Electric Entities: New ModelsElectric Entities: New Models

Sh. R.P. SinghSh. R.P. Singh

CHAIRMAN & MANAGING DIRECTORCHAIRMAN & MANAGING DIRECTOR

POWER GRID CORPORATION OF INDIA LIMITEDPOWER GRID CORPORATION OF INDIA LIMITED

Power Sector Reforms WorlwidePower Sector Reforms Worlwide

DEVELOPING COUNTRIES DEVELOPING COUNTRIES

To mobilise private investment efficiently and quickly to meet rapid growth in demand To mobilise private investment efficiently and quickly to meet rapid growth in demand To improve efficiency and quality of service.To improve efficiency and quality of service.

DEVELOPED COUNTRIES DEVELOPED COUNTRIES

To keep downward pressure on costs and pricesTo keep downward pressure on costs and prices To increase efficiency through competition.To increase efficiency through competition.

Power Sector Reforms: the TrendPower Sector Reforms: the Trend

Unbundling into Generation, Transmission and Unbundling into Generation, Transmission and DistributionDistribution

Regulation of monopolistic segmentsRegulation of monopolistic segments

Introduction of competition Introduction of competition

Establishment of predictable, transparent and Establishment of predictable, transparent and unambiguous regulatory frameworkunambiguous regulatory framework

VARIOUS MODEL ADOPTED WORLD OVERVARIOUS MODEL ADOPTED WORLD OVER UK

• Foremost country to restructure

• Vertically integrated CEGB unbundled. Transmission & Grid operation entrusted to NGC (TSO)

Australia

• Went for unregulated Merchant Transmission

• Not met with much success and reverted back to regulated status

United States

• Generation, transmission & distribution unbuindles and many utilities setup

• Independent System Operator (ISO)

• USA is now moving towards TSO model through RTO

French model

Canadian model

UK & South African ModelUK & South African Model

G GG

D DD

T + SO

G

D

G

D

This model is also followed in other European countries like Norway, Sweden, Finland, Netherland, Denmark etc.

American ModelAmerican Model

G G G

D D D

T T

G

D

G

D

G

D

TSO SORTO

This model is followed in USA. Based on their California experience, USA is now moving towards TSO model through RTO.

French ModelFrench Model

T + SOG

DEdF

RTE

This model is followed in France, wherein Transmission and System Operation functions have been delegated to RTE. EdF is responsible for the Generation and the Distribution.

Canadian ModelCanadian Model

G GG

D DD

G

D

T TT TASO

This model is followed in Alberta, Canada. In this model, since, there are more than one main transmission companies, an independent System Operator and Transmission Administrator exist.

Indian Electricity Market; EvolutionIndian Electricity Market; EvolutionElectricity Act, 1887

Electricity Act, 1910

Electricity (Supply) Act, 1948

1948

1963

1975

1981

First legislation on Electricity in India.

Basic legal frame work for Electricity Supply Industry was provided.

Dealt with Statutory Powers and functions of CEA, SEBs and Generating Companies.

State Electricity Boards were formed as vertically integrated utilities.

Country demarcated into five regions and Regional Electricity Boards established.

Central Sector generating Utilities like NTPC, NHPC were established.

Policy decision taken by GoI to form a National Grid

Cont …

1989

1991

1998

1998

2003

POWERGRID was formed.

Private Sector Participation in Power Generation was opened .

Power Sector reforms introduced in a limited way

Private Sector participation in transmission was opened.

Electricity Regulatory Commission Act, 1998 promulgated. CERC at Central level & SERCs at State level to be established.

Electricity Act 2003 was enacted, repealing all previous Acts.

Power Sector reforms gained momentum in a bid way

Indian Electricity Market; EvolutionIndian Electricity Market; Evolution …Cont.

Indian Electricity Market; EvolutionIndian Electricity Market; Evolution

Electricity Act, 2003 – salient points:

Delicensing of generation,

Transmission, Distribution & Power trading – licensed activity

More than one distribution licensee in the same area

Facilitating open access to transmission & distribution

Metering of all electricity with stringent theft penalties

Power producers to choose credit worthy buyers

CPPs to sell additional capacity through “open access”

Open Access Open Access

Greatly misunderstood

Does not mean “Free for all”

Phenomenal cost to build the Transmission Network to

transfer any quantum of power from one point to the

other,

Transmission facilities to transfer power from definite

sources to defined customers

Only some operational margins available. Can be used to

transfer economic power to bridge demand-supply gap

Inter-State Long-term Open AccessInter-State Long-term Open Access

Central Transmission Utility (CTU) ; Nodal agency Central Transmission Utility (CTU) ; Nodal agency

Period of Applicability ; 25 years or morePeriod of Applicability ; 25 years or more

Procedure, guidelines and Terms and conditions Procedure, guidelines and Terms and conditions formulated and available at POWERGRID web-siteformulated and available at POWERGRID web-site

System studies to determine whether system System studies to determine whether system strengthening required or not.strengthening required or not.

Short - Term Open AccessShort - Term Open Access

Short Term Access– upto 1 year usageShort Term Access– upto 1 year usage

Nodal Agency - RLDC of the region in which the importing Nodal Agency - RLDC of the region in which the importing utility is located.utility is located.

Trading of surplusesTrading of surpluses

Approval subject to transfer capacity availableApproval subject to transfer capacity available

Reduced priority then long-term Reduced priority then long-term

Economically priced ( ¼ th of long term )Economically priced ( ¼ th of long term )

Allotment based on e-bidding, in case of congestion in Allotment based on e-bidding, in case of congestion in Transmission corridorTransmission corridor

Role of POWERGRIDRole of POWERGRID

POWERGRID, the Central Transmission Utility to take up POWERGRID, the Central Transmission Utility to take up construction, operation and maintenance of major EHV construction, operation and maintenance of major EHV transmission network and for operation of Regional and transmission network and for operation of Regional and National Grid.National Grid.

Investment of Rs. 70,000 crores planned during 2002-12 Investment of Rs. 70,000 crores planned during 2002-12 for supporting generation capacity addition of 100,000 MW for supporting generation capacity addition of 100,000 MW and for National Gridand for National Grid

Role of POWERGRIDRole of POWERGRID

Development of National GridDevelopment of National Grid

Interregional power transfer capacity enhanced to 8500 Interregional power transfer capacity enhanced to 8500 MWMW

Planned to further enhance it to 2300 MW by 2006-07 Planned to further enhance it to 2300 MW by 2006-07 and 30,000 MW by 2009-10.and 30,000 MW by 2009-10.

POWERGRID in Southern RegionPOWERGRID in Southern Region

Power situation in SR had various problemsPower situation in SR had various problems poor frequency, poor voltagepoor frequency, poor voltage depleted natural resources depleted natural resources

POWERGRID evacuating power from 4500 MW Central POWERGRID evacuating power from 4500 MW Central Generating units in SR over 6700 Ckt Kms & 15 S/SGenerating units in SR over 6700 Ckt Kms & 15 S/S

SR greatly benefited by Inter-regional Links likeSR greatly benefited by Inter-regional Links like 1000 MW at Chandrapur between WR & SR1000 MW at Chandrapur between WR & SR 500 MW at Gajuwaka between ER & SR500 MW at Gajuwaka between ER & SR 2000 MW HVDC bipole between ER & SR’2000 MW HVDC bipole between ER & SR’

Further investment of 7500 Crore planned during next 5 yrsFurther investment of 7500 Crore planned during next 5 yrs

POWERGRID’s telecom network extends upto CochinPOWERGRID’s telecom network extends upto Cochin

POWERGRID & Grid ManagementPOWERGRID & Grid Management

Many Milestones AchievedMany Milestones Achieved

Three of the RLDCS (SR, NR & NER) modernised to improve Three of the RLDCS (SR, NR & NER) modernised to improve effective Grid Operationeffective Grid Operation

NO MAJOR GRID DISTURBANCE IN 2003-04 DUE TONO MAJOR GRID DISTURBANCE IN 2003-04 DUE TO

proactive approach in grid managementproactive approach in grid management commercial mechanism under ABTcommercial mechanism under ABT modernisation of RLDCSmodernisation of RLDCS implementation of inter-regional linksimplementation of inter-regional links deployment of expert manpowerdeployment of expert manpower round the clock vigilround the clock vigil

ISO Vs. TSO; A DebateISO Vs. TSO; A Debate

UK has kept Transmission & System Operation togetherUK has kept Transmission & System Operation together

In North America, FERC introduced RTOs by bringing In North America, FERC introduced RTOs by bringing together system operators and transmission providerstogether system operators and transmission providers

Their not being under one umbrella was identified as one Their not being under one umbrella was identified as one of the major reasons for recent grid collapsesof the major reasons for recent grid collapses

In China and South Africa also, transmission and Load In China and South Africa also, transmission and Load Despatch Centres are retained together after restructuring.Despatch Centres are retained together after restructuring.

INDEPENDENT SYSTEM OPERATOR (ISO)INDEPENDENT SYSTEM OPERATOR (ISO)

• System operation is independent of the function of System operation is independent of the function of transmission system development transmission system development

• ISO prevalent when there are multiple transmission ISO prevalent when there are multiple transmission agenciesagencies

TRANSMISSION SYSTEM OPERATOR (TSO)TRANSMISSION SYSTEM OPERATOR (TSO)

• Grid operation as well as transmission system Grid operation as well as transmission system development with single entitydevelopment with single entity

• TSO prevalent where unbundling has taken place TSO prevalent where unbundling has taken place and there is one transmission utility and there is one transmission utility

ISO Vs. TSO; A DebateISO Vs. TSO; A Debate

ISO Vs. TSO ; ISO Vs. TSO ; A Debate

In India, Transmission and system operation being under one In India, Transmission and system operation being under one umbrella is one of the major reasons for the outstanding umbrella is one of the major reasons for the outstanding performance of Indian gridperformance of Indian grid

Convenient to identify transmission congestion and make Convenient to identify transmission congestion and make decisions to adopt suitable technology for power transferdecisions to adopt suitable technology for power transfer

Economic Power Supply to AgricultureEconomic Power Supply to Agriculture

Reforms have laid special emphasis on improving distribution Reforms have laid special emphasis on improving distribution sector and rural electrificationsector and rural electrification

Endeavor to provide secure, reliable and economic power to Endeavor to provide secure, reliable and economic power to agricultureagriculture

Agriculture extends a helping hand in maintaining Grid Agriculture extends a helping hand in maintaining Grid StabilityStability

Flattening of Load Curve; reduces the gap between off-peak & peakFlattening of Load Curve; reduces the gap between off-peak & peak Contains high voltage during off-peakContains high voltage during off-peak Non-supply of agriculture during off peak will lead to hostile load, Non-supply of agriculture during off peak will lead to hostile load,

frequency & voltage curve and high cost of energy to meet peak loadfrequency & voltage curve and high cost of energy to meet peak load

LOAD CURVE OF SR FOR 18-03-2004

12000

14000

16000

18000

20000

22000

24000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

HOUR ---->

DE

MA

ND

IN

MW

--->

HYPOTHETICAL GRAPH : IF AGRICULTURAL LOADS WERE TREATED AS ANY OTHER LOAD AND THERE WAS NO POWER CUTS

AGRICULTURAL COMPONENT OF 30% OF TOTAL LOAD IF NOT SERVED DURING NIGHT HOURS THE SAME WOULD BE SERVED DURING OTHER HOURS.

THIS WOULD ALSO MEAN A PEAK-TO-LEAN RATIO OF 50%, CAUSING PROBLEMS IN UNIT COMMITMENT

SHARPER AND HIGHER PEAK

HYPOTHETICAL CURVE

PEAK LOAD CURVE

Economic Power Supply to AgricultureEconomic Power Supply to Agriculture

Enough scope is available to supply economic power to Enough scope is available to supply economic power to agriculture without burdening the exchequeragriculture without burdening the exchequer

Disproportional losses in Power Sector not on account of Disproportional losses in Power Sector not on account of agriculture but due to rampant theftagriculture but due to rampant theft

Cheaper power from the neighboring regions can be important Cheaper power from the neighboring regions can be important during off peak timeduring off peak time

Availability based Tariff leads to very less cost of energy during Availability based Tariff leads to very less cost of energy during off peak timeoff peak time

Conclusion – Challenges and IssuesConclusion – Challenges and Issues

MAJOR ISSUES WITH REGARD TO REFORMS MAJOR ISSUES WITH REGARD TO REFORMS

commercial interest takes precedence over public interestcommercial interest takes precedence over public interest

development of environmental friendly generation capacity and development of environmental friendly generation capacity and provision of electricity for rural areas does not remain a provision of electricity for rural areas does not remain a considerationconsideration

GOVERNMENTS’ ROLE VERY IMPORTANT IN TERMS OF GOVERNMENTS’ ROLE VERY IMPORTANT IN TERMS OF SETTING UP REGULATORY FRAMEWORKS SO THAT THESE SETTING UP REGULATORY FRAMEWORKS SO THAT THESE ISSUES ARE ADDRESSEDISSUES ARE ADDRESSED