How smart is your grid?

The potential to adopt smart grid technologies and designs in India in a big way in view of the anticipated growth in power infrastructure within the country is huge. A report on the rationale of the planned Smart Grid Forum.

Mission 2012: Power to All may seem like a tall claim to make today, but the advent of technological advancements like smart grids may make the road less daunting. In fact the smart grid technology, which has gained prominence only in the last five years or so, can revolutionise electricity supply in the country and place India in a position where it can provide a blueprint for developing nations with the design of a sustainable smart grid model.

India's large and looming supply-demand gap and its high electricity losses have spurred the interest of the government and other stakeholders in smart grid with the government setting up India Smart Grid Forum (ISGF) and India Smart Grid Task Force (ISGTF) to be headed by Sam Pitroda, Advisor to Prime Minister on Public Information, Infrastructure and Innovation.

The leapfrog opportunity

India's power sector, one of the largest in the world, has a capacity of 156,092.23 MW and ranks fourth in terms of installed capacity and sixth in terms of energy consumption. By 2012, India's demand for electricity is predicted to reach 157,107 MW. Although the government plans to add 78,577 MW during the 11th Five Year Plan (2007-12), its rising population and growing economy mean that demand could rise from 800,000 MW to as much as 950,000 MW by 2030.

According to Prakash Nayak, Head, Power Systems, ABB India, efficiency and sustainability have become the twin-mantras to emerge from the economic slowdown. In this recovery, smart infrastructure is expected to play an important role.

But India has limited experience with smart grid deployments and advanced metering, especially for small consumers and farmers. The factors that will drive India's adoption of smart grids include the need to reduce technical and commercial losses, addressing the supply-demand gap, and find a way to “leapfrog” into a more advanced electricity supply solution to satisfy its high-growth economic development goals.

Customers will be important stakeholders in the smart grid and they will need to be more aware of the risks involved. They can track their electricity usage, get real-time pricing and adjust their consumption accordingly. The energy savings accrued through smart grids will need to be distributed and incentives to conserve energy will be needed.

A good infrastructure of communication network and awareness of internet also put India in a different basket of preparedness.

The Pitfalls

The barriers to implementing smart grid concepts in India are much the same as those that have slowed power sector reforms since economic liberalisation. With the government already running severe losses on its current power subsidies, the additional cost of replacement in moving to a smart grid will be problematic. If there are only limited fiscal benefits from smart grid investments in the short term, it will be a challenge to get a commitment for significant additional funds from the government. Hence, innovative financing alternatives will have to be explored.

Because of the lack of experience with the full-scale deployment of AMI and dynamic pricing, there are a number of uncertainties associated with a smart grid's projected costs and benefits.

India's aggregate technical and commercial (AT&C) losses of about 30 per cent are some four times higher than those of developed nations (or China, which reports its total T&D losses at eight per cent). While a smart grid is not the only means of reducing losses, it could make a substantial contribution.

Any smart grid solution has to address two key problems: eliminate power theft (from overhead lines as well as complete meter bypass) and improve bill realisation.

The government has identified distribution reforms as the key area to bring efficiency and commercial viability into the power sector. It has taken various initiatives in this direction the most important being the Restructured-Accelerated Power Development and Reforms Programme (R-APDRP) of 2008, which will fund projects to upgrade sub-transmission and distribution networks.

Green Power

The experience with smart grids is recent in the United States and Europe; most of the projects have been implemented only within the last two years or so. In Asia (China and India), full smart grid projects are not underway, but there are a number of efforts toward a smart grid.

The potential benefits of the smart grid vision extend well beyond the power sector value chain. Thus, a utility-centric approach is too narrow and too parochial, and it probably won't produce the best results for customers and society.

With smart meters consumers can reduce carbon emissions that contribute to climate change. Reliable electrical supply helps the economy, improves the quality of life and is also environment friendly, since fewer generating units means lower emissions.

But there are no shortcuts to reach the dual targets of meeting energy needs while staying green. Plugging the leaks and maximising efficiencies will be the way forward for a long time.

In implementation of smart grids, more work needs to be done at the distribution level and in India over 95 per cent of the distribution business is undertaken by state government owned utilities that require huge capacity building to undertake and support such a transformation.

Compatibility in infra projects

Automated monitoring of projects in real time mode means the information can be available on a daily basis with selected reports for public viewing. An ERP system provides a comprehensive solution, integrating all work streams within the project to enable cross channelisation information flow. An ERP solution provides real-time information and digitises all processes in the lifecycle of infrastructure projects, from procurement to payment processes. It is based on role mapping and information based decision making. The security features built into the system help in maintaining a log of each activity performed by the user for effective management. Enhancing the awareness of the user through effective change management mechanism leads to higher levels of compliance.

ERP provides a variety of reports and executive dashboards for effective project monitoring, risk mitigation and reporting purposes.

Pre-bidding stage

The lifecycle of a project in general and infrastructure in particular are based on certain historic information like similar projects in past, suggested implementation approach, cost estimates, etc. These form part of the detailed project report for large projects. In the pre-bidding stage prospective bidders are provided with the basic available information. A software solution can help in many ways, including:

a. Pre-proposal queries can be collected, categorised in shortest possible time to be able to respond to those effectively;
b. Virtual pre-proposal conference can be held making it continent for all to attend from wherever they are—saving time, effort in traveling to attend, etc;
c. Prequalification of bidders can be done online in a very objective way with the information submitted by interested parties. Judgement of the capability of parties can be ensured by online scrutiny of documents and information submitted.

Inventory management

Inventory management is a key module in any ERP solution. As part of the system landscape, this piece is linked to other major modules like finance, fleet management, supply chain management, web portal, etc, that help in effective management of resources and better control over inventory and optimising resources by planned procurement. Further, as part of MIS reports, all the components of resources can be seen through Planned vs Used Reports to identify indicators for probable cost overruns during the project leading to effective planning and risk mitigation.

Value addition from ERP

Identification of value added and non-value added steps help in harmonising processes within the project ecosystem for better results. The key benefits that cut across process modules irrespective of industry under reference are reduction in cycle time, pendency report generation for backlog request clearance, transparency in deals, real-time information availability, etc.

It helps in different ways and provides wider ranging benefits, specific to infrastructure projects like:

• Information regarding the physical and financial progress is available online with portfolio wise or division wise details
• Construction/maintenance schedule for projects available online
• Monitoring activity slippages and critical path of project
• Real time consolidated data from project site, division and circles
• Seamless integration with projects plan and measurement books for financial progress reporting
• Single point data entry

In post implementation stages, ERP can help generate employment opportunities where in the system can extend facility for web-based access to private entrepreneurs to work as a medium between infrastructure provider and end user by extending value added services to end user saving time and resources for both.

Praful C Gharpure, Industry Solution Unit—Government, Tata Consultancy Services. Views are personal.