An Overview of Restructured of Power System

An Overview of Restructured of Power System Mrs.N.V.Vader H O D, Elect. Power System Dept V.P.M s Polytechnic, Thane Maharashtra, India nvvader@vpmthane.org Mr.Mandar Bhadung.Lecturer, Elect. Power System Dept V.P.M s Polytechnic, Thane Maharashtra, India mandarbhadang6002@gmail.com Abstract For more than three quarters of century electricity was widely and uncontroversial regarded as a regulated public goods that had to be delivered to customers by vertically integrated entities. These were mostly publicly owned or investor-owned. The vertically integrated utilities were nevertheless closely monitored by regulatory agencies for service quality and rates. Countries across the globe have been changing the structure of electricity utilities since 1970. In developing countries reformation has been adopted to increase competition &to enable consumers for selection of utilities. India has not been immune to the worldwide changes in the power sector In India Electricity Act since 1948 to 2003 had planned and carried out reformation in steps. This review paper narrates the historical reformation of electrical industry since 1910 and over the next two decades. Outcome result of reformation in industry and the way to go has been discussed. This paper also talks about constraints for reformation process. I. Introduction Electricity is the common denominator for all technologically advanced societies. Correlation between per capita income and per capita power consumption is very strong. If the power industry is below-par, overall growth is hobbled. So Reformation of electricity was supported by Indian Electricity Acts since last 50 years. The electricity acts were introduced to adopt developed technology to meet power demands which was rising continuously.following are the main features of Indian Electricity Acts II. Indian Electricity Acts Based on the government s regulations and policies, the evolution of the Indian power industry can be divided into two broad phases, pre-reform and post-reform phases. The prereform phase (up to 1991) can be divided into preindependence phase (prior to 1947) and post-independence phase (1947-1990) and post-reform phase. Following are the main features of Indian Electricity Acts which facilitate the reformation of electricity industry... The Indian Electricity Act, 1910 Provided basic framework for electric supply industry in India. Growth of the sector through by single license -State Govt & developing relationship with consumer Legal framework for supply of electricity in a specified area. The Electricity (Supply) Act, 1948 Mandated creation of SEBs. Need for extension of electrification (so far limited to cities) across the country. Energy Conservation Act, 2001 Eensured energy efficiency in consumption & introduction of Demand Side Management (DSM) Bureau of Energy Efficiency (BEE) has been set up for formulating norms for processes, consumption standards, testing, certification and labeling procedures etc. Electricity Act 2003 It is legislation replacing Electricity Act 1910, 1948 and 1998. The Electricity Act, 2003 is legislation in India that aims to transform the power sector in India The aim is to enable the States and the Centre to move in harmony and coordination. The objective is to introduce competition, protect consumer s interests and provide power for all. The Act provides for National Electricity Policy, Rural Electrification, Open access in transmission, phased open access in distribution, mandatory SERCs, license free generation and distribution, power trading, mandatory metering and stringent penalties for theft of electricity. 1

III. Development of the Electricity Industry in the last 50 yrs.: Pre Independence - Small Isolated systems developed in and around industrial & urban areas. Electricity (Supply) Act, 1948 -Establishment of CEA for coordinated development of Power Sector. The Act also provided for formation of State Electricity Boards (SEBs) in the States Between 1960 to 70 - Generation/Transmission By SEBs. The systems around urban and industrial areas grew into full-fledged State Grid systems. The country was demarcated in to five Regions for the purpose of coordinated power sector planning. Regional Electricity Boards were established in each of the regions for facilitating integrated operation of state systems In 1970s Inter-state lines were planned which were treated as centrally sponsored schemes. Emergence Of Central Sector Generation ( NTPC/ NHPC/ Nuclear Etc.) Stat Region al Nation al Late 90s - A strong National Grid system developed to transfer power from surplus regions to deficit regions. And also by utilizing maximum resources to ensure reliable, economical and quality power..all regional grids are Inter linked asynchrously. From 1991 to 2006 - All regional grids were synchronized as two systems i.e. All four Regional grids were synchronized expect Southern grid and it will be completed by 2013-14. IV Impact of Electricity act 2003: Under the Indian Constitution, Electricity falls under the Concurrent List, which means the state and central government both have jurisdiction to legislate laws on the subject. Through this act government wanted revamp and restructure the power industry to fulfil stakeholder s initial expectations. 1-Impact on Organizational structure: The act unites the laws relating to generation, transmission, distribution trading and use of electricity. In general it takes measures to encourage development of electrical industry by promoting competition and also protecting interests of consumers. Main objective is to supply electricity to all areas. Rationalization of electricity tariff ensured transparent policies regarding subsidies, along with promotion of efficient environmental policies. To entitle impacts on every segment of the power sector constitution of a Central Electricity Authority(CEA) and Regulatory Commissions (RC), establishment of Appellate Tribunals have been established. Loca l 1975 : Central Sector generation utilities created Benefits of these to be shared by the states of the region. Focus of planning and development in the transmission system shifted from State Grid system to system. By the end of 1980's strong regional networks came into existence 1989: Power Grid Corporation of India formed to give inter-regional links. Few inter-regional links were developed to facilitate exchange among the various regions (limited to emergency situations) Overall policy direction for the sector has to be set by the central government and state governments needs to follow them with some state specific minor adjustments

Indian Power Sector- Pre and Post EA 2003 The present scenario of NG is divided in to Five s as given in table no.-1. Four major Regions Grids namely, North-Eastern, Eastern, Western and Northern are now operating as one synchronous grid. State government controlled Electricity Board cater to the distribution, transmission and generation in the state. In many of the states, the Boards have been unbundled into separate generation, transmission and distribution entities. Some of the states have even privatized the distribution. Inter-state transmission and inter-state generation are mostly catered by the central government controlled entities Privately owned Independent Power Producers(IPP) are present in many of the states supplying power to the distribution licensees in the state Regulation of inter-state generation, transmission and trading are performed by the Central Regulator, whereas regulation of state level generation, transmission, distribution and trading is taken care of by the state regulators 2-Impact on Grid Interconnection in India: Transmission system planning at the inter-state level is carried out by the central government owned entity designated Power Grid Corporation of India Limited (PGCIL) as Central Transmission Utility( CTU) and at the state level the same is carried out by the state government owned entity designated as STU. System operation at inter-state and state level are performed by the CTU and STU owned entities Open access system allows generating companies to sell power directly to distribution companies and bulk consumers of 1MW and above is going to be implemented soon. The ministry of power has instructed states to implement the open-access system of Electricity Act, 2003. For making region-wise demarcation for efficient, economical and integrated transmission and supply, Government of India (GOI) has also constituted Regional Load Dispatch Centres (RLDCs). Name of the Region NORTHERN EASTERN SOUTHERN WESTERN NORTH- EASTERN Total States included Himachal Pradesh, Uttar Pradesh, Uttara khand, Haryana Punjab, Jammu Kashmir, Rajasthan West Bengal,, Zarkhand, Bihar Orissa, Sikkim Karnataka, Kerla, Tamil Nadu, Andhra Pradesh Maharashtra, Madhya Pradesh, Chattisgad, Goa, Gujarat, Asam,Arunachal Pradesh,Manipur,Tripura, Meghalaya Mizoram, Nagaland Installed capacity 38.0 GW 20.5 GW 39.6 GW 44.0 GW 2.2 GW Interlinks between s introduced the power transaction. Planned interlink capacities are given in table-2. Interlink power transaction capacity of was 40,000MW planned by 2012 but as on today it is 37.700MW. Inter Regional link WRG NRG WRG -- SRG SRG -- ERG WRG -- ERG NRG -- ERG NRG -- NERG ERG -- NERG Total Transmission capacity 7600 MW 2700 MW 3600 MW 8500 MW 8500 MW 4000 MW 2250 MW 37700 MW 144.5 GW 3. Impact in grid operation. Adaptation of new technologies in Grid operation: The control of the grid is planned to be done at 3 levels of hierarchy namely NLDC, RLDC and SLDC. Each level of hierarchy has definite roles and

responsibilities.the Load Dispatch Center (LDC) is the nerve centre for the operation, planning, monitoring and control of the power system.ldc co-ordinates generation, transmission and distribution of electricity from moment to moment to achieve maximum security and efficiency. Computerized LDC facilitates grid operation at National, Regional & State level effectively and economically. 4.-Restructering of State Grid Restructuring of utilities was considered to overcome technical losses & economical losses (tariffs) in transmission of power by privatization. Unbundling of the vertically integrated SEB into a few DISCOMs, one or more GENCOs, a TRANSCO that besides carrying out transmission functions also played the role of a buyer and seller of power from the generators and to the DISCOMs respectively Independent power producers (IPPs) and cogenerates system were introduced as GENCO. Similarly private companies are introduced as DISCOM like Reliance, Role of NLDC: Economy and Efficiency of National Grid; Scheduling & dispatch of electricity over the inter-regional links ; Monitoring of operations and grid security of National Grid ; Restoration of synchronous; operation of National Grid. Role of RLDC : Real time operation control & contingency analysis; Generation scheduling/ re-scheduling; Restoration ;Metering & data collection ;Compiling & furnishing of operation data; Operation of Regional UI pool Account. Reactive energy account and Congestion charge account Role of SLDC: Optimum scheduling and dispatch ; Monitor grid operations; Keep accounts of electricity transmitted; Activities of Real-time operation; exercise supervision and control 4- Introduction of Electrical market: Following to the Electricity Law (Amendment) Act, 1998,the Power Trading Company (PTC) was established with majority equity participation by the PGCIL and the National Thermal Power Corporation (NTPC),the Power Finance Corporation (PFC),and other financial institutions. This structural arrangement was not desirable for an developing competitive market,. Hence this market needs to be opened to more players. This Electricity Act,2003 allows third party sales, and also Introduces the concept of bulk electricity trading..the trading activity will be recognized as a separate licensed activity. The Electricity Act 2003 permits multiple licenses in parallel transmission and distribution lines; thereby making a provision for private transmission licenses and in the process provides a fillip to power trading. The basic objective is to

introduce competitive market in India; Any number of players can participate in the business of electricity trading. CERC or SERC would provide trading license to those players who qualifies the eligibility criterion on technical & Financial grounds. Distribution licensee and generation companies can engage in power trading However,NLDC, RLDC,SLDC, CTU and STU and transmission licensees have not been allowed to trade in power. This is again to avoid an undue advantage to these players. ERCs will have the right to fix a ceiling on trading margins in intra-state trading, if necessary Huge T&D losses (theft) and skewed tariff structure, making SEBs unviable India's electricity problem would remain for several years (at least until 2020) due to lack of capital, imbalances between industrial and agriculture, over population and the highly centralized and bureaucratic administrative system In a socialistic, centrally planned and democratic economy, the infrastructure was very lately reviewed Domestic private investments have not been very encouraging due to political instability, changing policies of the government, over bureaucratic interferences. Power sector reformation got the dimensions by Politicoadministration like free power supply to farmers /scheduled castes /tribes. Inefficient use of electricity by the end consumer; Also the consumers unethical ways and means to cheat the utilities have adversely affected the reform process Open Access-restrictions (Section 11/108 of Electricity Act 2003)imposed by several state governments /SLDCs citing shortages or non availability of transmission infrastructure Shortage of power-due to coal shortage, environmental issues, availability of power Equipment, challenges face by upcoming projects Poor financial health of the utilities & Promotion of Renewable I. Constraint in Reformation Power sector reform is the biggest problem that Indian economy faces. India' public generation capacity (state+ central+ private utilities) is around 148,000 MW and captive capacities add up to another 55000 MW. The public system has a plant load factor of about 75 per cent (thermals). Transmission and distribution losses are 27 per cent. Collection losses are another 7 per cent At these performance levels, average power shortage is around 8-9 per cent and peaking shortages hit 12-15 per cent. The T&D and commercial losses taken together translate into the production of 1.5 units of power for every unit delivered and billed. Inadequate power generation capacity; Lack of optimum utilization of the existing generation capacity; Inadequate inter-regional transmission links; Party politics raises interstate disputes on power supply Conclusion India's electricity problem would remain for several years (at least until 2020) due to lack of capital, imbalances between industrial and agriculture, over population and the highly centralized and bureaucratic administrative system. On the whole, we can see a radical change in the power sector in spite of the fact that lot of hue and cry against it is emerging.the government is committed for the power sector reforms but the success of the government efforts would depend upon how much innovation and modern methods are to be adopted by the new institutions. Private investors are to be encouraged with the input of polices & legislation acts & keeping away from local political principles Crises in peak power generation can be reduced by enhancing renewable energy sources & Nuclear Energy. Reduction of losses of Transmission and Distribution Networks will reduce the average power demand crises. Power transaction between at open access system will uplift the Electrical Market through Power Exchange..Improving the quality of

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