National Smart Grid Mission - National Grid Budget Plan

The National Smart Grid Mission (NSGM) is an institutional mechanism for planning, monitoring and implementing policies and programmes related to smart grids in India. In a written reply to a question in the Lok Sabha on 7 May 2015, Minister of State for Coal, Power and Renewable Energy Piyush Goyal stated, "NSGM entails implementation of a smart electrical grid based on state-of-the art technology in the fields of automation, communication and IT [information technology] systems that can monitor and control power flows from points of generation to points of consumption." The Minister also proposed the introduction of state-level missions similar to the national-level NSGM.

Structure

The NSGM has a three-tier structure. The highest level is the Governing Council, headed by the Minister of Power. The Council, composed of secretary-level officers of concerned Ministries and departments as members, will approve all policies and programmes for implementing the smart grid. The second level is the Empowered Committee, composed of joint secretary level officers of concerned Ministries and departments as members, and is headed by the Power Secretary. The empowered committee will provide policy inputs to the governing council and approve, monitor and review specific smart grid projects. The lowest tier comprises a technical committee headed by the chairperson of the Central Electricity Authority. The Technical Committee, comprised of Director level officers of concerned Ministries and departments, and representatives from industries and academia, will support the Empowered Committee on technical aspects, standards development, technology selection guidelines and other technical matters.

The NSGM Project Management Unit (NPMU) carries out the day-to-day operations of the NSGM. It is headed by the Director NPMU, who is also a member of the Governing Council and the Empowered Committee, and a Member Secretary of the Technical Committee. The NPMU is the implementing agency for operationalizing the Smart Grid activities in the country under the guidance of Governing Council and Empowered Committee.

State-level missions are chaired by the Power Secretary of the State. The NSGM provides training and capacity building to State Level Project Monitoring Units (SLPMUs) for smart grid activities.

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Budget

The NSGM was allocated a budget of ₹980 crore (US$150 million) under the 12th Five Year Plan (2012-17), with a budgetary support of ₹338 crore (US$51 million). The NSGM budget will provide grants of up to 30% of the total cost of smart grid related projects. Some components of a project such as training and capacity building, consumer engagement etc. are eligible for 100% funding.

In November 2014, Prime Minister Narendra Modi announced a budget of US$4 billion for funding smart metering programs across the country. A study published by the Northeast Group on 12 February 2015, forecasts India's cumulative spending on smart grid related infrastructure to be $21.6 billion over the period 2015-2025.

On 18 May 2015, during Modi's state visit to South Korea, the Korean Ministry of Strategy and Finance and the Export-Import Bank of Korea announced that they would provide India a total of $10 billion for several proposed infrastructure projects, including the smart grid. In addition the Indian Ministry of Power signed an MoU with the Korean Ministry of Trade, Industry and Energy for co-operation in several energy related projects, including the smart grid.

Background

Need for a Smart Grid

Every global driver for smart grids applies to India, but India also has additional drivers in the short term. With 230 GW of installed capacity with utilities (as of July 20 13), the Indian power system is now the fourth largest in the world, but per-capita consumption of electricity in India is only about one-fourth of the world average. This underscores the need to grow the power system at a rapid pace for the next several decades. This low consumption is amplified by the lack of access to electricity to a significant proportion of the population. The potential demand by 2032 is estimated to be as high as 900 GW. India is also pursuing an aggressive renewable generation program. The 12th Five Year Plan target for renewable energy (RE) generation is 36 GW, which will increase the current 12% share of RE (excluding hydro) to around 20% by 2020. The Ministry of Power believes that a power system of this size, growing at such a pace (8-10% per year), with an increased share of renewable energy, requires smarter systems to manage it efficiently and ensure its stability and reliability.

India had also recently launched a National Mission on Electric Mobility with a target of 6 million electric vehicles (4 million two-wheelers and 2 million four-wheelers) by 2020. For efficient rollout of the EV program, electrical distribution infrastructure upgrades and smarter systems are required which will control/limit simultaneous charging of hundreds of EVs from the same feeder . Beyond just timing the consumption of power, immediate policy level support is required to build enabling infrastructure to integrate the EVs in the electrical network so that these millions of EVs connected to the power system can be leveraged as virtual power plants (VPPs) that can store energy when there is surplus generation and support the grid during moments of deficit. Vehicle to Grid (V2G) technologies are evolving rapidly that can achieve these objectives. The transmission and distribution losses are still very high in the Indian pow er system and distribution network (aggregate technical and commercial, or AT&C) loss reduction continues to be the top priority of both utilities and government. Smart grid solutions will help monitor, measure and even control power flows in real time that can help identify losses and thereby appropriate technical and managerial actions can be taken to arrest the losses. Under the ongoing Restructured-Accelerated Power Development and Reforms Program (R-APDRP) some of the basic building bloc ks of smart grids are being implemented in all urban areas (1 40 1 towns) all across India and this infrastructure can be effectively leveraged to transform these utilities to smarter grids with low incremental costs which w ould result in better utilization of R-APDRP assets as w ell as those installed under new smart grid programs. The Ministry of Power believes that the goals of the Indian power system can be enabled by smart grids which can help improve the efficiency and optimize performance within the Indian pow er sector.

Another reason for implementing a smart grid is to curb power theft. According to the annual Emerging Markets Smart Grid: Outlook 2015 study published by the Northeast Group, LLC, the Indian power sector loses $16.2 billion annually to theft. President of Northeast Group Ben Gardner stated, "India loses more money to theft than any other country in the world. "The state of Maharashtraâ€"which includes Mumbaiâ€"alone loses $2.8 billion per year, more than all but eight countries in the world. Nationally, total transmission and distribution losses approach 23% and some states' losses exceed 50%. Most Indian utilities are financially unsustainable."

According to the draft Smart Grid Vision and Roadmap for India, published by the Ministry of Power on 12 August 2013, the drivers for smart grid for different stakeholders in India are as follows:

For utility companies

1. Reduction of T&D losses in all utilities as well as improved collection efficiency
2. Peak load management â€" multiple options from direct load control to consumer pricing incentives
3. Reduction in power purchase cost.
4. Better asset management
5. Increased grid visibility.
6. Self-healing grid
7. Renewable integration

For consumers

1. Expand access to electricity â€" “Power for All”
2. Improve reliability of supply to all customers â€" no power cuts, no more DG sets and inverters
3. Improve quality of supply â€" no more voltage stabilizers
4. User friendly and transparent interface with utilities
5. Increased choices for consumers, including green power
6. “Prosumer” (producer and consumer) enablement
7. Options to save money by shif ting loads from peak periods to off-peak periods

For the Government and Regulators

1. Satisfied customers.
2. Financially sound utilities.
3. Tariff neutral system upgrade and modernization.
4. Reduction in emission intensity.

Roadmap

In 2010, the Ministry of Power set up the India Smart Grid Task Force (ISGTF), an inter-ministerial task force chaired by Sam Pitroda, then Advisor to the Prime Minister; and the India Smart Grid Forum (ISGF), a public-private partnership initiative for airing Vendors voice. The mandate of both these agencies is to advise the Ministry on appropriate policies and programs for accelerated development of smart grids in India. One of the key tasks undertaken by ISGTF was to formulate a comprehensive smart grid vision and roadmap for India. The draft roadmap prepared by ISGTF and ISGF was released on 12 August 2013. The roadmap was in alignment with the Ministry's overarching policy objectives of “access, availability and affordability of power for all” . The roadmap was also drafted in alignment with the ongoing programs such as R-APDRP and RGGVY and builds on the assets being created under these programs and other existing systems in a manner that would complement each other.

The roadmap set broad policies and targets concerning distribution (including distributed generation), transmission, policies, standards and regulations, and other initiatives; and it advised stakeholders to formulate state/utility specific policies and programs in alignment with them. The roadmap also highlighted the need for a strong institution that can drive smart grid development in India. It stated that one designated entity should be made responsible for the smart grid roadmap including implementation roadmaps, research activities, technology selection guidelines, standards guidelines, capacity building programs etc., in addition to bringing all the stakeholders together . Existing institutions related to smart grid, i.e. the ISGTF and the ISGF, both lacked the organizational and financial strength to take up the responsibilities, and also lack authority. The roadmap suggested giving broader powers to the ISGTF, in taking decisions in matters related to smart grid developments.

The roadmap also recommended aligning ongoing activities that either already are or could feed into smart grids, including the R-APDRP and RGGVY, with smart grids . It also suggested that detailed plans for leveraging existing and R-APDRP/RGGVY systems may be drawn in the utility/state specific smart grid roadmap.

On 7 May 2015, Minister of State for Coal, Power and Renewable Energy Piyush Goyal informed the Lok Sabha that the National Smart Grid Mission (NSGM) had been approved by the Union Government.