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Electricity distribution which used to be the last mile of the electric supply industry (ESI) until recently is rapidly becoming the new face of it. A consensus is evolving among experts that this function would need a systemic transformation and brought to the frontline to deal with new challenges the ESI now faces. Taking a brief note of these challenges, we discuss below why must the ESI abandon its present way of functioning and adopt a more consumer-friendly and business-like approach. We also offer a few suggestions for the government to manage the much-needed transition.

Four technology-driven market trends have already started to the shake up the ESI. Small power generation technologies, especially those based on photovoltaic (PV) effect, have become competitive. Battery storage coupled with PV systems are enabling consumers to reduce, and even eliminate, their traditional dependence on the power grid. Electric vehicles and their charging facilities are opening up new vistas for their dual role as a load or a supply resource. Smart information and communications technologies (ICTs) are also unlocking new opportunities for control and management of the grid.

The above developments—often termed “disruptive market forces” by utility analysts—are affecting every part of the ESI. However, the real challenge they pose are to its distribution function as most of these systems will connect at low or medium voltages. Distribution systems were designed to convey power only in one direction and cannot handle the two-way flow of power and other challenges that distributed technologies are imposing on them.

Distributed renewable energy technologies (“distributed-RETs” for short) offer multiple benefits both to the power grid and the country. They can help the country avoid capital investments in the grid and reduce losses, help manage demand and support grid operation, avoid environmental pollution, spur local industrialization and employment, reduce reliance on imported fuels, enhance national security, sustainability, and numerous other benefits.

But Distributed-RETs also pose some new technical challenges on the system to which they connect. In addition to the two-way flow of power in the system we referred above, they add to issues such as loss of frequency and voltage control capability, risks of back feed to the system, deterioration of power quality, adverse behavior during system disturbance, and contribution (or lack of it) to system security and reliability.

Identifying these benefits and costs and incorporating these in the planning and decision-making frameworks however need a sea change in the present mindset–perhaps the most difficult requirement but which holds the key to the country’s transition to a secure, affordable, and sustainable energy future.

Assessing the impacts of a distributed-RET on the grid and preventing or minimizing these requires complex system studies and suitable counter measures. Unfortunately, the expertise and tools required for conducting such assessments and identifying the necessary system upgrades are not currently available within the local entities. Considerable effort will be needed to build this capability, expertise, and toolkits.

The hosting capacity (the ability of the system to absorb Distributed-RETs without any negative effect) involves multiple factors. Hoping their developers to determine the best sites for their facilities will be unrealistic. The distribution entities (DISCOs) will need to identify the scope of these technologies within their systems by studying power demand patterns in their areas and the potential of Distributed-RETs at various points in their system.

Since they are closer to end users, the DISCOs can plan better for the demand and required supplies in their jurisdictions. Planning and decision-making for the future development of the power grid in the country will have to be shifted to DISCOs from its current central location, at the National Transmission and Despatch Company (NTDC). Essentially, the DISCOs will be planning to function as mini grids in the future, designed to operate independently but inter-tied with the NTDC system to enhance the operation of the whole system.

The planning function at DISCOs will require considerable upgrading also. Most planning techniques, tools, and expertise have evolved around large and central station supply schemes. Planning with Distributed-RETs requires a radically different approach because the primary resources on which these technologies rely are diffused, dispersed, uncertain, variable, and location-specific. Their integration in the system therefore requires a careful assessment of resource patterns at a specific location and how well they correlate with the patterns of demand in that area.

DISCOs will need to treat Distributed-RETs not as threats to the power grid or a necessary evil they must live with. Instead, they will need to consider them as partners to their own efforts to serve the electricity consumers with reliable and affordable electricity. They will have to not just encourage, but aggressively seek contributions from these technologies.

DISCOs will also need to develop tools and data, information, and knowledge-bases and make these freely accessible to customers and investors for assessing the scope and viability of Distributed-RETs for meeting demand at consumer sites or nearby locations and their potential contribution to the power grid. This should also include any technical assistance needed for making such assessments.

DISCOs will need to modernize their existing networks to transform these into a smart grid that can facilitate successful integration of Distributed-RETs and squeeze the most value from them. The modernized grid must be capable of bringing together a host of stakeholders together—developers of Distributed-RETs and their financiers, other market actors, producers, operators, and end-users—with the aim to optimize resource utilization and operational performance, minimize economic and environmental costs, and maximize system reliability and resilience.

The National Electric Power Regulatory Authority (NEPRA) should mandate DISCOs to conduct such assessments periodically and publish the results on their websites to guide and facilitate developers of Distributed-RETs in determining the best option for connection with the power grid.

NEPRA should devise clear rules for processing Distributed-RETs’ interconnection applications by DISCOs, stipulate time limits for their processing, determining the priority in which applications should be processed in case of multiple applications for a specific location, and the allocation of costs for any system upgrades needed. This will add clarity to the process, the costs involved, and their fair and equitable sharing among existing and future grid users.

NEPRA will also need to provide an enabling framework to encourage the deployment of Distributed-RETs, storage technologies, and necessary ICTs in the local distribution systems. This framework should empower DISCOs to devise innovative pricing and compensation schemes to induce consumers and investors to deploy Distributed-RETs in the distribution systems. It should also enable proper accounting, allocation, and recovery of costs from participants while allowing them a fair compensation for the value they contribute to the power grid.

Without a favorable legal and regulatory cover and a conducive business environment, Distributed-RETs will still be “connected” with the power grid but will not by “integrated” optimally. This will deprive the power grid and the country the full range of benefits these technologies are capable to provide if integrated through careful planning and deployment. Electricity consumers will lose too because the benefits associated with their Distributed-RET systems won’t be realized to full extent. The country overall will suffer.

The writer is an independent contributor with interest in sustainable energy and power system policy, planning, and development. He can be reached at: