Empowering LDCs

FOR report on capacity building of load despatch centres

Indian load despatchers have a critical role to play in the smooth operation of power systems and electricity markets. As the power sector is preparing to take the next big leap with dramatic changes in the generation mix, rapid increase in the number of gird participants and introduction of concepts such as prosumers and energy storage, the load despatch centres (LDCs), at the national (NLDC), regional (RLDCs) and state (SLDCs) levels, must be well equipped to integrate all of these easily into the grid. The Forum of Regulators’ (FOR) report on “Capacity Building of Indian Load Despatch Centres” (CABIL), released in November 2018, has a 20-point recommendation to empower LDCs for the future. Its implementation will lead to a complete revamp of the way LDCs are organised (including infrastructure, human resources and accounting practices) and will help establish them as sustainable institutions of power system operations and facilitators of robust electricity market.

The report was prepared by the sub-group constituted by FOR to identify best practices in LDCs across the country, recommend suitable measures and create a roadmap for institution building. The need for a fresh impetus to capacity building of LDCs was identified by the technical committee of FOR for implementation of the framework on renewables at the state level in February 2018. The sub-group, chaired by S.K. Soonee, adviser, Power System Operation Corporation of India (POSOCO), comprises nine members with representatives from SLDCs, POSOCO and the Central Electricity Regulatory Commission (CERC).

The voluminous report (comprising close to 300 pages) is a result of a detailed literature survey, visits to LDCs, interaction with international experts, analysis of business models, survey of manpower facilities, technology, international practices and revenue models as well as 11 sub-group meetings from July to October 2018. It will serve as a detailed manual and a ready reckoner for establishing emerging system operators for many years to come. “The implementation of the report will ensure functional and financial autonomy of LDCs. It is an essential step for ring fencing of LDCs and ensuring neutrality in system and market operations. Institutional capacity building of LDCs with multi-dimensional faculty is necessary for handling the challenges of the future such as ensuring 24×7 supply, portfolio management and forecasting,” says S.K. Soonee. The key recommendations of the sub-group are as follows…

Key recommendations

Institutional capacity building: In terms of both tangible and intangible aspects, institutional capacity building is important for good governance. The tangibles include physical assets, organisational structure and systems, legal frameworks and policies. The intangibles pertain to social skills, experience, creativity, social cohesion, social capital, values, motivation, habits, traditions and institutional culture. “Institutional capacity building is a long-drawn process that can succeed only with a clear set of objectives and priorities; a long-term vision; transparency, role clarity and accountability; an appropriate methodology; general buy in, acceptance and participation of all the stakeholders; professionals and sufficient time and resources,” says Soonee.

Change management: Over the past decade, there has been a tremendous increase in the complexity of LDC operations in the wake of the huge influx of renewable generation. In the coming decade, decarbonisation, digitalisation, decentralisation and distributed generation are expected to impact LDC operations. Therefore, LDCs require an enabling framework to leapfrog and be able to handle the upcoming challenges.

Categorising LDCs: Recognising the diversity of LDCs, the sub-group recommends categorising LDCs into emerging, medium and large groups depending on the system size determined by various criteria such as the installed generating capacity, renewable capacity, transmission system, peak demand and energy consumption. The staffing requirements can then be worked out for each of the categories.

Decision support systems: Proper decision support systems at LDCs such as supervisory control and data acquisition systems (SCADA), energy management system, wide area measurement systems, dynamic security assessment and renewable energy management centres are essential for heightened situational awareness. Their life cycle has to be properly managed to ensure their relevance and utility for operators. To address the need for advanced data visualisation, business applications, expert systems based on artificial intelligence and big data analysis, the sub-group makes recommendations for developing visualisation aids for LDCs.

DSOs: In view of the increase in bidirectional power flow (due to distributed generation) as well as the proposed carriage-content separation in distribution, the sub-group recommends the creation of distribution system operators (DSOs) in each state that would interact with SLDCs to keep the systems secure.

Functional division for ICT: It recommends the constitution of a full-fledged functional division for handling information and communication technology (ICT). High obsolescence rates, cybersecurity, third-party software versus in-house capability, and vendor development must be factored in by the ICT teams. Further, communication expenses should be booked under the operations and maintenance (O&M) head in the computation of LDCs’ annual charge.

Civil infrastructure and ergonomics: The LDCs need to be housed in a separate independent building with the right ergonomics for a control centre environment.

Real-time operation desks: There should be five groups for real-time operations, where about 25-30 per cent of the LDC strength is involved, to be able to manage shift operations, leave entitlements and retain qualified personnel. Each shift must have three to eight persons to ensure that the decision support systems and ICT function smoothly and 24×7 reliability is secured (see Fig. 3).

Multidisciplinary aspects: The sub-group recommends that the LDC head must be suitably empowered in matters related to transfers, posting, training, certification, and professional engagement and career progression of the LDC staff. This is important to ensure that personnel other than those from power system/electrical/electronics discipline of engineering, and from other specialisations such as law, meteorology, economics and finance are encouraged to handle the multi-dimensional role of LDCs.

Human resource diversity: LDCs are executive-oriented organisations with a suggested executive non-executive ratio of 95:5. For an emerging LDC, the typical number of executives is 30-50, while for a medium and large LDC, it is 70-100 and 100-150 respectively.

Humanware vs IT-ware: A balance between the two is recommended depending on the size of the organisation. For medium and large LDCs, the IT systems would be much more evolved and complex. Advanced IT systems deployment, skill enhancement of LDC staff and outsourcing of peripheral services could optimise the requirements of humanware.

Data governance: The recommendation is for a suitable regulation by SERCs for the management of operational data by LDCs. The regulation must address the issues associated with managing and sharing various types of data by LDCs. Some of the key aspects include compliance with the Right to Information Act and other statutory provisions; responsibility and accountability on data sharing; an all India network model; information uniformity and symmetry; and nature of data, data granularity, modelling and duration of archival.

HRD in LDCs: At least seven days of training per person must be provided annually. Human resource development (HRD) expenses must be included in the HR expenses rather than in the administrative and general expenses. Further, it should be at least 5 per cent of the HR expenses. The Forum of Load Despatchers (FOLD) must be strengthened to play a greater role in hand-holding small SLDCs as well as in their institutional capacity building. Such expenditure on FOLD activities by LDCs must be factored into the fees and charges (F&C).

Certification of LDC personnel: A provision for operator certificate retainership is recommended with at least 75 per cent of the LDC executives having certification for basic level, while 10-15 per cent having certification for the specialist level.

Model F&C regulations: The sub-group suggests a methodology for the computation of the annual revenue requirement (ARR) for all LDCs and its recovery as per the draft model regulations included in its report (Figs 1 and 2). Some of the key features of the model regulations are:

  • One-time user registration fees and recurring monthly charges.
  • Removal of segregation between system and market operation charges.
  • Providing distinct heads like return on equity, interest on loans, depreciation, HR expenses, O&M expenses, etc.
  • Sharing of monthly charges between generation, transmission and distribution entities equally.
  • SERCs to place special category users (electric vehicle charging stations, battery energy storage, etc.) in any of the three categories for billing LDC F&C.
  • Provision for LDC empowerment and contingency reserves as well as monthly certificate retainership.

HR expense as a separate head: Given that expenditure on HR constitutes 70 per cent of LDC expenses, it is suggested that HR expenses be separated from O&M expenses. The manpower needed for the effective functioning of LDCs must be duly filed by them in their ARR petitions, which will be approved by the concerned SERC. This approved manpower then becomes the basis for calculating HR expenses for LDCs.

Performance evaluation: For LDCs, there should be a provision for performance-linked incentives (PLI), which would be linked to achieving a certain level of performance defined under a set of key performance indicators (KPIs) specified by the respective SERCs. The incentive is recommended to be defined as a base percentage of the annual gross revenue with scope for pro-rata increase based on LDC’s increase in performance index.

At the CERC level, the regulator notified regulations on F&C of RLDCs in 2015, which provide for incentive recovery by RLDCs based on the achievement of 11 specified KPIs. These includes reporting of interconnection meter error, grid incidents, voltage deviation index, frequency deviation index, system reliability, availability of SCADA systems and the percentage of certified employees.

Benchmarking: LDCs must be benchmarked on various performance parameters under the guidance of FOLD. Some of the parameters may be related to system operation, market operation, technology usage, best utility practices and implementation of recommendations.

Reward programmes: Periodic reward and recognition programmes under FOLD can be conducted to encourage healthy competition, bring in efficiency and build collaboration amongst LDCs.

Roadmap for implementation: This includes recommended steps for establishing a new LDC as well as for implementation by the existing LDCs (see Fig. 4).

The way forward

FOR has made the report a standing agenda in all its technical committee meetings. Its implementation is expected to take place at the interstate level (NLDC/ RLDCs) first. The CERC is expected to come out with regulations on F&C of NLDC/RLDCs for 2019-2024 by March 2019. The NLDC/RLDCs are likely to take the lead in implementing the structural changes related to human resources as well. Existing personnel need to be retrained while new workforce from various fields will have to be recruited. As LDCs have a great responsibility to ensure integrated and stable operation of power systems, it is vital to make sure that they are adequately equipped in terms of both infrastructure and human resources. “Execution will be challenging, slow and often painful as it encompasses skill upgrading, procedural improvements and organisational strengthening,” acknowledges Soonee. However, once the foundation is laid with strong institutions in systems operation, there will be greater transparency, grid security, efficiency and economy in the functioning of the sector.

Swarna Kesavan

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