COMMENTARY Grid Collapse of July 2012: Challenges of an Evolving Indian National Grid

Transcription

1 65 COMMENTARY Grid Collapse of July 2012: Challenges of an Evolving Indian National Grid Amit Kapur and Deepeika Kalia* In its evolution from a state-owned single buyer model to a vibrant market, the Indian power sector has grown significantly in the last two decades. However, the two instances of grid collapse in July 2012 highlighted the need to deal with the challenges of an integrated national grid regarding governance, capacity enhancement, real-time monitoring of grid operations with effective remedial measures and securing discipline between various generators/suppliers of power and offtakers. The Indian power sector has experienced significant change over the past two decades, 1 stimulated by legislation, policy and regulation. Based on a national consensus, the Electricity Act 2003 was enacted by the federal legislature to establish a framework for: a multi-buyer, multi-seller industry with public and private ownership; unbundling of vertically integrated state-owned electricity boards segregating generation, transmission, distribution, trading and supply functions; ensuring non-discriminatory open access to network infrastructure; and securing a level playing field with competitive neutrality through central and state-level regulators. * Amit Kapur is a partner with J Sagar Associates. He chairs the Regulatory & Policy Practice, and leads a team that handles significant projects and regulatory/policy assignments in the Indian and South Asian power sectors. He can be reached at amit@ jsalaw.com. Deepeika Kalia is an associate at the firm. She works with Amit Kapur on power sector assignments. She can be reached at deepeika.kalia@jsalaw.com. 1 It all started with the liberalisation of the Indian economy with investor-friendly changes (for both foreign and domestic) in laws and policies in 1991 culminating in state reform laws in nine states and an umbrella federal legislation enacted in 2003.

2 66 Journal of Energy & Natural Resources Law Vol 31 No One of the main objectives of the reform was to evolve from a statelevel grid to a stable, interconnected national grid with inter-regional transmission as well as promoting market development inducing competition in generation and supply. The law empowered and obliged the national, regional and state load despatch centres to ensure 2 smooth working of the grid. The central and state transmission utilities are obliged and empowered to discharge all the functions of planning and coordination relating to inter-state and intra-state transmission systems respectively. The load despatch centres have a Supervisory Control and Data Acquisition System (SCADA), which helps the operators to run tools designed to assist in real-time grid operation. In essence, the grid is an essential facility maintained in dynamic balance at 50 hertz with real-time scheduling, despatch, balancing and a safety mechanism. Figure 1: Electricity Act 2003: multi-buyer/multi-seller market 2 This includes power to give directions and to secure compliance.

3 Commentary: Grid Collapse of July A wake-up call Against this backdrop of reforms and capacity augmentation, the Indian power sector received a wake-up call at 2.33 am on 30 July The power supply to eight states and one union territory in north India 3 collapsed for 13 hours. Life came to a grinding halt as a result of the loss of 36,000MW of supply leaving trains stranded, miners trapped, subways paralysed and traffic gridlocked. Essential services at airports and hospitals functioned only by relying on back-up generators. After 21 hours of stable operation from the restored grid, a bigger grid disturbance occurred at 1pm in which 48,000MW of supply was lost affecting 20 states and one union territory 4 in the north, eastern and north-eastern grids (collectively referred to as the NEW grid ). The system was restored in phases taking between two and eight hours. Clearly, the time has come to reconsider the architecture of the national grid. Prompt investigation On 30 July 2012, as the first grid collapse was occurring, the federal Ministry of Power swung into action by establishing an enquiry committee headed by the chair of the national system planner, the Central Electricity Authority, to study the collapse and suggest measures to avoid its recurrence. The Central Electricity Regulatory Commission (CERC) initiated suo moto proceedings against certain states of the northern region 5 for violating grid discipline and putting the northern grid at risk. By an order dated 1 August 2012, CERC directed the Power System Operation Corporation (POSOCO) 6 and the Central Transmission Utility to investigate the incidences of grid failure on 30 and 31 July Uttar Pradesh, Uttarakhand, Rajasthan, Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir, Delhi and the Union Territory of Chandigarh. 4 Uttar Pradesh, Uttarakhand, Rajasthan, Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir, Delhi, the Territory of Chandigarh, West Bengal, Bihar, Jharkhand, Orissa, Sikkim, Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Nagaland and Tripura. 5 Uttar Pradesh, Haryana, Rajasthan and Punjab. 6 Established as a wholly owned subsidiary of the central transmission utility (POWERGRID). It is responsible for reliability, security and economy in transmission and includes the national load despatch centre (NLDC) and five regional load despatch centres (RLDCs), each being one of five regions of the national grid north, west, south, east and north-east. 7 The report was to cover (1) antecedent conditions of frequency, (2) inter-regional/interstate line flow, (3) voltages at inter-state/inter-regional points, (4) conditions of outage at inter-regional/inter-state lines prior to disturbance, (5) report of the sequence of event recorder maintained by RLDCs and (6) disturbance recorder and other associated reports. The POSOCO report is stated to have been submitted on 9 August 2012 but is not available in the public domain.

4 68 Journal of Energy & Natural Resources Law Vol 31 No Existing regulatory framework To evaluate the above incidents, it is worth examining the regulatory mechanism put in place to incentivise and secure grid discipline. Since 1948, the law has been orientated towards state-level grid development, with some inter-regional transmission capacities evolving but operating with large deviations in frequency from 48.5 hertz to 51.5 hertz. The regime then did not provide any incentives and/or penalties on individual utilities for grid discipline. 8 With a view to inducing grid discipline, in 2000 CERC established an availability-based tariff regime as a part of the national grid code characterised by: binding declaration of availability by generators and demand by procurers/ distribution companies; imposition of unscheduled interchange charges (UI charges) to regulate and penalise violations of the approved schedule entitlements for interchange of power by participants, which led to an increase or a decrease in the overall frequency of the grid 9 causing an imbalance in grid frequency; time-bound aligning and stabilising of regional grids followed by intra-state implementation of the same. Noticing some challenges, CERC issued the Indian Electricity Grid Code 2010 (IEGC) and UI Charges Regulations 2009 to restrain prices in short-term electricity by: narrowing the permissible frequency band for grid operation; distinguishing UI rates for normal real-time imbalances from those for drawing too much power (over-drawing) and under-injections when frequency is below a certain level; 8 Grid discipline refers to the planned interchange of power among various generators and traders (including distribution companies having surplus power supply), sending power to the grid and the various procurers/offtakers buying power by following operational schedules and grid standards as provided in the Indian Electricity Grid Code (IEGC) for effective operation of a national grid in dynamic balance. The IEGC lays down the rules, guidelines and standards to be followed by the various agencies and participants in the system to plan, develop and maintain the power system in the most efficient, reliable, economic and secure manner while facilitating healthy competition in the generation of electricity supply. 9 UI charges have been upheld by the Supreme Court as a regulatory mechanism with incentives and disincentives. A penalty is payable if: (1) a generator generates more than the schedule, thereby increasing the frequency; (2) a generator generates less than the schedule, thereby decreasing the frequency; (3) a beneficiary overdraws power, thereby decreasing the frequency; (4) a beneficiary under-draws power, thereby increasing the frequency (Central Power Distribution Co & Ors v CERC & Anr (2007) 8 SCC 197, paras 10, 22.1 and 22.3).

5 Commentary: Grid Collapse of July imposing quantitative restrictions on over-drawing; and capping the receivable rate of UI for over-injection/under-drawing beyond a small margin of the approved schedule. The UI pool was to be utilised for the benefit of the grid system as a whole, instead of the earlier perverse arrangement of windfall gains to generators and sellers. Grid disturbances Grid disturbances usually occur because of frequency instability 10 resulting from: persistent gaps in demand and supply; rampant indiscipline with states drawing too much power and disregarding the instructions of load despatch centres; lack of flexibility in grid operation to tackle unforeseen conditions such as shortages in output from hydro-stations and gas-fired stations; transmission constraints and poor maintenance of the grid and protection schemes such as under-frequency relays and reactive-power management; and/or poor monitoring and maintenance of power plants and the grid. 11 What seems to have led to grid failure Prior to the grid disturbance on 30 July 2012, the NEW grid was operating in an insecure condition because 48 transmission lines representing a transmission capacity of 20,480MW were out of service in the northern, western and eastern regions. Eight lines (for 3,565MW) were out of service owing to planned outages, while 40 lines (for 16,915MW) were out because of unplanned outages. What is surprising and needs attention is that some of the lines were out of service for nearly one month and 24 lines were out of service for one week or more. This reflects poorly on the level of monitoring being carried out. 12 The over-drawing by some of the northern 10 Since the grid is interconnected, on a real-time basis the distribution companies can draw power over and above their entitlement. When generation of power (input into the grid) is equal to the drawing of power (power offtake) from the grid, the frequency would remain at an ideal 50 hertz. When some states draw more than their entitlement from the grid, they deprive other states of their share, resulting in lowering of frequency and endangering grid security, which can lead to grid collapse. When the frequency is low, it is important to encourage greater generation of power and to reduce the volume of power withdrawn from the grid. 11 Pradip Baijal, Implement Electricity Act to get grid stability, The Financial Express, 16 October 2012, 12 Annexure 3.1 to the Enquiry Committee Report, 16 August 2012.

6 70 Journal of Energy & Natural Resources Law Vol 31 No region utilities resulted in the overloading of the 400kV Bina-Gwalior-Agra, which was the main AC interface between the northern and western regions of the Indian grid. Ironically, the load was enhanced to this extent since another line was taken out of service unexpectedly to augment its capacity from 400kV to 765kV. Once this line tripped, the northern region was cut off from the western region. Even on 31 July 2012, the NEW grid was operating in an insecure condition owing to 48 lines with a total transmission capacity of 20,175MW being out of service in the northern, western and eastern regions, including seven lines (for 2,800MW) with planned outages and 41 lines (for 17,375MW) subject to unplanned outages. It is noteworthy that 20 lines were out of service for one week or more. 13 Further, 38 of the 48 lines are common between the lists of the first and the second grid collapse. On 31 July 2012, the centre of power swing was in the eastern region and hence after the tripping of lines in the eastern region, the eastern and western regions became isolated from the NEW grid. Subsequently, all three grids collapsed owing to multiple tripping attributable to internal power swings. The load generation scenario in the synchronous NEW grid was highly skewed during July 2012 with a rise in agricultural demand in the north owing to the failure of monsoons to develop. This led to a large gap between demand and supply. Reduced rainfall depleted hydroelectric power thus forcing farmers to turn to electric pumps to draw underground water. Simultaneously, there was a surplus of power in the western region owing to high generation availability, resulting in heavy under-drawing by western states as is reflected below: July July 2012 Northern region Deficit of 5,686MW Deficit of 4,061MW Western region Surplus of 6,229MW Surplus of 4,559MW In this scenario, the following types of grid indiscipline continued unabated, despite repeated directions by the northern regional load despatch centre to state load despatch centres to restrict deviations from the schedule: a lower volume of withdrawal than the allocated share on the part of distribution utilities in the western region and an excess supply of power by generators/traders than the agreed schedule in the western region; and 13 Annexure 4.1 to the Enquiry Committee Report, 16 August Report of the Enquiry Committee on Grid Disturbance in Northern Region on 30 July 2012 and in Northern, Eastern and North-Eastern Region on 31 July 2012, 16 August 2012.

7 Commentary: Grid Collapse of July excess withdrawal than the allocated share on the part of distribution utilities in the northern region and a lower than the agreed schedule supply of power by generators/traders in the northern region. Such instances of grid indiscipline through the UI route are load deviations that occur without any revision of the schedule by the utilities, with the system operator remaining in the dark, 15 which was the primary cause for both grid disturbances. 16 Some of the accentuating factors CERC in an earlier order 17 was concerned that the utilities had no compulsion to stick to their schedule to buy/sell in a hurry. With a changing market scenario (demand-supply gap, fuel shortages and price escalation, price of short-term power procurement as set out in Schedule A at the end of this article), the UI mechanism that was designed to ensure grid discipline and real-time imbalance settlement became an alternative route to electricity trading 18 since the UI charge became an attractive clearance price as compared to more expensive short-term power. This perverse incentive to deviate from the schedule until the grid frequency reached the lower extreme of the permissible range negated the main objective that the regime sought to secure. Instead of purchasing electricity from short-term markets, several utilities resorted to large-scale over-drawing from the grid. The utilities exploited the situation of shortages to sell through UI rather than trading in markets as during the prevailing low frequency regime they received UI rates much higher than their costs. 19 A Parliamentary Standing Committee on Energy recently noted that gaming under the UI Regulation means an intentional mis-declaration of declared capacity by any generating station or seller to make an undue commercial gain through UI charges. 20 The design of the UI mechanism and its deterrent 15 Anil Sasi, The Financial Express, New Delhi Edition, 15 August Anil Sasi, The Indian Express, New Delhi Edition, 16 August CERC Order dated 18 January 2007, forelectricitytrading.pdf. 18 Ibid. 19 According to a study commissioned by CERC, the majority of the trade in electricity moved up to the ranges of INR 4.01 to INR 5.00, INR 7.00 to INR 8.00 and INR 7.00 to INR 9.00 in tandem with the revisions in maximum UI rate to INR 5.70, INR 7.45 and INR 10.0 per unit respectively: 20 Standing Committee on Energy Report ( ), Functioning of Central Electricity Regulatory Commission,

8 72 Journal of Energy & Natural Resources Law Vol 31 No effect needs to be revamped 21 since the UI charges collected a penalties during to aggregated INR 74,181 crores (US$14.84 US$1 = INR 50), which proves its failure to enforce the grid discipline desired. 22 Much of the SCADA data available to load despatch centres is not available on a real-time basis to the operators, leading to incomplete visualisations and situational awareness for the system in the control centre, thus delaying the restoration of the collapsed grid. 23 To ensure the effectiveness of the availabilitybased tariff regime, it is crucial that the participating entities in the grid 24 have this data in real time in order to anticipate and react to situations quickly. The sub-optimal inter-regional transfer is evidenced by the grid collapse. While there has been a significant addition of inter-regional transmission capacity, there is a need to add more transmission capacity. 25 At this stage of the development, it is crucial for a real-time inter-regional balancing market (between surplus and deficit regions) to evolve with effective real-time emergency measures, which can prevent such grid collapse. India s power sector is characterised by the dual responsibility of the states and federal governments and regulators. Power generated and sold in the same state is subject to the state level regulator, despatch centre and transmission utility while power sold inter-state or to two states is subject to the oversight of the federal level regulator, despatch centre and transmission utility. This poses significant challenges to maintaining a clear chain of command for real-time preventive and remedial action. 26 Multi-operator unbundled networks require mature and dynamic regulation of interconnections, grid discipline and their strict implementation This distortion of the UI mechanism led to breach of contracts as generators preferred to gain by gaming in UI through unchecked over-injections in long periods of low frequency and high UI rates: Alok Kumar and Sushanta K Chatterjee, Electricity Sector in India Policy and Regulation (1st edn, Oxford University Press, 2012). A Parliamentary Standing Committee on Energy recently noted that the gaming under the UI Regulation means an intentional mis-declaration of declared capacity by any generating station or seller to make an undue commercial gain through UI charges. Standing Committee on Energy Report ( ), functioning of Central Electricity Regulatory Commission, 22 Standing Committee on Energy Report ( ), Functioning of Central Electricity Regulatory Commission, 23 R K Ojha, Communication Failure upped woes of System Operators, New Delhi, 15 August The power system in India is divided into five regional grids, namely the northern, western, southern, eastern and north-east grids. With the exception of the southern grid, the four regional grids are integrated. The generators, transmission licensees, distribution utilities and traders in each region participate in and have an effect on the grid. 25 This requires a policy to address certain constraints such as right of way, environmental clearances and expediting grants of approvals under ss 68 and 164 of the Electricity Act. 26 India s Energy Policy and Electricity Production, An Interview with Charles Ebinger, 27 Pradip Baijal, Implement Electricity Act to get grid stability, The Financial Express, 16 October 2012,

9 Commentary: Grid Collapse of July During restoration, difficulties were experienced on account of constraints that need to be addressed regarding: extension of start-up supply and in black starts; load generation and reactive energy imbalances; failure of built-up sub-systems/islands; the need to bolster in a timely fashion; and effective emergency communication channels with improved telemetry and reactive resources. Some quick wins at the cost of flexibility After the collapse of the grid in July 2012, the regulatory institutions have managed to control deviations from the schedule significantly. CERC, the Northern Region Load Despatch Centre and POSOCO have come down heavily on the northern states responsible for over-drawing power and effectively banned any over-drawing, irrespective of frequency conditions when the regulations allow for over-drawing under certain conditions. The result of these measures has brought about a sharp decline in the extent of over-drawing by the states. In August, the grid frequency remained within its officially approved limit of 49.5 hertz to 50.2 hertz for 90 per cent of the time. In July, the corresponding figure was 74 per cent. This grid sanctity has been restored at the cost of reliability and a level of poor supply owing to resultant inflexibility in grid operations to fulfil universal supply obligations. One can foresee challenges in effective implementation since: Schedules in the 15-minute time blocks cannot be perfectly matched in real time since electricity travels across a chain before reaching 11kv level for implementation. The Indian system lacks spinning generation, 28 which could offset any over-drawing. SCADA readings vary from special energy meter readings. Some of these improvements can be attributed to the recovery of the monsoon, that is to say more rain after July, which reduced demand from the agricultural sector. There is also evidence that buying power from shortterm electricity markets and load shedding have reduced the power deficit Unloaded generation, which is synchronised and ready to serve additional demand. Also known as Spinning reserve, which is synchronised with the grid and ready for immediate power generation, Requirements_v2.0_final.pdf A Celestine, Reasons for power Blackouts stretch beyond Over-drawal by States, The Economic Times, 7 October 2012.

10 74 Journal of Energy & Natural Resources Law Vol 31 No What needs to be done? In essence, the problems that need urgent attention comprise: governance and monitoring issues; the physical limitations of the inter-state grid; and the need to remedy the perverse incentive and restore the deterrence effect of the UI mechanism et al. The enquiry committee report submitted on 16 August 2012 recommended: Reviewing the grid protection systems to phase out frequency controls through the UI scheme, being substituted by generation reserves and ancillary services. Establishing under-frequency load shedding schemes for a proper defence mechanism. Better coordinated planning of outages of state and regional networks, 30 in particular unplanned outages. Revision of total transfer capacity to deal with forced outages and UI transfers. Instituting strengthened initiatives such as reactive power planning, deploying WAMs, strengthening of intra-state grids to avoid frequent congestions, creation of security desks in the Northern Load Despatch Centre and regional load despatch centres, strong communication networks et al. Evolving appropriate Islanding Schemes 31 as a last resort learning from how some generators in the northern region survived the grid disturbance due to islanding. These generators could be helpful in meeting essential loads or extending supply to other units, and help to restore the grid in a reduced time frame. 32 Renewing emphasis on regular mock trials of contingency plans. 33 Periodic reviews of the UI rates to encourage additional generation and discourage over-drawing In accordance with Regulation 5 of the Central Electricity Authority (Grid Standards) Regulation 2010 and Section of the IEGC. This should avoid lines being taken out without the knowledge of the regional power committee/rldc concerned and lines lying out of service for weeks. 31 Islanding refers to the condition in which a distributed generator (DG) continues to power a location even though electrical grid power from the electric utility is no longer present. 32 P Baijal, Implement Electricity Act to get grid stability, The Financial Express, 16 October A Sasi, Grid Indiscipline main cause of Collapse, The Indian Express, 15 August The need for review of the UI rates was also observed by the Appellate Tribunal for Electricity in Delhi Transco Limited v Central Electricity Regulatory Commission and Northern Regional Load Despatch Centre reported as 2010 ELR (APTEL) 0339 (paras 33 37),

11 Commentary: Grid Collapse of July There are three clear roles under the Electricity Act 2003: 1. line operation and maintenance; 2. system operation; and 3. transmission system planning. The Central Transmission Utility/State Transmission Utility is required to perform the role of transmission system planning. Line ownership and maintenance are to be performed by a transmission licensee. Regulating system operation is the obligation of the regional load despatch centre at the regional level and state load despatch centre at the state level. Currently, although independent transmission service providers are allowed to obtain transmission licences, the Power Grid Corporation of India Limited at the central level and the state-owned transmission companies at the state level perform all three roles. With developing power markets in India and more instances of conflicting interests, these roles must be assigned to different companies under the provisions of the Electricity Act The system operator observes all elements of the power system in real time. System operators are required to be not-for-profit entities, which merely get reimbursed for their expenses. If system operation and transmission line ownership vest in the same entity, the result will be inherently biased regulation on aspects such as system availability, loss of availability of lines under certain conditions, blame for system losses, et al. It will be difficult to dispense with the UI mechanism until there is a deficit in generation (ie, the supply of electricity outpaces the demand). However, the existing provisions need to be substituted with stringent penalty provisions and an enforceable mechanism to disconnect supply in situations of overdrawing. 35 A periodic independent third party audit of protection systems in the context of a review of real-time grid regarding scheduling, despatch and energy metering monitored by regional power committees would go a long way to keeping it effective. CERC s authority under the Electricity Act 2003 is limited with regard to penalties for grid discipline and is insufficient to act as an effective deterrent against the tendencies of the erring utilities to violate grid discipline. CERC needs to be provided with better ways to execute the orders passed by it and for realising the penalty imposed. The Parliamentary Standing Committee on Energy Report ( ) recommended changes to the IEGC. These include: UI charges should be increased effectively to deter the distribution companies /generators from resorting to unscheduled interchange for gaming; 35

12 76 Journal of Energy & Natural Resources Law Vol 31 No short-term electricity trading should become a matter of last resort in emergency/unforeseen circumstances; and repeated offences of over-drawing and putting grid safety at risk must be deterred through penalty provisions and their quick enforcement with suitable amendments to empower CERC effectively to recover financial penalties imposed for the offences, as well as other punitive sanctions. Smart grid technology must be deployed to enable: (1) demand-side management by customers receiving real-time price signals and to respond automatically to those price signals; and (2) real-time monitoring of conditions by utilities so they can anticipate and prevent service interruptions or, when they do occur, respond more quickly and efficiently to them. Proper pricing would establish real incentives for more efficient use of energy and for overall conservation. 36 Many miles before we sleep It is clear that the regulatory architecture must be dynamic so as to have inbuilt periodic process safeguards to evaluate the sectoral developments and recalibrate the regulatory mechanism to secure optimal results. There have been several gains in terms of reform initiatives including: installed generation capacity enhanced from 63,289MW 37 in 1991 to 208,000MW; inter-regional transmission capacity enhanced to over 28,000MW; energy and peak shortages situation changing from 7.87/15.53 in 1991 to 8.6/10.01; annual per capita consumption enhanced from 347 units in 1991 to 880 units. India decided to proceed with an ambitious initiative in evolving a fully integrated, stable yet dynamic national grid. 38 It faces the challenge of steering this through an evolving and complex market, which in scale is comparable to three-fourths of Europe but is plagued with shortages. Such a mechanism requires an architecture that is both complex and simple. It requires complexity at one level to anticipate, manage and regulate regional divergences and unforeseen events, yet simplicity in order to implement it as a national blueprint, incorporating the suggestions listed above. 36 Adapted from article by Dr Ashley C Brown, The Indian Express, New Delhi Edition, 8 August One should not forget the divergent situations prevalent the world over including the perennial debate in the US on market design with three separate regional grids that are not interconnected; the Nord pool and its challenges during transition; the EU challenges and so forth.

13 Commentary: Grid Collapse of July Update The article was written based on publicly available information as of October However, in the period between October and December 2012, several developments that are noteworthy have come to light. Firstly, a report was submitted to the Central Commission by the Power Operation System Co Ltd as directed on 8 August 2012 identifying the underlying causes and the suggested measures to reduce the probability of re-occurrence of such grid disturbances. The issues that need consideration include the following: Skewed load generation balance across regional grids; Grid indiscipline including over-drawals and under-drawals; Depleted reliability margins; Failure of defence mechanisms; Absence of primary response from generators; Insufficient visibility and situational awareness at regional and state load despatch centers; Inadequate appreciation of transfer capability vis-à-vis transmission capacity; Inadequate dynamic reactive reserves; Performance of the protection systems; Impediments to the speedy restoration of the systems; Distortions arising from the existing regulations on grant of connectivity; Excessive reliance on unscheduled interchange rather than organized electricity markets; Tightening of the stipulated range for grid frequency; Institutional capacity limitation of the load dispatch centers. Moreover, the Central Regulator has initiated certain suo-motu proceedings to: (a) assess the reasons for grid collapse; (b) fix responsibility for the problem; and (c) take remedial action. It is expected that the same will culminate in revision of the regulatory framework to achieve more effective and co-ordinated implementation. The Commission has already identified the following: Need to ensure timely steps to prevent such the defaults recurring and spreading to a systemic failure; Should someone commit the default, there is a need to ensure that the default does not go undetected /un-remedied; Need to secure real-time correctional steps being taken by improving the detection and response time for protection co-ordination and timely declaration of reduced transfer capacity with changes in declared schedule.

14 78 Journal of Energy & Natural Resources Law Vol 31 No Schedule A Short-term sale prices for the sale of electricity in India serving as perverse incentive defeating the UI mechanism (INR) Prices of short-term transactions of electricity for the year Transacted through traders was 4.79/kWh. Transacted through power exchanges was 3.47/kWh. Transacted through UI was 3.91/kWh. Prices of short-term transactions of electricity for the year Transacted through traders was 4.18/kWh. Transacted through power exchanges was 3.57/kWh. Transacted through UI was 4.09/kWh. Prices of short-term transactions of electricity for the month of April Transacted through traders (average sale price) was 4.40/kWh, comprising: minimum price was 2.96/kWh; maximum price was 7.07/kWh. Round the clock (average sale price) was 4.35/kWh comprising: at peak hours was 5.78/kWh; at off-peak hours was 4.95/kWh. Transacted through power exchanges (IEX and PXIL): minimum price was 1.20/kWh (IEX) and 1.50/kWh (PXIL); maximum price was 20.00/kWh (for both IEX and PXIL); average price was 3.19/kWh (IEX) and 4.71/kWh (PXIL); average prices of electricity transacted in term-ahead market were 3.95/kWh (IEX) and 3.59/kWh (PXIL). Transacted through UI mechanism (computed for NEW grid and SR grid separately): 2.81/kWh (NEW grid) and 5.16/kWh (SR grid); minimum UI prices 0.00/kWh (NEW grid and SR grid); maximum UI prices were 12.22/kWh (NEW grid) and 17.46/kWh (SR grid) Table Tables 4 and Tables 3 8.

15 Commentary: Grid Collapse of July Price of short-term transactions of electricity for the month of May Transacted through traders (average sale price) was 4.30/kWh, comprising: minimum price was 2.75/kWh; maximum price was 7.07/kWh; round the clock (average sale price) was 4.26/kWh comprising peakhour price of 6.13/kWh and off-peak price of 4.79/kWh. Transacted through power exchanges (IEX and PXIL): minimum price was 1.80/kWh (IEX) and 1.30/kWh (PXIL); maximum price was 19.95/kWh (IEX) and 20.00/kWh (PXIL); average price was 3.60/kWh (IEX) and 3.89/kWh (PXIL); average price of electricity transacted in term-ahead market was 4.15/ kwh in IEX and 3.58/kWh in PXIL. Transacted through UI mechanism (computed for NEW grid and SR grid separately): 4.26/kWh (NEW grid) and 4.92/kWh (SR grid); minimum UI prices 0.00/kWh (NEW grid and SR grid); maximum UI prices were 17.46/kWh (NEW grid and SR grid). Price of short-term transaction of electricity for June Transacted through traders (average sale price) was 4.11/kWh, comprising: minimum price was 2.90/kWh; maximum price was 6.15/kWh; round the clock was 4.11/kWh comprising peak-hour price of 4.91/kWh and off-peak price of 4.17/kWh. Transacted through power exchanges (IEX and PXIL): minimum price was 1.30/kWh (IEX) and 1.20/kWh (PXIL); maximum price was 19.50/kWh (IEX) and 20.00/kWh (PXIL); average price was 4.11/kWh (IEX) and 4.10/kWh (PXIL); average price of electricity transacted in term-ahead market was 3.29/kWh in IEX and 3.82/kWh in PXIL. Transacted through UI mechanism (computed for NEW grid and SR grid separately): average price of 5.55/kWh (NEW grid) and 5.29/kWh (SR grid); minimum UI prices 0.00/kWh (NEW grid and SR grid); maximum UI prices were 17.46/kWh (NEW grid and SR grid) Tables Tables 3 8.

16 80 Journal of Energy & Natural Resources Law Vol 31 No Price of short-term transactions of electricity for the month of July Transacted through traders (average sale price) was 4.03/kWh, comprising: minimum price was 2.90/kWh; maximum price was 7.56/kWh; round the clock average price was 4.02/kWh comprising peak-hour price of 5.81/kWh and off-peak price of 4.69/kWh. Transacted through power exchanges (IEX and PXIL): minimum price was 1.20/kWh (IEX) and 0.99/kWh (PXIL); maximum price was 19.00/kWh (IEX) and 20.00/kWh (PXIL); average price was 4.51/kWh (IEX) and 4.54/kWh (PXIL); average price of electricity transacted in term-ahead market was 4.10/kWh in IEX. Transacted through UI mechanism (computed for NEW grid and SR grid separately): 6.13/kWh (NEW grid) and 5.09/kWh (SR grid); minimum UI prices 0.00/kWh (NEW grid and SR grid); maximum UI prices were 17.46/kWh (NEW grid) and 12.22/kWh (SR grid). Price of short-term transactions of electricity for the month of August Transacted through traders (average sale price) was 4.22/kWh, comprising: minimum price was 2.90/kWh; maximum price was 8.04/kWh; round the clock was 4.22/kWh comprising peak-hour price of 4.89/kWh and off-peak price of 4.30/kWh. Transacted through power exchanges (IEX and PXIL): minimum price was 1.00/kWh (IEX) and 1.00/kWh (PXIL); maximum price was 14.61/kWh (IEX) and 20.00/kWh (PXIL); average price was 3.89/kWh (IEX) and 3.53/kWh (PXIL). Transacted through UI mechanism (computed for NEW grid and SR grid separately). 2.16/kWh (NEW grid) and 4.12/kWh (SR grid); minimum UI prices 0.00/kWh (NEW grid and SR grid); maximum UI prices were 17.46/kWh (NEW grid) and 12.22/kWh (SR grid) Tables Tables 3 8.