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Transmission Adequacy and Strength of Interconnection Capacity of States in

India for future RE Integration, Market and Decarbonization

Presentation · October 2024

DOI: 10.13140/RG.2.2.30285.65764

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Transmission Adequacy and Strength of Interconnection Capacity of States in
India for future RE Integration, Market and Decarbonization

24PESGM2457
Subrata Mukhopadhyay, Sushil K Soonee, Deb Chattopadhyay,
Abishek R S, K V N Pawan Kumar, Pradeep Reddy, MVD Raghava
 Indian Context
Climate and Energy Transition Objectives
• India power system - Vast subcontinent-sized power system and diverse mix
of intra-state power systems
• Augmentation and strengthening of inter-state and cross-border
interconnections within and across the Indian grid under progress
• Bolstering security and resilience in electricity supply, particularly during
power plant failures or extreme weather events
• Diminish the necessity for constructing new capital-intensive power plants.
• Seamless integration of renewables into energy markets
 Policy and Regulatory Interventions
Institution Building and Transmission Access to Markets

• Independent System Planners

• Central Transmission Utility of India Ltd. (CTUIL)
• State Transmission Utilities (STUs)

• Reformed the principles for long-term PPAs and bulk electricity markets
• Transmission access, transmission pricing, scheduling, and dispatch methods.
• Point of Connection (PoC) charges and General Network Access (GNA)
 Roles and Responsibilities
Transmission Planning
• Central Electricity Authority (CEA) • National Electricity Plan - Generation
• National Electricity Plan (NEP) https://cea.nic.in/wp-content/uploads/irp/2023/05/NEP_2022_32_FINAL_GAZETTE-1.pdf
• Short Term and Perspective generation & transmission plans
• Coordinate the activities of planning agencies • National Electricity Plan - Transmission
• Central Transmission Utility (CTU) https://www.ctuil.in/uploads/cms_documents/NEP-Trans1.pdf
• Network planning and development in accordance with NEP
• Discharge all functions of planning and co-ordination related • Indian Electricity Grid Code – Resource Planning Code
to inter-state transmission system (ISTS) https://cercind.gov.in/Regulations/180-Regulations.pdf
• State Transmission Utility (STU)
• Network planning and development in accordance with NEP • CEA Manual on Transmission Planning Criteria
• Nodal agency for Intra-State Transmission System planning in https://cea.nic.in/wp-content/uploads/psp___a_ii/2023/03/Manual_on_Transmission_Planning_Criteria_2023.pdf

coordination with distribution licensees and intra-state

generators connected/to be connected in the STU grid • CERC (Planning, Coordination and Development of Economic
• National Committee on Transmission and Efficient Inter-State Transmission System by Central
• To evaluate the functioning of the National grid, consider the Transmission Utility) Regulations, 2018
recommendations of the Regional Power Committee http://cercind.gov.in/2018/regulation/Transmission.pdf
(Transmission Planning) (RPCTP) & CTU for system expansion
 State-wise interconnection targets
Need for Policy Push
• European Union's (EU) experience
o Minimum trading capacities (minRAMs) have to be provided to electricity markets.
• Need for Indian policy makers and planners to set interconnection targets
o To incentivize states to interconnect their electricity production capacity and upcoming load centres with
the national grid, including neighbouring states.
• Setting a minimum interconnection target of 50%
o Encourage states to align their transmission systems planning with internal demand and promote the
seamless flow of electricity pan India and across regions.
o Need to expand transmission interconnections in underserved areas of states & regions.
o Additionally, periodic reviews may warrant revising the target, potentially raising it to 70% by 2030.
• Transmission network reinforcement urgency indicators
o To address the imbalance between increasing renewable energy capacity and limited interconnection
capacities.
 Formulation of Urgency Indicators
Stimulate investments in a timely manner…

• Price differentials in the wholesale market

• Nominal transmission capacity of interconnections relative to peak load and

installed renewable generation capacity.

• Various innovative indices and ratios like TTC (Total Transfer Capability) and
GNA Network Access with Demand and generation could be devised to
quantitatively monitor the performance and achievements
Transfer Capability
Dynamically Varying
Transmission Planning
CEA and CTU – Alignment of Perspectives
Capacity Addition Planning
High RE Scenario – 500 GW by 2030
Capacity Addition by Renewable Rich States
Intra-state Level
Green Energy Corridors
Transmission of Green Energy across India
Inter-regional Capacity Addition
Margins available
 Indicator -1
TTC/GNA

Karnataka at
53% clearly falls
well below the
average

It is evident that states should prioritize enhancing their transmission networks

immediately to ensure that their transfer capability exceeds GNA requirements.
 Indicator -2
TTC/Demand

Once again
Karnataka’s TTC
to Demand at
only 14% is well
below the
average

states should aim to augment their transmission system to have 50% of their demand
as their import transfer capability to have more flexibility to meet their demand
Indicator -3
GNA/Demand

States with lower ratio suggests that there may be a need for expanding the
transmission network to improve access and reliability of electricity supply.
Comparison of States
Indicators
Comparison of States
Maximum Demand and Installed Capacity
TTC and Transmission Access
Effect of Transmission Addition
DAM Prices over the years
 Value of transmission expansion
Cost of Congestion
• The difference in wholesale electricity prices between two locations largely represents
the cost of congestion or, conversely, a key potential value of new transmission.
• While the congestion-based value of transmission analyzed here represents one of the
largest sources of transmission value, transmission provides other benefits
o Reliability, resiliency, and emission-reduction benefits
o Transmission enables a lower cost set of generators to meet load than would otherwise be available.
• Wholesale power prices exhibit stark geographic differences and that increased
transmission across many regional and interregional transmission links would have
substantial economic value.
• Extreme conditions and high-value periods have an outsized role in driving this value

lbnl-transmissionvalue-fact_sheet-2022update-20230203.pdf (lbl.gov)
Transmission value concentrated
Small portion of total hours

• The most valuable 5% and 10% of hours

accounted for a substantial portion of total
annual transmission value through
‘congestion rent’

• Generally higher wholesale electricity prices

leading to higher values across all hours.
• Price volatility and spatial differences in price tend
to increase with average prices.

lbnl-transmissionvalue-fact_sheet-2022update-20230203.pdf (lbl.gov)
 Possible Barriers to setting a target
In EU, the target for all bidding zones will be 70% in 2026.
• Barriers include:
o Loop flows due to a suboptimal configuration of bidding zones
o Costly although insufficient re-dispatching
o Lack of mechanisms to share the cost of re-dispatching.
o Unilateral restrictions, such as allocation constraints and individual reductions of capacity
o Lack of visibility on critical network elements other than the limiting ones.

• Cross-zonal constraints most often limit commercial energy exchanges.

o However, constraints internal to bidding zones are those that most affect the socio economic welfare.
o Lifting both internal and cross-zonal constraints is key to achieving the 70% target.

Source: ACER Cross-zonal capacities and the 70% margin available for cross-zonal electricity trade (MACZT) 2023 Market Monitoring Report
Effects of Renewables on Bidding Zones in EU
Across 30 bidding zones during 2015-2023
• Negative effects of domestic market penetration

• Cross-border effects on wind and solar value.

• The negative effects of domestic and neighboring solar
penetration on solar value are stronger than those of
wind, as solar generation is more strongly correlated
across time and space.

• Higher connectedness of bidding zones implies a

European bidding zones and interconnector capacity
trade-off
• Mitigates the negative effect of domestic market
penetration but exacerbates the effects of neighboring
market penetration.

Cross-border cannibalization: Spillover effects of wind and

solar energy on interconnected European electricity markets
Clemens Stiewe, Alice Lixuan Xu, Anselm Eicke, Lion Hirth
Monthly wind/solar value factor vs. market penetration for European bidding zones
 Decarbonization
More and more transmission…net zero target by 2070…

Transmission Impossible? Prospects for Decarbonizing the US Grid Lucas Davis, Catherine Hausman, and Nancy Rose June 2023
Published in Journal of Economic Perspectives, 37(4), 155-180, 2023WP338.pdf (berkeley.edu)
 The Bottom Line
Way Forward
• Each of the following four factors, progressively, raise the need for transmission
(a) economics, (b) reliability, (c) resilience and (d) emissions/environmental
• Regulatory mechanisms in India still focuses almost exclusively on reliability only
• Policy target number for reliability ( LOLP etc.) is there in generation adequacy
o In case of transmission, it is defined qualitatively (vague)
o Depends on many factors and the mind set of the planner and the scenarios factored
• Need for system level urgency indicators for transmission adequacy planning
o Resilience standard needs to have more dimensions to cover for a range of extreme weather
events (heatwaves, droughts, etc.) and the nature of impacts they may have on MW and MWh
requirements.
 References
1. NEP-Trans1.pdf (powermin.gov.in)
2. https://cea.nic.in/wp-
content/uploads/psp___a_ii/2023/03/Manual_on_Transmission_Planning_Criteria_2023.pdf
3. CEA_Tx_Plan_for_500GW_Non_fossil_capacity_by_2030.pdf
4. IEGC - 180-Regulations.pdf (cercind.gov.in)
5. http://cercind.gov.in/2018/regulation/Transmission.pdf
6. Monthly ATC Inter Regional (grid-india.in)
7. CTU | Central Transmission Utility of India Limited (ctuil.in)
8. ITP :: India Transmission Portal
9. Market Snapshot | Indian Energy Exchange Ltd (iexindia.com)
10. lbnl-transmissionvalue-fact_sheet-2022update-20230203.pdf (lbl.gov)
11. Why 70% grid capacity target is needed for renewable goals | www.acer.europa.eu
12. Cross-border cannibalization: Spillover effects of wind and solar energy on interconnected European
electricity markets Clemens Stiewea, Alice Lixuan Xua, Anselm Eickea, Lion Hirth 2405.17166v1.pdf
(arxiv.org)
13. Transmission Impossible? Prospects for Decarbonizing the US Grid Lucas Davis, Catherine Hausman, and
Nancy Rose June 2023 Published in Journal of Economic Perspectives, 37(4), 155-180, 2023WP338.pdf
(berkeley.edu)
 Thank You !

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