Challenges in Implementation of Smart Grid and Smart Metering – The Indian Context


To make electric utilities sustainable, it is necessary to make them smart to reduce AT & C losses. And to reduce AT & C losses, it is necessary to implement the smart grid and smart metering. Utilities are facing challenges in integration of different make smart meters, their data concentrators and Head End Systems (HES). Other challenge is remote meter communication to HES. Performance of communication system affects entire performance of smart metering. Standardization of metering specifications as per Indian requirement especially in tamper proof meters are hard for most of the meter manufacturers who are successful in abroad. Educating customer about how smart metering is beneficial for them is another challenge faced by utilities. Apart from technical challenges, there are socio-economic and socio-political challenges in implementation of smart metering. This paper put focus on the challenges and try to suggest some way to overcome the challenges.

The Average AT&C losses in India in transmission and distribution (T&D) is about 23%. The distribution sector contributes in it more. These losses in some states reaches up to 40%. Take example of Haryana. The overall AT&C losses in Haryana are in range of 29.46% but in the political sensitive areas these losses are more than 40%. The worst affected areas are rural areas where these losses exceed the limit of 50% in most of the villages. In case of Jind, Bhiwani, Rohtak and Kaithal circles, AT&C losses are in range of48% 44% 43% and 40 % respectively. The AT&C losses touch 70 % in rural domestic feeders of these political sensitive circles. There are 15% AT&C losses on agriculture feeders. The total accumulated loss of last 6 years of DISCOMs is Rs. 3.8 Lakh Crore till March 2015.

Therefore, there is need to reduce AT&C losses by measuring and controlling each incoming and outgoing energy unit and each incoming and outgoing rupee. The Government of India-Ministry of Power (MoP) has announced National Smart Grid Mission (NSGM) in 2012 under 12 th five year plan. So far 11 pilot projects are awarded till date and one is yet to be awarded. PGCIL is developing smart grid knowledge center at Manesar, Haryana. As per November 2016 update, NSGM undertook four more projects which are yet to be awarded. While implementing these pilot projects utilities and executing agencies/ vendors participating in smart grid pilot projects have faced number of challenges.

These are as follows:

  1. Deciding scope of the project,
  2. Budget
  3. Timeline to complete the project
  4. Managing Human Resources
  5. Commercial terms and condition of the tender and cash flow of the project execution agencies or lead bidder
  6. Standardization of overall specification and component wise standardization
  7. Testing and certifying the components,
  8. Testing and certifying proof of concept of entire integrated system
  9. Managing interests of all stake holders while implementation
  10. Managing all participating vendors to encourage competition and best technology and execution to come up
  11. Infrastructure challenges and modifying the existing infrastructure suitable for smart grid
  12. Communication infrastructure availability for remote industrial and agricultural customer.
  13. Executing the project with complete scope
  14. Training to operation and maintenance manpower and consumers/ prosumers.
  15. Managing Return of Investment
  16. Maintenance of smart grid infrastructure over the long time periods

Let us discuss these challenges in detail as explained as follows:

As listed in above introduction let us discuss the points one by one

  1. Deciding scope of the smart grid project

A smart grid is an electrical grid with automation, communication and IT systems that can monitor power flows from points of generation to points of consumption (even down to the appliances level) and control the power flow or curtail the load to match generation in real time or near real-time. The Increased visibility, predictability, and even control of generation and demand bring flexibility to both generation and consumption and enable the utility to better integrate intermittent renewable generation and also reduce costs of peak power. If the traditional grid was made secure only through over engineering, a smart grid is cost-effective, nimble, responsive, and better engineered for reliability and self-healing operations. The traditional electric grid will need to build additional layers of automation, communication and IT systems to transform it to a smarter grid. Some of the applications or building blocks of a smart grid are:

  • Supervisory Control and Data Acquisition Systems (SCADA) with Energy Management Systems (EMS) and Distribution Management Systems (DMS)
  • Enterprise IT network covering all substations and field offices with reliable communication systems
  • Enterprise Resource Planning (ERP)/Asset Management Systems
  • Geographic Information Systems (GIS) – mapping of electrical network assets and consumers maps
  • Modernization of the substations with modern switchgear and numerical relays
  • Advanced Metering Infrastructure (AMI) with two way communication and Meter Data Management Systems (MDMS)
  • Electronic Billing Systems and Customer Care Systems
  • Distribution Automation (DA) and Substation Automation Systems
  • Outage Management Systems (OMS)
  • Mobile Crew Management Systems
  • Wide Area Measurement and Control Systems
  • Forecasting, Dispatch and Settlement Tools
  • Enterprise Application Integration
  • Analytics (converting data into business intelligence)

The above list is focused on applications and systems, i.e., enablers. From a functionality point of view one might aim for functionalities or uses such as variable or dynamic tariffs, renewable integration, electric vehicle (EV) integration, etc. Power system network from Generation-to-Transmission-to-Distribution-toprosumers will become really smart when all of the above building blocks are seamlessly integrated with each other. In India, SCADAEMS are implemented at all the states utilities’ State Load Dispatch Centers (SLDCs) and Regional Load Dispatch Centers (RLDCs) of POSOCO.

Substation Automation Systems (SAS) systems are implemented at most of the 132 KV to 765 KV station in most of the states and PGCIL same report to SLDCs and RLDCs respectively. Therefore, we can say that transmission and sub transmission system is mostly integrated and operate in co-ordination as far as voltage and frequency is considered. Phasor Measurement Units (PMUs) are installed only at 220 KV and above voltage levels. Phase synchronization of entire grid is still away from the reality. There are more challenge is to integrate 33 KV and below at Power Distribution network and individual consumer.

Distribution Management Systems (DMS) are implemented only in metro cities under R-APDRP schemes. The distribution network is not in good shape. Maintenance is poor. Pole top Distribution Transformers (DTs) are not protected, monitored and controlled. Distributions Substations do not have SAS system. If SAS is to be implemented in a substation, communicable multifunction numerical relays and multifunction meters required to be retrofitted. Remote controllable Ring Main Units (RMUs) are to be retrofitted in the network to create ring bus structure to feed the DTs without interruption. To maintain the power factor and for reactive power compensation capacitor banks are used. However, uncontrolled switching of capacitor bank creates heavy inrush current and thus cause damage. Therefore, it is recommended to retrofit control switching devices for controlled switching of capacitor bank circuit breakers. The Distribution Transformers are mostly without CBs and protective relays and meters. Instead of mounting the DTs on pole top and in open to environment, we recommend that the DTs with a CBs at its primary and secondary side shall be mounted in single enclosure along with a control panel having RTU and communication modems for remote communication with the nearest substation with which the DT is connected. Thus, DTs will be monitored, controlled and protected. However, retrofitting smart grid enablers such as CBs, relays and meters at existing DTs is challenge due to not having sufficient space. Apart from SCADA-EMS-DMS, all other component are new to Indian Power infrastructure. Interfacing new smart components (hardware and software) with existing smart components like SCADA-EMSDMS is a big challenge. Though solution is available, the supplier of existing SCADA-EMSDMS system charges very high for integrating third party solution to their system. To make the entire gird really smart it requires to upgrade existing power distribution network. As this will take some more time even Government of India sanctioned a fund of Rs. 32,000 Cr under Integrated Power Development Scheme (IPDS). Therefore, most of the smart grid projects reduced to just a smart metering and its analytical applications i.e. Automatic Metering Infrastructure (AMI) at HES. If any utility has tried to include distribution network upgradation into smart grid project, it is not viable due to many reasons such as budget, time period and project management. Therefore, deciding scope in the long term interest of utility and end prosumers is remain a challenge.

  1. Challenge in deciding budget of the smart grid project

In India Smart Grid is still in pilot project mode and is not mature enough so that exact scope, specification, cost of HES and applications and hence budget cannot be finalized. For example in one of the utility of pilot projects, the lowest bid was double of the allocated project budget.

There were many reasons such as:

  1. Higher cost of HES infrastructure and application software
  2. Higher cost from communication network operators because of not understanding the exact application
  • Bidders don’t have execution experience so they are keeping more budget for contingency
  1. Payment terms of the tenders where in some of the tenders, it is mentioned that payment of 30-70% order value against the 100% supply.
  2. Guarantee/ warrantee and conditions for supply of spares
  3. Working style of electricity boards
  1. Challenge in deciding time line of completion of the projects

Let us assume that the scope and budget is decided. However, there is significant difference between assumed time line and actual time line. The time line cannot be strictly defined as the most of products used for the smart grid are under test in India, because of absence of experience of operation in Indian environment. Utilities want more vendor to participate same time they want no wrong product should be accepted. Therefore, the testing processes are taking more time. As manufacturers and the inspectors are facing the testing first time, there is no firm SOPs are developed. This will lead in more time consumption and irritation to wellprepared bidder or manufacturer. It is not possible to any single bidder to assess the field conditions and then decide the price and time line. Therefore, one has to prepare his mind for the surprise and to spend more time than expected. As smart grid is new concept, there is lack of competencies/ skill sets and project management expertise from utility as well as bidder side, this also leads in more time consumption. 4. Managing Human Resources.

  1. Managing Human Resources

It takes around 1-2 years to get the order from the date of publishing first NIT of smart grid tender. The utility ask to submit the list of experts and related human resources. There is requirement of Smart grid maturity Model expert and similar expensive human resources which are working mostly on other assignments during the period of tender bidding and finalization. The other assignment may be or may not be of his/ her interest and therefore, these people lose the work satisfaction and result in leaving the organization. Hence, most of the time the list of expert people submitted and the actual people executing the work are different. Getting proper mix of Power, Telecom, Communication & IT Engineers and adequate skilled human resources right from smart meter installation technicians to HES administrator and operator is a challenging task for the bidder who is responsible for executing the project. 

  1. Commercial terms and condition of the tender and cash flow of the project execution agencies or lead bidder

Commercial terms of any bid document generally include:

  1. Qualification Requirement (QR)
  2. Ernest Money Deposit
  • Terms of Payment
  1. Offer Validity
  2. Guarantee/ Warrantee
  3. Delivery Period
  • Performance Bank Guarantee
  • Price schedule

If we consider qualification requirement, none of organization can meet the technical and commercial QR on its own. This is also true for reputed players in power system. It difficult to find one and same organization is having all the technical experience and solutions required for smart grid and metering under one umbrella. Therefore, there is need consortium of more than two organization in most of the smart grid pilot projects. However lead bidder is one ‘brave’ organization who is under major risk, if project is not executed or delayed, though it is mentioned in the tender that “Bidder or all associates should be ready for accepting joint & several liabilities for all obligations under the contract for the supply and service support.” Most of the consortium members and some of the giants denies to commit this to lead bidder and the utility as their global legal department takes objection on such obligations. Therefore, it becomes difficult to form the consortium. However most of the giants and so called reputed players not ready to become lead bidder in these pilot projects. Some exceptions shall be considered. The terms of payment (ToP) are applicable to lead bidder. The consortium members or sub-contractors may not agree the terms of payment back to back as per their global company policy. In this case, the lead bidder may face problem of cash flow and must have good holding capacity. Offer validity is one challenge. Initially the offer validity is expected is 180 days. With extension in submission date of the tender it is demanded to extend the validity further.

  1. Standardization of overall specification and component wise standardization All the pilot project are handled by respective state electricity boards. They have their own priorities, and their specific requirement depend on the infrastructure development. They appointed different consultants. Therefore, while designing the scope and specifications, it was different for every utility. If the scope remain only limited to AMR & AMI, the system specification can remain same. However, most of the pilot projects are mixture of grid upgradation and then AMI and AMR. Grid upgradation is heavy work as compare to AMI and AMR. The AMI and AMR system specification shall be standardized in national interest and only make in India systems shall be allowed to use without compromising in technology. Grid upgradation requirement may be differ from state to state and place to place. However, automation and communication components like FRTU required in RMU and distribution transformers shall be standardized in terms of open inter operable communication protocols and its integration with third party SCADA-DMS system. If substations are already automated most of the multi-function meters within the substation is communicating to existing Substation Automation System (SAS) or the RTU which is communicating to SLDCs. Mostly meters are having only one communication RS485 port which is already engaged. In this case there is need to install new multifunction meter. However, If a meter is having Ethernet port supporting multiple concurrent masters over open protocol like Modbus or dlms.

The other challenges are listed as mentioned in introduction:

  1. Testing and certifying the components,
  2. Testing and certifying proof of concept of entire integrated system
  3. Managing interests of all stake holders while implementation
  4. Managing all participating vendors to encourage competition and best technology and execution to come up
  5. Infrastructure challenges and modifying the existing infrastructure suitable for smart grid 12.Communication infrastructure availability for remote industrial and agricultural customer.
  6. Executing the project with complete scope
  7. Training to operation and maintenance manpower and consumers/ prosumers.
  8. Managing Return of Investment
  9. Maintenance of smart grid infrastructure over the long time periods.

The above points are not expanded here because of length of the paper. However, can be explained, separately if someone is having interest.

All above 16 challenges can be overcome by techno-commercial improvements to achieve final goals of smart grid.

We hope to overcome the challenges as progress of the smart grid pilot projects and relevant test facilities, improvement of human resource competencies at utility side as well as vendors’ side. All Vendors need to critically relook into their performance in current SG Projects & jointly interact to bring about sustainable model to take India into major SG roll out journey.

We also suggest that there shall be one and fix national smart grid specifications which covers need of all state electricity boards and remote areas.

We also suggest that there shall be one common interoperable communication protocol for all meter manufacturers and HES manufacturers. Same shall be strictly followed without taking undue advantages of optional fields described in the protocol. If necessary the DLMS/ COSEM PROTOCOL shall be redefined in Indian context and shall be made fully mandatory in the interests of long term operation maintenance and expansion of the grid.

Learnings / Feedback from SG Pilots underway need to be studied by NSGM & should become basis for planning/awarding future Project work

About The Authors:

Anand Arvind Shastri
Senior Manager-Market Research
SCOPE T&M Pvt. Ltd.

Yash Sanjay Kulkarni
SCOPE T&M Pvt. Ltd.

Courtesy: IEEMA