Decentralised power generation is need of the hour

The take home message from the grid failure is that the paradigm of centralised generation of electricity and grid-based distribution has outlived its usefulness, notes Gopal Krishna.

The continuous power blackouts in most of the northern and eastern region of the country create a compelling logic for decentralised generation and off grid distribution could save hundreds of billions in capital investment, reduce power costs by 40 percent, reduce vulnerabilities, safeguard the integrity of ecosystem for posterity, cut greenhouse gas emissions in half and liberate the electricity consumers from the curse of those who are deprived of electricity and those who are displaced due to centralised power plants and stations.

In the backdrop of massive power grid failure, the 11th Session of 15th Lok Sabha that commenced on August 8 and is expected to conclude on September 7 can become historical if it can decide to adopt decentralised power generation and off grid distribution of electricity path as the key for India's power woes and grid failures.

The collapse of Northern, Eastern and North-Eastern grids led to the biggest blackout in the country and adversely affected 8 states directly and some 20 states indirectly. The first phase of blackout happened in northern India on July 30 and the second phase on subsequent days engulfed even the eastern India.

It has come to light that hundreds of mine workers were trapped underground by the blackout and hundreds of trains were stalled across the country. India has sourced 8,200 MW from Bhutan to restores supplies.

The Power Grid Corporation of India and its subsidiaries buy electricity from companies and transmit it via their network to the distribution companies. These companies sell it to end-consumers. While such routine transactions unfold, rampant energy injustice prevails. 

It appears that undemocratic and unaccountable entities are taking more power from the grid than their entitlement. Grids do not appear to be customised to meet seasonal rise in demand. A recent study has revealed that there was 8 per cent more electricity produced in the country in June 2012 than in June 2011.

What is required is a system of decentralised renewable energy generation at a micro scale. It will minimise transmission and distribution loss and maximise output. It can change the landscape of energy distribution and can reach even the unreached. 

As the Parliament meets for the monsoon session, it should enact a design through legislation that follows this path to meet the social and public health crisis due to grid failures almost permanently through a decentaralised and off grid renewable energy road map.

Transmission wires carry the electricity to users at huge distances with 35 to 55 percent loss. It is about time all future plants resist the temptation of continuing with the old habit of building large power plants.

It was heartening to note that the off-grid distributed generation-based distribution franchisee model is beginning to attract power regulators. Under the model, a developer sets up an off-grid project and supply power and recover rate fixed by the state electricity regulatory commission.

The developer can act as a franchisee of the distribution company, and the agreement between the distribution licensee and the developer would guarantee recovery to the extent of feed in tariff. Such efforts have been initiated to formulate model regulations on off-grid energy and supply. It is heartening that cost of renewable technologies is reducing.

Earlier, it used to cost less per unit of generation to build large plants than to build smaller plants. As a consequence power industry and government presumed that remote, central generation was optimal. It will deliver power at the lowest cost as compared to other alternative routes.

But now technology has improved. Mass-produced engines and turbines cost less per unit of capacity than large plants, and the emissions have been steadily reduced. The smaller engines and gas turbines can be located next to users. The wasted heat can be recycled from the decentralised generation plants to displace boiler fuel and essentially cut the fuel for electric generation in half, compared to remote or central generation of the same power.

This sane path is facing resistance from power producers who are jealously guarding their monopoly. The path of adoption of new technologies and for building decentralised generation faces the road block of entrenched power producers.

A paper 'Critical Thinking About Energy: The Case for Decentralised Generation of Electricity' based on extensive research into the economically optimal way to build new power generation in each of the past 30 years, given then available technology, capital costs, and fuel prices, aptly concludes that the continuing near-universal acceptance of the "central generation paradigm" is wrong. Power industry regulations largely derive from the unquestioned belief that central generation is optimal. The conventional "central generation paradigm" is based on last century's technology. It has been noted that the power industry has not deployed optimal technology over the past thirty years.

The universally accepted "Central Generation Paradigm" prevents optimal energy decisions. Decentralised generation (DG), using the same technologies used by remote central generation, significantly improves every key outcome from power generation. The fact is centralised power industry's average efficiency has not improved. It wastes two-thirds of its raw material. It has stagnant efficiency. It gets less productivity per unit output.

Another paper 'The environmental impact of decentralised generation in an overall system context' argues that DG technologies are very likely to play an important role in future energy supply for better environmental performance.

DG is not a new concept. Thomas Edison had built his first commercial electric plant near Wall Street in lower Manhattan, and he recycled energy to heat surrounding buildings.

DG plants employ all of the technologies that are used in central generation. DG plant capacities range from a few kilowatts to several hundred megawatts. It depends on the users' needs. DG can use renewable energy but as of now not every renewable energy plant is DG.

Solar photovoltaic panels on individual buildings or local windmills are distributed generation, while large wind farms large coal, hydro, and nuclear stations are central generation requiring transmission and distribution where admittedly there is huge loss.

Although nuclear power is rightly being phased out world over, the fact is DG uses all fuels, including nuclear. Modern naval vessels generate power with nuclear reactors and then recycle waste heat to displace boiler fuel.

It seems clear that the power industry has made poor choices that have increased cost and decreased efficiency. These data show that utilities eschewed least-cost generating technologies, effectively increasing prices to all customers.

The decentralised renewable energy producers and distributors should be given incentives and consumers can be charged a tariff less than the grid-connected consumers in first the stage and in the second stage it can be made equivalent to the grid connected players. The Central Electricity Regulatory Commission has recently said, "The advantages of decentralised renewable energy model includes maximum certainty of revenue to the developer, proper integration of off-grid projects with grid as and when it is feasible. There will be an optimum utilisation of the government subsidy, if offered."

This obsession with grid connection should be revisited. The power system can be designed to have loose connectivity to a grid to meet industrial requirements in specific cases.

The CERC has summoned top officials of five states of Uttar Pradesh, Haryana, Punjab, Uttarakhand and Jammu and Kashmir on August 14 to discuss the issue of overdrawing of electricity from the grid.

Members of Parliament should demand a model from the government that incorporates relevant factors for central and distributed electric generation technologies, including projected improvements in cost, efficiency, and availability of each technology to determine the best way to satisfy projected load growth.

Some 55 per cent rural and 12 per cent urban households are not electrified as yet. Parliament should make amends for its failure to provide access to electricity to large section of citizens. It should resolve to ensure that those rural and urban houses which has no access to electricity and who remained directly unaffected by grid failure get access from decentralised electricity production units within next five years.

In the aftermath of the blackout, Delhi's demand for power and their price must be rigorously examined by a Parliamentary Committee to ascertain the gains and losses of privatization of electricity.

It must examine and suggest ways to shift away from capital's reliance grid to off grid system. Such a model can be adopted by other state capitals to pave the way for energy justice.