Transmission Policy and Wind Energy

Grid Operational Challenges and Regulatory Measures

V Subramanian,CEO and Secretary General

Indian Wind Energy Association (InWEA)

Present Status and Enabling Provisions/Framework

Wind Energy Development in India

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National wind resource monitoring & demonstration programme

National guidelines for tariff and Interconnection for captive & third party sales

Policy framework to push indegenisation

Restructuring of power sectorand emergence of ERCs

Consolidation of wind energy Stakeholders

Emergence of EA 2003, and Textile Industry Investments

Operationalisation of

Kyoto Protocol

% fixation and fixed tariff regime

Mandated by ERCs

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Learning from the past

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• First burst : short one: early to mid-90’s

– Conducive policy framework

• First bust : long one: mid-90’s to late’90s

– Changes in policy framework – Not enough thought on commercialisation

• Second burst : long one : 2000 onwards till last year

– Consistency in policy & regulatory framework – Passage of EA 2003

• Second bust : ??? : already initiated – Policy frameworks getting rigid, not much

scope for leap-frogging – Higher input costs – Implementation bottle-necks !!

Grid-interactive renewable power - as on 30.09.2008

13,450.59 MW Total (MW)

2.12 MWSolar Power6

55.75 MWWaste to Energy5

993.83 MWCogeneration-bagasse4

2220.99 MWSmall Hydro Power (up to 25 MW )3

9521.80 MWWind Power2

656.60 MWBiomass Power (Agro residues)1

Installed Capacity Sources / SystemsSr. No

• Section “39 (2) – the functions of the State Transmission Utility shall be –

(c) to ensure development of an efficient, coordinated and economical system of intra-State transmission lines for smooth flow of electricity from a generating station to the load centres;

• Section 61: – “The Appropriate Commission shall, subject to the provisions of this Act, specify

the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following….

(h) the promotion of co-generation and generation of electricity from renewable sources of energy”

• Section 86(1)e: The State Commission shall discharge the following functions, namely: -

(e) Promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, for purchase of electricity from such sources, a percentage of the total consumption of electricity in the area of a distribution licence.”

Provisions in The Electricity Act 2003

Issues with Wind Power

Issue 1 - Wind Transmission

• Transmission access is necessary because some windy sites are located far from population centers

• Transmission or distribution access is also necessary for direct third-party sales between the Wind Energy producer and a final consumer

• New transmission access to remote Wind Project sites may be blocked by transmission-access rulings or right-of-way disputes

Issue 2 - Deliverability

• VAr support may be required especially if power has to flow long distances – Lack of voltage support

• Unlike conventional plants, wind farms require reactive support

• Adopt measure for mitigating reactive power losses• To supply wind turbine-generator reactive power

requirements (depends on type of wind turbine-generator)

Issue 3 - Intermittency and Variability

• Load and generation forecast variability

• Ancillary services and operating cost impacts– Increasing wind penetration levels may require dispatch

changes to conventional plants– Thermal units may have to be adjust their schedules to

accommodate must-take wind energy– Overall generation costs of thermal power plants may increase

• Increased wear and tear and loss-of-life issues wind turbines

• Spinning reserve – issue of buying replacement power to maintain system reliability, should wind suddenly drop off

Issue 4 - Regulatory and Policy

• Need for Grid Code to enforces Grid Reliability and Level Playing Field– Power/Production Control– Low-Voltage Ride Through– Reactive Power Compensation– Power Quality

• Need for Creation of Wind Market– Implementation of RPS/RPO– Implementation of REC– Promotional Tariff– National RE Law

Framework of Grid Connectivity

RLDC, SLDC

(CERC set standards)

Challenges in Planning

Key Challenges in Planning

Transmission Planning

• Planning Process– No specific provision in National Transmission Plan, IEGC and

State Grid Code for grid integration of renewable energy– Wind Energy evacuation schemes, typically do not feature in

long term transmission system plans of many STUs– In-adequate attention to planning for Wind Evacuation has

resulted in constraints in capacity addition.

• Planning Criteria– Redundancy criteria– Line loading

Transmission Planning: State Level Issues

• Responsibility for Transmission Planning at state level rests with the STUs

• However, STUs are yet to prepare detailed transmission capacity addition plan

• SERCs need to approve the plan

• Even after proper planning, STUs are unable to achieve their targets of system expansion due to several factors:– financial resource constraints, availability of right of ways and land,

adequate number of competent and quality suppliers of goods and erection contractors, etc.

Suggested Approach

• Planning Criteria:– Planning Standards by CEA– Seek Uniformity in planning approach across States through

Forum of Regulators

• Planning Process Essentials :– Transparency in Planning Process by STUs

– Involvement of Wind Developers/ Associations with strategic inputs for development.

– Participation through Grid Co-ordination Committees

Challenges in Construction

Key Challenges in Construction

Transmission Development

• Amongst RE technologies, wind farms with large capacities require interconnection with transmission infrastructure

• STUs typically do not give priority to RE evacuation infrastructure.

• Resource constraints make STUs averse to investing in RE evacuation infrastructure– Existing RE projects are under-utilised despite resource

availability

• RE Developers are called upon to invest in evacuation infrastructure

Inter-Connection Standards

• Due to variable nature of wind energy generation, Grid should have flexibility to sustain the variability

• In India, connection standards for wind energy are yet to be established

• The following aspects need to take into consideration for large scale grid integration:– Active power control

– Frequency control– Voltage control– Tap changer

– Wind farm security issues

– Modelling and communication requirements

Suggested Approach

• Regulation on Grid Code, Grid connectivity and Grid standards would be required to cover provisions addressing concerns related to Grid integration of wind energy

• Transmission planning criteria needs to adequately address the specific requirements of RE source connectivity

• Need for creation of ‘RE Transmission Agency’ for addressing GridIntegration issues may be examined

• CEA to be pursued to develop Connection Standards for GridIntegration of Wind Energy

Challenges in Operation

Key Challenges in Operation

Grid System Operation in India

• CERC and SERCs are responsible for specifying the operatingframework through Grid Codes

• RLDC and SLDC are responsible for real time management of power system

• Transmission network has evolved from region based network tolarge inter-connected network

• Except southern region, rest four regions operates on same frequency

• Key characteristics of Indian grid system– Wide variation in grid frequency in comparison to International Practices– Voltage fluctuation– Variable loading of transmission network– No transmission margin

Suggested Approach

• Forecasting of wind energy can reduce the Grid operation issues

• As penetration of WEG increases, wind forecasting becomes necessary

• Scope of Rescheduling on Block basis

• Uncertainly should be mapped by System operator to quantify imbalances

• Significant cost reduction and benefits due to accurate forecasting

• Distributed or centralised forecasting methods can be used. Its value is greater than the cost associated with it.

Grid integration & management

• A detailed study for grid strengthening and load-flow at regional level is a must

• Transmission planning needs to be done at regional level

• Grid strengthening and planning for evacuation needs to be established well in advance

• Documentation of best practices needs to be looked into

• Forecasting solutions be developed

Maharashtra• Developer is responsible for evacuation infrastructure up to nearest STU/DISCOM s/s upto interconnection point.• Developer provides 50% of cost as interest free advance

Gujarat Developer is responsible for

evacuation infrastructure up to nearest STU s/s upto the distance of 100km, beyond this STU will create

the Infrastructure

Tamil NaduEvacuation system to be Developed and owned by the STU/Discom

RajasthanDeveloper is responsible for the

development of evacuation and dedicated transmission arrangement up to

pooling station. STU be develop evacuation system beyond pooling stations till

the nearest Grid s/s

As per the EA 2003, providing suitable measures for grid connectivity is a responsibility of STU

Evacuation schemes in windy states

India road ahead…

• National Renewable Policy/Law

• Formulate a comprehensive action plan to develop Renewable energy

• Fix Target for each type of RE

• Fix state-wise targets along with intermediate milestones

• Impose Carbon Tax to support Renewable and Low Carbon Technology

• ‘Cost the Carbon’

India road ahead…

• Renewable Portfolio Standard

• Single RPS mandate either at national or state level

• Implement Renewable Energy Certificate (REC) Trading System.

• Clearly define penalties & implement the same for non-compliance

• Extend Tax benefits to voluntary buyers of RECs ( Not mandated by RPS)

India road ahead…

Tax Benefits• Increase the accelerated depreciation benefit to 100% -further stimulus for

investment

Tariff Policy• Adopt flexible tariff system based on local wind condition as warranted for a

weather-driven-resource\

• Options to Investors : Fixed throughout the PPA term or Partly fixed and partly indexed to market price of energy equivalent

• Leave the CER proceeds with the Investors

• Operationalize third party sales with ‘Nil’ Cross-subsidy

• Implement Generation Based Incentive for all ‘Non-depreciation driven-Tax planning’ investors

• To set the right tariff for Green-Power

India road ahead…

Higher the Wind PENETRATION a grid can accommodate satisfactorily

Lower the constraints for the Wind Farm to perform at its peak

Incremental costs vis-à-vis the benefits

India road ahead…

Wind Plant Integration Operating Aspects

• Cost & Reliability aspects associated with increasing levels of wind penetration

• Identification of Options to manage the impacts on the grid for those levels of penetration

• Costs include those of Reserve requirements, wind forecasting and market operation for increasing levels of penetration

More Wind On the Grid:

• Design & Operate Wind Farms as Wind Plants

• Optimize the Wind-plant operating characteristics largely in synch with the connected grid’s requirements – Grid Codes

• Evaluate wind- integration operating impacts

• Load Despatch Centers to incorporate the wind-plant forecasting into utility control-room operations

• LDCs to consolidate balancing areas into larger entities (Regional Grids or larger) or accessing larger resource base through the use of dynamic scheduling

More Wind On the Grid:

• Transmission & Distribution companies to make better use of physically (in contrast with contractually) available transmission capacity

• Transmission companies to Upgrade and expand the transmission systems

• Market participants to develop a well-functioning hour-ahead and day-ahead markets, and expand access to those markets

• Regulators to frame market rules and tariff provisions that are more appropriate to weather-driven resources

Mr. V Subramanian,CEO and Secretary General

Indian Wind Energy Association (InWEA) PHD House,3th Floor, Siri Fort Road

New Delhi – 110 016, IndiaTel: +91-11-2652-3452Fax: +91-11-2652-3042

E-mail: subram71@gmail.comWeb: www.inwea.org

Nature have given us the wind, it’s time to let

modern energy power us….

Thank you