Enabling Role

REMCs and PSDF to facilitate large-scale renewable integration

The Indian renewable energy sector has been witnessing unprecedented expansion. Renewable energy capacity in India crossed 50 GW in January 2017, doubling in the past five years. This was followed by record low solar and wind tariffs of Rs 3.30 and Rs 3.46 per kWh respectively in February 2017. Subsequently, in March 2017, the solar power capacity in India crossed the 10 GW mark and is likely to almost double in the next two years considering the awarded and ongoing tenders. In step with this expansion, there is an urgent need to address the problems associated with it, a key one being the intermittency of renewable energy generation. At present, renewable penetration in the grid is low and therefore, manageable. However, in order to operate at high levels of renewable penetration in the future, it is essential to modify the transmission network.

The increasing integration of renewable energy generation capacity with the national grid requires the expansion and modernisation of intra- and interstate distribution systems as well as the transmission grid. In this respect, the government has recently taken a number of initiatives.

In order to facilitate large-scale renewable generation integration, the Rs 380 billion Green Energy Corridors (GEC) project including intra-state and interstate transmission systems has been identified. Under this, intra-state transmission systems are being implemented by the respective state transmission utilities and interstate transmission systems are being implemented by Power Grid Corporation of India Limited (Powergrid). For funding of GECs in both intra- and interstate transmission projects, KfW Germany is providing a soft loan of around Euro 1 billion. In addition, Powergrid has entered into a loan agreement with the Asian Development Bank for $500 million to partly fund the GEC project.

Meanwhile, to evacuate green power from renewable-rich states including Andhra Pradesh, Gujarat, Himachal Pradesh, Karnataka, Maharashtra, Rajasthan, Madhya Pradesh and Tamil Nadu, renewable energy management centres (REMCs) are being set up along with  control infrastructure under the GEC project. REMCs are the hub for all information regarding renewable energy power generation in their respective areas of responsibility, which could be on the state, regional or even national load despatch centre (LDC) level. The functionalities of REMCs include forecasting of renewable energy generation in their areas of jurisdiction on a day-ahead, hour-ahead, week-ahead basis; real-time tracking of generation from renewable energy sources and its geospatial visualisation; close coordination with the respective LDCs for generation; and smooth grid operations.

The estimated cost of setting up REMCs under the GEC project is Rs 2.34 billion, which will be supported by a grant from the government. The first contract for the establishment of an REMC in Chennai will soon be awarded. Reportedly, some of the competitors for the contract are Siemens, ABB, Alstom and OSI. In addition, Powergrid has released a tender for the next REMC for the western region. At this pace, India will soon have a large number of REMCs to support the growing renewable energy capacity.

According to the Ministry of Power, a number of interregional transmission corridors are also being planned and implemented for the transfer of power from surplus states/regions to deficit states/regions on a short-term basis, subject to the availability of margins in these lines. These lines will interconnect the five regional grids – northern, western, southern, eastern and north-eastern regions. As of January 2017, the total transmission capacity of such interregional links stood at 63,650 MW.

In January 2014, the government had approved the scheme for the operationalisation of the Power System Development Fund (PSDF). The PSDF can be utilised for setting up transmission systems of strategic importance based on the operational feedback from LDCs to relieve congestion in the inter- and intra-state transmission systems. This fund can also be utilised for the renovation and modernisation of transmission and distribution systems. As of December 31, 2013, about Rs 63 billion was available in this fund. As of February 2017, 57 projects worth Rs 72.68 billion have been sanctioned under the PSDF scheme.

Going forward, if implemented in a timely manner, these initiatives along with a comprehensive policy framework in the sector will provide an optimistic landscape for rapid renewable energy development in the country.

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