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Deployment of MicroGrids in India


V. S. K. Murthy Balijepalli, Student Member, IEEE, S. A. Khaparde, Senior Member, IEEE, and C. V. Dobariya
AbstractThe MicroGrid concept using renewable energy sources is a building block towards the future energy networks for long-term viable solution of energy needs. The focus of the paper is centred around the encountered and foreseen issues, enabling technologies and economics for encouraging the deployment of MicroGrids in India. This paper presents state-of-the-art issues and feasible solutions associated with the deployment of MicroGrid technologies leading to the conceptualization of efcient and smart MicroGrids. The role of enabling technologies, automation and communication for sustainable development of MicroGrids is also explained here.

I. I NTRODUCTION

HE MicroGrid concept, involving small transmission and distribution (T&D) networks, efciently makes use of all the location specic distributed generations (DGs) and distributed energy resource (DERs). These are self sustained power systems mainly based on loads fed through radial distribution systems and can operate either interconnected to the main distribution grid, or even in isolated mode [1]. This small self-sufcient system would allow maximum extraction of the renewable power by coordinating control between renewable and the fossil fuel based generators. The concept is driven by two fundamental principles: 1) In order to reap the benets of integrating distributed energy resources in electric power systems, the stakeholders (customers), utilities and society should employ a systems perspective. 2) A business case model should be developed with the objectives of achieving reduction in the initial investment cost including measures that bring in value enhancement. The quantum of various salient technologies adopted separates the constitution of one MicroGrid from another, and the operational constraints vary accordingly. Though they all conceptually have the same goals, the way they are implemented is dependent on the type of dispersed generation facilities accessible. The practical implementation of a MicroGrid admits wide variety of exercises that include economic analysis [2], [3], power control strategies [4], grid connection issues [5], stability and protection issues [1], operating policies [6], etc. After implementation, all the advantages of a MicroGrid may not become apparent right away because of higher cost of energy as compared to the cost of grid power [7]. Hence,

immediately the economic arguments behind the viability of MicroGrids will be in focus and which are mainly driven by the regulatory and economic frameworks of DGs/DERs. Thus, to get the status of MicroGrids as public viable utilities, it is very important to evaluate and address the related regulatory and economic issues. To justify their viability, the decision making process should be strengthen, these include multiple attributes like cost of energy, loss of load probability, energy not served, thermal load, etc [2]. There will be new requirements in two-way metering, connection charges, and tariff mechanisms to increase the rate of adoption of MicroGrids in the near future. Therefore, a detailed economic analysis continues to be a gap to be lled in. In addition to the envisaged increase in local reliability, improvement of voltage and power quality, and reduction of emissions, new market opportunities for MicroGrids are also being seen as one of the stronger signals for economic justication of their implementation and promotion. The key driver for deployment of sustainable MicroGrids in developing countries like India is the need to provide electricity in (remote, rural areas) and energy security especially in urban areas, reduction in green house gases, and power quality. In this context, this paper mainly covers the various issues which will strengthens the economics of MicroGrids. This paper also identies the enabling technologies for efcient operation of MicroGrids in the smart paradigm and details some of the pilot projects implemented in India. The general organization of the paper is as follows, In Section II, an overview of Indian renewable energy scenario and status of operational MicroGrids are presented. Section III presents various economic issues and challenges in the deployment of MicroGrids. The identied technologies for efcient and economic operation of MicroGrids are presented in section IV. Details of smart MicroGrid pilot projects are explained in section V. Section VI concludes the paper. II. I NDIAN R ENEWABLE E NERGY S CENARIO AND S TATUS OF M ICRO G RIDS In the past several years India has seen signicant growth in renewable energy generation. Fig. 1 shows installation of various energy resources as in the year 2009 and projected installed capacity in the year 2032. The growth in this renewable energy installation is a combined effect of regional energy development agencies, ministry of new and renewable energy (MNRE), and private sector participation [8]. Supportive government policies are also driving renewable energy installation. The planning commission of India has published integrated energy policy report (IEPR) which highlights the need to maximally develop domestic supply options and diversify energy sources for sustainable

V. S. K. Murthy Balijepalli is a research scholar with the Department of Electrical Engineering, Indian Institute of Technology Bombay, India, 400076. e-mail: vsk@ee.iitb.ac.in S. A. Khaparde is a professor with the Department of Electrical Engineering, Indian Institute of Technology Bombay, India, 400076. e-mail: sak@ee.iitb.ac.in. C. V. Dobariya is a senior project engineer with the Department of Electrical Engineering, Indian Institute of Technology Bombay, India, 400076. e-mail: chandv@ee.iitb.ac.in

978-1-4244-6551-4/10/$26.00 2010 IEEE

TABLE I S UNDARBAN REGION M ICRO G RIDS DETAILS Technology used Solar Power plant Solar home lightning Bio-mass Gasier Wind farm Installed Capacity 300 kW 3200 kW approx., 1000 kW 1000 kW Remarks Serving more than 1500 consumers 6000 Nos., serving about 30,000 people Serving around 1000 consumers Grid connected

Fig. 1. Renewable energy scenario in India

energy availability. According to IEPR, total renewable energy may account for 11-13% of Indias energy mix by the year 2032. It also suggests that the distributed nature of renewable energy sources can provide many socio-economic benets for the country. Reference [9] presents various issues and feasible solutions associated with large scale deployment of the renewable energy technologies in India. Grid Interactive Energy sources developed so far in India are Solar, Wind, Small Hydro and Bio Energy. It is estimated that bio-power may play a key role in the next couple of decades due to the availability of abundant bio-fuel of different forms in India. A. Status of MicroGrids In the segment of distributed energy resources, a total of 33 grid interactive solar Photo-Voltaic (PV) power plants in co-ordination with small amounts of bio-power have been installed in the country with nancial assistance from MNRE. These plants, with aggregate capacity of 2.125 MW peak are estimated to generate about 2.5 million units of electricity in a year. 1) Sagar Island MicroGrid - Sundarban region [10]: There are many isolated DGs of coordinated operation existing in the country. Popular among them is the Sagar island MicroGrid. This particular project is being jointly funded by MNRE, the Government of India, Indo-Canadian Environment Facility (ICEF) and West Bengal Renewable Energy Development Agency (WBREDA). The power demand in Sagar Island is, at present, met from solar power of aggregate capacity 250 kW and from a diesel generator of 400 kW. The total number of consumers in the Island is to the tune of 1500 now. However, there are large number of prospective consumers, who are waiting for electric power. To meet the requirements, WBREDA has decided to set up a wind-diesel hybrid power plant of capacity 500 kW. In all, the WBREDA has done the activities in Sundarbans in respect of the renewable energy programme as shown in Table I. There is a three tier tariff structure set based on actual electricity consumption for consumers in domestic, commercial, and industrial categories. The tariff rates are Rupees 5/kWh for domestic; Rupees 5.5/kWh for commercial and Rupees 6/kWh for industrial consumers. 2) Asia-Pacic Partnership (APP) programmes: AsiaPacic Partnership on Clean Development and Climate: APP

is the regional cooperation framework established by the leadership of US to supplement the function of Kyoto protocol [11]. At present, 7 countries (Japan, US, Australia, Korea, China, India, and Canada) are participating in this activity. They formed Renewable Energy and Distributed Generation Task Force (REDGTF) to conduct preliminary and feasibility studies for development of smart energy solution using various renewable energies in various countries. One such study has been carried out in Maharashtra, India for comprehensive evaluation criteria for distributed power using MicroGrid. At this moment, the pilot model plant based on the proposed development scheme for rural electrication is expected to be executed in India. The project will cover the construction of pilot model plant consisting mostly of biomass and supported by solar renewable energies. The village people will be given responsibilities of analysis/evaluation of the sustainable practicability in its operation and management (O&M) of power supply facilities. These projects are supported by the public-private partnerships. The candidate project sites are in Nandurbar district, Maharashtra state, India. These projects are expected to be completed by 2012-13. Training on O&M, technical verication of the projects are being jointly executed with Japanese Non government organizations (NGOs). III. E CONOMIC I SSUES AND C HALLENGES IN D EPLOYMENT OF M ICRO - GRIDS DGs/DERs are considered as the building blocks for the existence of a sustainable MicroGrid. Economics of MicroGrids are mainly dependent on the regulatory and the economic frameworks of DGs/DERs in the respective countries. The issues of MicroGrid economics can be broadly classied as shown in Fig. 2.

Fig. 2. Identied economic issues relevant to MicroGrids

A. Main Economic Issues MicroGrids have on-site generation. One of the unique aspects of MicroGrids includes providing heterogeneous levels of reliability to the end-users as per their requirements. Hence, in the economic evaluation of MicroGrid, the additional costs should be considered against the added customer benets from islanding capability as well as the additional utility grid costs of maintaining high system reliability. Participation of MicroGrids in the ancillary service markets is limited. However, MicroGrids can provide excellent local ancillary services in voltage support and others for end-users. These distinct aspects can be utilized properly for encouraging the MicroGrids. The relationship of MicroGrid with the distribution system is also an important aspect of MicroGrid economics. The operational constraints of MicroGrid economics might not be similar to those of centralized power system economics. A real time price signal for successful interface between customers and distribution utilities can be provided in a MicroGrid. This helps to achieve optimal use of resources by both MicroGrid and distribution/utility-side grid. There are various benchmarks available on the various operational aspects of different DG resources. The focus is now on the challenges to be faced in dealing with the adoptability of these DG/DERs in a MicroGrid. The biggest hurdle of adoptability concern is the economic viability in selecting a particular model/technology and implementing it with the intent of proliferating its continued usage for a sustainable future growth. Hence, technical challenges and requirements need to be addressed fully for their continuous usage. They include the co-ordination issues of DG/DERs etc., and successful parallel operation of MicroGrids with distribution networks. Mainly, technical challenges can be dealt based on the study and analysis of the existing MicroGrids all around the world, and by using the amassed knowledge on power system operations of large-scale grids. It is known that technical challenges of MicroGrid operation can be linked to the economic issues. Hence, it is required to apply the combination of basic economics of optimal investment and available technologies in the operation of MicroGrids. This points to an important issue of optimal technology investment, where the established and reliable tools are suitably applied. These denitely adds some considerable improvement to the MicroGrid economics. B. Emerging Economic Issues Some of the emerging economic issues related to MicroGrids are identied and expected to play a signicant role in the near future. The issues like joint optimization of demand and supply, joint optimization of heat and electric power supply, more focus on quality and reliability, metering arrangement, connection charges, and tariff mechanisms incorporating metering, prole and xed charges for use of transmission and distribution systems for export and import of energy, are recently coming into the picture of MicroGrid economics and are crucial to mould MicroGrids as public viable utilities. Joint optimization of heat and electric power supply using Combined Heat and Power systems (CHP) creates the potential

in MicroGrid system for improving the overall energy efciency. This is a suitable option for countries with cold climatic conditions to increase the viability options of MicroGrids. So, developing and adopting the required low-cost technologies to meet the requirements are needed. In the market participation point of view, joint optimization of demand and supply is one of the special features for MicroGrid economics. Here, supply consists of imports from the utility grid and exports from micro-generation of customer, where as the demand is of customer load. The demand and supply optimization will become easier in a MicroGrid since the generator and the consumer is one and the same decision maker. The important criterion of this optimization is the marginal cost of self-generation at any point of time as against the traditional load control algorithms like load shedding, interruptible tariffs, demand side management etc. The MicroGrid should know both its marginal cost of power generation at any point of time and the equivalent costs of investments in energy efciency. Through this it can easily decide the cost of curtailment for trading. C. An Indian View In developing countries like India, most people in remote areas are not able to derive benets of the ongoing electrication process. Since there is no power network available to connect the isolated villages to the central or state grids, more investments are needed. In this connection, the Government had long before initiated the process of rural electrication through renewables and other locally available distributed generation resources. On the other hand, people in semi-urban areas are not able to fully meet with their energy requirements. For people in urban areas, the focus is on power quality and reliability issues. This is due to the geographical diversity and customer area priority levels set by the Government. Owing to these demarcations, the theme of MicroGrids in developing countries has a different perspective and broader scope for discussion. In India, though there is an initiative for the encouragement of MicroGrids there is still a long way to go in overcoming certain hurdles. There is a strong regulatory framework for encouraging the independent renewable energy generation which constitutes the building blocks for MicroGrids. The current on-going rural electrication programs are mainly with the renewable generation. Some of the identied concerns which are predicted for the acceleration in the focus on economics of MicroGrids in India are as follows: 1) Financial Concerns, Environmental Benets and Cost Recovery: A critical issue in DG/DERs for rural electrication is the cost recovery and the implementation mechanism. Except small hydro, solar and wind power generation, other technologies are not market proven. Hence, they put some risk on the investment. In addition to the capital investment, the auxiliaries like reactive power support, storage capacity, etc., to maintain reliability and power quality of the supply, eventually burden the process. However there are some relief processes which hedge risk on the investments. A mathematical tool named, EADER is developed in [7] for economic analysis of stand-alone/grid-connected DG and MicroGrid. The EADER

has been used to nd optimal mix of wind, bagasse, and natural gas based generation for a proposed MicroGrid at Alam Prabhu Pathar, Maharashtra, India. For these isolated MicroGrids in remote areas (rural), it is benecial to link the DG system to an industrial load (agricultural cold storage, oil mill etc.) to improve its load factor and hence for enhancing its economic viability options. There is a possibility for the upcoming renewable generations to be registered under clean development mechanism (CDM) projects of Kyoto Protocol. 62% of the projects under CDM from India are based on renewable generation [12]. This strengthens the economic viability options on going for renewable generations under Microgrids. The Government has initiated the assessment of CDM potential in all new green eld power projects, and accordingly instructed the nodal agencies like power nance corporation, etc. Hence, all these happenings in developing countries like India have opened up the possibilities for a faster cost recovery. With enabling technologies that transform the isolated mode of operation into inter-connectivity with main grid (either transmission or distribution), MicroGrids can sell excess power to the utility grid. Costs decrease because of reduced energy storage, less downtime, equipment operating at maximum efciency, lower hardware expense and optimal power input control based on energy costs. The exibility accorded by this arrangement can be benecial. This also warrants research on the ensuing cost-benet analysis, taking into account all the technical constraints. 2) Policy Making: In areas where there is no electricity grid, there are minimum clearances/permissions required for setting up a DG system. This will be continued for a welldened period or up to a well-dened limit and encourages in a way for outcomes and not just outlays. Different policy experiments for implementation of DG in different regions are under execution. The Indian Electricity Act, 2003 provides the requisite framework for expediting electrication in rural areas by permitting operation of standalone DG systems, independent of the regulatory regime. Now, policy changes to accommodate MicroGrids in different forms are needed. The village panchayat aided by the state energy agency in consultation with technical experts will decide the appropriate technology option (biogas, bio-mass gasication, wind-diesel, micro-hydel, bio-oil-engine) for the respective villages. Financial institutions are encouraged to setup venture capital funds for energy entrepreneurs. 3) Ownership and Regulation Issues: Ownership is in different forms. Different DGs in the MicroGrid can have different owners, in which case several decisions may be taken locally, making centralized control very difcult. But as an independent MicroGrid, when coordinating with other MicroGrids and the main grid, it requires a corresponding centralized decision making process by prioritizing the DGs individually. At this stage, the question of immediate concern is, who may control what? [13] For the MicroGrids to widely happen in communities (both rural and urban areas) across the country, there needs to be a fundamental change from the electric utility industrys traditional focus on supply-side technology and infrastruc-

ture. It requires demand-side technology and infrastructure. To create a more consumer driven electricity system that is accountable to the consumer and to create a truly sustainable economic stimulus based on entrepreneurial innovation, it requires awareness among end-users/consumers and more policies incorporating standards and market boundaries. This will unlock the benets of MicroGrids and invite innovation and investment. 4) Tariff Structure: There is an attractive tariff structure for renewable energy generation in India. Power regulators had made incentive structures that encourage utilities to integrate wind, small hydro, co-generation etc., into their systems. Incentives have been provided to the energy generated as opposed to the capacity created. 5) RE obligations and REC Mechanism: Recently, obligation to purchase renewable power has been made mandatory in India by MNRE. Taking suitable measures for connectivity with the grid and sale of electricity to anyone, and also specifying a percentage of the total consumption of electricity in the area of a distributing business for purchase of electricity from such sources, have been mandated. According to Indian Electricity Act, 2003, Section 86(1)(e), regulatory commission should specify purchase obligation from renewable energy sources. In this line, different state regulatory commissions had made different RE purchase obligation percentages for a distribution licensee, captive consumers, open access consumers and which is usually decided based on the RE generation potential and other factors of the respective states. Now, India has also taken wide steps to encourage the large amounts of RE generation. To serve this purpose, MNRE has introduced the Renewable Energy Certicate (REC) mechanism in India. RE generators with capacity untied in Power Purchase Agreement (PPA) will have an option to sell electricity and REC separately. The report on conceptual framework of REC mechanism in India can be found in reference [14]. The eligibility criteria for participating in this mechanism is for RE technologies recognized by MNRE and grid connected RE generators of at least 250 KW capacity. National load dispatch centre (NLDC) will issue the RECs on intimating the RE injections by corresponding SLDCs. Power exchanges approved by the central electricity regulatory commission (CERC) will act as a medium for exchanging the REC certicates. 6) Government Subsidies [8], [15]: Subsidies for renewables may be justied on several grounds. A renewable energy source is environmentally benign. It may be locally available, making it possible to supply energy earlier than when a centralized system can do. Capital subsidies available for improving rural access have become uniform for both remote and grid-connected villages/habitations [8], Ministry of Power (MOP) [15] and MNREs are coordinating the outcomes of Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), MNRE rural electrication programme and the newly developed Village Energy Security program for development of rural MicroGrids. Similar coordination is also called for between the rural electrication programs, telecom and road connectivity initiatives and certain social sector programs. Bundling of services is likely to achieve greater access and is more likely to yield sustainable structures that are replicable

through separate franchises. 7) Fuel Requirement: Fuel requirement of a class of renewable technologies based on biogas, biomass and biofuel needs investment upon the infrastructure to supply the fuel continuously. The infrastructure involves transportation facilities, fuel storage, etc. Availability of these resources in the close vicinity of the plant is highly desirable to reduce the fuel cost. Reference [16] presents an optimization framework aimed at reducing the fuel consumption rate of the system while constraining it to full the local energy demand (both electrical and thermal). The solution of the optimization problem in [16] strongly supports the idea of having a communication infrastructure operating between the power sources. When the concerns as elucidated above are addressed in totality, in the long run, it would lead to an amorphous integration of various MicroGrids and the existing grid in India, at which point the economic benets become considerably visible. D. Summary of economic benets The economic benets of MicroGrids are manifold. In summary, there would be signicant reduction in transmission/distribution costing and losses, also improving energy efciency. Cumulative small scale individual investments of end-users/customers would lead to lower capital cost of central generations in near future and this may results in low-cost entries to the market. Usage of micro-generation within the neighbouring vicinity would make self sufciency a priority, subverting the need to export energy to the main public network at lower prices. Further, there is additional security and ancillary services provision guaranteed. In view of the above benets, along with the day by day increasing energy charges from conventional generating plant, the initial higher investment costs can be justied. The various identied technologies as explains in section IV may also enhance the economic viability and efcient operation of MicroGrids. This in turn makes the MicroGrid as public viable utility. IV. E NABLING T ECHNOLOGIES TO E NHANCE E CONOMIC VIABILITY AND E FFICIENT O PERATION OF M ICRO G RIDS To build sustainable power system for future, it is essential to bring the low-cost technologies which subscribe to lowered initial investment cost and decreased operational costs to the market. At the same time, they should also include enhanced control strategies. These are necessary to bridge the gap between local networks, and to create a modern infrastructure with capabilities of integrating the DERs. Often it is very difcult in every aspect to quantify the technologies in terms of economics. However, an attempt is made in this section to identify the various technologies which make MicroGrids feasible for future energy needs, in different aspects. The previous section dealt with the various issues and challenges along with the arguments related to the MicroGrid development in general and also in an Indian view. This section describes the possible solutions to overcome a few of the hurdles. The enabling technologies for secure energy scenario, which also minimize the investment and operational economics in the future are as follows:

A. Advanced Fischer Tropsch Synthesis [17], [18] The Fischer-Tropsch (FT) process is a catalyzed chemical reaction in which carbon monoxide and hydrogen are converted into liquid hydrocarbons of various forms. The principal purpose of this process is to produce a synthetic petroleum substitute, typically from coal or natural gas, for use as synthetic lubrication oil or as synthetic fuel. The procedure was based on revisiting the basic chemistry at the molecular level which has resulted in a powerful set of solutions for many of todays industries and sustainability challenges. Various feedstocks ranging from plant and animal biomass to petroleum coke and heavy crudes can be processed in these systems to produce a variety of synthetic fuels and other products. The same reneries and distribution infrastructure would be able to process and distribute this ultra clean transport fuel, fertilizer or replacement for natural gas. B. Waste Heat Generators [19], [20] Some technologies to enhance the economic viability of the MicroGrids are under development. One of them is the waste heat generator (WHG). It converts geothermal and industrial waste heat or pressure into emission free electricity. One of the prototypes has employed 190 o C water to vaporize a low condensing liquid in a closed system. It then uses the pressure from that expanding gas to spin a turbine like device that drives its generator. With a projection cost per kilowatt under $2,000, a 20, 40, or 100 kW units will be able to pay for themselves out of the energy cost savings in less than 3 years. In addition, WHG can be placed local to heat sources, right on the plant oor, saving piping costs and reducing heat loss. Some of these units are available in the Indian market [21]. C. Smart switches, relays and sensors Technical challenges include the design, acceptance, and availability of low-cost technologies for MicroGrids. Several technologies under development, including MicroGrid switches and advanced DG controls, allow the safe interconnection and use of MicroGrids. Power electronics based interconnection switches that can be used with a variety of DGs are required to replace their outdated and inefcient predecessors to allow the MicroGrid to manage and distribute power more efciently and reliably for becoming a smart microGrid. The generic design of the control system allows the use of faster power electronics. This power electronics interface can have signicant benets compared with circuit breaker technology because the system can be designed for seamless transfer applications [22]. These interconnection switches are designed to meet grid interconnection standards (IEEE 1547 and UL 1741 for North America) to minimize custom engineering, site-specic approval processes, and lower cost. D. Standards Development The standards provide a common portfolio for a variety of generation technologies. Absence of the standards slows down the proliferation of various renewable energy technologies available in a MicroGrid. IEEE P1547, IEEE 929-2000 and

IEEE 519 standards are available for grid-connected DG/DER systems [23], [24], which includes: Impacts of voltage, frequency, power quality, Inclusion of single point of common coupling (PCC) and multiple PCCs, Protection schemes and modications, Monitoring, information exchange and control, Understanding load requirements of the customer, Knowing the characteristics of the DG/DER, Identifying steady state and transient conditions, Understanding interactions between machines, Reserve margins, load shedding, demand response, Cold load pickup, additional equipment requirements, and Additional functionality associated with inverters. Similar standards need to be developed for MicroGrids (isolated/grid connected or rural/urban) as well, which will help in daily operation of such systems. Hence, large scale deployment of MicroGrids should be supported by international standards, and adopted worldwide. E. Energy Storage Technologies and Storage Integration The energy storage devices play an important role in enhancing energy production from the renewable energy technologies like wind and PV cell. The supply inconsistency due to intermittency of weather conditions can be mitigated up to some extent by providing backup from the energy storage devices. Various energy storage technologies include battery, ywheel, ultra-capacitor, superconducting magnetic energy storage (SMES), pumped hydro, compressed air energy storage (CAES), and hydrogen energy storage. Among these, the battery technology is the most developed, and is well established for a variety of applications. The other forms of energy storage are either still in the prototype stage of development or are not suitable for mass production [25]. Since electricity production from some of the renewable resources depends upon weather conditions, use of storage devices will enhance energy extraction. For instance, many wind plants produce much of their energy when it is not needed, and solar plants produce electricity based on daylight variations. The storage of renewable energy would allow to dispatch the renewable plants. The next issue presented centres on how to integrate these technologies. 1) Virtual Power Plant (VPP): The Virtual Power Plant allows us to remotely control and aggregate multiple energy systems and storage devices. Actually, VPP is still in hypothesis stage and there is no unique denition for the framework of VPP in the literature [26], [27]. Low inertial forces of DG/DERs in a MicroGrid will reect on the generationload balance adjustments. To overcome this, VPPs, creating sufcient inertial forces may be employed for commercial integration, which in turn increases the economic viability. Market participation at peak demands increases revenues, thus sending signals for sustainable options. F. Information and Communication Technologies The infrastructure development for the existing power system and the information and communication technology

(ICT) are highly important to realize sustainable energy scenario [28]. European research has taken an initiative to realize this need. The research aims to make the conventional power systems more intelligent, self-managing, and self-healing. The ICTs in this regard are capable of catering to many of the functionalities of the future electricity network. Two successful advanced ICTs are software agents and electronic markets [5]. Few of the important outcomes of ICTs are universal connectivity, services over the internet and web, increasing the intelligence of the grid, advanced fault detection and handling, and smart displaceable load options. 1) DER Co-ordination Architecture: A Way Forward: Due to their modular generation, the DER co-ordination issues will point to the decentralized control strategies. These require new architectures for their implementation. In this respect, theories presented to the research world are multi agent system (MAS) approaches and their possible applications are being explored. Many researchers are trying to apply MAS theories to nd possible solutions for MicroGrids operation. These are important for enhancing the viability options of the MicroGrids and inturn the effect can be seen in the effective operation by increasing revenues and in the initial investment cost recovery processes. V. T OWARDS S MART M ICRO G RIDS : A C ASE S TUDY IN I NDIA India faces formidable challenges in meeting its energy needs and in providing adequate energy of desired quality in various forms in a sustainable manner and at competitive prices. A. Smart MicroGrids The term Smart MicroGrid reects a new way of thinking about designing and building SmartGrids. Reference [29] details the SmartGrid initiatives and deployment strategies for the Indian scenario. There are some similarities between the SmartGrids and smart MicroGrids. The scale, the types of decision makers involved and the potential rate of growth are different for both. SmartGrids are realized at the utility and national grid level, involving large transmission and distribution lines, while smart MicroGrids are at the end-user side and have faster implementation. Smart MicroGrids are to create a perfect power system with smart technology, redundancy, distributed generation and storage, cogeneration or combined heat and power, and consumer control. This is to work together with the bulk power grid or system as an integrated whole to provide its consumers with maximum economic and environmental benets, reliability and efciency. The smart MicroGrid makes smart decisions about what clean energy source to run at what times, links to smart appliances, and regulates energy demand. It can optimize all of the above for cost reductions, energy savings and CO 2 emission reductions. The integration of multi MicroGrids at the distribution level will complement the goals of smart grids. Valence Energy to Develop First Smart MicroGrid in India [30]: This project is under contract with Palm Meadows,

a 330 premium home neighborhood developed by SA Habitat [30]. The MicroGrid solution will include smart home technology and an extensive smart meter platform that intelligently connects 83 kW of solar power generation and 2 MW of diesel generation and also offers power conditioning and demand response. The system will ensure reliable and cost effective power for the neighborhood, and limit the impact of grid power failures. VI. C ONCLUSIONS MicroGrid is a prospective approach which integrates various distributed generation technologies into electricity distribution networks with known advantages like deferred network expansion, improved voltage prole, reduced losses etc. The benets of interconnecting multiple systems can be realized on smaller scale by a MicroGrid. India has just started their effort in this direction with two small MicroGrids as described. The economic analysis of MicroGrids at planning stage is generally the function of various aspects like distance to grid, fuel availability, choice of technologies, subsidies, and the regulatory policies. The economics of operation would involve optimal schedule with the diversied generation technologies used for a particular MicroGrid. The key considerations for success of MicroGrid are development and utilization of safe and dependable communication infrastructure and control strategies. The enabling technologies like SmartGrid will play an important role in the success of MicroGrids. R EFERENCES
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V. S. K. Murthy Balijepalli is currently a research scholar with the Department of Electrical Engineering, Indian Institute of Technology Bombay, India. His current research interests include Transmission System Expansion Planning, data mining application to power systems, smart grids and governing standards.

S. A. Khaparde (M87-SM91) is a Professor, Department of Electrical Engineering, Indian Institute of Technology Bombay, India. He is a member of the Advisory Committee of Maharashtra Electricity Regulatory Commission (MERC). He is the editor of International Journal of Emerging Electric Power Systems (IJEEPS). He has co-authored books titled, Computational Methods for Large Sparse Power System Analysis: An Object Oriented Approach, and, Transformer Engineering: Design & Practice, published by Kluwer Academic Publishers and Marcel Dekker, respectively. His current research areas include power system restructuring, distributed generation, policy making and model building for emerging power markets.

C. V. Dobariya, is senior project engineer with the Department of Electrical Engineering, Indian Institute of Technology Bombay, India. His current research interests include Transmission System pricing, Distributed generation., etc.