Towards the Grid of the Future

New technologies drive traditional utilities to redefine traditional approaches to operations. While micro-grids and other Distributed Energy Resources (DER) play a significant role in lighting up India's rural communities, supporting initiatives such as Saubhagya also play a valuable part in the development of India's smart grid of the future.

For the energy sector, digital revolution means beginning to reassess traditional business models and developing new ways of supporting growth in a fast changing environment. DER and micro-grid integration are becoming particularly important in countries with established power infrastructure, such as India, to create a grid capable of surviving the digital disruption storm.

The grid of the future will be a smart system that can accept electricity from various producers, stores and distribute it on demand, while ensuring reliable base load supply. Such a system requires advanced data management, technologies that ensure security and reliability of supply, as well as new tools that operate along the value chain, including end-user devices in homes and businesses of customers and producer-consumers.

The position was summed up recently by Sambitosh Mohapatra, Partner (advisory, power and utilities), PwC India: 'The pace of technological developments on renewable and storage equipment; innovations, especially on the metre and data generated to specific customers, will destroy demand as we know on the grid and spawn various market and business models to coexist.'

As power grids modernise, transmission and distribution (T&D) systems are being designed to improve reliability, integrate DER and operate more efficiently. According to Black and Veatch's Strategic Directions, drivers of grid modernisation based on smart cities report include broader deployment of smart metres, updating and automation of distribution and sub-station infrastructure, as well as improvement in cyber and physical security.

Smart grids
Smart grids allow utilities to integrate DER by using real-time data analytics and controls to balance the supply and demand. Despite initial hesitancy, many utilities are realising that smart solutions offer long term cost-savings and greater flexibility to divert excess power to large-scale commercial users. Optimised smart grids are also proving to be prudent capital investments that can help readily absorb the effects of unexpected power disruptions.

The Ministry of New and Renewable Energy (MNRE) of the Government of India has taken cognisance of the importance of micro and mini grids in achieving 24 X 7 power to all with the proposed development, announced in 2016, of 10,000 renewable micro-grids and mini-grids with a capacity of 500 MW. To achieve a genuinely smart grid, the growth of DER needs to go hand-in-hand with the development of the centralised grid and not as an alternative.

The financial health of DISCOMs is improving due to a combination of lower T&D losses, higher tariffs and greater efficiencies û and the reach of the traditional grid is growing. As the grid improves the use of micro-grids to fill the gaps in coverage, or augment poor coverage, it may become less attractive. Where grid power is extended to communities that have previously been poorly served, it is likely be cheaper than a micro-grid combination of renewable power and battery storage.
This scenario is posited by Rahul Tongia in the Energy and Sustainability Fellow at Brookings India in hisreport, Microgrids in India: Myths, Misunderstandings, and the Need for Proper Accounting report. In this report, he suggests that, 'microgrids being interactive, or interactive-capable with the grid, could allow for the evolution of advance load and supply options and could offer primary power, backup, or secondary power, islanding when needed and, when available, cheaper supply. This is a smart grid tailored to meet India's needs.'

Way forward
Achieving these outcomes requires an understanding of leading-edge technologies to an extent that many utilities lack currently. Full understanding of and experience in integrating and deploying advanced communication and power distribution systems, data collection and analysis tools, as well as sophisticated automation solutions to support new work flows will be crucial in the development of a smart grid.

The transition to a modernised distribution network requires more than implementation of the latest technologies. New business models and an enabling regulatory framework are also crucial.

DER and increased consumer control of energy consumption mean that people will use the power network in new and different ways. Utilities must look beyond the traditional business models of one-way power flow because their consumers may also be DER providers, who expect compensation for the power they supply to the grid. The expansion of rooftop solar, the fastest growing sub-sector of the renewables market in India, could play a significant role in this trend.

These changes will require utilities to navigate new territories. Often, they have a limited idea of the initial analysis and planning required, how to value DER, and how to integrate them into the network. Leveraging the large quantity of data from the smart grid is also challenging. In general, utilities are uncertain as to how to structure that data, manage them, ensure accuracy and most importantly,  use them to make better informed decisions.

This opens up opportunities to partner with other companies. Ideally, they need partners with experience in traditional and new ways of generating and delivering power and in smart technology projects. Partners with these complimentary skill sets will enable utilities to make them most of India's smart grid of the future.

Author:
Authored by Rajiv Menon, Managing Director, Black & Veatch India