According to Gopal Gajjar, a researcher with the Indian Institute of Technology in Mumbai, the recent blackouts in India that left hundreds of millions of people without power were the result of complex processes in the national grid. The problems faced by the Indian system are many (such as theft, distribution losses, free power, subsidies etc.). Recently there has also been a shortage of coal as new mines (required for new generation plants) are not getting environmental clearances. As a result, there has been approximately 15,000 MW of generation capacity built in the last 2-3 years, remaining idle. Too little capacity and too much demand were the "root" causes of the recent blackouts. According to Gajjar, these blackouts were "inevitable" and are rooted in the recent history of the Indian electric grid and national policies.
Gajjar provided the following analysis of recent events leading up to the blackouts: India faced several blackouts in the Mid-1990s and early 2000s. At that time the North, East and West systems were asynchronously operated, with only HVDC connections between them. There is no primary government control of frequency in India. Most of these old blackouts were caused by demand exceeding the supply, forcing the frequency below even 47.5 Hz frequency, causing some generators to shut down due to the under-frequency condition, which started the cascade and the whole grid to go down. There were no other under frequency relays for load shedding except at the generators. There were at least 4 such blackout events.
The power system engineers then came up with "ingenious" scheme to link frequency and over-demand. The main problem was demand exceeding the supply. The unwillingness of Indian States to raise tariffs; giving free power; theft; environmental regulations; and so on resulted in not enough new generation coming online. Now, with availability-based tarrifs (ABT) and unscheduled interchange of power (UI), implemented since 2002, if a state draws more power than its schedule, and frequency is below 50 Hz, it has to pay some penalty. At the same time the generators which supply more power than scheduled when frequency is below 50 Hz get some higher returns. So in this way ’frequency’ was used as a ’price signal’ to incentives for the generators to generate more.
That was in 2002. The three grids are integrated now with ac synchronous tie lines. India now has a Day Ahead Market. But ABT and UT are also in operation parallel to the Day Ahead Market. The frequency band has improved – now it rarely goes below 49 Hz. There were no new blackouts until now after ABT and UI and operators were happy monitoring the frequency and patting themselves on the back with their "ingenious" solution. But UI was a ’jugaad’ (a Hindi term that literally means an improvised arrangement or work-around, which has to be used because of lack of resources).
The use of ABT and UI was initially successful, but the system stopped evolving. The incentive for generations was not revised up enough and the penalty for overdrawing was also not revised up. There were some minor tweaking in UI but its core remained the same. The regular tariffs were also not changed in most of the states. As a result, it became common for generators to declare lower capacity and get a lower scheduled capacity, but then generate more and earn the incentives for over generation through UI. For states also it was advantageous to get power as a result of "poor forecasting" through UI, as the penalty was not so high. It was indeed cheaper to get power through UI than in the day ahead market. Also the financial situation of state utilities were poor, so they preferred to get power in UI and default on payment (as the payment was ex-post) rather than pay upfront in the day ahead market to purchase the required power.
This situation was so common that nobody bothered to notice it any more accept for routine issues of warnings to states that were overdrawing. As many as 300 warnings were issued in 2012 in the Northern region alone.
Due to a) experience of previous blackouts due to under frequency, b) linking of unscheduled interchanges to frequency and c) the fact that UI had become so common, the grid operators only monitored the frequency and did not bother enough to look at and worry about the tie line flows. If frequency was ’fine’ (above 49.5) then the system was ’secure’. But the events of these two blackouts show the fallacy of this thinking. Tie-lines between West and North were over loaded due to UI, even when frequency was about 49.7 Hz. Even if the grid operators had noticed it they could not do anything about it. If they asked any state to reduce the over demand situation, one can imagine the reply: "why are you worried? The frequency is in the safe region, and why deprive me of cheap power without penalty?"
This blackout was bound to happen one day. And everybody’s first reaction was; why did it happen when frequency was well above 49.5 Hz? India had seen its first blackout that is NOT due to under frequency and demand supply mismatch on 30th July 2012.
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