At the recent 5th POSOCO Day event, R.K. Singh, union minister for power, new and renewable energy, spoke about the sector’s achievements, the challenges ahead, and the outlook for the sector. Excerpts…
The Indian power sector has witnessed a significant transformation over the years. Power availability has increased and the sector has moved from a state of being power deficit to power surplus. We have connected the whole country into one single grid, strengthening it to now transfer 112,000 MW of electricity from one part of the country to another. We have connected the whole country into a single market, allowing electricity to be generated in one part of the country and sold in any other part of the country. Connecting the entire country into a single grid has ensured that no region of the country is power deficit as far as availability of power is concerned.
However, if there is a shortage of electricity, it can either be attributed to the financial position of the distribution utilities or the lack of technical capacity to draw the requisite quantity of power. Until now, the Ministry of Power (MoP) has come across some cases in two to three states that needed power but were constrained from drawing it owing to the lack of adequate transmission infrastructure. Earlier, the reason could be attributed to the weak position of the distribution segment; however, in the past four to four and a half years, the MoP has strengthened the distribution segment via schemes such as the Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and the Integrated Power Development Scheme (IPDS). Moreover, in the past few years, the MoP has strengthened the distribution segment by adding 2,900 substations and upgrading 3,800 old substations, besides adding 750,000 ckt. km of HT lines and 550,000 ckt. km of LT lines. These developments have ensured that the distribution utilities are able to deliver electricity in all regions of the country. In addition, the MoP has provided electricity connecti-ons to all households in India under the Saubhagya scheme.
We have also introduced a series of reforms in the power sector. We have put in place an electricity market with two power exchanges offering a day-ahead market, a term-ahead market, and a real-time market. We have a separate day-ahead market for green energy, and have proposed to have a separate term-ahead market for green energy.
Apart from this, we have instituted a system of merit order despatch, which prioritises the despatch of the cheapest electricity first, thus encouraging efficiency and cheapest prices for consumers.
At the COP21 event, the Government of India had committed to developing 40 per cent of the total installed capacity from non-fossil fuel-based sources by 2030. Notably, India achieved this target in November 2021, nine years before the target. Now, at COP26, held in Glasgow, the government has pledged to develop 500 GW of non-fossil fuel-based installed capacity by 2030. On the country’s march towards achieving a renewable energy capacity of 175 GW by 2022, it has achieved an installed capacity of 150 GW of renewable energy, including large hydro projects. About 63 GW of renewable energy capacity is under various phases of installation and is expected to be completed by next year.
In 2020, India witnessed a total investment of $6.2 billion towards the development of renewables. In 2019, renewable energy investments in India stood at $9 billion-$10 billion. Although renewable energy investments have slowed down across the world owing to Covid-19, it may be noted that India is way ahead on its energy transition journey.
The power sector is undergoing a transformation, with large penetration of renewable energy. Notably, the intermittency issue of renewables is an evolving and emerging challenge to the stability of grid operations. With the increased installation of rooftop solar, greater penetration of renewables in agriculture, and increased EV charging, power demand will fluctuate and become more volatile. Hence, it is necessary for POSOCO/RLDCs/NLDC to plan and mitigate these evolving challenges by preparing accordingly. In the initial years, the volatility of the electricity grid will pose problems in grid operations; however, over the long term, demand will probably even out with the introduction of battery energy storage systems. We are trying to encourage storage in a big way. The MoP has recently come out with a bid for 1,000 MWh of storage, which is the largest bid in the world.
In the next 15-20 years, even though consumption will grow to a certain level, a substantial part of that consumption will actually be generated by the consumers themselves as they will become prosumers. This transition will be visible at not only the household level but also among industries because of cross-subsidies. World over, the power tariff for bulk consumption for industries is low as compared to household consumer tariffs, but in our country, it is inverted. Hence, it will be profitable for industry to switch over to renewables.
The next challenge is related to cybersecurity. It is not just cyberattacks from a recognised enemy; any sort of misguided groups can come out with a cyberattack on our system or any part of the system. Since the whole network is vulnerable to cyberattacks, we need to pay focused attention to it.
There is a need to work on ancillary services, to have reserves that can be called upon. Until now, we had surplus generating capacity because of which we always had some capacity on standby. As demand catches up with the existing capacity, POSOCO will not have the luxury of surplus power at hand. Therefore, POSOCO should have reserves through ancillary services. There is a need for a system of secondary and tertiary reserves. This automatic generation control is a good thing, but it will last only for about 15 minutes. After 15 minutes, secondary generation/standby has to kick in, which necessitates a policy for ancillary services. That said, secondary and tertiary reserves will not be required if we have a situation of huge surpluses, if we add so much of renewables. Even with renewables, when huge surpluses of solar and wind are injected at the same time, battery storage will be required so as to prevent energy from being wasted.
The power sector in the world is changing. We are also going to connect with other countries under the “One Sun One World One Grid” initiative. We need to work on this, as it will have its own challenges. Further, as far as load despatch is concerned, it is a very specialised field and can only be handled by people who are well trained for this. That is true for both the NLDC and RLDCs, but not for state load despatch centres. So, there should be compulsory certification of people who are going to work in this field.
Moreover, everybody who participates in the grid, whether the one that draws power from the grid or just a part of the grid, must follow discipline. If they do not follow discipline, there will be chaos and the whole country’s national grid will collapse, which will result in a national disaster. That is what we together need for the country to have a secure future where power is available round the clock and of good quality without any blackout in any part of the country. It is a major responsibility because it is electricity that runs everything, it is a part of our life like oxygen.