“Need for a Strong Grid”

Views of POSOCO’s S.K. Soonee

With the growth in the transmission network and greater injection of renewables into the system, the grid  is now gearing up to meet the new challenges. Although many initiatives have been taken at the interstate level, a lot needs to be done at the intra-state level. In addition, the launch of ancillary services is expected to address the concerns related to grid operations. Power System Operation Corporation Limited (POSOCO) has been playing a key role in maintaining operations and security of the grid. At a recent Power Line conference, “Power Transmission in India”, S.K. Soonee, chief executive officer, POSOCO, spoke about grid expansion and flexibility, ancillary services, integration of renewables and distribution. Excerpts…

Grid expansion

As far as grid expansion is concerned, the power sector has made significant progress. Recently, we took a small step towards setting up a 11 kV transmission line between Manipur and Myanmar. The grid is growing rapidly and every week a new transmission line is commissioned in the country. The grid frequency is also maintained at almost 50 Hz. Further, the prices in power exchanges have been declining. On an average, the price has been around Rs 2.48 per kWh in 2016. This is possible due to a better transmission network as costly power can be replaced with cheaper power. Besides, growing competition among generators has facilitated the buying and selling of power. On several days, a single price has been observed on a pan-Indian level, which is essentially the marginal cost of electricity. However, this scenario cannot continue for long.

Ancillary services

Ancillary services have started gaining traction since April 2016. As per initial estimates, nearly 48 plants with an aggregate installed capacity of about 52 GW and with variable charges ranging from Rs 1.30 per kWh to Rs 3.30 per kWh have been increasing generation (regulation-up) to the tune of 2,000-3,000 MW and decreasing generation (regulation-down) by 2,000-2,500 MW. While regulation-up occurs two to three times a day, regulation-down takes place occasionally, for instance, on a rainy day when the total load has declined. The experience so far has been exceptional and this is helping us in the integration of renewable energy.

However, falling power prices is a cause for concern, as it will affect the sector’s viability. In addition, a different tariff design would be required in the future as the share of renewables and/or hydro increases in the grid owing to zero fuel cost of these energy sources. Meanwhile, around 30 per cent of the tariff accounts for fixed charges and 60 per cent accounts for fuel charges. Going forward, 60 per cent of the tariff will account for fixed charges and the rest will be for fuel charges. Further, with distributed generation coming up, industry players will be self-sufficient. However, they will still need the grid in case of contingencies. In such a scenario, it will be difficult to recover the cost of the grid. Given that renewables are coming up in a big way, fixed charges will become significant and the tariff structure would need a complete metamorphosis.

Ancillary services are an important tool for operators to overcome contingencies and we need to introduce them at the state level as well. These services essentially entail harnessing the reserves available in the grid. For this purpose, we need to have adequate reserves to provide quality power and 24×7 uninterrupted supply. We would also need a qualifying coordinating agency that can interact with the load despatch centre. As there are several open access consumers and entities, we need to set up a settlement organisation to track all the transactions, charges and schedules. Although the current settlement system is working fine at the inter-state level, we need to introduce these agencies at the intra-state level. Barring five-six states, which have this system in place, around 20 states have not implemented any such process.

While we have tertiary control in terms of ancillary services, we need secondary and primary control as well. Primary control essentially means that every generator has to respond in case of a contingency, while secondary control requires harnessing reserves automatically without human intervention. Bringing in these changes in a large grid is difficult as appropriate regulations have to be issued followed by compliance monitoring. In the coming years, we expect to have secondary and primary controls, as well as a greater degree of automation. Further, transmission congestion has significantly reduced at the interstate level but it has been persistent at the intra-state level. To deal with this, autotransformers and 130 kV networks in states need to be strengthened.

Integration of renewables

In order to integrate renewables into the grid, it is imperative to have a robust transmission network. In my opinion, before building a smart grid, we should have a strong grid in place in order to cater to diverse energy sources. Even though we have a large grid to accommodate renewables, generators need to come under the ambit of forecasting and scheduling. Overall, the framework for renewable integration at the interstate level has already been created and many intra-state utilities have been taking steps in this direction.

Distribution

Distribution is the most important link in the entire power value chain as the sector’s financial viability depends on it. Although it has been a passive segment, with distributed generation and renewables it has become active and therefore all the initiatives that we have taken at the transmission level need to be implemented at the distribution level. We need to set up distribution system operators to interact with transmission operators.

As far as wires are concerned, reliability is a concern as  soft wires which are deployed do not meet the requisite standards. Network-related faults must be cleared within 100 milliseconds as the entire grid is tested during that duration. Grid protection is another key focus area which requires due attention. This can be possible through the installation of state-of-the-art equipment. Regulators must monitor and penalise wrong operations so that there is incentive to ensure grid protection. Further, telemetry, and supervisory control and data acquisition systems need greater attention to improve grid visibility.

Grid flexibility

Once we achieve 24×7 power supply, consumer behaviour is expected to change significantly. At present, the load increases more during peak hours as compared to off-peak hours. Also, many states like Punjab, Haryana, Rajasthan and Madhya Pradesh experience seasonal loads. For instance, in Punjab and Haryana, peak load of about 10,000 MW lasts for three months (paddy load) and then it eventually comes down to about 4,000 MW. For such states, flexible generation and proper

management of the power portfolio is required to avoid paying unnecessary fixed charges. Therefore, sourcing of power has to be right to ensure minimum cost. Further, to deal with low-probability high-impact (LPHI) events like earthquakes, cyclones, floods, etc., grid strengthening is equally important. If load is reduced from one corner of the grid due to an LPHI, then it should be supplemented from another part of the grid in a distributed manner.

The way forward
Although there are huge uncertainties regarding load growth, delicensed generation and policy stances, authorities should continue transmission planning to achieve grid security. Institutional mechanisms for transmission planning are required to replace the current optimisation and cost minimisation mechanisms. Going forward, we need to have locational marginal pricing systems so that generators get the right signals for sustainability and optimisation. In the long run, we need to create financial transmission rights as well. Transmission charges when seen separately can send confusing signals. Thus one needs to look at the total cost of power procurement.

In the next 30-35 years, the transmission segment is expected to witness several changes, for instance, the direction of power flow is expected to change, and heavily loaded lines will become lightly loaded, and vice versa. Therefore, transmission has to be viewed keeping in mind a long-term perspective in addition to its immediate benefits. n

(The above address was made by Mr S.K. Soonee when he was CEO, POSOCO. He is now adviser to the organisation.)

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