Grid 2.0

Developing a smarter generation of power networks

Smart grids combine the latest automation, information and communications technologies (ICT) with electricity generation, transmission and distribution (T&D) infrastructure to monitor and control power flows. They feature multiple functionalities depending on utility requirements. The global market for smart grids has been expanding rapidly and is expected to reach $125 billion by 2017.

In August 2013, the Ministry of Power issued the Smart Grid Vision and Roadmap for India, which targets a nationwide roll-out of smart grids by 2027. Later, in May 2015, the government launched the National Smart Grid Mission (NSGM) to plan, monitor and implement grid modernisation policies and programmes in “mission mode”. During the next decade, the country is expected to spend about $21.6 billion on the development of smart grid infrastructure. Meanwhile, investments of about $4 billion will be undertaken for the roll-out of new metering systems and upgrade of distribution networks.

Significance and functionalities

In India, the deployment of smart grid technologies has become a necessity due to the growing complexity of the grid with the addition of distributed generation sources and increase in consumption. At the sub-transmission level, smart technologies help keep pilferage in check and are thus instrumental in reducing aggregate technical and commercial losses, currently ranging from 25 per cent to 35 per cent for most utilities in India.

Smart grid deployment is essential for comprehensive demand-side management as it allows utilities to measure, communicate, monitor and manage electricity flows. The integration of operation and information technologies allows for real-time visibility, thus enabling quick response.

The development of smart grids is also being supported by the country’s ambitious target of installing 100 GW of solar energy by 2022, of which about 40 GW is proposed to be added to the low voltage grid through rooftop photovoltaic installations. Significant modifications in the grid will be required to manage the injection of solar power into the grid by about 20 million households.

This creates the need to make the T&D network flexible enough to absorb large quantities of intermittent renewable energy generation. Making the grid more responsive holds the key to ensuring stability in operations and maintaining the quality of power supply.

Progress in India

For over a decade, utilities in India have been integrating automation, and ICT into the conventional grid to enable intelligent functionalities like two-way communication, self-healing and self-outage recovery. Early efforts were encouraged and funded by the Restructured Accelerated Power Development and Reforms Programme (R-APDRP) launched by the government in 2008.

Under Part A of the programme, several utilities deployed IT applications such as supervisory control and data acquisition-data management systems (SCADA-DMS), and geographic information systems to enable energy accounting. While their implementation has not been completed, the technologies deployed under the R-APDRP have laid the foundation for the deployment of smart grid technologies in India.

In order to ensure dedicated efforts for smart grid development, the government set up the India Smart Grid Task Force (ISGTF) and the India Smart Grid Forum. These included public-private participation and aimed to assist in policy formulation and implementation.

Meanwhile, the NSGM was launched with the mandate to formulate and monitor projects, evaluate standards and technologies, and assist with resource mobilisation, among other activities. The total outlay for NSGM activities for the Twelfth Plan period is Rs 9.8 billion with budgetary support of Rs 3.4 billion. Under the NSGM budget, grants will be provided for up to 30 per cent of the smart grid project costs, while selected functions such as training, capacity building and consumer engagement are eligible for 100 per cent grants.

The first phase of the mission includes 14 smart grid pilot projects, undertaken by various state-owned discoms in association with the SGTF, at an investment of about Rs 4 billion. The objective of the pilot projects was to test various smart grid functionalities in the distribution segment including automated metering infrastructure, peak load management, outage management systems, power quality, distributed generation and SCADA-DMS.

The pilot project initiative saw limited success, with nine projects awarded so far, two under tendering, and three cancelled. This is attributed primarily to the lack of knowledge about smart grid technologies at the time of planning and underestimation of costs.

The second phase of the mission involves the implementation of smart grid technologies under the central government’s ambitious Smart Cities Mission, which entails investments of Rs 980 billion in the execution of 100 smart cities across the country. The deployment of smart grid functionalities is a key component of the mission as it targets assured electricity supply in the selected cities, with at least 10 per cent procured from solar power installations. Under the first phase of the Smart Cities Mission, the government recently selected 20 cities.

In order to provide regulatory support, the Forum of Regulators released the model smart grid regulations in August 2015, which can be adopted by states. The regulations cover aspects such as smart grid cell formation, a time-of-use tariff regime, demand response and mandatory rooftop generation for large customers, formulation and execution of projects, mechanisms for cost recovery and monitoring and evaluation of projects. So far, Assam, Karnataka and Madhya Pradesh have adopted these regulations, and other states are expected to follow suit by the end of next year.

Further, the industry expects the government to soon announce the wide-scale deployment of smart meters (about 100 million) in the country. Mass procurement is expected to push down the prices of smart meters to $20-$40. In a significant development, in October 2015, the Bureau of Indian Standards finalised the national standard for smart meters, IS16444, to standardise anti-tamper measures and enable modular plug-and-play communication.

Another initiative of the government supporting smart grid deployment in India is the Electric Mobility Mission, which targets the roll-out of 6 to 7 million electric road vehicles by 2022. The distribution grid in the country will have to undergo a significant overhaul in order to make this possible.

Challenges and the way forward

Stakeholders agree that a transition to smart grids is inevitable for India given the role it can play in reducing the demand-supply imbalance and network losses, integrating distributed generation and improving the overall efficiency of the power system. However, the implementation and adoption of smart grid technologies remains challenging for Indian T&D utilities.

This is because the concept of smart grids is relatively new in India, and utilities generally display reluctance and caution in the adoption of new technologies. The decision-making process in the public sector is slow, and the practice of procurement through least-cost bids further limits innovation. Another challenge is the lack of comprehensive regulations and standards to guide utilities in technology adoption.

The initial pilot projects failed to pick up due to the lack of expertise among utility staff, limited response from bidders and extremely high prices in certain cases. Therefore, it is essential for the government to undertake capacity building activities and encourage knowledge sharing.

Indian utilities can gain significantly by studying the experience gained from hundreds of successful smart grid projects implemented across the world. While studying foreign success stories is important, it is also essential to ensure that the solutions deployed in India are designed specifically to deal with indigenous economic and environmental conditions. Further, India’s leadership in IT must be leveraged for implementation activities. Further, awareness has to be created among consumers regarding the benefits of smart grid technologies.

Limited availability of funds with the cash-strapped utilities is another major challenge. While huge investments are required to implement smart technologies, Indian utilities are reeling from the financial losses accumulated as a result of inefficient operations and inadequate retail tariffs. In order to fill the funding gap, stakeholders must develop innovative business models that encourage private investments in the deployment of digital technologies. The funding challenge can also be addressed through mass procurements and implementation, which can potentially reduce costs through economies of scale.

The adoption of smart grids in India has become a necessity. For the country to continue along the path of aggressive economic growth, it needs to build a modern, intelligent grid in an efficient, cost-effective, innovative and scalable manner. Effective implementation of government programmes and initiatives can potentially take India to the forefront of the smart grid market.

 

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