S.K. Soonee, Former and Founder CEO, Power System Operation Corporation Limited (now Grid Controller of India Limited), shared his perspective on the journey of reforms in the power transmission segment at Power Line’s 16th Annual Conference on “Power Transmission in India”. He also shared his outlook for the segment going forward. Edited excerpts from his address…
In the 1960s and 1980s, there were a few dozen separate grids operating across the country and a need was felt to establish regional grids to form an integrated national grid in India. At that time, the questions in everybody’s mind were: How to connect the grids? How much investment would it require? What would be the issues and challenges? And how would the integrated grid be operated? Nearly four decades later, India has realised the vision of one nation, one grid. We are able to evacuate large volumes of renewable energy while ensuring negligible network congestion. Robust transmission in India has been an enabler for an all-India electricity market and cross-border exchange with neighbouring countries. These achievements have been made possible through reforms in the transmission segment at the policy, regulatory and institutional levels.
Policy and regulatory reforms
The Electricity Laws (Amendment) Act, 1998 paved way for the creation of a Central Transmission Utility in the country. The Electricity Regulatory Commissions Act, 1998 was another landmark reform as far as the regulatory commissions are concerned. The mandate of non-discriminatory open access in transmission in the Electricity Act, 2003 gave a further thrust to strengthening the transmission network and institutional capacity building of systems operations. The National Electricity Policy, 2005, Section 5.3 with 10 sub-sections, and the National Tariff Policy, 2006, Section 7 with three sub-sections, deal with various facets of the transmission segment. The new national electricity policy is expected to place further emphasis on transmission.
The separation of carriage and content at the bulk level has been a daunting process. Its implementation in the true sense required the setting up of an independent company with functional, financial and institutional autonomy. The past practice of granting connectivity only for a pre-defined source and sink has now given way to flexibility to change the point of withdrawal. Transmission tariff is independent of the quantum of power flow. The grid is now considered a common carrier; one has to only ensure that the power sale agreement is in place and the interchange at the point of injection/drawl is recorded. This is the true separation of carriage and content.
Another important aspect of India’s transmission system is the layered structure/federated system, comprising interstate and intrastate networks. Electricity, being a fungible commodity, when traded, takes its own path. It follows the laws of physics, and not the contracts. Therefore, transmission is the key to developing a robust power market in the country. A major reform that has been undertaken is that now we have a pool from which all the transmission charges are recovered and paid.
A prominent issue that is being flagged now-a-days is the mismatch in the gestation period of renewable capacity addition and the transmission system. To tackle this, the connectivity regulations have undergone a tremendous change.
Regulations on General Network Access (GNA) have been introduced. This is also a unique and complex experiment that India has taken up. Under the GNA regime, the state utilities have to only indicate the required import and export capabilities for planning the interstate system. The paradigm has evolved from Kirchhoff’s Current Law (path based) to Kirchhoff’s Voltage Law (node based). Overall, planning, access, pricing – all are considering the grid as a common carrier, and they are node specific, and not path specific. Even transmission losses are administered through point of connection loss.
With renewables mushrooming throughout the country, providing connectivity to the grid and maintaining a stable and robust system will be a challenge going forward. Therefore, it is essential that the standards and regulatory framework evolve over time to keep pace with the new and emerging requirements. At the time of connectivity to the grid, all the criteria pertaining to connections and communications should be met. Reactive power sources and their pricing need to be worked upon. Dynamic VAR compensation and reactors as well as repurposing of the retired thermal generators as synchronous condensers needs to be pursued. Inverters can give reactive power provided they are suitably configured and remunerated for grid support services. A separate regulation and pricing for reactive power are urgently needed. We must unbundle reactive power from the transmission of power.
Institutional reforms
We have independent power transmission companies, an independent system operator and now, are almost in the process of having independent system planners. The central transmission utility (CTU) has been hived off from Power Grid Corporation of India Limited as an independent institution. Whatever has been done at the inter-state level needs to be replicated at the state transmission utility (STU) level, each with its own nuances.
Many private players have entered into the transmission segment. Tariff-based competitive bidding in the transmission segment has led to a reduction in costs. With this, the role of the CTU, STUs, the power ministry and the regulators is to facilitate and get the most efficient, best price, and ensure fast construction and quick clearances. Another revolution that has taken place in the country is that all the HVDC links are now regulated at the national level.
Conclusion
India has achieved commendable success in the transmission segment, but building transmission at the same pace for the next few decades would be challenging with the right-of-way constraints. Going forward, we need to explore the possibilities of reorientation of the existing lines too, in order to have optimum investment, minimum congestion and loss, and a more reliable and resilient system. For cross-border, we need to convince our neighbours to be liberal as far as transmission is concerned. To the extent possible, India has avoided financial transmission rights since congestion is negligible.
That said, transmission planning has become a real challenge. Resource adequacy must be ensured not only for generation and load, but also for transmission. There is a need to have integrated resource planning. The resource adequacy draft has been in circulation for the last couple of years now and is expected to be finalised within the next six months, and resource adequacy for transmission would be a part of it. We also need a lot of intrinsic capacity building at all levels.
