This is modelled on IEC57, the world standard by CIGRE. The draft is ready and will become a standard soon.´

Lack of interoperability leads to use of technologies that are either incompatible with the existing system or lack adequate interface facilities defeating the very objective of Smart Grids to communicate between different components on a real-time basis.

Road ahead
The development of a dynamic regulatory environment is a prerequisite to fast tracking Smart Grids in India. This will provide the green signal to investors, technology providers and attract large investments and new technologies. And the government is planning to introduce some changes in the regulatory framework, reveals Reji Kumar Pillai, President & Chief Executive Officer, India Smart Grid Forum (ISGF). ´A model regulation is under preparation by a committee constituted by the Ministry of Power. The first draft has already been presented to the Forum of Regulators (FOR) in December 2013 and it is expected to be finalised soon. A National Smart Grid Mission (NSGM) is expected to be launched soon which will drive policy and project formulations on fast track. The existing programs of the government such as the Jawaharlal Nehru National Solar Mission, National Electric Mobility Mission, R-APDRP and RGGVY etc. would all be integrated with NSGM. It encourages innovative business models to leverage the assets being created under each of these programs in a complimentary mode and the scope for private sector participation is tremendous,´ he says.

Other issues that need to be looked into are capacity building of all stakeholders, training of utility officials at all levels on emerging technologies, operation of new systems, and reliable and secure communication network. There is also a need for a single institution that should be made responsible for formulation and implementation of Smart Grid roadmap.

´The NSGM with experts from diverse fields would guide utilities and governments in overcoming the challenges that we would face in the smart grid journey,´ maintains Pillai. ´There cannot be a Systems Requirement Specification (SRS) Template like that of R-APDRP for Smart Grids. You need flexibility and dedicated specialised manpower to handle the diverse, complex, and evolving needs of technology, standards, policy, regulations, innovation, etc,´ says Pillai. Smart Grids are no doubt the way forward for Indian power sector, but the era of whole-scale implementation is still a long way down the road.

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