Why Indias power grid collapsed - and what to do

about it- by NICK ROSEN on AUGUST 5, 2012

ENERGY
Just a few days ago 10 per cent of the worlds population faced a series of
power cuts - Indias Northern and Eastern grids came to halt and 600
million people were confronted with the delicate state of their nations
electricity grid.
The reason for the power failure is complex, and you can read more detail
below, but essentially it came down to one thing: the power system had
recently been transformed from a system to move electricity around this
massive country into a system to trade electricity. Power stations, which
earlier had to be very sensitive to shifts in demand within their region
over the course of the day, can now export their surpluses to where its
needed, the Economic Times proudly announced today. But the pricing
mechanism s and regulatory frameworks need to match up with the
physical development. Bigger systems require better regulatory oversight
- the costs of failure can be huge in a large system, it says.
These days, India has something approaching one national grid, since a
decision last decade to bolt together several regional grids. And the
connections joining these sub-grids together are both too complex to be
managed easily, and insufficient to handle partial failures elsewhere in
the system. The solution is to diversify the power supply from the current
state-owned monopolies to allow private investment of every size and
kind - particularly the establishment of micro-grids based on renew able
energy, which could be partially connected to the main system and would
add huge resilience were the same thing to happen again in the future.
The grid collapse was just a failure of technology and economics, but it
came to symbolize everything from the weaknesses and failures of Indias
power reforms, the moral and policy failings of the eight-year reign of the
UPA government, to the evaporation of the Indian economic miracle.
What exactly happened will only emerge when a committee of enquiry
delivers its report. But the emerging data is clear that a few states
overdrawing power from the grid is no explanation for the breakdown.
There have been rapid changes in Indias power transmission network
over the last decade. In M arch 2012, Indias
Central electricity authority, warned that the Indian power system ...
complexity is increasing on all fronts. And that any incident - natural
calamity etc., even on single element of this capacity, has the potential to
cause a major grid disturbance.

Decades ago Indias power grid was a large collection of state-level

networks with few if any links among states. In the 1960s, states began to
link their electrical networks with each other. It wasnt until 2002, that
connections between regions began in earnest. Until then, Indias
transmission grid, was a system to move power from generating plants to
wholesale customers like state electricity boards. But between 2002 and
2006, the northern, eastern, western and northeastern grids w ere all
linked up through a set of transmission lines creating a power
superhighway which excluded only the southernmost states, and ran
across central and eastern India from Agra and Gwalior in the west
towards Sasaram in Bihar. From Maharashtra and Gujarat to the North
East, states are now one electrical grid whose crucial artery is this
Superhighway. The commissioning of the Agra-Gwalior line in 2006, was
the final link in closing this mega-loop. It was this Agra-Gwalior link which
was to play an important part in the grid collapse. This national grid
(North East-East-West) is loosely linked with a southern grid, and by 2014
the southern states had expected to be tightly linked with the
superhighway - something which they will no doubt now be re-thinking.
Why was it important to integrate the grids this way? Customers for
power are widely distributed - important urban and industrial centers
such as Gujarat, Maharashtra, Mumbai, and Delhi for instance, while the
fuel for the power they need is highly localized. The coalfields of
Jharkhand and Chhattisgarh are the most critical source, followed by the
hydropower rich states in the north, and the northeast. Rather than move
the coal to w here its needed, its cheaper to set up generating stations
near the coal fields, and move the electricity to customers, which is w
here the grid comes in handy.
Coordinating the movement of electricity between the five grids, and
within them, is a hierarchy of what are called load dispatch centers - at
the state level, at the level of each of the five grids, and finally a national
one. The five Grid-level dispatch centers, and the national center are run
by Power System Operation Co Ltd (POSOCO), a subsidiary of Power Grid
Corporation, a central government PSU. The state-level centers, on the
other hand, are run by the state governments.
So what exactly happened to kill the grid? It appears the breakdown
began in the western part of the superhighway. The day before, two
components of the grid were already weak. One of the two circuits linking
Agra and Gwalior, and the line between Zerda in Gujarat and Kankroli in
Rajasthan w ere down either due to repair or upgrade work. Between
them, these two routes w ere the main link between the western and
northern grids. With two important links between the western and
northern grids down, the remaining circuit between Agra and Gwalior had

to carry a massive amount of traffic. By July 29, there was over 1,000 M W
o f power flowing on this one circuit alone, leading to a n ear collapse of
this critical line on that day at 3 pm - around 36 hours before the grid
actually collapsed. Given the steadily weakening link between the
northern and western grid, how was power to flow from west to north? It
was likely that power would have been wheeled through the east - a
long circuitous route across Madhya Pradesh, Chhattisgarh, Jharkhand,
Bihar and Uttar Pradesh, leading to massive loads on the lines there. This
is where the decisions of states and politicians began to be relevant. The
lines in different states (called radial lines) are fitted with special
equipment which is supposed to disconnect that line from the rest of the
grid, if there is a sharp fall in frequency, signifying high loads. As the line
disconnects, the demands on the rest of the grid should fall (since a set of
consumers have been cut off), thus helping bring the supply-demand
back into balance. However, many of these radial lines and under
frequency relays as they are called, are owned and operated by state
government entities. These entities rarely maintain relays properly and
are often under political pressure to continue drawing power from the
grid, even when the load on the system is heavy. With such massive
loads, at some point things h ad to give way. Between 2:33 am and 2:35
am on July 30, a large set of lines between Balia in Bihar, Gorakhpur in
eastern UP and Lucknow simply tripped and shut themselves down. In
2009, the Agra-Gwalior line had suffered a similar collapse. In a study of
that incident, Power Grid engineers stated:
Outage of only one element in the system might have lead to a
collapse... thus we need to revisit...Contingency plan for better security in
future. At the same time as the various lines in UP and Bihar were
tripping in the early hours of July 30, other components started shutting
themselves out or islanding themselves from the problem. The western
region would have disconnected itself from the rest of the grid by this
time. Then the generating stations started islanding themselves as well to
protect against damage to power equipment caused by sharp swings in
the grid frequency. Within two minutes, between 2:33 am and 2:35 am, a
vast swathe of north India went dark. It was a classic domino effect - a
chain of events, each one causing the other. Individual events w ere not
necessarily critically dangerous in themselves, but taken together, they
bought system crashing down.
The second outage of July 31 was a consequence of the first. In the hours
leading up to it, a large chunk of lines connecting the east and the north
from Balia to Patna to Bihar shariff were still down. The crucial RanchiSipat link between the eastern and western regions was down. And the
Zerda-Kankroli line was still out of action. I f the grid was already com

promised before the outage on 30th night, it was tottering on the morning
and early afternoon of the31st.
Questions will be asked as to how the grid was allowed to function in such
a weak state. Again, a small fault anywhere along the system would have
triggered a cascade of trippings. Within the space o f a minute, between
1:01 pm and 1:02 pm, 38 links between various parts of the northern,
western and eastern grids went down. Most of the generating capacity
went too.
The Western Grid could also have suffered a collapse - as it islanded itself,
the frequency there rose sharply, indicating excess supply of power (since
customers in the north were not available) - this could have potentially
damaged plants in the region.
The private sector currently provides 30% of electricity in India. The
system is supposed to incentivize producers to supply more at a time of
heavy load. But as soaring fuel costs have boosted the cost of power, this
incentive effect has weakened sharply.
Besides the physical infrastructure, the economics of the grid has
changed sharply in the past decade. Buyers and sellers declare the power
they are likely to draw from the grid, or supply to it, 24 hours in advance
to enable engineers plan and distribute loads between different entities.
Delhi for example might announce on Wednesday, that it will draw 2,300
M W in the morning of Thursday, increase that to 3,000 M W by the
afternoon, and then gradually wind down in the evening. But if Delhi
actually draws more than it said it would, th a ts w hats called
overdrawing.
The system attempts to make states pay a price for doing so. When there
is heavy demand in the system, and the frequency starts to drop, the cost
of each unit of power starts rising automatically, making it more
expensive to buy power, or making it more remunerative to supply more
to the grid than a supplier earlier com mitted to.
Alternatively, if a buyer chooses to cut demand at such a time of stress,
he gets rewarded by being paid this so-called UI rate. And for sellers who
over commit, but under deliver, the UI rate becomes a penalty they have
to pay. The aim is to bring demand and supply back in balance. Its a
different matter that some states are in heavy default of their UI dues.
But what regulators discovered a few years ago was that some states
began intentionally scheduling more power than they actually needed. At
times when they knew the grid was going to be overworked, they would
tell the system they needed to draw say 3,500 MW, when they actually
only needed 3,000 MW.

Thus they got the credit for being responsible members of the system at
a time of stress, while making a tidy sum of money in the process, from
the UI benefits they received. Similarly producers had an incentive to
announce they would supply far less power than they actually could, then
supply more, benefiting in the process. So the regulator effectively
capped the benefits that any player could get from the UI system, by
replacing a single rate with a set of slabs. As a result, the per unit UI price
has fallen from Rs 6.7 per unit in 2009-10 to Rs 4.09 per unit in 2011-12.
Court rulings have also put paid to attempts to raise the UI rate.
But over time, fuel costs and the cost of generating each extra unit of
electricity have soared, leading to a scenario where the cost of generation
of each unit is more than the UI rate. Put simply, the costs outweigh the
returns, leading to a situation w here in times of heavy demand, power
producers would rather cut production below w hat they scheduled, and
pay the UI penalty, rather than produce more power as the UI system was
supposed to incentivize them to do.