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Smart Grid Regulatory and operation perpective

Smart Grid for Sustainable Development Regulatory and operational perspectiveVijay MenghaniJoint Chief ( Engg.)B.E.,MBACentral Electricity Regulatory Commission

20-04-20141

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Sustainable Development Development that meets the needs of the present without compromising the ability of future generations to meet their own needs Brundtland Commission:Our Common Future( 1987)Sustainable Economy Sustainable Power SectorSustainable Regulatory Mechanism20-04-20142

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Indian Scenario Low Per Capita Energy Consumption= 918 kWh( 2012-13)Installed Capacity=237743 MW ( Feb,2014)2013-14Peak Demand Met 129915 MW Shortage 4.3% Energy Availability 877784 MU Shortage 4.2%Decreasing PLF 70.13 (2012-13) 65.53(2013-14)Reason Coal Shortage, Economic slowdown and affordability20-04-20143

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Many issues GenerationTransmissionDistributionConsumerCoal Shortage ROWT&D LossesLow per capita consumptionEnvironmental issuesCongestionNetwork ReachAffordability( Legacy subsidy)LandRenewable IntegrationLow level of automationInformation Asymmetry

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Smart Grid as ToolEarlier Smart Grid was being viewed as only meant for distribution in line with US investment in aging infrastructure. For managing grid Regulatory tools of Grid code and deviation settlement mechanism were being used.Commission started viewing this as an integrating solution.Electricity Grid is an integrated eco system where problems of one part quickly spill over to higher voltage level if not visible, measured and controlled.The big event of 30th and 31st July, 2012 due to Network visibility and reliability , Renewable issues and Grid discipline and load forecasting and management issues.

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Way out Generation : For sustainable Development and Energy Security dependency on Coal need to be reduced at least for Energy It may be due to compulsion like Domestic coal production not matching with requirement or costly imported coal resulting in higher generation cost for which there is no buyer.Desirable TO reduce carbon foot print Renewable need to be embraced .20-04-20146

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IEA estimates20-04-20147

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IEA Estimates20-04-20148

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RenewableCarbon emission (2011)

USAChinaIndiaWorldTotal(Million Metric Ton)54908715172532578Per capita17.626.521.454.69

Sustainable development possible only with Renewable12th plan target - MW( working group report)Wind SolarBiomassSmall HydroWaste to energyTidal/GeoTotal1500010000405021005001431664

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Issues in RenewableGrid connected wind has integration issue due to variability at system operation end and transmission investment issues.Solar PV has integration and commercial issues at distribution end .The mismatch in timing of renewable generation and demand both daily and seasonal .For effective and optimum use Storage and balancing power requirement .The impact of renewable on conventional generation management and cost of balancing service raise regulatory issues of tariff realization.

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Smart Grid

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Solution or more problemWhere we are , why we are here(Hum kaoun thai ,kya ho gaye hai or kya hoge abhi)

Shortage of fund , but more funds are required to implement smart grid. I am facing shortage of power Where I should invest money, to buy more power or invest in smart grid.Not an alternative solution but a complimentary solution

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Tariff hiked but can it continue

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Tariff hike needed but can be reduced

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Necessity

Growing demand of ElectricityProviding high quality electrical energy whenever wherever it neededReducing losses in every part of delivery chainEnsuring integration of Renewables20-04-201415

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Sustainable Development Agenda 16Inspired from : Accenture Analytic 2013

DefinitionAsmart gridis a modernizedelectrical gridthat uses analogueor digitalinformation and communications technologyto gather and act on information, such as information about the behaviors of suppliers and consumers, in an automated fashion to improve the efficiency, reliability, economics, and sustainability of the production and distribution of electricity.[20-04-201417

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SMART Specific target a specific area for improvement.Measurable quantify or at least suggest an indicator of progress.Assignable/Attainable specify who will do it.Realistic state what results can realistically be achieved, given available resources.Time-related specify when the result(s) can be achieved.

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Why clarity is requiredFrom a regulatory perspective , a clear definition is important for following reasons:20-04-201419

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Drivers for Smart Grid in IndiaUtilitiesCustomersGovernment /Regulator1. Reduction of T&D losses in all utilities as well as improved collection efficiency2. Peak load management multiple options from direct load control to consumer pricingincentives3. Reduction in power purchase cost4. Better asset management5. Increased grid visibility6. Self-healing grid7. Renewable integration1. Expand access to electricity Power for All2. Improve reliability of supply to all customers no power cuts, no more DG sets and inverters3. Improve quality of supply no more voltage stabilizers4. User friendly and transparent interface with utilities5. Increased choices for consumers, including green power6. Prosumer (producer and consumer) enablement7. Options to save money by shifting loads from peak periods to off-peak periods1. Satisfied customers2. Financially sound utilities3. Tariff neutral system upgrade and modernization4. Reduction in emission intensity

20-04-201420Source: Smart Grid forum of India

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Objectives for Smart Grid20-04-201421

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What is a Smart Grid?A smart grid uses digital technologies to improve the reliability, security, efficiency, and flexibility of the electric system.Image used courtesy of Florida Power and LightSmart Grids Involve System-Wide Approaches

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Existing and expectedExisting Grid Smart GridTypeElectro mechanical+DigitalCommunicationOne WayTwo wayGenerationCentralisedDistributedPresence of sensorFewThroughoutMonitoring /Fault DetectionManualAutomaticFault CorrectionManual Restoration+Self HealingControlLimitedPervasiveConsumerPassiveActive

20-04-201423Source : POWERGRID

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Key Technologies and Systems for Smart Grids24

sourceUS Energy Department

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Cost price and benefitTo reach informed decision on any Regulatory issue like Tariff, Quantum of Renewables or smart Grid investment say Smart meter it is necessary that whole value chain is understood. It was opined that the cost of smart meter was quite prohibitive. Minutes of meeting.If smart meter is considered as only a metering device to get 15 minutes data and it is not clear that what will be done with that data, this confusion about cost would prevail. Smart Meter is only a building block.

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Without application?

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Spectrum of applications20-04-201427

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Regulatory PerspectiveExpectations from RegulatorInformation to RegulatorStructural issues for RegulatorTechnical and Commercial appraisal issues Tariff Design Challenges Performance Measurement ChallengesConsumer Engagement ChallengesForum of Regulator 39th meeting in Chandigarh emphasis few of these issues28

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Expectations from RegulatorSmart Grid need proactive support from RegulatorThe condition of India are different from US and EU . To sell a concept of smart Grid in high energy consumption country where people understand benefit of electricity and its quality is easier than the country where power shortage exist. Indian Regulator is working under various constraints like staff shortage, technology uncertainty, limited pass through of investment cost in addition to legacy political economy issue of subsidy .Smart Grid is not a priority area for local government and utility which is fire fighting with resource crunch.

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Expectations from RegulatorCollaborate with public and private sector stakeholders to determine regulatory and market solutions that can mobilise private sector investment in all electricity system sectors.Recognise that smart grid deployments should reflect regional needs and conditions a one-size-fits-all does not apply to the deployment of smart grids.( e.g. Renewable Rich or not, consumer profile, status of unbundling)Plan for evolution in regulation along with technology development new technologies will both offer and need new regulatory options.Invest in research, development and demonstration (RD&D) that address system-wide and broad-range sectoral issues, and that provide insights into behavioral aspects of electricity use. (Source: IEA Road map)

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Information base Traditional information asymmetry is more pronounced in Smart Grid investments.Traditionally utility held back information from Regulator for commercial reasons.Here even utility is not certain about benefit and information is either vendor driven and or expectation driven based on project done elsewhere.So there is need of a information clearing house for knowledge management which become more important as staff in most of the Commission is on deputation. 20-04-201431

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Structural and Policy issuesThe success of smart grid elsewhere was driven by active collaboration of Federal Government( Through Act), Federal Regulator Policy , State Regulator, Private Utility, Innovators/ entrep