Status Check: Update on NSGM and smart grid pilot projects

Update on NSGM and smart grid pilot projects

Smart grid development is expected to transform the Indian power sector into a secure, adaptive, sustainable and digitally enabled ecosystem providing reliable and quality energy for all, with active participation of stakeholders. To realise this vision, the Ministry of Power (MoP) has taken several initiatives such as setting up the India Smart Grid Task Force (ISGTF) and the India Smart Grid Forum to provide policy direction to smart grid initiatives and accelerate the development of smart grid technologies; undertaking smart grid pilot projects  to test and showcase various smart grid functionalities; and launching the National Smart Grid Mission (NSGM) to plan and monitor the implementation of policies and programmes. The first phase of the NSGM ended in March 2017 and the mission was extended to the second phase (April 2017 to March 2020). A total outlay of Rs 9.9 billion is estimated to be undertaken under Phase II. Of this, Rs 9.38 billion (30 per cent of this will be government grant) will be used for the development of smart grid pilot projects.

The MoP along with the ISGTF had shortlisted 14 smart grid pilot projects across different locations in India. Of these, 10 smart grid pilot projects and one smart city research and development platform were sanctioned, with nearly 50 per cent funding support from the MoP. The key functionalities tested in these pilots include advanced metering infrastructure (AMI), outage management system (OMS), peak load management (PLM) and power quality management. So far, seven of these projects have been completed, while the others are at various stages of implementation.

Under the NSGM, five projects are under implementation, two in Chandigarh and one each in Odisha, Kerala and Jharkhand, entailing a total project cost of Rs 6,858 million. Apart from this, two projects at Amaravati and Congress Nagar were surrendered by Maharashtra State Electricity Distribution Company Limited (MSEDCL) in December 2018.

An update on the various smart grid projects under implementation…

MoP-sanctioned pilot projects

The pilot projects sanctioned by the MoP are being implemented across Assam, Gujarat, Himachal Pradesh, Haryana, Karnataka, Punjab, Telangana, Tripura, Puducherry, Uttar Pradesh and West Bengal at a total cost of Rs 2.9 billion (including Rs 1.3 billion funding support from the government). All projects have been partially funded by the MoP, except the project developed by the Uttar Haryana Bijli Vitran Nigam (UHBVN), which was fully funded by the New Energy and Industry Technology Development Organization (NEDO).

Nine of these projects have been completed and are under commercial operation, as of February 2019. These include a smart city demonstration project at the Indian Institute of Technology (IIT)-Kanpur campus, the Smart Grid Knowledge Centre developed by Power Grid Corporation of India Limited (Powergrid) in Manesar, Haryana, and projects implemented by UHBVN (Panipat City Sub-Division of Haryana), the Himachal Pradesh State Electricity Board (HPSEB) in the Kala Amb Industrial Area, Himachal Pradesh; Chamundeshwari Electricity Supply Company Limited (CESCOM) in V.V. Mohalla Division, Mysore, Karnataka; West Bengal State Electricity Distribution Company Limited (WBSEDCL) in Siliguri town, Darjeeling; Tripura State Electricity Corporation Limited (TSECL), Electrical Division-1, Agartala; Uttar Gujarat Vij Company Limited (UGVCL), in Naroda; and Puducherry Electricity Department (PED) Division-I.

The remaining two projects are at advanced stages of implementation and are expected to be commissioned in the coming months. Under the The Southern Power Distribution Company of Telangana project in the Jeedimetla Industrial Area of Telangana, all single- phase meters and automation components have been installed. The control centre is yet to be commissioned. Under the Assam Power Distribution Company Limited (APDCL) project in the Guwahati distribution region, smart meters and data concentrator units (DCUs) have been installed while smart grid system integration with the Restructured Accelerated Power Development and Reforms Programme (R-APDRP) is in progress.

NSGM projects

NSGM projects are under implementation at five locations – subdivision-5 (Chandigarh), the entire city of Chandigarh (excluding subdivision-5), Kochi city in Kerala, Ranchi city in Jharkhand and Rourkela city in Odisha. These projects entail an aggregate investment of Rs 6.86 billion, 30 per cent of which is funded by the government. Bids are being awarded for various project components such as AMI, supervisory control and data acquisition (SCADA), distributed generation, demand response and electric vehicles.

The smart grid project in Chandigarh is being implemented by the Chandigarh Electricity Department (CED) at a cost of Rs 285.8 million. The utility floated the tender for SCADA and AMI implementation in December 2017 and the project was awarded in October 2018. Other projects were sanctioned in September 2018, tenders for which are yet to be issued. On February 14, 2019, a tripartite agreement was signed between the NSGM, Government of Odisha and Odisha Power Transmission Corporation Limited (OPTCL) for the implementation of the Rourkela smart grid project.

Key takeaways and the way forward

There have been delays on the part of utilities in arranging counterpart funds (50 per cent for pilot projects/70 per cent for NSGM projects). In addition, there are procurement and contractual issues. Utilities must adopt enabling provisions in contracts so that vendors with proven capabilities are selected while allowing experienced global players to participate independently or through consortiums/joint ventures with domestic players. Further, the utilities have been focusing only on equipment deployment and technology demonstration. As a result, not much progress has been seen in process redesign, and change management.

The key issues faced in the implementation of smart grid projects pertain to interoperability, grid architecture planning, lack of skilled manpower, delays in investment approvals, lack of innovative business models, high costs and absence of required support from consumers.

The assessment of the progress is expected to help the utilities in executing smart grid technologies more efficiently in the future. This will also enable them to identify the best technology and practices. Going ahead, there is a need to develop innovative financial and business models to implement smart grid projects. More pilot projects are likely to be initiated under the NSGM with renewed funding under Phase II of the programme. Meanwhile, more regulatory support is needed for time-of-day metering, connect/disconnect, improvement in operational efficiency and loss reduction, etc. This will be crucial for facilitating the deployment of smart grid technologies.