Special Workshop -5: Theme: D Regulations for Smart Grids

Vijay L Sonavane

Former Member MERC Mumbai

Model Smart Grid

Regulations in India

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• In 2010, for advising appropriatePolicies & Programs for SG, MOPconstituted ISGTF & ISGF

• In Sept 2013, MOP constituted aTechnical Committee for preparationof Draft SG Regulations.

• Office Memorandum for NSGM issuedon 27th March 2015. ISGTF mergedwith NSGM Project Management Unit(NPMU)

• SG Knowledge Center is beingdeveloped by PGCIL.

SG Institutional, Policy & Regulatory Framework

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Preamble:

• An Act for taking measures conducive to

(1) Development of electricity industry,

(2) Promoting competition therein,

(3) Protecting interests of consumers

(4) Promotion of efficient & environmental

friendly policies

• S 61 (c): “ Commission…. shall be guidedby the factors which would encouragecompetition, efficiency, economical useof resources, good performance &optimum investments

SG Projects: EA 2003(Mandate for Reforms)

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• Bill defines a Smart Grid as “AnElectricity Network that uses Info& Communication Technology togenerate, transmit & distributeelectricity efficiently.

• SG: For Improving efficiency,Reliability, sustainability &Economics in G/T/D of Electricity

• S 55: Sub-section2; the provisoincluded for installation of Smartmeters for proper accounting &measurement of consumption.

Inclusion of SG in the Electricity Bill, 2014: S 79

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• SG cannot evolve withoutdynamic, flexible “Enabling”Regulations

• Regulator needs to be facilitatorto SG business (“Catalyst”)

• Discoms need to demonstrateclear positive benefits toconsumers (“Business Case”)

• Regulators more than ever needto protect the interests ofconsumers (“Avoid Tariff Shock”)& “Data Privacy Protection”

Role of Regulators in framing SG Regulations

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• On 28th Aug 2015 FOR relaesed draft modelSG regulations

• Usher greater Tech adoption to bring out:– Efficiency in operation– Enhance N/W security– Integrate RES to grid– Enhance N/W visibility & access– Improve customer– Prosumer Service level

• Enhancing network visibility & access,promoting optimal asset utilization,improving consumer service levels, therebyallowing for their participation in operations.

Objectives of FOR’s Model SG Regulations

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• Aggregator: Entity registered with DLto provide aggregation of services likeDR services, Distributed Gen, EnergyStorage etc.

• Interoperability: Measure of ease ofintegration between two systems orsoftware components to achieve afunctional goal

• Wide Area Measurement System:Advanced measurement technology,Info tools & operationalinfrastructure, facilitating themanagement of Large PS to enhanceSystem Operator’s “situationalawareness” for safe & reliable gridoperation

New Concepts definedin Model Regulations

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• Licensees to ADHERE TO Guidelinesissued by SERC through SG Cells

• To carry out Baseline study &development of data

• Formulation of SG Plans, Programs,Projects & seeking necessary approvals

• Design & development of SG projectsincluding cost benefit analysis, plans forimplementation, monitoring &reporting and for M&V

• Implementation of SG programs

• DL may combine activities related to EE,DSM & SG in the same Cell

Licensees to establish Smart Grid Cell

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• Submission of MY SG Plan along with MYTPetition

• Prior approval of SERC for projects requiringinvestments > Rs. 10 Cr.

• Proposal to include DPR, Customer engagement& participation plan, Capacity building plan

DPR to include:

• Technical Feasibility Study/ FinancialImplications

• Cost-Benefit Analysis/ Mechanism for recoveryof costs

• Implementation Mechanism: Schedule/ M&VPlan

Formulation of SG Plan, Programs, Projects

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• SERC shall approve the SGProgram/ Project

• SERC may identify costs &decide methodology, process,procedure, for recovery of suchcosts

• SERC may provide Incentive/Penalty mechanism linked tothe execution, implementation& performance during the lifeof project.

Approval of SG Plan, Program, Project Document

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• Execution to be in line with theapproval given by SERC

• System standards CEA Regulationsor Regulations notified by SERC

• For network, communication,products, interoperability & cybersecurity, Standards of BIS orrelevant IEC/ IEEE/ ANSI Standardsshall be followed in that order.

• Bureau of Indian Standards (BIS)published “Standard for the dataexchange protocol for Smart Meters,IS 15959 (Part 2)”

• SOP Regulations of SERC shall apply.

Execution of SG Programs, Projects

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• Identification of net incremental costs,if any, associated with planning, design& implementation of programs

• Licensee may propose methodology forrecovery of “net incremental coststhrough tariff” or Additional Surcharge.

• In order to qualify for cost recovery:

– each program must be approvedprior to implementation &

– Implemented in accordance with theapproved program plan

Mechanism for Cost Recovery

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• DL to Submit Detailed Project CompletionReport to SERC within one month ofcompletion of such program

• Completion report: to be available on DLwebsite

• SG project shall be monitored & evaluatedbased on appropriate methodologyincluding KPI as decided by SERC usingsuitable M&V protocols identified bySERC

• DL shall also submit Evaluation report toSERC which will include outcomes,benefits, lessons learnt & way forward.

Completion Report, Monitoring, Evaluation, M&V of execution & performance

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• Automated Metering Infrastructure • DR & Peak Load Management • Grid Integration of RES & Energy

Storage • Micro-Grids / Distributed Gen• Dist SCADA/Dist Management • OMS & Asset Management System• Wide Area Measurement Systems • EV including Grid to Vehicle (G2V) &

Vehicle to Grid (V2G) Interactions • SG Data collection & analysis • Dynamic Tariff Mechanism including

TOU etc.

Indicative list ofComponents of SG Projects

REGULATORY SUPPORT Needed

FOR SG PROJECTS

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Dynamic tariffs are designed:

To lower PP costs for utilities

Incentivize consumers to consume duringoff-peak hours

Tariff Design for SG project area :

• Time of Use tariff

• Critical Peak Pricing

• Real-Time pricing

• Variant & Combination tariff

Time of Use (TOU): Energy prices forconsumption during these periods are setin advance) & known to consumersallowing them to vary their usage inresponse to such prices

Need for Dynamic Pricing MechanismIn Indian Context

• MERC introduced TOD tariff for HT IND for MSEB in May 2000.

• Changes have been made in TOD tariff to encourage consumers (> 20 KW) to shift load

• HT IND Tariff: (Ps/Unit) 671 Peak: 781 Off peak: 520

MSEDCL TOD: (Ps/Unit) (Effective Dynamic Pricing Mechanism

TIME Slot

2000-01

2001-02

2003-05

2006-10

2011-12

2012-14

2015-16

0900-1200

+30 +50 +60 +80 +80 +80 +80 (12%)

1800-2200

+60 +90 +100 +110 +110 +110 +110 (16%)

2200-0600

-50 -75 -85 -85 -100 -250 -150 (22%)

Critical Peak Pricing (CPP):

• Much higher critical peak tariff in addition to TOD tariff

• Used for days on which, peak crosses a particular limit

Extreme Day Pricing: Similar to CPP/ Higher price in effect for all 24 hours of critical days

Extreme day CPP:

• Critical peak price & lower off peak price applies to critical peak hours on extreme day

• No TOD tariff on other days

Real Time Pricing:

• Tariff vary hourly or sub hourly for entire year

• Rates notified on day ahead or hour ahead basis

Dynamic Pricing Mechanism

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• Need for Institutional Regulatoryframework for SG Projects

• SG-CC may be constituted by SERC

• SGCC: Representatives from Licensees,SLDC, Academic Institutions, CRs & SGSpecialists : Consultative approach

• To Act as Nodal Agency for implementationof SG Projects in State

• Provide assistance to SERC in evaluation ofSG projects & recommending these toSERC for in-principle approval.

• Only those projects recommended by SG-CC may be considered by SERC for approval

My suggestion: Smart Grid Consultation Committee (SG-CC)

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• SERC may create a fund under the aegis of the Commission to fund activities to be carried out by SG-CC through:

–1% of Annual Licensees fees or 1% of Annual Budget (Rs.40 L)

My Suggestion: Funding for SG-CC

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• SERC may allow create of a fund as a provision for R&D activities in SG projects in ARR of DL: 1 Ps/U sales of DL & 0.10 % of ARR of TL

• Fund can be also be utilized as Equity participation for SM Pilots of DL/TL

• MAHA Case 150,000 MU sale R&D Fund: Rs 150 CR & TL ARR: Rs 8000 CR R&D Fund: 8 Cr

My Suggestion R&D Activities in SG: Need for funds

Regulatory support for SG required across 3 key dimensions : To overcome its challenges

Economic Safety & Standards Awareness & Capacity Building

Optimal dynamic tariff design that promotes SG Applications (TOU)

Inter-operability standards (BIS)

Consumer Awareness

Investment Approval Mechanism (SG-CC)

Standards for Cyber Security

Capacity Building for Utilities, Regulators, (NSGM/USAID)

Standards for EV Integration

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• FOR “Model SG Regulations”: Effort inright direction : A complete Code

• Need: Dedicated SG Utility cell: SGCC

• Need Fast approvals by SERCs & thenquick implementation by Utilities

• Tech standards & KPI for evaluation and Financial support needs to be built-in

• Draft SG Regulations notified by ERCs:Assam/ Karnataka/ Tripura/ MP/Haryana: Good positive beginning

Conclusions: Let Us Make a SMART beginning

Smart Crow

Thanks! We need to work ogether!! (Contact me: vlsonavane@gmail.com)

IF IT IS TO BE; IT IS UP TO ME!!!

SGCC

NSGM

NSGM