SMART GRIDS : INTELLIGENT POWER SUPPLY FOR THE

SMART GRIDS : INTELLIGENT POWER SUPPLY FOR THE FUTURE
BMW GUGGENHEIM LAB, BERLIN
23 JULY 2012
Mr. Nicolas Zimmer, State Secretary of Economics and Science, Senate of Berlin,
Mr. Volker Schlegel, President of Asia-Pacific-Forum Berlin,
Mr. Lutz Henke, of the BMW Guggenheim Lab
It’s my privilege to address this august gathering at this scientific mobile laboratory, the BMW
Guggenheim, which is travelling to 9 major cities including Mumbai over the next 6 years. I am really
impressed with the lab’s goal of addressing issues of contemporary urban life through public discourse,
new ideas and ultimately, the creation of forward looking solutions for city life.
As many analysts point out, the world, at this point in time, is living in the urban century. For the first
time, in recorded history more people are living in urban areas than in rural. The trend towards
urbanisation accelerated after the 1950s, when only about 30% of the world population lived in urban
areas. The percentage has kept growing continuously since then it is estimated by 2030, over 70% of the
world’s population will live in urban areas.
Urbanisation seems to be strongly co-related with prosperity. All high income countries are highly
urbanised. Cities are emerging as centres of economic traction, innovation of ideas, knowledge and
commercial activities, at times transcending the national framework. Cities serve as magnet for talent and
human capital seeking not just fulfilment of dreams and aspirations but basic economic sustenance. This
in turn leads to sustained high economic growth.
India is presently at the cusp of urbanisation. The sheer pace and scale of urbanisation expected in the
foreseeable future on hitherto unprecedented scale, will see the majority of India’s population residing in
urban areas in the near future. This presents both challenges and opportunities. The challenges faced by
cities all over the world are multi-faceted - constraints of space, environmental degradation, socioeconomic challenges. Cities already under a high degree of strain to meet the demands of their residents
would be hard pressed to meet the incremental demand without degrading the quality of life.
There is, thus, a fundamental need to walk the path of intelligent urbanisation, which not only serves as a
driver of growth but is also socially inclusive and environmentally sustainable. Our unprecedented
urbanisation demands a pro-active response, necessitating a wide range of policies and practices to be
conceptualised around new socially inclusive and environment friendly paradigms.
In 1911, only about 10% of India’s population lived in urban areas. This figure went up to 31% in 2011;
the comparable figure for China is 48% and for Brazil, 87%. We have 50 cities with a population of 1
million or more; this number is expected to increase to 87 by 2031. The share of urban areas in GDP rose
from around 38% in 1970-71 to 63% in 2009-10 and is expected to rise to 75% by 2030-31. Five of the
20 most densely populated cities in the world are Indian such as Delhi & Kolkata.
India’s rapid urbanisation is also characterised largely by a bottom up, self-driven approach. This model
has some unique challenges, both structural and executive, such as unprecedented scale and high density
cities, resource constraints, a narrow resource base and less than adequate capabilities. Our cities are
predominantly Brownfield, largely characterised by unplanned growth and the challenges of governance
across multiple authorities.
In order to meet these challenges, India is seeking to rapidly create the required urban infrastructure and
reform its governance structures in order to streamline and fast-track delivery of services that provide
access to basic universal services, especially to the poor. We are also consciously trying to build a ruralurban synergy.
The 74th Constitutional Amendment Act was a landmark initiative introduced in 1992 for creation of Urban
Local Bodies (ULBs). More recently, India has launched its flagship programme under the Jawaharlal
Nehru National Urban Renewable Mission or JNNURM, an investment of Euro 14.75 billion. The new
improved JNNURM has a budget of about 0.25% of India’s GDP on an annual basis. It covers both big and
small cities as well as towns, a 20-year project focussing on capacity building at all levels of governance.
The Mission prepares the overall programme for urban infrastructure development with funds from the
Central Government routed through the State Governments and opportunities for finance via PPP mode
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route by leveraging private resources of funding for municipal corporations as well as bigger
municipalities.
Jawaharlal Nehru National Renewable Urban Mission (JNNRUM) has created dynamism in India’s urban
sector. We are also re-focusing on metropolitan planning and the development of efficient Mass Rapid
Transport Systems. Some instances of these are the Municipality of Nagpur has developed an integrated
approach to 24/7 water supply delivery, Navi Mumbai, Waste Water Management; Rajkot, Solid Base
Management; Bhubaneswar, Urban renewable of old town; Ahmedabad and Bhopal – Bus Rapid Transport
System under the JNNRUM; are all examples of what is happening in this area.
The development of Mass Rapid Transport Systems in Metropolitan cities of Delhi, Bangalore, Chennai,
Kolkata, Mumbai and Jaipur and integration of various modes of transport in these cities will go a long way
towards enhancing our transport capabilities and improving the quality of urban life.
Technology will play an increasingly important role in realizing India’s urbanisation goals and also generate
significant business opportunities. The use of technology in energy/utilities/water, smart metering
systems etc. are expected to save 10-15% by way of energy and also improve accountability. Similarly,
intelligent transport systems based on real time information of traffic flows will reduce congestion,
intelligent real estate solutions will reduce the cost of ownership of building life cycles and encourage
development of environmentally sustainable buildings. Technology will also make cities safer.
THE SMART CITY IN INDIA
The concept of the Smart City is a relatively new concept in India. The concept is gaining ground with the
rapid growth of urbanisation in India and the opening up of the Indian economy to 100% FDI in building of
townships. The Smart Cities we hope to build would have state of art infrastructure, efficient transport
and connectivity, mostly on a BOT basis with minimum dislocation of existing population and using nonagriculture land for urban development.
One of the most important projects that India is presently working on is the Delhi-Mumbai Industrial
Corridor - DMIC as a global manufacturing and investment destination utilising the high capacity of about
1500 kms. long Western Dedicated Fleet Corridor along the railway lines that connect the two cities. DMIC
aims to develop futuristic industrial cities in India to compete with the best manufacturing investment
destinations in the world. A number of industrial zones and investment regions and cities have been
planned along this route in the states of Delhi, Gujarat, Haryana, Madhya Pradesh, Maharashtra,
Rajasthan and Uttar Pradesh.
In order to create Smart Cities with a unified administration and management, Special Purpose Vehicles or
SPVs would be set up between the Government of India and the respective State Governments with
suitable representation from the private sector. The SPVs would be empowered to develop the master
plan for the city; following development, management of the cities would be transferred to local
governments.
Recognising the importance and untapped potential in the field of sustainable urban development our
Minister of Urban Development, Mr. Kamal Nath, and the German Federal Minister for Transport, Building
and Urban Development Dr. Peter Ramsauer, signed a declaration in April 2012, with the objective of
cooperating on promotion of integrated policies and principles for sustainable urban development.
Pursuant to this declaration, a delegation of senior officials led by Minister Kamal Nath and Dr. Sudhir
Krishna, Secretary, Ministry of Urban Development visited Germany and participated in the India Session
on Metropolitan Solution 2012 in Hannover. The delegation also studied the pattern of urbanisation in
Berlin and its unified transport system, which could perhaps be replicated in the future, in our own Smart
Cities.
THE SMART GRID IN INDIA
And now a few words about the Smart Grid. As on May 31, 2012, the total power generation capacity of
India reached 2,02,980 MW, the major part of which 66.32%, is from thermal sources, 19.25% from
hydro, 12.07% from renewable energy and 2.35% from nuclear energy. We hope to add a further 100,000
MW in the next 5 years, of which 20% will come from renewable energy.
The demand for electricity is expanding in the exponentially growing Indian economy. There is a gap of
about 15% of electricity during the peak hours in India and a similar percentage of energy is lost in
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transmission and distribution of electricity. There is a growing realisation in India about the need to
develop smart grids for stable and reliable power supply as well as its integration with renewable energy
sources. We recognise that the smart grid is a continuous process of innovation that involves developing
and implementing various technologies to transform existing electricity grids. Naturally, energy storage
will be an inseparable part of smart grids and distributive energy generating systems.
Smart grid technology is also expected to play an important role in the integration of grids. Presently in
India, the North, West and Eastern regions are integrated through strong transmission grids to form the
NEW grid. Soon, the southern region will also be integrated with the NEW grid to form one of the largest
synchronous interconnections in the world. By 2014-15, the Central Electricity Authority will place 1186
Phase Monetary Units (PMUs), throughout the electricity grid at strategic locations in order to monitor the
grid system from a central location. With the integration of the grids and the use of smart grid
technology, we hope to significantly improve our Transmission & Distribution capabilities.
India has set up a Smart Grid Task Force, which in July 2011 announced 8 smart grid pilot projects in
India. Based on assessment of consumer participation, the electronic city in Bangalore was chosen to
study the smart grid concept. Bangalore Electricity Supply Company (BESCOM) is the first power
distribution utility in India initiating the testing of smart grid technologies on a smart grid pilot project
started in 2009. BESCOM is now introducing two types of smart meters, one with pre-paid capability and
the other with a post-paid meter. At present, BESCOM has access to Geographic Information System
(GIS), which helps in effective implementation of the smart grid concept. The project is supported by M/O
Power and USAID (United States Agency for International Development) and Central Power Research
Institute (CPRI).
India and Germany have long-standing cooperation in the energy sector, dating back to 1982 when NTPC’s
Singrauli Power Project received German assistance. This cooperation has been taken forward through the
establishment of an Indo-German Energy Forum (IGEF), the first meeting of which was held in Hannover
in 2006. Since then, IGEF has been meeting annually on a regular basis, alternatively in Germany and
India, co-chaired by Secretary (Power) from India and State Secretary, M/O Economics & Technology from
Germany. Apart from Government institutions, public and private sectors companies & institutions from
both countries are increasingly playing their important role. A permanent office of IGEF has been opened
in New Delhi in March 2010.
There are four sub groups under the Indo-German Energy Forum:
i.
Efficiency Enhancement in Fossil Fuel Based Power Plants,
ii.
Decentralised Distributed Generation Based on Bio-mass and other Renewables
iii.
CDM Projects in Energy Sector
iv.
Research Cooperation in the Energy Sector (2010)
The Department of Science & Technology is also one of the contributors to the fourth sub-group. There
are possibilities of cooperation in research and development of smart grid technology under this subgroup, with integration of industry and research institutions from both countries.
Thus, as you can see, Germany and India are already cooperating to a significant extent in planning for
and implementing technologies for the smart cities of the future. However, there is still further scope for
engagement, not only in energy and power, but also in all the other elements that go into making for
sustainable and healthy urbanisation – health, sanitation, education, roads and all the other connected
areas and services.
I have no doubt that given the high regard in which German technology is held and the vast market in
India for these goods and services, coming years will see an every deeper engagement between the
governments and industry of our two countries.
Thank You
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