Sucheta Dalal :Smart grids could open up prospects for various sectors
Sucheta Dalal

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Smart grids could open up prospects for various sectors  

November 26, 2009

Smart grids are likely to benefit not only distribution utilities, but also a number of other sectors involved in power generation and distribution. The renewable industry sector and the Information Technology (IT) industry are among those sectors which should have interest in smart grids, say experts.

A smart grid delivers electricity from suppliers to consumers using digital technology to control appliances at consumer homes to save energy, reduce cost, increase reliability and improve transparency. It includes all kinds of information technology—such as sensors, digital meters and a communications network. Among other things, a smart grid would be capable of avoiding outages, will save energy and help other green undertakings such as electric cars by encouraging use of renewable sources of energy.

“Distribution utilities like Tata Power, along with software companies, equipment providers and those involved in providing metering equipment will benefit from the smart grid system. It (the smart grid) provides an opportunity to the renewable industry, so even they will have an interest in the concept,” said Banmali Agrawala, executive director, strategy and business development, Tata Power Co Ltd.

Wind, solar and tidal energy are the main renewable sources of energy that can be tapped. Currently, the total installed capacity for renewable energy in India is about 13,242MW, or around 7.7% of the total installed capacity.

For a  landmass like India, the amount of incident sunlight is estimated at five quadrillion watts a year. If even a hundredth of that energy source could be utilised, it would exceed the country’s current and projected annual energy consumption, the needs of the growing population and rising per capita consumption of electricity.

Wind energy has also has emerged as the most promising renewable energy technology for generating electricity. The total potential for wind energy in India is around 48,561MW, as against 10,242 MW of the total installed capacity in India for wind power. Wind electric generators are being manufactured in the country by around a dozen manufacturers.

However, the main problem in utilising renewable sources of energy for electricity generation is the high cost involved. Moneylife had earlier reported on how electricity generation costs for companies like Suzlon have nearly doubled over the past four years—from Rs3.80 crore per MW in 2004-05 (on total sales of Rs1,942 crore for 506MW) to Rs6.50 crore-Rs7 crore per MW in 2008-09 (on total sales of Rs26,000 crore for 2,790 MW). The total landed cost per MW is much higher after factoring in sales tax, freight, land price, grid connecting charges, etc. In contrast, the cost of thermal power has declined from Rs4.50 crore per MW to Rs4 crore per MW over the past four years.

It is not just the higher capital costs that are plaguing the wind turbine industry; the performance cost per MW is also very poor in case of wind turbines. For every MW of installed capacity, wind turbines can generate only around 1.5 million kWh a year whereas thermal power projects can generate 7 million kWh. This means an investment of Rs10 crore per MW of wind energy capacity will generate 1.5 million kWh, whereas an investment of Rs4 crore per MW of thermal power capacity will generate 7 million kWh.

“The challenge with renewable energy today is that it is expensive; the cost of solar power is about Rs15 to Rs17 per unit. At places where there is load-shedding, you will find people using generators and invertors. But here also the cost comes to around Rs14 toRs16 per unit. With access to a nearby solar farm, the moment there is a power outage, you can tap into that solar-based power system. Smart grids will allow more access to renewable power,” explained Mr Agrawala.

Speaking about the role of IT companies in the smart grid system, Mr Agrawala said, “You have companies like IBM, Microsoft and HP already working and improving on smart grids everyday. And they are coming up with newer and newer ideas.”
According to media reports, Intel India’s president Praveen Vishakantaiah had said that the country could emerge as a home for future developments in green technologies and become the leading supplier of technologies based on the smart grid.

“India will emerge as the leader in IT-based green technology. There will be a major shift from physical infrastructure to digital infrastructure. The sea change in use of technology like broadband or mobile voice will lead to India commanding a clout across the globe as the leading provider of value-added services (VAS). It would be exporting 30% per cent of the global needs of VAS. Around 20% to 25% of the energy needs of the country will be met through solar power,” Mr Vishakantaiah told the media at a recent IT conference hosted by the Karnataka government at Bengaluru.

The Indian government is also taking its initial steps towards putting in place a smart grid system. However, Mr Agrawala thinks that the government should show more interest in smart grids as they can bring down the incidents of power theft—already rampant in the country—thereby improving efficiency. “To start with, the government can segregate feeders (medium-voltage lines used to distribute electric power from a substation to consumers or to smaller substations), like rural feeders and urban feeders. Although this is a simple process, it shows how smart you are in structuring the grid. So I think the government is certainly doing some work (towards establishing a smart grid); it is just that we do not call it a smart grid,” Mr Agrawala added.
 -Amritha Pillay [email protected]

-- Sucheta Dalal