Utilities

Emerging Top Trends For Indian Power Sector

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<p style="text-align: justify;"><span style="font-size: 12pt;">One of the complicated engineering systems is the interconnected electric power grid. </span></p><p style="text-align: justify;"><span style="font-size: 12pt;">Historically, high voltage transmission lines were used to transport electricity over long distances from centrally located power plants, and transformers were used to lower the voltage at distribution lines. After that, residential, commercial, and industrial users received electricity.&nbsp;</span></p><p style="text-align: justify;"><span style="font-size: 12pt;">Decarbonization, decentralization, and digitization have long been the three main trends in the world, and these trends are continuing today. </span></p><p style="text-align: justify;"><span style="font-size: 12pt;">The electric power grid is undergoing a significant transformation due to the widespread use of renewable energy sources, particularly wind and solar energy, distributed generation, microgrids, energy storage, and electric vehicles.&nbsp;</span></p><p style="text-align: justify;"><span style="font-size: 12pt;">The result is a more complex, dynamic, and stochastic electrical power grid. An electrical power grid's most important feature is that generation and loads must always be balanced.&nbsp;</span></p><p style="text-align: justify;"><span style="font-size: 12pt;">Additionally, it's crucial to remember that electrical systems react quickly (within one second), making it imperative to maintain the system's stability and resilient to dynamic variations.</span></p><h2 style="text-align: justify;"><span style="font-size: 14pt;">Key Trends in the Indian Power Sector</span></h2><p style="text-align: justify;">India has the largest synchronous interconnected transmission grid and the third-largest power generation capacity in the world. India has a 400 GW installed capacity for power generation, with 57 GW of solar and 40 GW of wind energy.</p><p style="text-align: justify;">After the 2012 blackout, transmission grid stability has continued to gain significant importance. Since AT&amp;C losses have always plagued the distribution grid, it is anticipated that deregulation of the distribution grid will help reduce losses while adding new complexities to technical and commercial transactions.&nbsp;</p><p style="text-align: justify;">At the consumer level, there is a push to replace outdated meters with smart pre-paid meters. In India, there is also a push for policy to promote the use of electric vehicles.&nbsp;</p><p style="text-align: justify;">Additionally, distributed generation systems or extending distribution feeders are used to start supplying all homes with uninterrupted power. The difficulties and chances presented by the new electricity ecosystem come along with these revolutionary changes.</p><p style="text-align: justify;"><strong>Large-Scale Adoption of Renewable Energy Sources</strong></p><p style="text-align: justify;">As Wind and Solar become more integrated into the grid, the level of uncertainty resulting from the erratic nature of these sources rises. It is necessary to develop new quick-acting load balancing techniques and methods for controlling the dynamic stability of the grid.</p><p style="text-align: justify;"><strong>Explosion of EVs</strong></p><p style="text-align: justify;">As more EVs are incorporated into the system, it is essential to carefully evaluate how they will affect the distribution grid. Because charging can take place anywhere, it is necessary to anticipate load behavior and take proactive steps to maintain grid stability and ensure power quality. Technologies for V2G would probably develop.</p><p style="text-align: justify;"><strong>Integration of Grid-level Energy Storage</strong></p><p style="text-align: justify;">Energy storage appears to be a godsend for managing the intermittent nature of renewable energy sources and assisting in grid stabilization. It is anticipated that new standards will develop, necessitating the creation of new ancillary services-related policies.</p><p style="text-align: justify;"><strong>Microgrids</strong></p><p style="text-align: justify;">There is an impending opportunity for distributed power to explode in India due to the falling solar and battery storage costs.</p><p style="text-align: justify;">Future regulations governing the purchase of excess power may change, and retail power trading may also occur. Since LVDC grids are more effective, more activity is also anticipated there.</p><p style="text-align: justify;"><strong>Distribution Deregulation</strong></p><p style="text-align: justify;">The content/carrier separation at the distribution level will eventually come to pass due to mounting losses for power distribution utilities. This will guarantee that utilities strive to become competitive and innovative to maintain their customer base.</p><p style="text-align: justify;">In addition, they should keep the system's losses under control and maintain their financial stability. At the same time, it will be expected that the final customer will have more options for their advantage.</p><p style="text-align: justify;"><strong>Engagement of Consumers</strong></p><p style="text-align: justify;">As the electricity ecosystem develops to the next level, consumers' or prosumers' roles are anticipated to grow. When energy markets evolve, they will be able to participate in them and be self-sufficient. In such a case, utilities should rethink their role.</p><p style="text-align: justify;">Thus, the power sector has progressed from acquiring customers to increasing efficiency since it began its journey to give electricity access to every person. All power utilities are now focusing on customer satisfaction and adapting to new technology to run the evolving grid due to technological advancement and the new demography of millennial consumers (born with mobile phones as a necessity).</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Devanpic1.png" width="688" height="374" /></p><p style="text-align: justify;">A key goal of the 2003 Electricity Act was to make the grid more visible while ensuring everyone had electricity access. Later, R-APDRP concentrated on grid documentation and reducing AT&amp;C loss by increasing operational effectiveness.&nbsp;</p><p style="text-align: justify;">By implementing Smart Grid, an emphasis was placed on utilizing new technology to enhance grid performance. India has advanced along a similar path, and the following graph shows the development of Indian utilities that prioritize customer satisfaction. India is currently looking to use new technology (IT and OT technology) to create a digital, sustainable grid.</p><p><img style="display: block; margin-left: auto; margin-right: auto;" src="https://kradminasset.s3.ap-south-1.amazonaws.com/ExpertViews/Devanpic2.png" width="688" height="333" /></p><p>&nbsp;</p><p><span style="font-size: 10pt;"><em>This article was contributed by our expert <a href="https://www.linkedin.com/in/deven-patel-3862275/">Deven Patel</a></em></span></p><p>&nbsp;</p><h3><span style="font-size: 18pt;">Frequently Asked Questions Answered by Deven Patel</span></h3><h2><span style="font-size: 12pt;">1. What is the future of the power sector in India? </span></h2><p>Per capita energy consumption in India has increased 4 to 5 times since 2000. With electrification reaching the remotest area of India, consumption is likely to go up. This increasing demand is pushing all power utilities to generate more. However, increasing fuel cost is forcing power utilities to optimize their operations more eco-friendly way. This is reflected in all policies formulated by regulators or governments.&nbsp;</p><p>In short, there will be steady growth of power demand, a constant push for optimization of operation, push to use green fuel/means for energy generation. This will have opportunities for almost all players in this setor, be it OEM, Service providers, or EPC contractors.</p><p>However, the power sector is being heavily influenced politically, so progress will be slower than in other sectors. But growth will gain momentum in the coming 3 to 5 years. R-APDRP, Smart Grid, and now RDSS scheme of government are a few examples where now visible progress is being seen</p><p>&nbsp;</p><h2><span style="font-size: 12pt;">2. What is the present installed power generation capacity in India?&nbsp;</span></h2><p>The installed Power Generation capacity of India is almost 400GW. It includes a type of power generation.</p><h2><span style="font-size: 12pt;">3. What is the role of SMEs in the smart grid?&nbsp;</span></h2><p>SMEs will have a significant role in the Smart Grid rollout in terms of providing equipment and services. Smart Meters are forming a major hardware component for Smart Grid. With the RDSS scheme aiming to replace 25Cr household meters with smart meters, a huge market is for meter manufacturers. Another part is that installing and commissioning these meters will open up work areas for semi-skilled workers.&nbsp;</p><p>This is not a one-time job because these installed meters will need to be operated and maintained. Apart from this work, there will be a huge demand for software supply and services like HES, MDM, Pre-paid Billing, post-paid-billing system, and their integration. Providing analytics using this data will be another area of work.</p><p>Such a wide variety of skills will be needed. Any one large company cannot cater to all such requirements. Hence SMEs will play a vital and integral role in the Smart Grid echo system. However, they need to be clear in their approach to the market or segment and aware of some inherent delay/payment systems.&nbsp;<br />&nbsp;</p><h2><span style="font-size: 12pt;">4. What are the challenges currently faced by India in mainstreaming solar energy?&nbsp;</span></h2><p>The mainstream solar energy system is facing a major challenge in the input cost of solar plants vis-a-vis current per KWH unit rate. This has increased RoI. At the same time, the payment security mechanism, though in place, sometimes due to DISCOM's inherent problem, does not attract small investors. Otherwise, this sector would have progressed at a much faster rate. Apart from this, DISCOM's current distribution infrastructure forces solar plants to inject their power at the Substation rather than at the feeder level.<br />&nbsp;</p><h2><span style="font-size: 12pt;">5. What is the potential of power generation from renewable sources in India?&nbsp;</span></h2><p>Considering the overall push to go green in the energy sector. The potential of power generation from a renewable source is very good. India is a country where the sun is available for almost 300 days adding up with seasonal Wind and Hydro creates a good combination for renewable generation.&nbsp;</p><p>The steady increase of demand for domestic usage, growth in Industry to make a presence at the global level, and push for EVs will add up to the demand for electricity much more than expected. Such a huge increase in demand can be addressed quickly only by adding up small renewable at various levels and then meet the missing factor. Such small renewable will create VPPs and DER. If Industry taps this area well, there is a huge potential for renewable sources in India in the coming 3 to 7 years.</p><p style="text-align: justify;">&nbsp;</p>
KR Expert - Deven Patel