Interview with S.R. Narasimhan: “Grid-India stands committed to ensuring the reliable operation of the grid”

S.R. Narasimhan, Chairman and Managing Director, Grid Controller of India Limited (GridIndia)

In a recent conversation with Power Line, S.R. Narasimhan, Chairman and Managing Director, Grid Controller of India Limited (Grid-India), talked about the power sector’s achievements in the past year as well as the evolving demands and prerequisites of the power system. He also elaborated on the relevance of the deviation settlement mechanism and the security constrained economic despatch model for the Indian power sector. Edited excerpts…

How has the power sector performed in the past one year or so? What have been the key hits and misses?

Over the past year, the Indian power sector has witnessed significant developments, with notable achievements as well as some challenges. Firstly, India successfully met its all-time high electricity demand of above 240 GW on Septem­ber 1, 2023. Furthermore, an all-time high record for daily energy met (about 5,224 Mus) was also achieved on September 2, 2023, demonstrating the robustness of the power supply infrastructure to meet the growing energy needs of the country. Several states also managed to meet their highest-ever en­ergy and peak demand records, underlining the generation ca­pa­city and transmission capability of the regional power grids.

Next, the country made substantial progress in renewable energy capacity additions, with total installations crossing 175 GW (including large hydro) in 2023. In the past year (September 2022 onwards), the increase in solar and wind capacity alone exceeded 13 GW, demonstrating a strong commitment to expan­ding the country’s green energy infrastructure. Last year, we also witnessed re­cord-breaking variable renewable en­ergy levels, with the maximum instantaneous wind and solar penetration reaching approximately 32 per cent.

In the past year, the Indian power sector also witnessed the introduction and implementation of several new rules, regulations and guidelines. Some of the major ones are the Electricity (Amend­me­nt) Rules, 2022, the Central Electri­city Regulatory Commission (CERC) (In­di­an Electricity Grid Code) Regulations, 2023, the Connectivity and General Net­work Access to the Inter-State Transmis­sion System (ISTS) Regulations, 2023, the Deviation Settlement Mechanism (DSM) Regulations, 2022, and the Reso­ur­ce Adequacy Guidelines, 2023.

While the above accomplishments sh­ow­case the resilience and progress of the Indian power sector, there also have been challenges due to large generation losses in wind and solar complexes, especially in Rajasthan. The detailed an­alysis of these events is ongoing and various remedial measures have already been suggested and implemented so far.

What are the emerging needs and requirements of the power system in India?

India’s ambitious target of achieving 500 GW of non-fossil fuel capacity by 2030 has brought about several emerging nee­ds and requirements in the power system. To facilitate this transition, India must focus on the following key aspects:

  • Resource adequacy and flexibility: With a substantial increase in renewable energy sources, ensuring resour­ce adequacy in all time frames is of utmost importance. Furthermore, it is crucial to have adequate flexible reso­urces in the power system to meet the increasing demand ramps and the ne­ed to reduce thermal generation du­ring peak renewable energy periods. Thermal flexibility would also mean faster start-up and shutdown times, minimum uptime and two-shift operations as we go forward.
  • Regulations and standards: The codes and standards that govern the integration of renewable power and energy storage sources into the grid need to be regularly revisited and updated. It is imperative that they evolve in tandem with technological advancements and the changing needs of the grid to ensure seamless integration and optimal utilisation of renewable resources.
  • Robust transmission network and grid resiliency: The increasing penetration of renewable generation has resulted in a behavioural change in interregional flow patterns across the country. In order to effectively adapt to this change, there is a need for adequate flexible transmission resources such as high-voltage direct current transmission links in the grid.
  • Evolution of electricity markets: Elec­tricity markets should be able to harness all generating resources in times of need. Factors such as price caps and market segmentation should also be considered against this backdrop. Id­entifying timely capacity expansion needs and having a capacity market is an important aspect of ensuring reso­urce adequacy. In ancillary services, the participation of demand-side reso­urces for demand response should also become important.
  • New competencies: With the rapid integration of renewables into the grid, the importance of accurate modelling and simulation capabilities is also growing significantly. Modelling and simulation studies not only aid in renewable energy compliance verification and interconnection planning but also in understanding and addres­sing the complexities arising from the integrated operation of large quantum of renewables in close vicinity. Fur­th­er­more, it is important to develop lab/ field test facilities for testing in­ver­ters and wind turbines against sp­ecified standards in India.

What are the unresolved issues?

While there have been significant thru­sts as far as policy and regulations are concerned, technical standards for grid connectivity require further modifications to keep pace with technology. Newer elements such as battery energy storage systems, green hydrogen electrolysers and electric vehicle (EV) charging stations will get connected to the grid and thus, there is a need to provide support for frequency and voltage control. Similarly, distributed energy resour­ces should support these functions. The grid of tomorrow will have a greater integration of these new elements. Retrofits would be simply impossible to implement for these new resources; therefore, standards become important, along with compliance monitoring mechanisms, to ensure adherence to these st­an­dards from the planning stage throu­gh the operational stage.

Another aspect is utilities conducting resource adequacy assessments across all time horizons and taking proactive steps to ensure the same. An aggressive 50 GW per annum bidding schedule has been announced by the Ministry of New and Renewable Energy, which is essential for scaling up renewable energy capacity. However, the appetite for PPAs has to be matched at the discom level, both for renewable energy and energy storage, in line with renewable purchase obligation and storage purchase obligation targets. The financial health of discoms becomes crucial here. While the Late Payment Surcharge Rules, 2022, notified by the Ministry of Power, has helped in reducing the outstanding dues for energy payments, it is also important to ensure that discoms have adequate surplus to take up new investments and ensure resource adequacy.

What is the expected timeline for the roll-out of SCED? What have been the key learnings from the pilot project?

A pan-Indian security constrained economic despatch (SCED) pilot project, covering 52 thermal independent system generating systems with a combi­ned capacity of 58 GW, was operatio­nalised by Grid-India on April 1, 2019. The pilot has been extended until furth­er orders by the CERC in its order dated March 31, 2022. Since the implementation of SCED, savings of approximately Rs 30 billion have been achieved as of August 31, 2023.

As per the CERC (Indian Electricity Grid Code) Regulations, 2023, SCED will be rolled out from October 1, 2023, to generating stations connected to the ISTS that are willing to participate in SCED. The National Load Despatch Centre (NLDC) has been designated as the nodal agency for implementing SCED through regional load despatch centres (RLDCs).

The key learnings from the pilot project are as follows:

  • SCED highlighted the immense scope for optimisation of production cost by enhancing thermal flexibility (ramping capability, turndown level, maximum generation limit, etc). The experience provided key lessons in unit commitment for maintaining reserves in the grid.
  • At the power station level, SCED led to reduced disruptions in the injection schedule, easing generator operations.
  • One of the major learnings on the system operation front has been the support to system reliability along with signals for technology interventions.
  • With decentralised scheduling as the baseline, centralised optimisation closer to the despatch hour requires a high level of information technology (IT) and communication support with the required redundancies. This would be one challenge besides the need for regulatory support and harmonisation of gate closure timelines (interstate and intra state) if we wish to extend SCED to generators at the intra-state level.

What is your view of the DSM Regulations, 2022? What more needs to be done to maintain a balanced and stable grid?

The CERC (DSM and Related Matters) Regulations, 2022, came into effect from December 5, 2022. Further, suo-moto orders were issued by the commission on December 26, 2022, February 6, 2023 and April 9, 2023.

Ensuring frequency stability of the grid necessitates consolidated actions in all areas such as resource adequacy in all time horizons, load and renewable energy forecasting, portfolio management and generation reserves. The scope for improvement in all these areas is huge. Despite this, due to the inherent nature of electricity, there would be deviations from the schedule. These deviations necessitate the establishment of appropriately priced mechanisms to encourage utilities to align with efficiency goals.

The CERC DSM Regulations, 2022, have delinked the charges for deviation from frequency, which has previously been the core of the deviation settlement mechanism in India over the past two decades. The revised DSM Regulations, 2022, is based on the premise that all entities will adhere to schedules and deviations will be managed through the deployment of ancillary services.

Grid-India had expressed its concern regarding the commission’s move both at the draft stage as well as after the implementation of the new regulations, which came into effect on December 5, 2022. Some modifications have been ordered by the commission. It is felt that until the whole set of arrangements mentioned in the second paragraph are in place, we should continue with the frequency linkage for DSM prevailing earlier. We are hopeful that the Honourable Commis­si­on will accept this proposal in the interest of ensuring reliability of the grid

What is your expectation from ancillary services in India going forward?

The CERC approved the commissioning of the Automatic Generation Control (AGC) pilot project between NLDC and NTPC Dadri Stage II in December 2017. AGC in India was operationalised in January 2018, on a pilot basis. Secondary reserve ancillary services (SRAS) thro­ugh AGC were operationalised in the In­dian power system for the first time in an organised manner. Since December 5, 2022, with the operationalisation of SRAS, secondary frequency control th­rough AGC has been formalised as an an­cillary service. A total of 70 power pl­an­ts with an installed capacity of 67,336 MW are operating round the clock under the SRAS scheme.

The CERC has notified the Ancillary Services Regulations, 2022. NLDC, acting through RLDCs, has been designated as the nodal agency for implementing ancillary services. The regulations introduced the Tertiary Reserve Ancillary Se­rvice (TRAS). Reserves under TRAS wou­ld be procured through power exchan­ges in the day-ahead ancillary market and real-time ancillary market. As stated earlier, resource adequacy is the key and the TRAS market has hardly seen any bids for selling. The trend will have to be observed for some more time and steps should be taken to correct this.

The next step would involve the participation of demand-side resources in SRAS and TRAS, alongside renewable energy resources. Primary response an­cillary services could be postponed for at least four to five years in India, as th­ere still is a significant conventional generation providing these services.

What are your priorities and key focus areas for Grid-India?

The areas meriting attention have been discussed above. Grid-India stands co­m­mitted to ensuring the reliable operation of the electricity grid even as the country works towards achieving the target of 500 GW non-fossil fuel generating capacity by 2030. The company, whi­ch has been recognised as a “Great Place to Work”, will further work towards en­han­cing transparency, stakeholder coordination and collaboration. Internal policies will focus on managing talent, promoting diversity at the workplace, em­powering system operators and ke­eping them motivated to meet the growing stakeholder expectations.

Both the mindset and skill sets have to adapt to the integration of new variables such as EVs, storage, green hydrogen and distribution system operators. The modernisation of control centres with artificial intelligence (AI) tools and maximisation of system performance are key areas to ensure a cyber-secure and efficient system operation.

On the electricity market front, we keenly await the introduction of capacity markets and carbon markets, with Grid-India expected to play a key role.

What is your perspective on future power demand in the country in the near to medium term? What is the outlook for the power sector?

The perspective on future power de­mand in the country for the near to medium term appears robust and promising. Looking forward, there is a clear indication of a substantial surge in po­w­er demand. In the coming year, the projected peak demand is anticipated to touch the 250 GW mark. A word of caution: when we say “demand”, we are re­ferring to the load incident on the transmission grid. It excludes behind-the-me­ter captive generation and distributed energy resources such as rooftop solar. The latter is not on Grid-India’s radar. The large-scale addition of rooftop solar or captive generation in any state would lead to a reduction of the load incident on the transmission grid.

EVs will also play a major role in driving the future power demand, considering the government’s ambitious targets for EV penetration. Green hydrogen, with its diverse uses such as powering vehicles and producing industrial feedstocks, is also expected to further push electricity demand, especially given the government’s goal of becoming a global player in this segment.

The expansion of the regional footprint, facilitated by cross-border trade through initiatives such as the One Sun, One World, One Grid; the Bay of Bengal Ini­ti­ative for Multi-Sectoral Technical and Eco­­nomic Cooperation; and the Bangla­desh, Bhutan, India and Nepal initiative, would gain prominence. The development of digital infrastructure, cyber security and scalable ways of working, supported by interoperable information and communication systems, is imperative. Additionally, the modernisation of control centres with AI tools and the maximisation of system performance are crucial measures. Risk-based probabilistic transmission planning processes and criteria, along with non-wire alternatives, have to evolve. Offshore wind and hybrid renewables (such as wind-solar and wind-solar storage) should be seamlessly integrated into the grid.