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Challenges before Power Grid, the Central Transmission Utility, Shri R V Shahi, Former Secretary, Ministry of Power

The Management Development Institute, Gurgaon, organised a three day programme for the Senior Management Team of Power Grid at the levels of Executive Directors and General Managers on October 21-23, 2009. The title of the programme itself aptly reflected the intent - "Power Grid Towards Next Orbit : Innovative Strategies". I was invited to speak on "Power Grid Towards The Next Orbit : Issues and Challenges". Obviously there are a large number of issues and, there are, therefore, enormous opportunities and challenges for this premier organisation which controls almost entirely the national and regional grid operations of the country. I confined myself, within the short time available, to a few important issues which are briefly articulated in this paper.

The biggest challenge for the power sector as a whole - and, therefore, for Power Grid as well - is how to meet the aspirations of people of India to have not only access to electricity but to have reasonably reliable electricity supply. No doubt, we have come a long way in supporting and driving economic growth to an orbit in which atleast there is expectation that India could also achieve 8-10% GDP growth rate. The most important contributor to economic growth rate (which mainly consists of manufacturing, services and agriculture) is electricity. Quite apart from the GDP growth rate, the Agenda of an inclusive growth continues to remain incomplete because vast majority of Indian population, which mostly live in villages, remain deprived of access to electricity and, therefore, deprived of all the benefits and facilities of a modern society. Even essential ingredients of social development, such as Education and Health Care are adversely constrained because of inadequacies and lack of reliability of electricity supply in rural India. The mushroom growth in the television and media has further enhanced the aspirations of people, because they are now better enabled to understand the gaps in the standards of living and modern facilities available in towns, vis-?-vis those available in villages. This understanding could obviously lead to stresses and tensions. Therefore, perhaps the biggest challenge for power suppliers, which consist of not only those companies which generate electricity but definitely also those which have been entrusted with the responsibility of transmitting electricity across the regions and States, is to ensure access to electricity for all, which also happens to be one of major promises of the present Government.

Under the new architecture of electricity industry in India, which has been envisioned in the Electricity Act 2003, Power Grid Corporation of India (Power Grid) has been designated as Central Transmission Utility (CTU). The Act envisages, besides Power Grid being just a transmission operator, definite roles and responsibilities as CTU. Its present and future responsibilities, therefore, emanate from the provisions of Electricity Act which go much beyond Power Grid being just a company to evacuate and transmit power from generating stations. A few important extracts relating to functions of the Central Transmission Utility, from the Electricity Act, appear relevant to mention to highlight the challenges for Power Grid ahead. Section 38 (2) of the Act :

"The functions of the Central Transmission Utility shall be-

  1. to undertake transmission of electricity through inter-State transmission system;

  2. to discharge all functions of planning and co-ordination relating to inter-State transmission system with -

  1. State Transmission Utilities;

  2. Central Government;

  3. State Governments;

  4. Generating Companies;

  5. Regional Power Committees;

  6. Authority;

  7. Licensees;

  8. any other person notified by the Central Government in this behalf;

  1. to ensure development of an efficient, co-ordinated and economical system to inter-State transmission lines for smooth flow of electricity from generating stations to the load centres;

  2. to provide non-discriminatory open access to its transmission system for use by-

  1. any licensee or generating company on payment of the transmission charges; or

  2. any consumer as and when such open access is provided by the State Commission under sub-section(2) of section 42, on payment of the transmission charges and a surcharge thereon, as may be specified by the Central Commission."

Another aspect which is very relevant to briefly highlight, to put into prospective the nature and enormity of challenges ahead for Power Grid, relates to an unprecedented rate of growth in expansion of power sector. The most authentic reference on this subject is the Integrated Energy Policy which projects the expansion of Indian power sector for a twenty five year period, i.e. 2007 to 2032. There are a number of subjects and issues which have been covered in the Integrated Energy Policy, but, for this discussion, perhaps it would suffice to say that the sector is targeted for a phenomenal expansion from 130 GW in 2007 to over 800 GW in 2032. This itself entails one of the biggest challenges on the CTU to see that the objectives of this expansion are appropriately achieved. To understand further the magnitude and nature of challenges ahead, we could classify them under a few broad categories - (a) Technical, (b) Policy Related and Administrative, (c) Diplomatic, for example Regional Connectivity, (d) Regulatory, (e) Market Structure and (f) Financing.

Under the Technical category, the challenges relate to Planning, optimising operating practices, technology upgradation including research and development and limitations caused by inadequate domestic manufacturing capability. Under the new dispensation, deshackling of power industry is categorised by delicensing of generation, Open Access on transmission and distribution networks and enhancing the scope of competition by several other measures. All of these lead to unpredictable demands on the process of planning transmission systems. The rule of the game has changed a lot and would change a lot more. In the past, we knew where the power station is being set up and to which region and States power has to flow under long term Power Purchase Agreements. Planning of transmission systems, therefore, was comparatively easier. A few important features of Electricity Act, viz. (a) delicensing of setting up power generation facilities, (b) development of merchant plants away from long term supply contracts and (c) facilitation for developing captive power plants including Group Captive Plants, have all been provided in the new architecture, and they aim at much larger and laudable objectives. Each one of them has powerful potentials for transforming the electricity sector and creating competitive environment in the larger interest of consumers. But, at the same time, each one of them creates equally extraordinary burdens and demands on Transmission System Planners. Predicting various variables and providing for them in the Planning process, is indeed a great challenge.

There was a time when we had Regional Grids for each of the five power regions of the country. Each of the Grids had its own frequency and movement of power across the regions obviously had limitations. With the objective of optimising power generation and consumption and, therefore, trying to balance the needs of power deficit regions with those of power surplus areas, one after another, we started integrating various Grids. By 2006, except the Southern region, we had succeeded in integrating all the other four power Regional Grids in the country, amounting to more than 90,000 MW. This has obviously led to a number of benefits, but at the same time challenges of operating the Grid in a proper manner have increased. In coming years, when the size of the power industry keeps expanding, enormity of challenges would keep getting enhanced. Better technical skills coupled with managerial inputs, to cope with these challenges, would be necessary. Prediction of problems associated with timely remedial actions would have to be a routine affair rather than exceptions.

Technological upgradation in the transmission systems would be essential if we have to keep pace with such a rapid expansion of power generation, in terms of magnitude, but more in terms of complexities, arising out of freedom to set up generating facilities, as mentioned earlier. Changes have started happening - we have started getting into 800 KV transmission systems, Hybrid of AC and HVDC Systems, Transmission Pooling Hubs, enhancing the transmission capacity of the existing transmission lines by deploying uprated conductors etc. We need to imagine and simulate the situation when the installed capacity of the country would rise to 800 GW and see how the transmission systems would look like. This is easier said than done. It is here where a more proactive role to facilitate research, development and technological upgradation would be a challenge. This gets further compounded by the ground reality that the domestic Engineering and manufacturing capabilities have not kept pace with the dynamically changing needs of the country. Here again, Power Grid as the major player and as the CTU has an important role to cause things to happen in the field of technological upgradation, both domestically and internationally.

Under the category of Policy related and Administrative issues, there could be many areas which could cause problems, but the important issues which could become, or are, challenges relate to acquisition of land, right-of-way, forest clearance particularly in North-East and hill States and security and safety of transmission lines. Those who have been entrusted with the responsibilities of developing and maintaining the transmission systems over the years, have got attuned to deal with the owners of land in a certain manner. We used the provisions of Indian Telegraph Act which facilitated these in the past. Things have changed and are changing fast. In today's context many of these provisions do not appear to be compatible with any rationale approach which could be acceptable. This disconnect is causing considerable stresses in the process of developing new transmission systems. These problems are likely to get magnified in coming years. Managers at the operating level need to think innovatively and generate options to deal with these emerging situations and expectations, so that these solutions become the basis for required changes in the Government Policies and legislations, as considered necessary. Our energy resources are concentrated, in respect of Hydroelectric Schemes, in Hill States. Transmission systems have necessarily to pass through dense forests. Technically we need to think of innovative solutions to see how best these transmission lines are allowed to pass through these forests and, yet, don't create any adverse impact so as to stand in the way of permission from the authorities. In a few cases this was done, but as the problems increase in terms of a number of lines having to pass through such forests, technology development must come to the rescue. Safety and security of transmission systems, particularly of transmission lines in far flung areas has emerged as an area of concern. Globally, militancy and terrorism are on the increase. Transmission lines are common to a large number of power generation plants and disruptions in anyone of them could paralyse power supply systems. Therefore, this may not be the high end technology challenge, but it is emerging as a major challenge to ensure that these lines are secured from such disruptions.

In the South-Asian region, the natural energy resources are possessed by various countries. There are inequitable developments in this part of the world just as there are inequitable developments within India. Even though North-Eastern States in India are endowed with enormous water energy sources, production and consumption of electricity in this part of the country is the minimum. Bangladesh, Myanmar, Nepal and Bhutan, are endowed with different forms of energy resources. Optimal developments to the collective advantages of all the countries would require a skilful planning and implementation of regional transmission systems. It is not the case that only India benefits from generation of power in other countries. Infact, the case is that the energy development strategy has to proceed on a win-win formula under which every country benefits. Central Transmission Utility and Central Electricity Authority have a major challenge in this regard - a technical challenge and also a challenge to convince all that the structure they evolve is acceptable to all concerned.

Thus far, Power Grid has been the singular large transmission utility, has established its own benchmarks of performance and, therefore, has remained unaffected, by and large, from any pressures of competition. This was also the case with NTPC until the Ultra Mega Project Scheme came on the scene. This development led to people at large asking whether NTPC can be considered as the benchmark in terms of cost and performance. With a time difference of couple of years, similar situation would happen with reference to Power Grid as well when a number of players would emerge in transmission field. It would be a managerial challenge for Power Grid to re-visit its own systems, procedures, performance benchmarks etc., so that its leadership position, not only in terms of its size but also in terms of quality of management, remains. As we go along regulatory approaches may not remain as predictable as they have been hitherto. To cope with regulatory uncertainties would be one of the important challenges for Power Grid.

An out-of-box thinking is needed to create and provide electricity transmission access in the country. When for the first time, Noida Toll Bridge with a comparatively large investment was conceived and developed, one did not exactly know the traffic density, there was no question of something like transmission service charges or Power Purchase Agreement for electricity. Time has shown that the wisdom which predicted that it would not only be a commercially viable link but would emerge profitable, has been vindicated. We need to take risks - calculated risks - and develop transmission systems to deal with so called uncertain situations of the future. Power Grid is not expected to be just anyone transmission system operator, it is the national leader in transmission systems and, therefore, it would be expected to play a leadership role which will facilitate electricity market development. And, it is this responsibility and it is such expectation that will make its role even more challenging.