Smart grids, smart cities
Smart grids face many challenges but if properly implemented, they can offer multiple benefits and be a vital part of a sustainable solution to India’s rapidly increasing energy needs, says R Srinivasan.
Smart grids are part of the solution in meeting the increasing energy demand of the country and supplying 24x7 power to all its citizens. Establishment of smart grids is crucial since it is estimated that the demand for power will nearly quadruple by 2032 and the current T&D losses too are very high. Smart grids are also in keeping with the ambitious climate change commitments and for largescale deployment of intermittent renewable energy generation. In addition, they are crucial to some key projects such as 100 Smart Cities, 175 GW of renewable energy (RE) by 2022, electric vehicles, etc.
As per some reports, the Indian smart grid market is estimated to touch Rs 50,000 crore in the next five years. Reji Kumar Pillai, President, India Smart Grid Forum (ISGF) had opined that these 100 smart cities and 500 smart towns will involve smart metering, smart street-lights, rooftop solar, state of the art billing, energy storage, electric vehicle charging stations, etc.
Commenting on the current scenario of the 100 Smart Cities and 500 smart towns initiative and if it has shaped up as expected in the last few years, Rudranil Roy Sharma, GM & Senior Consultant – Energy Vertical, Feedback Business Consulting Services
Pvt Ltd, said, “Globally, there is no specific definition of a smart city. Different countries or authorities define it in a different way and from the Indian perspective the definition can vary from state to state and city to city. As mentioned in the policy document, the smart city mission objective is to promote cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘Smart’ Solutions. The focus is on sustainable and inclusive development and the idea is to look at compact areas and create a replicable model which will act like a light house to other aspiring cities. The mission was launched by the current Prime Minister of India in June 2015. Its objective is to retrofit, re-development and green development of 100 cities across India so that it drives economic growth and improves the quality of people’s lives by enabling local area development and harnessing technology, especially technology that leads to smart outcomes. The mission has made significant progress in the last one year. In the beginning, these 100 cities were distributed among all the states and UTs with each state/UT having at least one smart city. This distribution was done based on urban population of the State/UT and the number of statutory towns in the State/UT. Post this, a ‘City Challenge’ programme was conducted among the aspiring cities in order to shortlist cities to be taken up for the Smart City mission. The challenge was conducted in two stages. The first stage was intra-state competition, where cities within the same state compete with each other for selection. In the next stage, shortlisted states from each state compete with each other for Pan-India level selection. So far, two rounds of selection have been conducted and a total of 47 cities have been selected for the mission - 20 in round 1 and 27 in round 2. The investment model for the mission has already been finalised. For each city, a SPV will be formed with equal equity participation from the Centre and state. Private companies may take an equity stake in the project however the state and central govt jointly should be the major shareholder. The Central govt will disburse Rs 500 crore for each city - Rs 200 crore in the first year and Rs 100 crore for the next 3 years. The respective state will make an equal contribution and projects will be executed through joint ventures, subsidiaries, public-private partnership (PPP), turnkey contracts etc. To sum up, the mission has seen significant movement in the last one year and initial planning and roll-out activities are very much on track. It will be interesting to see the pace at which implementation takes place over the next few years. Most initial projects are focussing on area based development. It will be interesting to see how the same can be implemented for the entire city so that citizens at large benefit from the mission.”
About the current scenario of the 100 Smart Cities and 500 smart towns initiative, an India Power spokesperson said, “The Rs 70.6 billion (approximately US$1.2 billion) worth smart city programme is a visionary initiative. Cities and towns equipped with technologically advanced and environmentally sustainable conditions apparently seem to be a tremendous accomplishment, if achieved, in India. However, the current pace of work in the infrastructure development of cities or their planning does not reflect any remarkable move in the direction of smart cities or towns. The majority of the budget allocation towards the same remains underutilised due to lack of city governance and budgetary responsibilities taken by the local governments.”
Queried about the price-sensitive Indian market and if the country is ready for full-
fledged implementation across India, Rudranil Roy Sharma said, “Price sensitivity is definitely a point for consideration when we talk about mass implementation of smart meters as the govt is yet to figure out the investment model. However, price sensitivity is not relevant for smart cities as the investment model has already been worked out and funding will come from govts, private companies/solution providers, global aid agencies etc.”
About the price-sensitive Indian market and if the country is ready for full-fledged implementation across India, an India Power spokesperson said, “Worsening climate changes along with depleting resources have led to mass urbanisation. One of the main aims of the smart city or town concept is to bring about a revolution in the way the utilities, transport, healthcare, education systems work in India. Therefore, to begin with, the country needs to focus on its tier 2 cities, instead of their tier 1 counterparts, in terms of modern urban planning. This is especially true with the growing influx of migrants from rural areas and tier 3 cities to tier 2 and 1 cities. It is a time and cost-consuming idea to try to re-organise the tier 1 cities, therefore, tier 2 cities could be a plausible starting point. A giant leap in technological innovation, toward smart grid metering infrastructure, better traffic and congestion management, and reduced carbon footprint, is the way to go for the full-fledged implementation of the initiative in India.”
Smart metering is at the heart of the smart grid and many metering projects have failed to take off in many states. Asked about what ought to be done to lend impetus to smart metering, Rudranil Roy Sharma said, “There is no fixed definition of ‘Smart Grid’. Since it is an evolving technology, it is difficult to define it. In simpler terms, a smart grid solution enables two-way communication between all the elements in a network – Generation, Transmission and Distribution. It helps in real-time monitoring and control of the overall network and increasing its efficiency. Smart meter helps in this two-way communication and hence it is not an overstatement that smart metering lies at the heart of the smart grid. The National Smart Grid Mission (NSGM) was launched in 2010 and as a first step, 14 smart grid pilot projects were rolled out across various parts of the country. These projects were launched to see the effectiveness of various features of smart grid i.e. AMI, OMS, peak load management, power quality, micro-grid and distributed generation; whether the claimed benefits have been achieved and whether it is financially viable to implement these technologies on a larger scale. Investments for pilot projects were to be shared equally between the Central govt and respective discoms. It is sad to mention that till date, implementation timelines for these projects have been revised multiple times, some discoms have implemented it partially, some are yet to implement it and some projects have already been cancelled and some new projects have been identified by the new govt. The new timeline has been set as 2017. Discom’s financial health and preparedness for next generation technology can be some of the reasons for such a huge delay in implementation of these pilot projects. It has been decided that 130 million smart meters will be installed in India by 2021. Customers with a monthly consumption of 500kWh and above will get a smart meter in Phase-1 by December 2017 and customers with a monthly consumption of 200kWh and above, will get smart meter in Phase-2 by December 2019. A major challenge in such mass implementation of smart metering programme is the cost of meter itself. A good quality smart meter costs approximately $100 per piece. It is practically impossible to bear such a huge cost looking at the current financial health of discoms. Consumers will never agree to bear the cost of the meter though there are merits in adoption of a smart meter. The govt is yet to figure out the right funding model for such a mass roll-out of smart metering programme. Development of a low cost smart meter with basic functionalities and cost as low as $ 20 per meter is under progress for many years now and it would be interesting to see when such a low cost meter hits the market however, it is agreed that the cost of meter will eventually go down with better economies of scale through mass implementation. Innovative funding models need to be worked out to make these projects viable. Additionally, experts mentioned that significant infrastructure development and capacity building issues need to be addressed before planning a large-scale implementation of smart metering projects.”
About metering projects, an India Power spokesperson said, “Metering projects failing in many of the states in India can be
attributed to a lack of clear mandates and policies concerning the installation of smart meters by the central and state governments. The country is yet to comprehend effectively the viability of smart metering in its states in terms of infrastructure requirement and cost-effectiveness, and in overcoming power shortfalls. By default, infrastructure development planning in the country needs to be streamlined – identifying the gap and investing resources appropriately in advanced technology implementation and faster upgrades. Most importantly, the aim should be clear behind the implementation of smart meters for individual states – reducing the aggregate technical and commercial losses of states and union territories.”
The Indian power system is fourth-largest in the world. Asked to comment on smart grids as a game-changer in view of grid evacuation issues, Rudranil Roy Sharma said, “The basic answer to grid evacuation issues is to expand the transmission network to all parts of the country – matching transmission line and substation capacity with generation capacity and energy demand of a region. Once the basic transmission infrastructure is in place, smart grid helps in real time monitoring and control of the grid network, balancing between energy generation and demand across various regions so that the surplus power of one region is available to the region where power deficit situation exists. Smart grid, therefore, helps in improving energy utilisation of a country and managing peak demand in a more effective way. With more and more RE plants coming on stream, usage of smart grid will be absolutely essential for grid balancing and stability. These RE powers are intermittent in nature and not available throughout the day. Hence, intelligent balancing of the grid throughout the day between generation points and load centres will be of immense importance in coming days and that is where smart grid will play a very important role.”
Queried about grid-related challenges, especially in rural India and how rural India would benefit from smart grids, an India Power spokesperson said, “Most people in our country, especially in rural India, are oblivious of the process in which power is delivered to their houses. This mandates the need to educate consumers about the utility of smart grid technology first, before its implementation. Consumers should be made aware of the benefits of a smart grid both in terms of its cost-effectiveness and as an environmentally healthy option. One of the chronic problems plaguing rural India is frequent power-cuts or sporadic power supply. Smart grids can provide a solution by imparting energy independence to these regions. Implementation of smart grids can be rendered complete or successful only if we start implementing prototypes of the technology through small and medium-sized pilot projects in different areas. We must remember that every place will have its unique context and requirements in terms of development and infrastructure. Therefore we should at all cost avoid any policy that emphasises on the “one size fits all” approach with regards to the implementation of smart grids in India.”
About issues and challenges in their successful implementation and advantages and disadvantages of smart grids, an India Power spokesperson said, “Lack of awareness among consumers and inadequate standards and regulations concerning smart grid technology are some of the biggest hurdles for smart grid implementation in India. Besides, there are other issues like cost, which is another major concern. For example, retrofitting of old equipment with new technology may be cost-intensive and may not even be feasible in case of certain non-compatible machinery and equipment. The cost of procuring new equipment may deter implementation of smart technologies. It is true that implementation of smart grids on a large scale involves crores of rupees, however, the benefits to be reaped from installation is also equally big. Besides efficient meter reading and reduced carbon footprint, smart grids also ensure better quality of power supply, protection from power theft, reduced equipment failure and cost-effective power consumption among others. However, with digitisation of electricity grids, extra care should be taken towards efficient data management to prevent abuse of personal data and information of consumers by cyber miscreants.”
On cyber security and funding affecting the large-scale implementation of smart grids, an India Power spokesperson said, “Besides cyber security and funding issues, factors like socio-political conditions of a place can come in the way of successful implementation of smart grids. Regulatory and compliancerelated policies concerning technology are yet not streamlined in the country. Besides, there
is lack of clarity in terms of a proper estimate about state-wise or city-wise requirement and procurement conditions. These factors are impeding the growth of smart grids in India.”
About whether state governments can help mitigate issues of timely completion of projects, Right-of-Way (RoW) issues, clearances, land acquisition, etc, an India Power spokesperson said, “Our power generation capability has peaked from 100 GW to 255 GW from 2001 to 2015 however, the country is still facing as much as 10% of peak power deficit. A lack of planning in transmission infrastructure development is what has led to this day. There are states that have surplus of power, while regions in the South like Tamil Nadu and Telangana face immense power deficit. Right of Way (RoW) and land availability are other hurdles to completion of smart grid projects, as there are no standard rules or regulations for RoW compensation, which leaves land-owners and developers in doubt about the price offered as compensation. The solution lies majorly in delineating policies and associated factors. For example, a clear timeline should be issued by state governments in their respective areas and jurisdictions in receiving approvals from land-owners with penalty fees for failure to meet deadlines. It should be mandatory for governments to take all the required approvals from the respective individuals and departments before starting off with a project.”
About the standards compliance issue, Rudranil Roy Sharma said, “The Ministry of Power (MoP) mandated Central Electricity Authority (CEA) to prepare the functional requirements and technical specifications for indigenous smart meters. CEA released the first edition of the smart meter specifications in June 2013. However, the distribution companies implementing 14 smart grid pilot projects issued different specifications in different states. This issue was brought to the attention of MoP by India Smart Grid Forum (ISGF). MoP requested the Bureau of Indian Standards (BIS) to formulate a national standard for smart meters. Subsequently, BIS assigned this task to the Technical Committee under Electro Technical Division (ETD- 13) to prepare the standards for smart meters. In August 2015, BIS published the new Smart Meter Standard, IS 16444: AC Static Direct Connected Watt hour Smart Meter – Class
1 and 2 Specification covering single phase energy meters; three phase energy meters; single phase energy meters with net metering facility and three phase energy meters with net metering facility. Another standard IS 15959: Data Exchange for Electricity Meter Reading, Tariff and Load Control — Companion Specification has been revised and published as IS 15959: Part 2-Smart Meter in March 2016.”
About the standards compliance issue, an India Power spokesperson said, “With respect to regulations and compliance, the approach should be holistic as well as customised by taking into consideration the political and cultural realities of each individual state and region under consideration for smart grid implementation. In addition, to these factors, resource availability and constraints should also be given equal importance. Policies and regulations should be directed towards encouraging incentives for investments. It must be remembered that the interest of consumers and that of suppliers and utilities should match, with the consumers’ interest in low-cost power at the helm.”
Incentives for investments
Utilities that invest in these technologies need clarity in terms of financial benefits. Commenting on this, Rudranil Roy Sharma said, “Definitely. Any kind of investment should be linked with some kind of return/ benefit in the longer term. Be it social, economic or financial. One of the key reasons for implementation of smart meter is reduction in commercial loss of discoms through efficiency in meter reading and billing, zero power theft, accurate energy accounting and auditing. This would help discoms realise higher revenues and reduce their loss and debt burden.”
About financial benefits for utilities that invest in these technologies, an India Power spokesperson said, “To be honest, to the utilities in India, the advantages or benefits of smart grid technology are yet to be realised or even envisioned. Implementation of smart grids would mean installation of new and advanced equipment or retrofitting old equipment with the latest technology. In the first case of procuring new machinery, utilities and regulators have to bear the initial high cost of purchasing these equipment, which can be an additional load for those firms that have recently upgraded their existing electromechanical meters or older static equipment. In case of retrofitting, it is possible that some equipment may not be compatible with the new technology. Such
situations also translate into additional cost for power utilities. Therefore, utilities and discoms need clarity in policy structures relating to smart grid technology from the concerned authorities. Financial assistance is also necessary for cash-strapped utilities that are perennially reeling under neck-deep debt. Privatisation and open source access is another way to reduce the onus on these firms.”
On smart grids as a demand side management tool, Rudranil Roy Sharma said, “A feature of smart grid is Demand Response Management System (DRMS). A DRMS solution is usually linked with a Smart Meter. Through this energy consumption of a facility during peak time can easily be tracked by the power consumers and the distribution utility. Based on information available through smart meter, consumers can opt for peak shaving and reduce their energy consumption during peak hours. Alternately, utilities can enter into an agreement with consumers for demand curtailment during peak hours. This demand curtailment can be on voluntary basis or can be automatic through implementation of Building Management System (BMS). Either way, it helps in reduction and management of peak demand.”
Many people would love to buy electric vehicles but fear getting stranded without sufficient charging points. In this context, electric car pioneer Chetan Maini, founder of Reva, had reportedly suggested that the govt should come up with a PPP model to install fast-charging points and as per reports the Centre too is working on a policy.
Commenting on smart grids as a demand side management tool and as a natural corollary for electric vehicles, an India Power spokesperson said, “Smart grids are intended to allow consumer’s visibility on energy consumption. One of the primary objectives of demand-side management is to make consumers conscious of electricity usage, to encourage consumers to use less energy during peak hours and to avoid the peaking load on the power sources and subsequent power cuts. The smart grid technology empowers consumers to make informed decisions. This has manifold effects – cost-saving for commercial and domestic consumers, increased efficiency of utilities in power generation and distribution, and better environmental sustainability. The popularity and optimum use of electric vehicles (EVs) can be achieved based on various factors such as effective integration of utilities with the electric vehicle concept. For utilities, the idea of transportation electrification is laden with challenges related to peak load management, etc. Smart grids help in the effective use of power consumption in EVs by providing visibility and control to utilities in managing transformer load and electricity distribution efficiently.”
The way ahead
On the way ahead for smart grids, Rudranil Roy Sharma said, “The way ahead is the quick implementation of pilots, learning the implementation challenges, take proper action on those challenges and then systematic roll out of smart grids from higher consuming to lower energy consuming category. With more and more RE power coming to the Grid, Smart grid implementation has to be time bound to reap the benefits in coming years.”
About the way ahead for smart grids, an India Power spokesperson said, “The way ahead is bright for smart grid implementation in India. If we can take care of political and regulatory hurdles, future of the power sector in India with incorporation of smart grids is highly promising. Technological advances in the form of smart meters and smart grids managing peak load and demandside responses will lead to prosperity in the long term and utilities will get a lease of fresh air, overcoming decades of debt-ridden situation. Most importantly, consumers will be benefitted with an empowered transparency on power consumption levels, reduced cost of electricity, and greater efficiency.”
At the recent India Smart Grid Week 2016, Power Minister Piyush Goyal summed up the need to adopt smart grids in India when he said, “Every dimension of human existence can be transformed with quality power and energy. Smart grids and smart meters are the first step for India to become a smart country. Smart grids are extremely important to reach the last man at the bottom of the pyramid. Hence, we need to have innovative solutions that are cost-effective, technology- enabled and give an equal opportunity to all.”
In conclusion, smart grids face many challenges but if properly implemented, they can offer multiple benefits and be a vital part of a sustainable solution to India’s rapidly increasing energy needs.