Fulbright US-India Series: KVS Baba | Chairman of Indian Government Power Operations (POSOCO)

2022-08-17
KVS Baba is the chairman and managing director of the Power System Operation Corporation (POSOCO), which is the Indian government organization responsible for ensuring the integrated operation of the Grid in a reliable, efficient and secure manner. In this conversation, Mr. Baba provides his perspective on the system level challenges associated with the integration of renewable energy sources.
Mr Baba also discusses POSOCO's primary functions and work in the improvement of forecasting the demand for and supply of energy. Hope you enjoy my conversation with Mr. Baba! ‚Äč

Topics covered on this podcast:
  • What are the primary functions of POSOCO?
  • What system level challenges will India face in its attempts to achieve the 2022 RE targets?
  • The extent of transmission losses found across the Indian electricity system
  • What is the role of the regional load dispatch center?
  • How has the new government measure of requiring letters of credit to the generators from the discoms been implemented?
  • What are the primary impacts of RE integration and how can regional cooperation help mitigate those?
  • A breakdown of what is and what is not allowed for Discoms to meet RPO target?
  • What work has POSOCO engaged in to improve RE forecasting and the demand estimate?

Transcript

00:06 Karan Takhar
Hello everyone. This is Karan Takhar, and welcome to the Zenergy podcast. Over the past decade, India has done an impressive job of integrating renewable energy into its energy mix. For this Fulbright Podcast series, I sought to investigate the enabling factors and potential of India's global leadership in renewable energy with a focus on solar this Fulbright series is broken down into Four Seasons. This season we look at the next set of key technologies and regulations integral to unlocking India's continued renewable energy success at the system level. It includes conversations with leading regulators and thought leaders across energy management storage, transmission, and distribution.
In this episode, I will be speaking with KVS Baba, who's the chairman and managing director of POSOCO. The Power System Operation Corporation, which is the government organization responsible for ensuring the operation of the grid in a reliable, efficient, and secure manner. I asked Mr. Baba about his views on the challenges of the grid integration of renewable energy, and I hope you enjoy this conversation with Mr. Baba.
Thank you, Mr. Baba, for taking the time, and I'd like to start by asking about POSOCO Co operations, and for my understanding, POSOCO cooperates with one national load despatch center, and five regional load dispatch centers which manage Interstate flows of power in coordination closely with the states load dispatch centers just briefly, could you talk about what POSOCO primary functions are and the role it plays in India electricity landscape?

02:19 KVS Baba
Our main Moto Mission is to ensure integrated operation of the Indian power system to facilitate transfer of electric power within and across the regions and off late beyond now, are responsible for transnational exchange of power with neighboring countries like Bangladesh, Bhutan, Nepal also, so and the prime objectives are provider reliability, economy, and sustainability this is the main mission and we also facilitate competitive and efficient wholesale electricity market and the administration of the settlement systems and we, as part of it we try to lot of do research R and data sharing in actually, we try to disseminate lot of information to the all the stakeholders on various electricity system, operational and market operational aspects so, in a very short, this is what we try to do, understood and very safe here like I want to give you a little bit of brief till three years ago, India was going through a lot of shortages now lot of generation has come in many of the regions and lot of central sector plants projects have come so electricity now it is not a shortage none of the states appreciate I mean encounter any shortage of electricity so now there are many times surplus depending upon the number of units who are working on it so that is it and once the grid in 2013, All India has been connected through one synchronous grid. So now power can prescribe, transferred, or exchanged across the entire Indian grid in more we have now established so many transmission links, more HVDC we call it asynchronous connections, and many AC lines there more synchronous connections, so that is what India is now up is the largest synchronously operated grid in the country in the world.

04:48 Karan Takhar
Very interesting, so does this mean that power can go from any point to any point?

04:50 KVS Baba
Yeah.

04:57 Karan Takhar
 I Mean, say, the surplus wind of Tamil Nadu, for example, can that be shipped to Delhi?

05:07 KVS Baba
Yes, Only they need to have a contract, that's all.

05:10 Karan Takhar
OK, will there be any transmission losses?

05:15 KVS Baba
No transmission, any physical system will have lost, but the transmission losses we don't generally power of wind power of Tamil Nadu will not go directly to Delhi. It goes by displacement, so what happens is the power in Tamil Nadu, whatever is generated will get consumed, but the power coming to Tamil Nadu from Andhra Pradesh, Karnataka they get diverted to other region, other states, and it gets displacement we call it by displacement OK, so actual power, the electron that has been generated in Tamil Nadu will not go to Delhi It is adjusted there and say absorbed there, and power goes by displacement Chattisgarh power plants have share contracts with Tamil Nadu, our Southern region, so power do not go down so when the power is a more power is available in Tamil Nadu so this check is called power will go to the neighboring regions and for that neighboring regions, the power will come to Delhi, something like that.

06:20 Karan Takhar
That makes sense that makes a lot of sense, so then what is the role of the regional load dispatch center? Are they the one who coordinates all of this energy flow across the city?

06:35 KVS Baba
Yes, so we have a very, very elaborate Indian electricity grid code and the market mechanism, so all we call it actually they had scheduling there are many market players systems are there is a long-term contract. There is a medium-term contract, and there is a they-had contract and a contingency contract like that, so everything is before the actual operation gets tide up. What is power? Who is going to generate our cell and who is going to consume our purchase, so everything happens 24 hours before, and it is called scheduling, so the entire process goes through a very detailed software we call it buzz-based energy scheduling software so they all people try to throw in, give their requisitions and there, and purchases from that as per the contracts for tomorrow, June 24 hours, 00 hours to 24 hours. The whole schedule gets prepared by evening, 6:00 o'clock every day. This is a routine, so this is how the entire power gets scheduled, and so on. That from 0 hours, it is a current state, so any see variations that take place again people will these regional load dispatch centers so as per present to the world are the control Centers for within the region and across the regions when it comes then the National Dispatch Center comes, but the entire scheduling takes place in a coordinated manner so any exchange between one region to another region, so the one system interacts with the other system and there is a national place, it gets all amalgamated, and again it gets dispersed back to regional low dispatch center SO1 generator in a region need not look into other In his computer or in his major, he gets the entire information there how much he is going to generate our consume How much at work and the entire day is divided into 96 blocks of 15 minutes each.

09:08 Karan Takhar
I understand.

09:09 KVS Baba
So that is how the entire scheduling takes place.

09:13 Karan Takhar
OK, that makes a.

09:14 KVS Baba
So yeah, So what happens is this power we, I mean, a lot of sense. It is all they discussed Indian electricity grid code establishes the procedure, and I mean, we prepare the procedure, and Central Electricity Regulatory Commission approves them, and so for many, I mean, it is from time memorial. It has been operated like this channel from 2002 onwards, so it is how they had scheduled. Takes place and all the asper contracts and any there can be a contract for few hours for the long term is 25 years. Medium-term is 5 to 10 years, 3 to 7 years. Something like that, there are timeframes fixed, so as per that, people make contracts, and we implement those schedules.

10:10 Karan Takhar
I see, so yeah, in terms of how the contracts actually work, I won't get in too much into the contracts, but just really briefly, I know that's so there is a problem where there's a delay in payments, so I know since August 1 Yeah, power the power ministry ben has required the distribution companies to give letters of credit to the generators prior to them dispatching the actual electricity can you talk a little bit about how that has been implemented?

10:53 KVS Baba
It is like this see any contractor business should be proper payment mechanism is prescribed as per in every power purchase contract that you know any for that, whether it is a power or anything whenever you want to buy something, you have to assure when you will pay the money so most of the generating state companies have some standard power purchase agreements and it is earlier in some days 60 days, sometimes 45 days after the bill is raised, they can pay so the and generally most of the people are paid through letters of credit and they give in a pre-signed letters of credit the bank will manage so this is the payment security mechanism has ease in place, but of late for various reasons, states are unable to honor the payment schedule that has been written in the contract so what is happening ultimately the generating companies are facing uphill task to honor their contracts because in only electricity in India are postpaid whereas the ship fuel for which the generator has to pay in advance, like for getting a cold he has to pay fried charges to railways he has to pay in advance to coal companies for procuring decode
so whereas wild generators are paying advance to the resource source, but whereas their payments are coming later so that their new within many people, many of these states are paying for it Yeah, I'm not saying that everybody is defaulting, but there are certain sustained way people are unable to pay our defaulting the payments so that is causing a worry to be generating companies so that is why then the there was a furor and the government came in to say that another thing is the why the distribution companies are unable to pay It is not because it is the inefficiency of the distribution companies there are many governmental payments which the state government has to pay their distribution companies like there are certain municipalities or commissions you understand what are words they also consume electricity Street lights OK, suppose they don't pay then the distribution company falls short of cash thinking that these distribution companies are their own state entities State does not obligate meet their obligation of payment towards their electricity consumption one way second, the reason is for various reasons, for their economic reasons are there are many subsidized rates are given to many consumers my policy of the state like agriculture they feel the agriculture farmers are to be given a subsidized price power. So, but what they say is that OK, whatever you charge, I will pay you. A subsidiary of this much are some free power, so the states are supposed to supplement the expenditure of the state distribution companies that don't take place in a routine manner, so these are all small, small things that get piled up over a few years then someday it becomes a break-even point.

14:40 Karan Takhar
That makes sense.

14:41 KVS Baba
So that is why when the ministry said that basically the state governments are supposed to pay for it, the onus lies in the state governments so. Then there have been many series of discussions where state governments have been impressed upon to appreciate the distribution companies' difficulties, and they try to moderate the things and try to talk on behalf of the state governments or distribution companies then, but all states are not listening to these centers, advice or anything so what they felt is that OK, let us in there now there is an in Casper the electricity act we are supposed to do the scheduling as per contracts and the so the when the contract has defaulted then power should not be provided so this is what the provision is in the contract, and the provision is in the Electricity Act. So the central government has thought that we have to use a little, I mean stricter arm, so enforce be payment security mechanism so what we try to do is that through this MIC we can't make them any payment because we don't do we only administered the contract or we say to enable the power flow so what happens many times is these states don't pay to be generating companies, but they try from purchase from the short term or an exchange market electricity exchange in the electricity exchange and the contract for short-term they have to pay in advance, so they don't pay the main generating companies to who are supposed to get after 60 days or after 45 days? They don't pay but for meeting the peasantry requirements
they buy from the electricity market electricity we call it extra electricity exchange, so there is a gap is increasing, so I thought then they said OK, then you will be prohibited to buy from the market If you are a perpetual defaulter, so that is how this payment security mechanism we are administrating, and it is working fine.

16:59 Karan Takhar
Thank you for clarifying. I've been reading the meeting minutes from the form of regulators for probably the past like the past 10 to 15 meetings, and classical, of course, has delivered quite a few presentations to various meetings, and one presentation that Poloko delivered was on-demand analysis, and it was very extensive, and one of the claims that were made was that there's a strong desire for regional cooperation among a group of states to minimize the impact of Ari. so can you talk about some of the primary impacts of Ari integration, renewable energy integration, and how stronger regional cooperation can help mitigate these impacts on the system?

17:53 KVS Baba
Yeah, I told you, electricity go get transmitted. Our electricity is consumed by displacement. You appreciate it now. What happens? Each region has its own diversified resources.
Some region is hydro rich and a balance of thermal and hydro some regions are more thermal dominance the way the natural resources are located and electricity also gets generated based on the those like Northern Region has many hydro plants similarly Southern Region also has many hydrobot eastern best planned are more thermal dominant, so like this, this is a nature we have to appreciate and deserve are So what happens since this renewable electricity resources are variable and their intermittent that you know I don't need to explain you much, wind comes only on a seasonal basis and that two wind power cannot be generated across the 24 hours so some regions it comes in the night starts in the evening, 4:00 o'clock and then the IT picks up in the night and comes down by morning 6:00 o'clock depending upon the how the wind flow and with what speed it comes six are basically natural turf what it happens whether it is coastal weather, is middle of this country, or whether there are any heels so there wind can die I mean make its way and so It increases the speed and you know that wind is always only two there are few sites where Linda can generate went generation is very large similarly solar, where solar is there where sunlight comes in a good insulation levels so their nature dependent and location dependent. In the Southern region, luckily, the wind is the best, and solar also there they are the potential area for excellent renewable generation center some. Will similarly nature part of Gujarat, the western part of Rajasthan, like this, there are only a few pockets where renewable energy can be I mean effectively and efficiently generated. Otherwise, wherever you put a solar panel, it will generate, but its efficiency and economy of operation may not be that of a place where it is like Tamil Nadu. All southern states are rich in renewables, so what we said in 2015 when the renewables were getting introduced, we had a requested ministry to come. So we told there are 15 points which we said how best the renewables can be integrated right you must have definitely seen this report of Ministry of Power in 2015 where we have given there has to be a demand forecasting excellent demand forecasting and then renewable energy forecasting and there has to be some settlement processes and all like this there are many we have given So what happens another thing is that each state are not reaching all the place like solar, somebody can be some state can be solar reach symbol some state can be wind reach then the solar is a peak, wind is not there but when did speak solar is not there we appreciate so when we have excellent transmission system across the country so if the states are cooperating among themselves and and within the region States and across the country regional population so each region has to cooperate with others so that is what we suggested was that to harness the diversity of these renewable resources and there Seasonality of there and the generation over a diurnal variation, and the seasonal variation the technical enablers, that means the transmission grid has been man, has been established and it is getting strengthened to day by da so what is required is only or cooperation among the States and a proper contracts have to be there so there can what he suggested was let's you decide any price at which you want to exchange so there will be a pre decided price would be there. Anybody can reduce or increase their they I mean renewable sorry do, there is no question of renewable reduction, so what we suggested was there are many hydro stations, so when the renewals are at a peak, you can store the wall and so suppose Tamil Nadu is in that on that day Tamil Nadu is having the highest wind, but they have no room tell hydro resources in Tamil Nadu, but Karnataka has lots of hydro resources so if they contract so you can make a good contract Tamil Nadu generates Karnataka absorbs In the night when the wind is not our anytime then the wind is not there so to that extent Karnataka uses their hydro they maximize their hydro generation and meet the Tamil Nadu power OK so we appreciate what you I'm telling.

23:41 Karan Takhar
Yeah, I do this myself.

23:43 KVS Baba
So we try to tell them like this, so there are like we gave a say connection something like Punjab requires power only three months when their agriculture is at peak those June, July these three months Southern region does not require power because at that time their demand comes down their peak demand is much below their annual peak so much of generation is there in South, so if they contract each other like Tamil Nadu to Punjab what he said, so that is the best time, so the diversity is harnessed this is what we propagated that regional cooperation in this form also.

24:31 Karan Takhar
Has that happened success?

24:35 KVS Baba
See it all. We can only give way because we can. It's a contract between one country and one state to another state. There are other than only electricity. The availability, they see many other things and the what price and what are the so this thing there are few contracts but not to that 100% that we have, and he said, we have demonstrated.

24:58 Karan Takhar
Thank you, thank you for clarifying. I read an interview of yours where you stated that a key focus of Prosecco is on load and generation forecasting to manage uncertainties on account of load and renewable variations. We've talked about this already. However, can you speak More specifically about some of the classical work in terms of helping to improve the forecasting and the supply estimate of renewable, and I know that puzzle code developed a weather portal, for example, exactly.

25:37 KVS Baba
Yeah, see, the basic issue is first India is a developing country or it is fast double when a growth rate is much fast and demand characteristic is changing too fast there are too many factors In I'll first talk about yours, are any developed European country today, your demand pattern is free, I mean more or less so then across many years, they've saturated whatever demand variation of 1 to 2% on a seasonal basis or a diagonal basis, and the seasonally, there is some variation, but all are more or less, the Industrialization is almost stagnant and the domestic load is more or less, so the variation per year on year the way increases very little, whereas in India we are increasing the demand by 6 to 7% every year another part another problem is our weather pattern is changing a lot plus earlier supply is on the shortest side, so people were not very sure of availability of judge, so they gadgets at home or less Industrialization is less, but now once you are assured of your own plant, sorry, power supply. So what happens you will buy in one earlier all family members were sitting in one room and one AC was there the class of people are easy of buying, so they have more gadgets every room has a air conditioning system now you know that even if you have 3 rooms and all three are fitted with the air conditioner, you have geezer so like basically I mean, people are able to afford more gadgets, so the demand is increasing plus what is happening, the weather pattern is changing earlier in my childhood, even if it is 35 degree I, we never switched on we were only power is there when you switch on the fan and no AC was yeah, but so when you want you can switch on, then you want don't want tokens which are so brother is 1 basic reason, another is a commercial center slow many commercial complexes have come so the demand pattern characteristic is changing so much so what is happening our demand forecasting has to be very, very accurate are more so not here as opposed to code, we are only advocating to all be live to the demand forecasting unless your demand forecasting is perfect your generation forecasting cannot be perfect see what is happening your frequency will be 50 heads only when demand and generation are matching but are unfortunately we are wearing our once these renewables are coming so the generation is also varying on the one side, and demand is also varying, so we are unable to contain the the gap between the availability and the requirement so the frequency is varying too much ultimately, it is getting reflected in the quality of power
What happens in the fall if the frequency goes slow? The process control. Suppose a steel factory has to traverse eight milliseconds from A1 place to another place, so the eight milliseconds is that the travel time is supposed to be over 10MM. It requires eight milliseconds, and you calculate the distance traveled by frequency and suppose the frequency is varying, so your output of that process will go back, you say, 8,000,000 milliseconds 10MM, suppose I hope I'm not bothering you with too much of number.

29:45 Karan Takhar
No, this is very nice.

29:47 KVS Baba
So what happens with eight milliseconds so it can be seven milliseconds or nine milliseconds if the frequency is not at 50 Hertz? So what happens if the output of your process industry goes gets rejected in the ultimately, the product that he has developed we did will get rejected from quality control.

30:10 Karan Takhar
OK.

30:11 KVS Baba
So the power quality is an essential product, I see, so this is what we are trying to educate are trying to request all people to come to this demand forecasting, and renewable forecasting are not only renewable any generation for testing to be more scientific this is what I was trying to explain.

30:32 Karan Takhar
OK, that makes a lot of sense. Ends what do you think In terms of the challenges of getting to 175 gigawatts by 2022 and then also the 40%
Of electricity mix from renewables by 2030. What would you say Is the main change in India to be able to achieve these targets from more transmission?

30:56 KVS Baba
Hey Josh.

31:03 Karan Takhar
Point of view.

31:05 KVS Baba
No, it's it is possible there is nothing impossible as an operator, we are ready only thing is that what we always say is that it is not one It is a collaborative effort and injury player has to play their role meticulously the point is meticulously, everybody have to play their role the generation has to come at the time when they are asking our vendor day camp program and I did create technical standards are to be met the transmission will be there and there is no difficulty but so the system operator or the distribution companies cannot shoulder their pain on somebody so everybody have to take their own advocate steps like If I come to the point of distribution company first, they have to assume ma'am, sorry they have to clearly tell what is that demand forecasting then they have to clearly workout what is there merit order and what is their economic way of meeting that particular command so some optimization has to be there, so own more scientific systems are to be in built by distribution company in their procurement also so for performance they are not doing any scientifically OK, or when you call it scientifically or economically I mean the proper algorithms have to be there and it has to be properly analyzed and then the renewables are to be properly managed so there has to be a proper monitoring centers and like this on the distribution side and the generating company also have to make their systems like there are technical standards for any renewable generator to get connected to the grid so they have to fulfill all their obligations and all the equipment that control equipment that are required are to be installed and monitored and maintained and the transmission anyway, it is a passive element they have to see their availability to that, whatever designated and we require more controls see once it's there renewables, the one the moment renewables are coming into the grade the more decentralized controls are required. Yeah, you, you must have heard at least N number of times the 3DS Decentralization, Decarbonization, and Digitization. You might have heard this many times from various people.

33:50 Karan Takhar
You have heard them all individually, but it's nice to hear you say them all altogether.

33:55 KVS Baba
Yeah, so these decentralized as very essential and digitization, unless information is made availability to all stakeholders everybody should be able to visualize it and everything should be automatic, automated everything no human intervention should come and your decarbonization is the ultimate goal of the renewables that is why I said decarbonization the first word so these are the things which everyone has to appreciate and everybody have to play their role this is what, as a system operator we tell so what we tell is a distribution company also has to have a distribution system operator C now you know so much of rooftops are coming so behind the meter so much of things are happening so all those things are to be play in place, then integration of renewable energy is not at all difficult not only this actually, even after I have only talked about the generation control like all conventional people also have to become flexible so the most important aspect of renewables is the flexibility actually, the IT is a Co synchronous ET renewables. Is there flexibility, so the flexibility should be there in generation flexibility should be there in transmission? Flexibility should be there in distribution, so these are something like 3DS associated with renewables flexibility is also associated with an effective and efficient system operation, so generation flexibility means the thermal plants are should be able to lower down there requirements during the High Peak renewables, when renewables are not there, then they have to pick up two so at fast ramping fast ramp down are required by d Hydrothermal every all the generator conventional generator Of course, nuclear cannot do it this is what so much so far the technology has not been developed for nuclear, but for thermal and hydro yes they can flex their generation, so one is on the generation side, and the transmission How the transmission is of being a passive element can be flexible so more controls like starting stack, crims, SVC's and HTC. All these are flexible AC transmissions, and all these flexible transmission providers are required so that a line should be able to be synced in, sync it out like that so the distribution side again distribution I mean, the flexibility means even the consumers they, the distribution company should think of If required they will be able to provide from the demand response this thing so you might have definitely discussed with many distribution company or experts. So the demand response is one of the flexible aspects made-they are being taught in the world that demand response is a very one of the very pry I mean important technical feature and all the conferences just now beat Europe or USA now it has to come ultimately to in India also so the point is the demand so the flexibility, generation, distribution, and the distribution, transmission and distribution is also to be discussed and implemented along with their new groups this is that another important aspect of effective and efficient system operation.

37:38 Karan Takhar
Thank you so much. Sincerely thank you, Mr. Baba. I hope you enjoyed that episode, and do check out the show notes For more information on my guest. See you next time.
Also Listen to Our Other Podcast

Related Podcasts



Rick Rossow | Senior Advisor at Center for Strategic and International Studies (CSIS)

Read More


Sameer Shukla | World Bank Energy Head for Europe and Central Asia

Read More


Meagan Fallone | CEO of Barefoot College International

Read More


Vaishali Sinha | CoFounder of ReNew Power (NASDAQ: RNW)

Read More