India Smart Grid Week 2015

A STEP TOWARDS SMARTER CITIES, CLEANER ENERGY

The emergence of India as a strong economic power is receiving widespread recognition in the world. On the other hand, although we operate the fourth largest power system in the world, one-third of our population have no access to electricity and our percapita consumption of electricity is one-fourth of the world average! Transmission and Distribution losses in India are also quite high - about 26% in distribution and more than 7% in transmission. Government of India (GoI) and other stakeholders have realized that by implementing incremental improvements in a business as usual scenario we will not be able to provide 24x7 electricity to all households in the country - it requires innovative strategies, breakthrough technologies and bold decisions. In 2013, GoI issued Smart Grid Vision and Roadmap for India; and the present Government in India is committed to provide 24x7 electricity to all households by 2019 and has recently launched 3 focused programs towards this objective with a total capital outlay of US$ 14 billion. The Government has also announced ambitious programs to build 100 Smart Cities on fast track and add 175 GW of renewable energy (100 GW solar and 60 GW wind and 25 Gw from other sources) generation capacity by 2022! With all these ground breaking initiatives, India has already emerged as the prime destination for Smart Grids and Smart Cities.

ISGF organized 'India Smart Grid Week' (ISGW 2015) from 02 - 06 March, 2015 at Bangalore. ISGW 2015 was a Conference and Exhibition that brought together India's leading Electricity Utilities, Policy Makers, Regulators, Investors and world's top-notch Smart Grid and Smart City Experts and Researchers who discussed the technology trends, shared best practices and showcased next generation technologies and products. ISGW 2015 got the support from numerous national and international agencies such as IEC, CIGRE, IEEE, GSGF, ISGAN, NEDO, CPRI, GERMI, SESI, Ministry of Power, Ministry of New and Renewable Energy, Ministry of Urban Development and Department of Telecom.

Special plenary sessions were scheduled as part of ISGW 2015 in which several eminent persons from around the world participated as visionary speakers. Besides several top minds in the smart grid and smart cities domains joined as speakers at ISGW 2015. The world's top-most thought leaders in the energy sector too shared their views at ISGW 2015 on development needs and future technology trends that India could leverage to provide clean energy access to over a billion people.

Inaugurated by Mr.Devendra Chaudhry, Special Secretary, Ministry of Power, Govt of India, ISGW 2015 witnessed participation from over 700 persons representing nearly 180 organisations.

KEY FINDINGS AND RECOMMENDATIONS FROM ISGW 2015 FINDINGS:

In the implementation of major transformation projects with high degree of technology interventions (R-APDRP and Smart Grid Pilot Projects), India faced several challenges which were discussed at ISGW 2015 and in the light of such challenges and global experiences with similar practises, following recommendations were made as an outcome of ISGW 2015:

a. Capacity Constraints

The capacity issues were mainly due to simultaneous large scale deployments by many utilities which seriously depleted the very limited resources of the supply chain in the country. R-APDRP was one of the largest transformation programs launched in the country that introduced several new technologies which required trained manpower with specific skills in large numbers. No comprehensive programs were undertaken by any agency (public or private) to train manpower to undertake these projects simultaneously and as a result all projects are delayed by few years.

b. Conditions of Contract

The terms and conditions in the General Conditions of Contracts (GCC) that are in use in most utilities is very old and were framed during 1950s with primary focus on civil and mechanical works. These GCCs have clauses on "defect liabilities", "intellectual property rights", "confidential information", "limitation of liabilities" et cetera that are not relevant for contracts involving IT equipment, software and IT services. Despite frequent cries from several quarters, utilities have not changed these contract clauses. These draconian clauses precluded all international agencies from participating in the tendering process of R-APDRP Part-A. All System Integration contracts went to local firms as no MNCs submitted bids. This should be a key lesson for new programs.

c. Qualifying Requirements

Framing appropriate qualifying requirements is always a difficult issue particularly for Government owned utilities. Need to devise fool proof systems to qualify only bidders with prior experience and adequate resources to undertake the projects.

d. Payment Terms

The payment terms in R-APDRP were not supportive of smooth project execution. According to the Model RFP there will be negative cash flow for 6 quarters (18 months) for the best performing agency if everything is done on schedule by both the contractor and the purchaser. The intention of tough payment terms was to avoid contractors drawing major portion of the contract value against supply of equipment and consequently delay commissioning of the full system. However this has only discouraged reputed agencies from bidding.

e. Stiff Templates

A standardized template (System Requirements Specification, or SRS) was given as a baseline, but this was overwhelmingly followed as-is, even when there were reasons to choose (improved) alternatives.

f. Procurement System based on L-1 Bidding:

Utilities in India strictly follow bidding route for all procurements. Smart Grid pilot projects are basically technology trials and world over the practise is to allot such trials on the basis of proposals received and evaluated. New technologies cannot be piloted on an L-1 procurement basis. The Smart Cities projects in Japan, Smart Grid Test Bed in Jeju Island in South Korea, the ARRA Projects in the USA; and the EC projects in Europe are all undertaken in public-private partnership modes in which utilities, research labs and technology companies jointly applied for government grants. Based on the project merits full or part grant was allotted by the Govt and part of the money invested by the industry and the utility.

India should explore more pragmatic approaches to undertake "smart" technology projects rather than L-1 bidding route with GCCs of 1950s!

RECOMMENDATIONS:

India's grid modernisation plan and renewable energy targets are ambitious but achievable. In order to help guide the process, following seven best practices were recommended based on observing hundreds of smart grid projects around the world over the last 10 years. Many of these draw heavily on project lessons from North America, but learnings from Europe and other parts of Asia are also incorporated.

Roadmap and vision: All successful projects need a clearly defined vision for the role that smart grid technologies will play and a roadmap to deliver on this. Consider end goals, technology maturity, standards, local capabilities and existing regulatory frameworks when developing the roadmap. Ensure that current regulatory models align incentives for project participants, or provide a plan for how these might be changed in order to do so.

Costs and benefits: Take a holistic view on project costs and benefits. Many ancillary benefits of smart grid programmes can easily be missed out because they do not directly accrue to one of the parties involved. Conversely, be careful not to overstate the benefits, particularly around demand side management initiatives. Many early projects in the US, Canada and Europe ended up revisiting their business case after lower-than-expected demand side benefits.

Stakeholder engagement: Ensure broad based stakeholder engagement throughout the process and do not underestimate the importance of engaging end-consumers early on. For example, a total of 15 US states now have smart metering opt-out programmes in place following consumer push back. Other areas like the Netherlands and Victoria in Australia have also seen significant pushback, sometimes delaying overall project timelines or future prospects. Addressing this early can help avoid challenges later on.

Pilot projects: Develop clear success criteria for any pilot projects and a plan for how to move from pilots to business as usual. This is especially true around emerging technology areas but applies to others as well. Billions of dollars have been poured into smart grid demonstration projects globally over the last ten years, but not all have had a clear path to commercial deployment. Demonstrating stable and sustainable business models is as important as demonstrating new technologies. Look carefully at what has already been piloted in other countries in order to maximise the value of demonstration project funding.

Standards: Wherever possible, adopt a standards-based approach to ensure future compatibility and avoid vendor lock-in. Leverage work already completed by groups such as the International Electrotechnical Commission (IEC), the Smart Grid Interoperability Panel (SGIP), US National Institute of Standards and Technology (NIST), the Institute of Electrical and Electronics Engineers (IEEE) and others.

Timelines: Set realistic project timelines that incorporate potential delays. Most smart grid projects experience delays due to a variety of factors. These are more often due to systems integration and change management challenges than hardware installation. Allow time for iterative deployments; incrementally rolling out components of a smart grid project can help keep integration smoother.

Localisation: Not all technologies are well suited for all markets. Tailor the portfolio of technologies and solutions to best fit local market conditions. For example, countries such as Brazil have had success with their tamper proof AMI meters specifically targeting non-technical losses. Microgrids and related applications may turn out to be the 'killer app' of the India smart grid market.

ISGW 2015 Event Report including Agenda, Pictures and Statistics

SMART GRID Bulletin August 2017


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