1. Operationalizing One Nation One Grid
S Prakash
CEO, IL & FS Solar Parks
November 2016

2. Presentation Structure1
India’s Fuel Mix 2
India’s Ambitious RE Targets 3
Current Issues with Renewable Energy 4
Operationalizing One Nation One Grid 5
Key Issues and Solutions 6
Conclusion 2

3. Objective of Today’s Presentation
To present a Generator’s view on adding capacity to the Grid to meet the ambitious Renewable Energy targets of Government of India 3

4. India’s Fuel Mix Coal : 175.2 GW Gas : 24.5 GW Oil : 0.9 GW
Hydro : 42.6 GW
Nuclear : 5.7 GW
Renewable : 38.8 GW
Coal : 251 GW
Gas : 34 GW
Oil : 2 GW
Hydro : 61 GW
Nuclear : 12 GW
Renewable : 175 GW 4

5. India’s Ambitious RE Targets5

6. Green Push needs a Balancing Act
Renewable Project Developer : Incentive to maximize generation/ revenue
Utility : Incentive to optimize resource portfolio
Grid Operator : Incentive to maintain grid security

7. Generator’s Perspective
No grid back down. Must run status to be adhered to in practice
Lack of enforcement of RPOs creates disincentives for generation and demand
Tariff and non tariff barriers for free flow of RE power to be removed; should be able to sell anywhere and to anyone
Incentives to generators to support grid discipline are welcome (Eg: Scheduling and Forecasting)
Will participate in grid balancing when storage technology becomes viable (3 years)

8. Suggestions on Capacity Augmentation
RE projects require a maximum period of 24 months to set up (including time for land acquisition). However, Transmission augmentation typically takes 36 months including time required for planning/approval
Consequently the green corridor plan and state plan needs to be planned in advance to service identified grid scale RE regions [instead of the current process of LTA application]
State Governments to identify the regions and enter into appropriate agreements with PGCIL
Wherever it is technically feasible GoI to allow setting up of Hybrid Parks so that Transmission corridor is better utilized

9. Suggestions on Regulation and Tariff Support
A) No charges and losses on ISTS till 2021 for Solar and Wind. Once battery technology becomes feasible, then the charges may be introduced
Current mechanism of Transmission Pricing based on Point of Connection (PoC) principles, determined in Rs./MW/month basis
Since capacity utilization factors of RE generation is much lower than conventional generators, this pricing imposes a significant penalty on RE generators
Solution: Till the time the cost of RE generation stabilizes, the exemption of transmission charges and losses in the ISTS network should be continued for such generators. This will enable inter-state transactions of wind and solar power thereby contributing to the GoI’s ambitious RE target of 175 GW by 2022
Basis of charges would need a relook compared to the current mechanism which has been designed with thermal generation as basis

10. Suggestions on Regulation and Tariff Support
Till 2021, receiving states to provide regulation for RE power as if the power has been generated within the state
In the present context, for open access ISTS transaction of RE power, the host states charge STU charges and losses and the buying state imposes transmission charges, losses & wheeling charges, losses, making such a transaction commercially infeasible
Solution: Host State – in case the host state is an incidental network in the ISTS, then the state should not levy any STU charges, losses
Buying State – those buying states that have concessions applicable for solar/ wind power should extend these concessions for ISTS open access transaction too. Banking facility for RE power should also be permitted by the Buying States
D) Scheduling and forecasting to be the responsibility of aggregator in case of large grid scale development [ie more than 250 MW in a single location]

11. Suggestions on Regulation and Tariff Support
E) ISTS Open Access Transaction i.e. Direct Sale to Consumers having load < 1 MW
Electricity Act 2003, Sub-section (2) of Section 42
The State Commission shall introduce open access in such phases and subject to such conditions, (including the cross subsidies, and other operational constraints) as may be specified within one year of the appointed date by it and in specifying the extent of open access in successive phases and in determining the charges for wheeling, it shall have due regard to all relevant factors including such cross subsidies, and other operational constraints:
Provided also that the State Commission shall, not later than five years from the date of commencement of the Electricity (Amendment) Act, 2003, by regulations, provide such open access to all consumers who require a supply of electricity where the maximum power to be made available at any time exceeds one megawatt.
Intent of EA 2003 is to provide Open Access to All Consumers
There are some consumers having load < 1MW but being obligated entities are required to fulfill the RPO. Such consumers can be provided solar power through the ISTS
Solution: To provide open access on inter-state network for demands less than 1 MW, CERC may take initiatives through Forum of Regulators and other SERCs

12. Looking Ahead Medium term when RE is on a standalone
Technical Standards and Protection Requirements for Renewables such as LVRT, FRT, etc. & implementation
Regulatory Framework for Ancillary Services Operation
(B) Long term when RE plus battery becomes competitive with thermal
Implementation of Renewable Energy Management Centres (REMCs)
Capacity Building of SLDCs particularly in RE Rich States
Standards and Regulatory Framework for incentivizing “Flexibility” in Power Generation
Merger of CTU assets with STU assets gradually (400 KV to start with) to rationalize Transmission tariffs and reduce burden on RE beneficiaries using ISTS system

13. Thank You 13 13