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

Why it Happened?
Overdrawing

Power Supply Halt

Transmission Lines Trip

Vidyut : The Power Story

Indian Power Sector: An Overview

Ranks 5th among world in terms of energy generation Installed capacity as on june12: 2,05,340.26 MW Facing acute power deficit with peak power deficit of 12.9% Power trading still at a nascent stage Distribution primarily controlled by State electricity boards

Distribution

Demand-Supply

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

35 30 25 20 15 10 5 0 N W S Anticipated Energy 3 2.5 E N-E

5 MWx 10000 4 3 2 1 0 N W S E N-E

MUx 10000

Anticipated Power 5 MWx 10000 4

MUx 100000

2 1.5 1

3
2 1

0.5
0 N W S E N-E Actual Energy

0 N W S Actual Power E N-E

Power Sources in India

12% 19% Coal Gas 2% 1% 9% 57% Oil Nuclear Hydro Other Renewable

CRISIL 2011-12

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

Hydro Power Generation

Water falling from a height runs turbine, which coupled with electric 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

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

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

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

World Electricity Generation by fuel(EIA)

Electricity Regulation in India

Indian Electricity Act, 1910
Provided 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

Electricity Regulation in India

The 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

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 made available Per capita availability of electricity to be increased to over 1,000 units by 2012, at reasonable rates Minimum lifeline consumption of 1 unit per household per day by 2012 Financial turnaround and commercial viability of electricity sector

National Tariff Policy, 2006

Provided framework for determining tariffs Incentivized aggregate technical and commercial (AT&C) loss reduction Encouraged non-conventional sources and power from captive generators

Structural Framework

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

CERC
Regulate 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.

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

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 resource constraint) 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

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.

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.

FDI in power sector

Hydro Projects Captive Power Ultra Mega Power Projects Nuclear Power National Grid Program Rural Electrification Trading Renewables

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

Franchisee Distribution
Sell power to franchisee Distribution Franchisee Franchisee distributes at price prescribed by SEC

State Power Corporation

End User

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 to meet the countrys energy requirements

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

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%

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%

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

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

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

World Sources of Power

3%
15% Coal 42% 14% Gas

Oil
Nuclear Hydro Other Renewable 21%

5%

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

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