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Importance of Anticipatory Regulations As India's Data Centre Boom Sparks Grid Stability Concerns

Importance of Anticipatory Regulations As India's Data Centre Boom Sparks Grid Stability Concerns

Category : CEA

Commentary by Mr Parvesh Sharma


India is witnessing a rapid growth of data centres in the country. Installed data-centre power capacity has increased from 375 MW in 2020 to 1575 MW presently and is expected to reach around 17 GW by 2031-32. This has prompted Central Electricity Authority (CEA) to examine their impact on country’s power system and grid stability. As these loads are geographically concentrated and have 24X7 requirement, few states have raised concerns about their large and sudden purchases from power market. This exercise will build on earlier efforts by CEA, Central Transmission Utility of India Ltd. (CTU) and Grid Controller of India Ltd. (Grid-India) in the same area.

This proposed step reflects a change in regulatory philosophy in the electricity sector. The traditional planning used to focus on generation, transmission, distribution and the regulatory focus used to be on regulating tariffs, supply and economic transactions in the sector. However, the increasing penetration of Renewable Energy (RE), Battery Energy Storage Systems (BESS) and large load centres has made the institutions follow a more dynamic and system-oriented approach. The planners and regulators are now increasingly trying to regulate the behaviour of the system by moving from ex-post grid planning to anticipatory planning/regulation.

On supply side, RE generation by nature is variable and BESS is suitable for rapid response, balancing, ancillary services etc. On load side, data centres are large, concentrated and continuous loads with significant implications on transmission network, voltage management and system operations. Therefore, the central question before sector planners/regulators has rightly evolved from ‘how to price or supply electricity’ to ‘how this new kind of resources and loads interact to maintain grid stability, flexibility and security’.

  

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