POWER SUPPLY TRILOGY Generation mix done, now we go for the distribution mix!

The three main ‘unavoidable’ factors, on which an ‘efficient’ power supply will
depend on, UDAY 2.0. cybersecurity and transmission infrastructure

In an era of accelerated change, trying to limit climate change and achieve sustainable growth is strengthening the momentum of the global energy transformation. India’s power sector is undergoing a noteworthy change and this has redefined the industry outlook. Demand for electricity is seeing a steady growth with a pick-up in the economy, especially manufacturing activity, as well as favorable government policy. The government has implemented various progressive measures to maximise power generation capacity and improve distribution.

In September, we woke up to the news ‘India’s 5-year power plan: Move away from generation; focus on supply!’ As per India’s 5-year power plan, submitted to the Prime Minister’s office, the country’s current installed power generation capacity stands at 360,000 Mw, contributed by the thermal (coal and gas) and renewable power. Loaded with over capacity of power, India is said to witness a marked shift towards efficient supply and optimum generation.

According to the Central Electricity Authority (CEA), India’s installed capacity as on 31st August 2019 was approximately 360 GW. The total generation from conventional and renewable sources for the same month was close to 118,000 MU. For a full year (2017-18), the country saw a peak demand deficit of 2.1per cent and an energy deficit of 0.7per cent. (CEA, Load Generation Balance Report (LGBR), 2018-19).

In theory, we have adequate generation, and the deficit figures point to a scale which can easily be resolved. However, this masks a deeper underlying problem of deteriorating distribution company finances; delayed payments to generators and stranded generating assets.

While Indian power industry is undergoing a noteworthy change to redefine the industry outlook, and move away from generation and focus on supply, we, here look at how efficiently this supply can be when put into reality. We take you through the three main ‘unavoidable’ factors, on which an ‘efficient’ power supply will depend on.

Improving distribution operations under the expectant UDAY 2.0
One of the major criticisms of UDAY 1.0 was that the existing financial liabilities were just being shifted to another state entity, and there was no real control over improvement of the DISCOM performance. In the wake of this, UDAY 2.0 is said to definitely going to play a major role in initiating major tariff restructuring in power sector. N Janaiah, VC & MD Telangana State Renewable Energy Development Corporation Limited, Government of Telangana says, “They are to improve the operational standards and effective service standards of the DISCOMs by imposing penal charges for failure to comply services.”

Deepak Sriram Krishnan, Associate Director, Energy Program, WRI India, says, “It looks like UDAY 2.0 is likely to build penalties in the form of denying loans and grants to DISCOMs that don’t meet targets; opening of LCs for supply of power (already in place).” UDAY 2.0 is principally developed with the sole aim of resolving DISCOMs’ losses which is the “only difficulty” in ensuring round the clock electricity supply to all.

A major concern after the rollout of tariff policy and UDAY 2.0 scheme is, if a DISCOM would not take steps to reduce losses, then Government of India would not give any grant or loan. Rajneesh Khattar, Group Director- Energy Portfolio – India, Informa Market in India (formerly UBM India) says, “In sync with UDAY 2.0 doc, the funds from the Centre would only be released if the DISCOM takes steps and shows adequate intent to reduce their losses.”

Policy interventions such as increased private participation focus on short-term or long-term credit instead of working capital loans, distribution franchisee model modification and adoption and penalty norms for load shedding have to be encouraged. UDAY 2.0 is said to empower end consumers and transform DISCOMs to supply uninterruptible electricity and manage the difference between the average cost of supply (ACS) and average revenue realised (ARR). On tariff front, frequent rational tariff revision, restriction of over 15 per cent loss to be reflected into tariff and decrease in cross-subsidy charges are expected. N. Yuvaraj Dinesh Babu, Senior Advisor, EY India says, “UDAY 2.0 maybe expected to involve funds outflow provision linked to achieving operational and financial targets by DISCOMs.”

Protecting India’s power sector from those cyber ‘bugs’
Cyber attacks are a big issue, not just for our country, but for the whole world. In the last two years, around 5 cyber-attacks have been reported including high-profile cyber-attack on THDC Ltd’s Tehri Dam in Uttarakhand and ransom ware attack on West Bengal State Electricity Distribution Co. Ltd (WBSEDCL).

The government and the people who work with the grids need to work together to bring in the latest technologies for protecting themselves from cyber attacks. Ajay Shankar, Distinguished Fellow, TERI says,” The other area where work is required is to ensure that we have a robust recovery ability, so that in case of a cyber attack and grid collapse, we canrestorethe grid and power supply very quickly.”

There are various methods and protocols to implement Advanced Metering Infrastructure (AMI) in a secure way for the DISCOMs; implementation of DNP3 Protocol, DLMS Protocol, AES Encryption methodology, and public key infrastructure ensures each device a unique certificate guarantee, certificate management to manage the certificate for each smart meter, DTLS session and cipher suite etc.
Smart meters are appealing targets for malevolent hackers who fiddle with a meter to immediately manipulate energy costs or fabricate energy meter readings. There is also the possibility of mass cyber attacks on smart meters as they are becoming IP devices and getting exposed to external world and so could be prone to cyber attacks. To avoid such incidences, Anil Daulani, CEO and MD-India, CyanConnode, suggests to have device-level security together with traditional IT security is vital to build a robust system.

Considering the pace at which our national grids are becoming dependent on computers and data sharing which in return provides significant benefits to customers and DISCOMs, it has also become more vulnerable to cyber-attacks. More and more complex our systems are becoming, more sophisticated the hackers are. Hence, Saurabh Patawari, CEO, National Electrical Equipments Corporation suggest that to have an efficient supply, there is a need to be pro-active, put in place of strong authentication mechanisms, vulnerability assessments should be only on regular basis. DISCOMs should also be vary of data collection and many other things which can be done to reduce the rate of cyber-attacks threats, which will be there due to everything becoming online.

To put things straight, our country have not yet risen to the occasion to fight this huge security threat in form of framing new legislatures, adopt proper technology and preparing and implementing standard practices and procedures on this subject . To stand tall against the growing menace of cyber attacks, Gautam Chandra, Power & Energy Consultant suggest our government need to gain experience and need to take ques from developed nations who had been thriving against this menace since quite some time.

While prosecuting cybercrime is not within the remit of the power sector, there is a great deal that the industry can do to protect itself. Potential actions such as upgrades in network access control, firewalls and intrusion-detection systems are among the quickest wins; with the deployment of encryption techniques a logical next step, says, Sachin Deole, Director, Business Development – Power, India Black & Veatch.

Efficient transmission infrastructure network to be resurrected
Increasing renewable energy capacity without building evacuation infrastructure is like adding vehicle without building roads. With the transmission infrastructure unable to keep pace with the increase in solar power generation, Faruk Patel – Chairman and Managing Director, KPI Global Infrastructure says that the substantial mismatch is bound to put immense pressure on the present transmission infrastructure, a situation which we cannot afford especially when we have huge stakes in the solar power sector.

Conventional infrastructure will continue to have a role in established urban centers. Even here, however, as we incorporate ever greater amounts of power from intermittent renewable sources such as solar into the grid, there will be a growing need to invest in battery storage. This will need to be combined with smart distribution management systems that enable the smooth and on-demand integration of energy from conventional and renewable sources to ensure there is always enough power to meet end-users’ needs, says Saurabh Shrivastava – Director of India Utilities Business, Climate Connect Ltd.

Modernisation of infrastructure by improving the hardware to harness the advances in technology of the 21st century is important. This will help in improving financial conditions of all players involved in the system. Sidhharth Gangal, CEO, The Solar Lab says, “We can improve efficiencies by promoting electricity generation at point of consumption using micro grids.” The other parameter is expansion of the grid network. The grid expansion focus should be on building inter-regional transmission capacity.

Way forward
Modern civilisation is always some way or the other sustained by electricity. A simple thought ‘What would not happen and not work in the absence of electricity’ is all one needs to be on toes. Now, all that matters is to keep the momentum going on the road to be ‘renewable India’. To fuel this march, it is imperative that India focuses on its transmission woes, cyber security woes and infrastructure woes for an efficient power supply.