India Japan Energy Forum 2017 Enhancing Grid Stability in India 9 January 2017 Nomura Research Institute 7 th Floor, Tower A, Building 5 DLF Cyber City, Phase III Gurgaon, India Otemachi Financial City Grand Cube 1-9-2, Otemachi, Chiyoda-ku, Tokyo, Japan
Issues of India Grid System Ideal System as per Grid Code IEGC stated both the maximum utilization of RE and reliability of electricity networks: The primary objective of integrated operation of the National/Regional grids is to enhance the overall operational reliability and (IEGC 5.1 (a)) System operator (SLDC/ RLDC) shall make all efforts to evacuate the available solar and wind power and treat as a must-run station. (IEGC 5.2 (u)) Real Situation Load shedding is common Sometimes RE curtailment happens Both of these things is expected to increase in future, for the avoidance of grid disturbances and cascade black-outs *IEGC - Indian Electricity Grid Code 1
Issues of India Grid System Higher the RE penetration, higher the grid instability Less than 10% RE Penetration 10% RE Penetration in Grid 20% RE Penetration in Grids 30% RE Penetration in Grids Source: USAID and MNRE Report, March 2014 2
Policy suggestions to improve Grid Stability in India There are four methods to sustain grid stability without relying on load shedding and RE curtailment Generation T&D Consumers RE (Wind, Solar) Ⅰ. Strict control against load shedding and RE curtailment STU/SLDC DISCOM Consumers Thermal Ⅳ. Enhance effectiveness of spinning reserve Ancillary Service Ⅱ. Enhance SLDCs capability for frequency control Ⅲ. Establish optimal market design of ancillary service 3
Ⅰ. Strict control against load shedding and RE curtailment Need to introduce SAIDI/SAIFI* targets and incentives Subsidy scheme or Incentives from govt. to DISCOMs based on outcomes Premium tariff for non-outage high-quality power supply to customers *SAIDI - System Average Interruption Duration Index; **SAIFI - System Average Interruption Frequency Index SAIDI status in India Grid reliability is still low Grid performance indexes are not controlled with target SAIDI for Industrial Users(2015-2016) Delhi 3 49 AP 80 2,603 Gujarat 8 8,063 MP 109 6,809 Punjab 449 5,646 Kerala 595 11,530 Orrisa 1,504 24,989 Source: Central Electricity Authority Min---Max Unit: minute RE Status in India RE curtailment occurred in several states Rajasthan Madhya Pradesh Tamil Nadu DISCOMs curtailed wind power generation 2 or 3 times a day, leading to losses of around Rs 1-1.50 billion to Developers in April and May 2016 Wind developers asked for curtailment of 50% or more (Jul 2016) The curtailment rate for wind power is in between 33-50% (Oct 2016) Source: The Economic Times, Business Standard, GTM 4
SAIDI of major state (2015-2016) Unit: minute Unit: crore INR Consumers Indu strie s GSDP State DISCOM Min. Max. Min. Max. Delhi BSES Yamuna Power Ltd.(East & Central Delhi) - 190-9 BSES Rajdhani Power Ltd.(South & West Delhi) - 279-3 451,154 TPDDL (North & North East Delhi) - 987-49 Rajasthan Ajmer VVNL2 47 330 N/A N/A 574,549 Andhra Pradesh Gujarat Southern PDCL, Tirupati 14 4,658 80 2,603 520,030 Eastern PDCL, Visakhapatnam 42 21,203 174 1,912 MGVCL,Vadodara N/A N/A 209 1,035 DGVCL,Surat N/A N/A 120 6,685 UGVCL,Mehsana N/A N/A 1,642 2,621 890,153 PGVCL,Rajkot N/A N/A 11 8,063 Torrent Power N/A N/A 8 258 Madhya Pradesh MPMKVVCL, Bhopal 2 7,400 109 6,809 508,006 Punjab PSPCL,Patiala 128 5,584 449 5,646 349,826 Kerala KSEB,Thiruvananthapuram 11 10,038 595 11,530 451,469 Orrisa CESCO,Bhubaneshwar (CESU), Orrisa 1 10 1,504 24,989 310,810 Maharashtra N/A N/A N/A N/A 1,686,695 Karnataka N/A N/A N/A N/A 702,131 Tamil Nadu N/A N/A N/A N/A 976,703 Haryana N/A N/A N/A N/A 435,310 Telangana N/A N/A N/A N/A 430,599 Source: Central Electricity Authority GSDP: Gross State Domestic Product 5
Ⅱ. Enhance SLDCs capability for frequency control SLDCs need to install enough capacity of frequency control at their own cost 1Allowing wheeling charges to reflect investment and outcomes for frequency control 2SLDCs need to be responsible for forecasting of demand/ supply/ reserves 3Automatic reduction in active power output by using measures such as Battery storage, Demand response etc Incentives for SLDCs will allow procurement of ancillary service and motivate them to maintain more reliable network SLDCs need to understand demand/ supply uncertainty, enabling them to plan for appropriate amount of ancillary services Penetration of RE causes over frequency more than before 6
Ⅲ. Establish optimal market design of ancillary service Central government needs to play a leading role in establishing workable ancillary service design such as: Formulation of model contract Regulation and monitoring for market growth 1Market segmentation by response time and duration (primary, secondary, tertiary) 2Payment differentiation based on accurate response Cost of ancillary service with slower response are usually cheaper Total cost of ancillary service can be reduced by service segmentation Paying less for lower performance service can reduce the cost 3Ancillary service procurement by long term contract is better than short term Long term contract reduces cost of ancillary service procurement, as the risk of service provider is less 7
Awarded Price for FFR and EFR One of the reason for low cost of EFR is the longer term of contracts compared with other ancillary services Awarded Price for FFR and EFR^ (UK National Grid Example) FFR - Monthly contract* EFR - 4 year contract** ( /MW per hour) 7-12 35.5 One of the reason for low cost of EFR is the longer term of contracts compared with other ancillary services Kiran Arora, Partner Berwin Leighton Paisner ^FFR Firm Frequency Response (response time 10-30 seconds; EFR Enhanced Frequency Response (sub-second response time) Source: *Report of Energy Storage operators forum, Dec 2014 (Page 167); **UK s National Grid Tender Results (Aug 2016) 8
Ⅳ. Enhance effectiveness of spinning reserve Spinning reserve regulation needs to be implemented and properly monitored Allowing Battery storage(bes) as spinning reserve can enable power plants to maintain optimal efficiency Spinning reserve by BES Capacity for spinning reserve can be substituted by BES Reserve Generation Reserve by BES Expand Generation Case Example - Chile Spinning reserve is mandated in Chile Grid operator allows IPP to install BES as an alternative to spinning reserve and IPP can increase active generation Angamos Coal Fired Plant 544MW AES 20MW (BES) BES High Plant load factor leads more electricity and efficiency Source:AES 9
Thank you Nomura Research Institute Arpit Agarwal Email: arpit.agarwal@nri.com Phone:+91-8130700228