CENTRAL ELECTRICITY REGULATORY COMMISSION

PRESS RELEASE-1.11.1999

INDIAN ELECTRICITY GRID CODE

India began to develop an inter-state transmission system (ISTS) to enable electricity to flow over the country as a whole, only about two years ago. The system has been severely stretched because of inadequate transmission capacity. One result for example is that surplus power of the East can only be partly sent to deficit areas in the South. The Grid Code tries to bring discipline in the operation of the ISTS so as to enable power to flow at an optimum level while maintaining good quality, which is not the case today. The CERC had issued on 31st March, 1999, directions to the central transmission utility (Powergrid) to prepare the Indian Electricity Grid Code. A draft was submitted on 11 June, 1999. This was widely circulated for public comment. CERC held hearings in July '99 and a large number of comments were received and considered.

The CERC has issued an order on 30^th October, 1999 to the CTU to submit the final Indian Electricity Grid Code, incorporating the directions of the order, within two weeks. They have been given time till the rest of this year to hold meetings and correspond with all constituents of the inter-state transmission system, to make them familiar with the various provisions. The IEGC will come into effect from the 1st January, 2000.  Being an order of the Commission, violations will be treated as violations of the Commission's orders and subject to penalties.

The Grid Code contains many detailed provisions. The highlights are:

A chapter on transmission licensing is to be submitted separately, which will keep in view the urgent need for the huge investment in transmission and to mobilise private and public resources. Powergrid will submit this chapter to CERC, in which the whole process of transmission investment will be transparent. Till that is done, the CTU shall invest on new lines through a transparent process, announcing its intention to make investment on any new lines, setting out in full the details of such investment including the costs, time and tasks involved. It shall allow at least a month for objections or alternative proposals to be submitted. In case such are received within the given time, they shall be submitted to CERC for consideration and final disposal before taking up the new investment. When the chapter on transmission licensing is incorporated or announced separately by the Commission that shall then be in force.

The order also specifies the respective roles of RLDCs and other constituents of the system. It asks all concerned including the Central Electricity Authority to take cognizance of the changed legal provisions subsequent to the ERC Act 1998, and the amendments in 1998 to the Indian Electricity Acts of 1910 and 1948. The CTU and Regional Load Despatch Centres (RLDCs) should be allowed to play the roles, assigned to them and accept responsibility as per law. The constructive role played by CEA in the operation of the ISTS is now vested in the CTU. The law also redefines the roles of REBs.

The order asks the CTU to suitably man RLDCs with senior functionaries so as to effectively discharge their independent responsibilities. CTU operations including the RLDCs should be under the charge of an independent full time Director of Powergrid so that it may be seen separately within Powergrid.

There shall also be a monitoring committee at the CTU which shall cover all the 5 RLDCs. This Committee shall periodically monitor the functions of the RLDCs and review their directions, as well as compliance/non-compliance by the concerned agencies. This Committee shall consist of the Chairman, Powergrid as Chairman, Chairman of all REBs, and one representative from the generating companies owned or controlled by the Central Government.

In order to keep the RLDCs operating in a transparent fashion, RLDC accounts will be independently audited. In many countries the CTU functions of system operation incorporating those of RLDCs and REBs, are performed by a non-profit independent system operator (ISO). Our present legal framework does not provide for this. This is why we have tried to structure the functioning of the RLDCs in a manner, which is open and transparent, and accountable to a collective forum.

As far as planning is concerned, the role of the CTU has to be in conformity with the perspective plan and the planning criteria and guidelines issued by the CEA. It shall be the responsibility of the CTU to revalidate on an annual basis the studies in the short term of five years, by incorporating realistic assessment of generation addition, load growth and delay if any, in actual execution of transmission lines.

The main part of the Grid Code relates to connection conditions, operating procedures and scheduling and despatch.

The CERC has directed that the CTU must ensure that constraints that restrict merit order despatch, are removed. The scope of the connection code extends also to the CTU. The CTU will within one month of an application being received by it, seeking connection/ modification, shall specify the details of the connection. The CTU will announce the draft prepared on the lines suggested by the CEA and approved by the Commission to be annexed to the IEGC before release.

Frequency variations are at extreme ranges in India, from as low as 48 in the South to 53.5 in the East. This is against the range of 48.5 to 50.5, provided in the Indian Electricity Rules even though the world over, the frequency is set to be stabilised at 50 hertz. In order to move towards a more stable frequency regime, CERC has directed that free governor action shall resume immediately in thermal units with capacity of 200 Mw and above, and all reservoir based hydro stations. For others, the CTU may separately announce the time limit. Some exceptions are made for nuclear power stations in view of their safety requirements.

Another major problem in the quality of electricity supply in India has been the extreme voltage fluctuations. This is largely due to the inadequacy of reactive power compensation. The Grid Code provides for adequate charges towards provision of reactive power at the cost of real power. It is expected that SEBs and distribution companies will soon begin to provide adequate reactive compensation.

The Grid Code will aim to minimise sudden variations in voltage and frequency due to loss of generation and load.

The Regional Load Despatch Centres shall report instances of persistent non-compliance of the Grid Code. In case of non-compliance, a penalty system will be enunciated as per the Act, and in case of disputes, CEA will be the first level arbitrator, followed by the CERC.

The commercial accounting of inter-state transactions in power will continue to be done by the Regional Electricity Boards. The Grid Code will spell out the detailed scheme for metering which shall be the responsibility of the RLDC.

Any over drawal or under drawal beyond the scheduled despatch will be subject to penalties which could be in the form of extra tariff to be notified separately, regulation of power, and other penalties available to CERC under the Act.

The Grid Code also provides for a periodical review of the Grid Code so that it remains dynamic in relation to the changing conditions in the system. The first review will commence in March, 2000.