1. RELATIONSHIP BETWEEN COMPETATIVE POWER MARKETS AND GRID RELIABILITY PJM RTO EXPERIANCE vis – a – vis PRACTICES FOLLOWED IN INDIAN GRIDS

2. OVER VIEW After 14 th August 2003 blackout, US Dept. of Energy (DOE) and Natural Resources of Canada (NRCan) invited PJM Interconnection and others to comment on the relationship between  Wholesale Electric Competition  Grid Reliability  The presentation covers the views expressed by PJM.  The practices followed by PJM.  The practices being followed in Indian Grids on the respective issues

3. PERSPECTIVE ON 14 th AUGUST 2003 BLACKOUT  Myth Some believed that competition is the cause for the blackout as the need to maximise profits has caused the utilities to defer investments and expenditures necessary to maintain reliability.  Fact Though with the passage of time the investments and expenditures have certainly diminished, the advent of competition is only one (small) of the several drives for such business decisions

4. PJM’s BELIEFS ON COMPETITION vis a –vis RELIABILITY PJM believes that  Wholesale electric competition enhances rather than compromises Grid Reliability.  Competition supported by Regional Grid Managers viz RTOs has brought  Better Exchange of Information  Effective Grid Management Tools  Locational Marginal Prices  Competition makes all market participants  Partners in Reliability Protection  Reinforce and Improve Grid Reliability

5. CAUSES OF THE 14 th AUGUST 2003 BLACKOUT The task force final report has concluded that the main causes for the blackout are  Failure to assess and understand the inadequacy of the transmission system. (System planner/Grid operator)  Failure to recognise and understand the deteriorating condition of the system in real time. (Grid operator)  Inadequacy of Real time Diagnostic support. (SCADA/EMS)  Failure to adequately manage vegetation growth in its right of way. (Maintenance Agency )

6. BLACKOUTS IN NORTH AMERICA IN THE PAST Major Blackouts (7) in North America : 1965, 1977, 1982, 1996, 1996 1998, 1999 Common Set of Factors:  Failure to ensure/operate the system within safe limits  Inability of system operators to visualise events over the entire system  Lack of coordination on system protection  Over estimation of generators dynamic reactive outlet  Conductor contact with trees  Inadequate training of operating personnel. Most of these factors were found in the 14 th Aug 2003 Blackout also

7. 14 th AUGUST 2003 LIKE CONDITIONS IN INDIAN GRIDS Almost daily such situations are being experienced in Indian Grids:  Inadequacy of Transmission Network  AC Network in Western Region  Interconnections between ER – WR & ER - NR  Load Generation Imbalance in Real time  Severe deficit conditions in NR  High Voltage conditions in SR  Extreme Climatic Conditions  Severe foggy conditions in NR  Rains for long spells in SR However these situations are being tackled day- in/day-out.

8. Practices followed by PJM to Improve Reliability  Regional Despatch through – Locational Marginal Pricing (LMP) –Day Ahead Scheduling  Using Advanced Technologies – Real Time Contingency Analysis –Real Time Voltage Analysis –Visualisation Technology –Outage Planning & Coordination –Applications Scale & Scope  Discharging Regional Coordination Responsibilities  Operator Training  Regional Planning

9. Practices followed by PJM to Improve Reliability Regional Despatch through Locational Marginal Pricing (LMP) ( Responding to price signal in real time to improve reliability )  LMP model uses actual system inputs from a large number of points.  Provides real time transparent information about the system to all.  Gives all market participants an awareness where power needs to be increased or decreased and there by action is taken to improve reliability. A Parallel can be drawn with OA/ABT

10. Practices followed by PJM to Improve Reliability Regional Despatch through Day Ahead Scheduling  Generation resources are scheduled based on projected system conditions and operating margins.  While scheduling, operational reliability standards are kept in to consideration.  Total transparent information mechanism between grid managers and market participants. Practices followed by Indian Grids

11. INDIAN GRIDS  The Concept of Day Ahead Scheduling is being followed meticulously. (well defined in IEGC Document)  While Scheduling the transmission constraints are taken into consideration  The exchange of information is totally transparent ( through Web sites)

12. Practices followed by PJM to Improve Reliability Using Advanced Technologies  Real-Time Contingency Analysis  Application Run PeriodicityEvery minute  Data Points Processed68,000 (every 10 seconds)  Elements Monitored13,000  Number of Contingencies being evaluated 4,000 Provides System Operators with near Real-Time information on the impact of Contingencies. Practices followed by Indian Grids

13. Practices followed by PJM to Improve Reliability Using Advanced Technologies  Real-Time Voltage Analysis  On line Voltage Analysis Software that monitors and recalculates the voltage characteristics every 10 minutes.  Enables the Operators to avoid operating near voltage collapse conditions. Practices followed by Indian Grids

14. Practices followed by PJM to Improve Reliability Using Advanced Technologies  Outage Planning and Coordination  Implementation of internet based outage coordination software that ensures coordination of outages over the entire market regions. Practices followed by Indian Grids

15. Practices followed by PJM to Improve Reliability Using Advanced Technologies  Applications Scale and Scope  Smaller control areas don’t observe enough of the grid to identify and understand all the factors.  Observing of only localised conditions may craft sub optimal solutions. Wide area visibility is being envisaged to provide high reliability and high economic value solutions. Practices followed by Indian Grids

16. Practices followed by PJM to Improve Reliability Discharging Regional Coordination Responsibilities  Enhanced operation information through data transfer protocals between RTOs and Reliability Coordinators.  Exchange of reliability and market data amongst all players.  Enactment of Joint Operating Agreement (JOA) to enhance reliability, data exchange and to coordinate settlements. Practices followed by Indian Grids

17. Practices followed by PJM to Improve Reliability Operator Training  Significant time and resources to train operators.  32 hours/year training and drill in system emergency response/ realistic simulation.  Same level of training to member companies  Every sixth week operators are scheduled for a training week  Level of training ( 16% of each operator’s work year) necessitates that RTO increase its total staffing levels to maintain the necessary operator presence in the control room while others are being trained. Practices followed by Indian Grids

18. Practices followed by PJM to Improve Reliability Regional Planning  Works with stakeholders to conduct holistic and integrated system planning.  Planning process, identified transmission system upgrades and enhancements to provide operational, economic and reliability requirements.  All adjoining RTOs work together to be sure that transmission expansion is compatible.  Process requests for the interconnection of the new generator facilities.  Managing the queue of interconnection requests  Analysis of the system impact of each proposed generator Practices followed by Indian Grids