India Power Sector Grid Failure

7/27/2019 India Power Sector Grid Failure

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What Happened?

Worlds biggest power cut

At 02:35 on 30th July & 13:02 on 31st July

Blackout in 22 States

620 Mn without power

3 grids failed: North, East, North-East

Hundreds of trains and Lacs of households and establishments

affected


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Why it Happened?

Overdrawing

Transmission

Lines Trip

Power Supply

Halt


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Vidyut : The Power Story


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Distribution


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Demand-Supply


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Distribution Grids in India

India is divided into 5 Regions

Northern Region (NR),

Eastern Region (ER),

Western Region (WR),

Southern Region (SR)

North-East Region (NER)

NR, ER, WR, and NER synchronized as NEW Grid

whereas SR is not synchronized


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0

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Actual Energy

Anticipated EnergyAnticipated Power

Actual Power


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Power Sources in India

57%9%

1%

2%

19%

12%

Coal

Gas

Oil

Nuclear

Hydro

Other Renewable

CRISIL 2011-12


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Thermal Power Generation

Uses heat energy of fossil fuels such as coal, lignite, natural

gas, naphtha and diesel

Steam Cycle Plants

Combined Cycle Plants

In 2011-12, power sector accounted for 70-75 per cent of total

coal consumption and 46 percent of total natural gas

consumption

Advantage

Low cost of generation

Disadvantages

Long gestation period

Emission of carbon dioxide and oxides of sulphur


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Hydro Power Generation

Water falling from a height runs turbine, which coupled withelectric generator helps generate electricity

Conventional (dams)

Pumped-storage

Run-of-the-river

Tide

Underground

Advantages

Low operating costs Absence of emissions

Disadvantages

Economic and social costs

Submergence of forests and loss of marine life


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Nuclear Power Generation

Enormous heat energy emitted by dissociation of nuclear fuel

atoms like uranium is used to generate electricity

U.S., France, and Japan together accounting for about 50% of

nuclear generated electricity

Advantages

Do not emit gases or particulate matter

Low cost of generation

Disadvantages

Possibility of nuclear hazard, e.g. Chernobyl, Russia

High capital costs and long gestation period


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Wind Power Generation

Wind power is converted into electricity using wind turbines Wind farms

Offshore wind power

US, China & Spain generate approx. 55% of the total

Advantages Plentiful and renewable

Clean , no greenhouse gas emissions

Disadvantages Intermittent supply

Large number of turbines required Noise pollution


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Solar Power Generation

Conversion of sunlight into electricity using photovoltaics Thermal mass systems are used to store solar energy in the

form of heat

Advantage

Clean, no harmful emissions Abundant

Disadvantages

Initial installation cost

Large land requirements


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World Electricity Generation by fuel(EIA)


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Electricity Regulation in India

Indian Electricity Act, 1910Provided State Govt. Authority to grant licenses

Covered technical and operating standards of Indian power sector

The Electricity (Supply) Act, 1948

Financing norms for performance of industry

Creation of SEB, CGUs and the CEA

Amendment to the Electricity (Supply) Act, 1991

Provided for private participation

100 per cent foreign equity participation allowed

The Electricity Laws (Amendment) Act, 1998

Introduced concept of CTU and STUs to plan, co-ordinate, supervise & control

transmission

Defined Licensing role of the CERC and SERCs


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Electricity Regulation in IndiaThe Electricity Act, 2003

Consolidated all previous policies; streamlining power sector

Generation of electricity was de-licensed

Opened access to retail consumers consuming more than 1 MW

Encouraged competition through international competitive bidding

Consumer allowed to source power from supplier of their choice

Availability based tariff (ABT) system introduced to avoid grid failures

The Electricity (Amendment) Act, 2007

No license required for sale from captive units

Definition of theft expanded to cover use of tampered meters

Theft made explicitly cognizable and non-bailable


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Electricity Regulation in India National Electricity Policy, 2005

Power to all-access to electricity for all households

Demand to be fully met by 2012, spinning reserve of 5 per cent to be madeavailable

Per capita availability of electricity to be increased to over 1,000 units by 2012, atreasonable rates

Minimum lifeline consumption of 1 unit per household per day by 2012

Financial turnaround and commercial viability of electricity sector

National Tariff Policy, 2006Provided framework for determining tariffs

Incentivized aggregate technical and commercial (AT&C) loss reduction

Encouraged non-conventional sources and power from captive generators


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Structural Framework


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Functions CEA

Formulation of National Electricity Plan in accordance with National Electricity

Policy

Main technical advisor of government and regulatory commissions

Specifies electrical standards and safety requirements

CERCRegulate tariff of companies owned or controlled by Central government

To regulate and grant licenses for inter-state transmission and trading

To advise Central government in formulation of National Electricity Policy and

Tariff Policy. SERC

Determines tariffs for generation, supply etc within state

Issue licenses for intra-state transmission, distribution and trading

Promote co-generation and generation of electricity from renewal sources of

energy etc.


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Functions

CTU and STUs

Undertake transmission of energy through transmission system

Planning and coordination of inter/intra-state transmission systems

National load dispatch centers

Apex body to ensure integrated power system in each region

Responsible for dispatch of electricity within regions, monitoring grid

operations etc

Regional and State load dispatch centers

Work at the regional and state levels respectively

Appellate Tribunals

Hear appeals against orders of the Electricity Regulatory Commissions (ERC)

Became operational in 2005


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Bidding

Competitive bidding made mandatory for all power projects,since January 2011

Case 1 Bidding

Route, location and type of fuel is flexible (states with resourceconstraint)

e.g. Project Amravati by Indiabulls in Maharashtra

Case 2 Bidding

Route, location and type of fuel is fixed (resource rich but cash

constrained states)

e.g. MPP Anpara by Lanco in Uttar Pradesh


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Eleventh Five Year Plan (2007-12)

Indias per capita energy consumption is one of the lowest in

the world, 50% of the population does not have access to

electricity.

The Planning Commission set up an expert group to

recommend integrated energy policy.

Rural Electrification-Ensure Electricity connection to all

villages and BPL households by 2009 and round - the - clock

power by the end of the Plan.


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Opportunities in Power Sector

Low Penetration providing significant opportunities for future

growth

Large investment required to achieve Government target of per

capita consumption 0f 1000 KWH by 2012.


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FDI in power sector

Hydro Projects

Captive Power

Ultra Mega Power Projects Nuclear Power

National Grid Program

Rural Electrification

Trading

Renewables


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Power Distribution Franchisee

Emerging PPP model in power distribution

Distribution assets stay under state control

Private player is involved in efficient distribution

Step to leverage best corporate practices

Cut down high utility losses (national average ATC of 27+%)

Predictable cash flows directly from end-consumers

A total of 14 states have appointed franchisees for different

zones


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Franchisee Distribution

State Power CorporationDistribution

Franchisee

End User

Sell power to

franchisee

Franchisee

distributes at price

prescribed by SEC


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Increase in Captive Power

Electricity Act 2003 liberalized captive power generation

Attractive to manufacturers as they can generate own power at

prices 25-80% cheaper

Act allows captive power producers to sell excess capacity

Group captive power plants also allowed to enable small

medium industries and cooperatives.

Free capacity from captive plants is connected to the grid tomeet the countrys energy requirements


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New Alternative Sources Of Electricity

Solar Thermal (not solar photovoltaic)

Two under construction in Gujarat & Rajasthan to be

commissioned in 2013

Ocean thermal energy conversion

1MW pilot plant was constructed in Tamil Nadu

Geothermal Energy

One plant (25MW) under commissioning at Khammam in

Andhra

Tidal Power One plant (50MW) planned in Gujarat


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Challenges

Acute shortage of power Over 300 million people in India have no access to electricity

Existing electricity supply is found to be intermittent and unreliable.

Peak hour supply-demand gap Generation increased by 8.1% in 2011-12

India suffers a peak-hour shortfall of about 10.6%


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Challenges

Aggregate Technical and Commercial Losses About 27% of generated power is lost

International average is 10-15%

Major technical reason is energy dissipation in conductors,

transmission and transformation equipments

Commercial losses caused by pilferage, defective meters and

unmetered supply of energy

The energy loss in some states is as high as 70%


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Challenges

Fuel constraint Thermal Power accounts for 65% of total electricity generated in India

but affected by shortage of fuel

India has abundant resources of coal but production has not been able

to meet demand

State owned Coal India which has monopoly in coal production has

been marred by bureaucracy and environmental issues

Lesser than projected production of natural gas has caused shortage of

fuel and dependence on imported natural gas has increased


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Challenges

Poor infrastructure

Ageing and improperly maintained infrastructure is affecting electricity

supply

Added production capacity has not been complemented by improved

transmission and distribution infrastructure

Slow pace of tariff reforms

Slow increase in distribution tariffs is increasing chasm between tariff

revenue and distribution cost

Subsidized or free electricity to key sectors affecting cash reserves of

state run distribution companies


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Challenges

Pollution caused by thermal power plants Indian coal-fired, natural gas-fired and oil-fired power plants are

inefficient causing massive emission on greenhouse gases

The CO2 emission per KWH produced is 50-120% higher in Indian

thermal power plants as compared to EU countries

Issues related to Nuclear Power Plants Potential hazard of nuclear radiation has been a cause of concern

Nuclear power generation potential has been stymied by protests since

the Fukushima disaster in Japan


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World Sources of Power

42%

21%

5%

14%

15%

3%

Coal

Gas

Oil

Nuclear

Hydro

Other Renewable


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Way Forward Strong political will required

Tariff reforms

Strict regulation on state grids

Electricity Retailing( UK, US, New Zealand)

Lack of incentives to promote selling power to grid by users

Implementing Smart Grids for Distribution Automatic Fault Detection

Islanding

Self-healing

Efficient utilization of resources AT&C losses should be brought at par to international average

Privatization of Coal sector to achieve production efficiency


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Reasons For Grid Failure

Agra-Gwalior-Bina circuit section under maintenance

Second circuit was down since 28th July

One circuit O/L to 1000MW (capacity:691 MW)

Lack of planning of maintenance

Under frequency relays bypassed

No Automatic Demand Management System

Grid Security voluntary in India, not mandatory


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Documents

India Power Sector Grid Failure