Interview with Pankaj Batra

“National Distribution Perspective Plan will facilitate uninterrupted power supply”

Pankaj Batra, chairperson, Central Electricity Authority (CEA), believes that the power sector has matured significantly in recent years and will continue on the growth trajectory on the back of growing power demand, introduction of storage solutions, deployment of electric vehicles, etc. However, issues pertaining to the intermittency of renewable energy sources, 24×7 quality power supply, and build-up of stressed thermal assets continue to be the key areas of concern in the sector. Excerpts from a recent interview with Power Line…

How would you rate the performance of the power sector in the past one year? What are the biggest issues and concerns for the sector? 

The peak demand met in the country by the state power utilities increased from 156,934 MW in 2016-17 to 160,752 MW in 2017-18, a growth rate of 2.43 per cent. The energy requirement met by the state utilities increased from 1,135.3 billion units (BUs) in 2016-17 to 1,204.7 BUs in 2017-18, a growth rate of 6.11 per cent. Electricity generation in the country increased from 1,242 BUs in 2016-17 to 1,308 BUs in 2017-18, a growth of 5.32 per cent. The energy not met was 7.6 BUs (0.66 per cent of the requirement) in 2016-17 and 8.6 BUs (0.71 per cent of the requirement) in 2017-18. The generating capacity addition from conventional sources (coal and lignite, hydro, gas and nuclear) was 14,209.8 MW during 2016-17 and 9,505 MW during 2017-18. The generation capacity addition of renewables increased from 11,320 MW in 2016-17 to 11,778 MW in 2017-18, a growth rate of 4.04 per cent.

We have set a huge target of renewable capacity addition of 175 GW by 2021-22, which the government is trying to exceed. The price per unit of power from solar and wind energy sources fell to a record low level of Rs 2.44 per unit in May 2017 and Rs 2.43 per unit in December 2017 respectively. With the price of power from these sources being lower than that of coal-based plants, and even pithead power plants, the states are more keen to offtake power from solar and wind sources. As a result, the existing overcapacity in coal-based plants has resulted in the build-up of stranded coal-based generation assets. In order to tackle the situation, various measures are being taken by the Government of India including undertaking warehousing stressed power projects under the Pariwartan (Power Asset Revival through Warehousing and Rehabilitation) and Samadhan (Scheme of Asset Management and Debt Change Structure) schemes for reducing the debt to a manageable level by converting it into equity, which would be held by banks and then bid out to interested developers.

It is felt that the demand for electricity would keep on growing since India is a growing economy and we have not yet achieved 24×7 supply to all households. The CEA’s National Electricity Plan shows a compound annual growth rate of 6.18 per cent in energy consumption for the period 2017-22 and 5.51 per cent for the period 2022-27. The government is making all efforts to ensure 24×7 power supply to all households by providing money to the state governments for last-mile connectivity of the unelectrified households under the Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya). The government is also making efforts for demand creation through the sale of power to neighbouring countries like Bangladesh and Nepal, and through 100 per cent electrification of railways.

The biggest issues and concerns for the sector are ensuring 24×7 power supply to all consumers, dealing with stranded generation capacity (both coal and gas), and tackling intermittency of power generation from renewable sources. There is a huge potential for setting up solar photovoltaic in the Leh-Ladakh region, which we are proposing to inject into the Indian grid. For this, the transmission lines will have to pass through a tough terrain and we are trying to address this issue. We are also working on how to lessen the transmission evacuation charges for wind and solar energy and whether these should be borne solely by the generators or should form a part of the transmission grid, or a combination of both. Currently, the interstate transmission charges and losses  are free for solar and wind energy plants commissioned till March 31, 2022, and hence these are to be borne by the utilities purchasing power from conventional generation.

What has been the progress on drafting the perspective plan for the distribution segment up to 2021-22? 

Distribution is the weakest link in the power sector affected by both technical and commercial issues.

In order to provide a uniform framework and guidelines to all distribution utilities, strengthening of the distribution sector in the country, and collating information from the distribution licensees, the CEA, under the guidance of the Ministry of Power (MoP), has prepared the first National Distribution Perspective Plan. The plan highlights the infrastructure requirement of the distribution sector up to 2022 for providing quality and uninterrupted power supply to all consumers. The plan projects that the increase in 33/11 kV substations, 11 kV feeders and low tension feeders will be in the range of 30-50 per cent during the period 2017-22. Further, the plan envisages the adoption of new technologies like smart metering, supervisory control and data acquisition, enterprise resource planning solutions and improvement in power quality. Overall, the plan anticipates the requirement of more than Rs 4 trillion for additional distribution infrastructure. The distribution plan is under finalisation and will soon be sent to the MoP for final approval.

What are the biggest challenges in enabling grid integration of renewable energy? What are the solutions needed to overcome these issues?

The grid integration of renewable energy poses both technical and financial challenges. On the technical front, the challenges identified by the CEA pertain to the type and quantum of the balancing capacity required, whether balancing should be the responsibility of the state or the regional load despatch centres, having a real-time market, setting up of a transmission systems in advance to take care of the difference of gestation periods between renewable energy capacity and transmission lines, etc. Besides, there are concerns regarding reduced inertia and short circuit capacity with the increasing quantum of renewables. All these can be tackled.

As far as financial challenges are concerned, the CEA has recommended that the balancing charges should be paid by all the states in the ratio of their renewable purchase obligations (RPOs), since RPOs, as per the Tariff Policy dated 28 January 2016, are uniform for all the states (8 per cent by 2022). The CEA has also calculated the balancing charge as Re 1 per unit for 30 per cent renewable penetration in the “Report of the Technical Committee on Study of Optimal Location of Various Types of Balancing Energy sources/Energy Storage Devices to Facilitate Grid Integration of Renewable Energy Sources and Associated Issues”.

There is also the issue of optimising the cost of balancing. We have almost completed a study on the required generation mix, including the use of electrochemical batteries for balancing for 2030. Considering the falling prices of batteries, we feel they will become affordable by 2022. Prices of lithium batteries dropped by 70 per cent between 2010 and 2017, and further by another 20 to 30 per cent in the past year.

What are some of the steps being taken in the area of cybersecurity?

Cybersecurity is becoming increasingly important. In May 2017, the WannaCry ransomware attack infected more than 230,000 computers in over 150 countries, which was unprecedented in scale. A cyberattack on Ukraine’s power grid on December 23, 2015 and December 17, 2016, affected the power system of Ukarine. The Government of India is making earnest efforts to deal with cybersecurity threats.

The Information Technology Act, 2000, the primary law in India dealing with cybercrime and electronic commerce, was notified on October 17, 2000. On January 10, 2014, the National Critical Information Infrastructure Protection Centre (NCIIPC) was created by the Government of India under Section 70 A of the Information Technology (IT) Act. Two important documents were notified by NCIIPC, that is, Guidelines for Protection of Critical Infrastructure and Framework for Evaluation of Cyber Security and notification of Computer Emergency Response Teams (CERT-In) under Section 70(B), under which sector-specific CERTs were constituted.

As per Rule 12(1)(a) of IT Rules 2013, it is mandatory to report specific cybersecurity incidents to CERT-In. The Government of India, under the IT Act, 2000 and the Rules therein, for Reasonable Security Practices published in 2011, require all organisations to implement ISO:27001 as the recommended Information Security Management System.

The CEA is coordinating the implementation of cybersecurity measures in the power sector. Four nodal officers have been appointed for the four sector-specific CERTs (hydro, thermal, transmission, distribution). NHPC is the nodal officer for hydropower plants, NTPC for thermal, Power Grid Corporation of India Limited for transmission and the CEA for distribution. Further, actions to enhance cybersecurity awareness, preparation of a crisis management plan, cybersecurity audits, appointment of a chief information security officer, and identification of critical assets are being taken by the CEA. The CEA, jointly with other organisations, has organised workshops on cybersecurity and would continue to do so.

What are some of the steps needed to ensure flexibilisation of thermal power plants? 

All new rules are initiated through policy measures, followed by regulations. The National Electricity Policy is under amendment and flexibilisation has also been suggested for new power plants in the amended National Electricity Policy that is under finalisation. A number of measures can be taken for the flexibilisation of coal-based plants, without much cost. The important thing is to make the states aware of what requires to be done for making their plants flexible. CEA and NTPC jointly organised a workshop on this issue in September 2018 for raising cybersecurity awareness among the state utilities.

What are the some of the initiatives that CEA has taken to facilitate the roll-out of smart meters? 

The Ministry of Power had constituted a committee in December, 2012 under the chairmanship of Chairperson, CEA, to review the Functional Specifications of Low Cost Single Phase Smart Meters framed by an earlier Committee. Other members of the committee were representatives from the Forum of Regulators secretariat, regulatory commissions, distribution companies, Central Power Research Institute, Bureau of Indian Standards, meter manufacturers, Indian Electrical and Electronics Manufacturers Association and India Smart Grid Task Force.

The committee finalised the functional specifications of low-cost, single-phase smart meters in 2013.The CEA also published the “Functional Requirements of Advanced Metering Infrastructure in India” in August, 2016. These functional requirements define the minimum functionalities and performance for an advanced metering infrastructure system proposed to be developed in India. The main objective of AMI is to enable two-way communication between a smart energy meter and a head-end system to enable remote reading, monitoring and control of electrical energy meters, billing, payment, demand response and installed at the consumer, feeder, distribution transformer level and to serve as repository of record for all data.

As per the Tariff Policy notified by the Government of India in January, 2016:

“Appropriate Commission shall, therefore, mandate smart meters for:

(a) Consumers with monthly consumption of 500 units and more at the earliest but not later than 31.12.2017;

(b) Consumers with monthly consumption above 200 units by 31.12.2019.”

R.K. Singh, Minister of State for Power and New and Renewable Energy, has stated:

“In the next three years, metering will go smart prepaid, and gone will be the days of bills reaching your house. So, the need of the hour is to scale up manufacturing of smart prepaid meters and to bring down their prices.”

In view of the above, smart meters are being mandated for all consumers under the CEA (Installation and Operations of Meters) Regulations, which are under amendment.

The CEA and India Smart Grid Forum have been jointly conducting national and regional workshops on Smart Grid since 2012, to make regulators and utilities aware of functionalities and advantages of smart meters.

What were some of the key initiatives taken by the CEA in the past year? What are some of the new studies and regulations under preparation? 

The CEA has undertaken a number of studies in the past one year. We have almost finalised the distribution plan, undertaken a study on the optimal location of balancing sources for renewables and other matters, and completed a study on the peaking operation of combined cycle power plants (CCPPs). We also started testing of the Dadri CCPP for peaking on August 27, 2018. We ran this plant only during the peak time, starting at about 4 p.m. and shutting down at 9 p.m. We intend to take up another CCPP in the western region for peak time operation and will then submit a report to the MoP and the norms to the CERC. The Volume II National Electricity Plan on Transmission up to the period 2026-27 has been finalised and would shortly be put up on the CEA website. We are also carrying out an econometric method of demand forecasting, considering economic factors like anticipated gross domestic production growth, etc. This would be finalised in September 2018. We have also finalised amendments to the CEA regulations for connectivity to the grid and CEA safety regulations to facilitate connectivity of charging stations for e-mobility, hybrid wind/solar projects, storage solutions, etc. to the grid. The regulations have provisions on low voltage ride-through, high voltage ride-through, active generation control by wind and solar plants, power injection from vehicle to grid, etc.

What is your outlook for the power sector for the next few years? 

My outlook is that the power sector has matured rapidly in India in the recent years and it will continue to mature equally rapidly, especially in the distribution sector, with stricter performance norms for the distribution utilities. The distribution system, especially the last mile, would experience the fastest rate of growth, with a push by the Government of India for 100 per cent connectivity to all households through grant under Saubhagya. Another area of growth will be renewable energy capacity addition and measures to tackle the intermittency of renewables. There would also be a push towards optimisation in the entire power sector through policy and regulatory measures, which include bringing more and more information technology in the power sector through smart grid and further distribution reforms.

Megawatt-scale batteries and other new types of energy storage devices would experience one of the fastest growth rates, in order to tackle the intermittencies of renewable sources of energy. Smart meters would also grow at a very fast rate, because of the numerous advantages it offers, that is, accurate demand forecasting, measurement of demand profile, leading to accurate design of the distribution system, demand response, accurate load shedding only to the extent required, etc. Besides, electric mobility would grow at a fast rate to cut emissions and, in the case of India, to save costly oil imports.

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