A recent news report in Business Standard drawing attention to the power shortage that India faces today was a stark reminder of the state of electricity in the country. According to the report, the Central Electricity Authority has projected an energy shortfall of 10.3 per cent and a peak shortage of 12.9 per cent in the country during 2011-12 (“Power deficit for 2011-12 pegged at 10.3 per cent”, June 13). Clearly, we need more supply, but let’s first consider China. Although it added 100,000 Mw of net capacity in 12 months (almost 10 times that India added), it still faced a shortfall. Therefore, apart from increasing supply, we need a grid that can be adapted to meet today’s needs and future challenges.
The traditional grid was about engineering — making enough power flow safely through the system. Today, however, we need highly improved management and control mechanisms. In essence, we need a “smart grid”. A smart grid has no single definition and isn’t one single technology; it involves the use of digital communications and control to transform the grid to be more resilient, nimble, renewable-friendly and efficient.
Improvements in information and communication technologies allow us to make grid measurements and control almost real-time. For many, this starts with a smart meter. It has advanced bi-directional communication and control (connect/disconnect) facilities, which enable us to know in almost real-time where the power is going. This can help cut down theft and other losses. But there is more this technology can do.
What smart grids can deliver is driven by need. The US and Europe, for instance, care more about labour costs, renewables and electric vehicles. In India, there is evidence that load management, especially the peak, will be a major driver. Considering that electricity cannot easily be stored in large scale, one has to either increase supply or reduce demand.
Increasing supply is what the West does today, through the use of “peaker” units, which operate on fast-starting fuels like diesel or open-cycle gas turbine (or hydro turbine). Such a plant only operates during the peak, for a fraction of the time, so its electricity is inherently expensive. Consumers in the West typically don’t see such peak costs since the final tariff is a blended one, with the exception of larger bulk consumers or selected newer systems with variable tariffs. We estimate that if India were to add peakers (which may come to around Rs 7-8/kWh), and blend this, the average supply cost might increase by over 35 per cent.
The alternative is to reduce demand, not merely through demand-side management, which includes efforts like solar water heaters and compact fluorescent lamps, but by a dynamic system that reduces demand when and where required. This can be achieved through a “demand response”. Under this arrangement, large consumers are paid to reduce their load in lieu of the utility buying expensive peaking power. An even simpler option is “time of use” pricing, whereby we can incentivise off-peak over peak usage (recall the queues at STD booths before the 10 p m quarter-rate tariffs).
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Today, India manages load reduction at a feeder level, which is involuntary. In a smart grid, we can end feeder-level load shedding, as was demonstrated in a small smart grid pilot in Mangalore in which we assisted (under the pioneering efforts of MESCOM). Under shortage conditions, instead of zero supply, consumers could be provided a 300 or 500-watt power supply (or some threshold), which is sufficient to meet their basic needs. This is superior to their inverters or diesel, and gives the utility enough load relief to avoid a blackout. Today, the system in MESCOM would trip the individual consumer connection if power consumption goes beyond the limit, but in the future, with regulatory approval, the consumer could pay a premium for additional power. This would be higher than the normal tariff, but lower than today’s stand-alone backup options, hence a win-win situation. We can even provide higher uninterrupted loads for important users such as schools and hospitals. Without a smart system, we can’t apply such control, leaving everyone to suffer a blackout.
India has just started working on smart grid pilot projects, and the transformation will not be easy, nor will it happen overnight. However, smart grids may be inevitable in our portfolio of options for energy sustainability, since a business-as-usual approach is simply not an option. People now demand more electricity, whether in terms of environmental impact (including carbon), energy security or reliability.
We should, therefore, no longer think of a kilowatt-hour of electricity being the same as every other kilowatt-hour. To extend an analogy by Peter Fox-Penner in his book Smart Power, people today think of electricity as buying fruit. They buy it at, say, Rs 4 per unit. But in reality, that basket of goods is a mix of different fuels and different costs. Though the “fruit” is made of bananas, apples, mangoes and so on, including some expensive and some seasonal items, the blend remains hidden. In fact, not only are we blending costs, by hiding from consumers the true marginal costs of electricity, we are selling the same basket to different consumers at different prices. This isn’t just about subsidies to agricultural users versus higher rates to commercial users — even within residential users we charge differently, based on the total monthly consumption. But from a system perspective, whether one uses 50 or 100 units of total power is less important than when that power is consumed. This needs to change and a smart grid can enable this change.
The long-term possibilities and impacts of a smart grid are vast, including increased renewables, greater load management and higher quality of services. The first step will be articulating the needs and options, before deciding on solutions. Although it is not clear whether anyone knows the “right” answers, but, like with all transformations, we have to innovate, experiment and attempt. Only then can India realise its 21st century power dream.
The author is principal research scientist at the Centre for Study of Science, Technology, and Policy, a Bangalore-based not-for-profit research institution. He is currently technical advisor to the India Smart Grid Task Force established by the Government of India