"HARMONICS"- ATTRIBUTE TO PREMATURE FAILURE OF DISTRIBUTION TRANSFORMERS

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GUEST ARTICLE POWER TRANSFORMERS

“HARMONICS”- ATTRIBUTE TO PREMATURE FAILURE OF DISTRIBUTION TRANSFORMERS

Synopsis: Unlike Voltage-Sag, Voltage-swell, Interruptions, Voltage-unbalance Voltage-fluctuations, Transient conditions due to switching & lightening surges, etc. which are short lived, Harmonics is the component which shall neither die nor vanish from the Power Systems over a period of time unless otherwise harmonic filters are used. Harmonics are responsible for deteriorating the Power Quality. Many Distribution Transformers installed in the Commercial & office complexes, Malls etc fail prematurely. Most of the Distribution of Power Supply Utilities procure DTRs (Distribution Transformers) confirming to the IS: 1180(part-1)-2014[1] /IEEEC57.12.202017[2] irrespective of the location, where they are to be installed at . The causes of failure are generally reported to as over-loading or short-circuit in L.T. network in the complexes etc whereas the cause of failure of such DTRs is predominantly due to Harmonics only. The Distribution Transformers confirming to IS: 1180(part-1) -2014[1]//IEEEC57.12.20-2017[2] are manufactured to feed linear loads; however, they are also capable of feeding the non-linear loads which give rise to Harmonic distortion in sinusoidal wave to the tune of TDD (Total Demand Distortion) of 5% as stipulated in the BEE (Bureau of Energy Efficiency, India) Std. and IEEE Std.-519.-2014[3] The authors has narrated the ill-effects of Harmonics attribute to premature failure of DTRs in this Article and has also suggested remedial measures thereof. Key words and Acronyms: DTR (Distribution Transformer),THd (Total harmonic Distortion),TDD (Total Demand Distortion),PCC( Point of Common Coupling) K-Type Transformer, Non-linear Load (whose impedance continuously varies with its applied voltage Cycle), PQ (Power Quality). 1.0 Introduction: Prior to year 2018, IEEE std1159-1995 (Recommended practice for monitoring Electric power quality) was followed in India, however,

S PRESS RELEASETRANSFORMER

BIS has now defined the “DISTRIBUTION SYSTEM SUPPLY VOLTAGE QUALITY vide IS: 17036- 2018.[4] Now, It is mandatory on the part of Distribution Utility to abide by this IS and maintain; a) Frequency. b) Magnitude c) Wave form and d) Symmetry of line voltages a) (i) Supply frequency limits of the source connected to synchronised system + 4% / - 6%.however frequency range for the whole country as defined in IEGC (Indian Electricity grid code) as 49.9 to 50.05Hz. w.e.f. 17th Feb. 2014. as per CERC’s which is within the stipulations (ii) Supply frequency limits of the source without having connection to Synchronised system ±15% of 50Hz b) Voltage Magnitude in the band of Un±10 %. c) Low voltage harmonic distortion Limits.

Parameter *Special application General system #Dedicated system

THD 3.5% 5% 10%

Note:

* Includes Hospitals and Airports. # Exclusively dedicated to converter loads. d) Supply Voltage Unbalance: Ratio of rms value of negative Phase sequence component (fundamental) to rms value of positive phase sequence component (fundamental) of supply voltage 95% of each period of one week should be ≤2% 1.1 Following are the voltage wave shapes/Voltages which pollute the Power Supply to the Consumers;

Fig.1: Voltage wave shapes / voltages which pollute the Power Supply to the Consumers. In the present era/scenario, though the technology in the field of Electronics, Computer Science, IT, Lighting & illumination etc have grown by leaps and bounds, enabling every office, commercial stalls etc to save on time, money and manpower using electronic gadgets which are predominantly non-linear electronic gadgets like; Switched mode Power supplies (SMPS), Variable speed motors and drives, UPSs(Un-interrupted Power Supplies), PCs(Personal Computers), Laser printers, Photocopiers, FAX machines, Battery chargers, Florescent Light Ballasts etc however, the irony is that, all these electronic modern gadgets in-turn pollute the power supply by producing Harmonics contrary to maintaining PQ . Single phase non-linear loads are prevalent in the modern offices and commercial complexes which are responsible for giving rise to harmonic currents. 2.0. What Causes Harmonics? Harmonics are generated by electronic equipment with non-linear loads drawing in current in the form of abrupt pulses. These short pulses cause distorted current waveform which in-turn cause Harmonic current to flow into the power system.

Fig.2: Concept of linear and non-linear loads in a circuit. 2.1 Harmonics Waveforms:

Fig. 3: Harmonic Waveform [5]

The above figure (Fig no.3) depicts the distorted non-sinusoidal wave form which is the resultant waveform of fundamental waveform, 3rd harmonic & 5th harmonic wave forms. 2.2 Voltage & current profile of Linear & Non-linear loads; Sample wave forms of Linear and non-linear loads are depicted in fig.4 & 5 [6]

Fig. 4 : Voltage and current profile of linear load(Conventional bulb).

Fig. 5: Voltage and current profile of non-linear load (CFL).

Harmonics degrade the PQ level and also efficiency of the Distribution Transformers feeding the load particularly in the office complexes and commercial complexes. Following gadgets/systems are designated as non-linear loads on a Power-system/ Transformer which produce harmonics: Switched Mode Power supplies (SMPS), Variable speed motors and drives, UPSs (Un-interrupted Power Supplies), PCs (Personal Computers), Laser printers, Photocopiers, FAX machines, medical test equipment, Battery chargers, Florescent Light Ballasts etc. Single phase non-linear loads are prevalent in the modern offices and commercial complexes. 2.3 Sample Harmonic profile of a consumer load;

Fig.6.Harmonic current Profile

Fig.7 Harmonic Spectrum of Fig.6. 3.0 THD (Total harmonic Distortion) and TDD (Total Demand Distortion); The Total harmonic Distortion (THD) as a measurement indication of signal deviation from a pure sine wave. i)Current Distortion;

Where n=harmonic no, In= Amplitude of Current at nth Harmonic, I1= Amplitude of fundamental Current. ii) Voltage distortion;

Where n=harmonic no, Un= Amplitude of voltage at n th Harmonic, U1= Amplitude of fundamental voltage.

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iii) Total Demand Distortion;

Where I max Demand 4.0 What are triple – N Harmonic Components? • Distorted waveform in Power Systems contains only odd harmonic components, • Odd Harmonic phase sequence rotations are shown here under;

 Harmonics of the order h = 1, 7, 13,… are purely positive sequence.  Harmonics of the order h = 5, 11, 17,… are purely negative sequence.  Triple N Harmonics (h = 3, 9, 15, …) are purely zero sequence. Thus, are co-phasal. 4.1 Derivation of sequence rotation of odd harmonic currents [6];

Harmonics Harmonics A A B

B C

C Ph a rotation Phase s e rotation

Fundamental

Fundamental 00

3rd 0 O 120O 240O

(+)Ve 0 O 3x120 1200 O (0 O) 3x240 2400 O (0 O) Zero (+)Ve

5th3rd

00 0 O 5x120 O 3x1200 (00 ()240 O) 5x240 O 3x2400 (00 (120) O) (-)Ve Zero

7th5th

00 0 O 7X120 O (120 O) 7x240 O (240 O) (+)Ve `

5x1200 (2400) 5x1200 (00) (-)Ve

7th

00 7x1200 (1200) 7x2400 (00) (+)Ve

9t 9thh

11t 11thh

13t 13thh

15t 15thh

17t 17thh

00

00

00

00

00 0 O 9x120 9x1200 (00) O (0 O) 9x2409x2400 (00) O (0 O) ZerZero o 0 O 11x120 O (240 O) 11x240 O (120 O)11x1200 (2400) 11x2400 (1200) (-)(-)Ve Ve

0 O 13x120 O (120 O) 13x240 O (240 O)

13x1200 (1200) 13x2400 (2400) (+)(+)VeVe

0 O 15x12015x1200 (00) O (0 O) 15x24015x2400 (00)O (0 O) ZerZero o 0 O 17x120 O (240 O) 17x240 O (120 O)

17x1200 (2400) 17x2400 (1200) (-)(-)Ve Ve

Table.Table 2 2 4.2 Phasor representation of Odd- harmonic currents;

Fig.8: Phasor representation of odd –harmonic currents. 5.0 Current distortion Limits as specified by IEEE 5192014(120 V to 69 kV);

Maximum harmonic current distortion in % of IL Individual harmonic order (odd Harmonics)

ISC/IL 3≤h <11 11 ≤ h <17 17 ≤ h <23 23 ≤ h <35 35 ≤ h <50 TDD

<20 4.0 2.0 1.5 0.6 0.3 5.0

20< 50 7.0 3.5 2.5 1.0 0.5 8.0

50<100 10.0 4.5 4.0 1.5 0.7 12.0

100< 1000 12.0 5.5 5.0 2.0 1.0 15.0

>1000 15.0 7.0 6.0 2.5 1.4 20.0

Table 3. • ISC =Max short Current at PCC (Point of Common

Coupling) • IL = Max. Demand Load current (fundamental frequency Component) at PCC. • TDD=Total Demand Distortion, Harmonic current

Distortion in % of max Demand load current (15 or 30min Demand.) • The odd harmonic range is given from 3 to <50.Say for example: 23≤h<35 that means odd harmonics between the range 23rd to 35th. • point of common coupling (PCC): Point on a public power supply system, electrically nearest to a particular load, at which other loads are, or could be, connected.

The PCC is a point located upstream of the considered installation.

Fig.9A Fig 9B 6.0 Detrimental effects of Harmonics (Generalised):

Power systems can accommodate a certain level of harmonic currents but shall experience problems when the current harmonics are enhanced. As these higher frequency harmonic currents flow through the power system at load side as well as on PCC (Point of Common Coupling) side. The ill-effects caused by the harmonics are as follows;

• Flaring of Fire in multi-storied residential complexes. • High voltages and circulating currents caused by harmonic resonance. • Equipment malfunctions due to excessive voltage distortion. • Increased internal energy losses in connected equipment, causing component failure. • Shortening of Life-expectancy of Power equipment. • False tripping of branch circuit breakers • Metering errors. • Fires in wiring and distribution systems. • Lower system power factor, resulting in penalties on monthly utility bills. • Overheating of electrical distribution equipment, cables and Distribution Transformers. • Increase in neutral current. 6.1 Detrimental effects of Harmonics on the 3 Ph Distribution Transformers; A) Increase in losses in the Distribution Transformers. i) Increase in iron-losses; The iron-losses are due to hysteresis & eddy current phenomenon. The iron-loss due to hysteresis is proportional to the frequency and the iron-losses are caused by the eddy currents depend on the square of the frequency. ii) Increase of copper-losses and stray flux losses;

Increase in Copper-loss is due to increased square of the harmonic current and also skin effect associated high-frequency harmonics.

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iii) Presence of Harmonic circulating currents in the Delta windings. As most of the Distribution and Sub-transmission Transformers in the DISCOMs and Distribution Utilities in India are Delta-Star wound ones. Though the third harmonic components are prevented from propagating to upstream network of the Power supply system, however due to circulation of 3rd harmonic and triple N harmonic currents in the delta winding gives rise to heating of the Distribution Transformers resulting into reduction in the life expectancy thereof. B) Increase in Neutral Current: i) 1-phase loads are fed from Phase & Neutral. Unfortunately, 1-phase non-linear loads give rise to very high triple-N harmonic currents. In fact, they are odd multiples of 3 times the fundamentals. Since Triple- N harmonic currents (h = 3, 9, 15, …) are purely zero sequence currents, thus they pass through the neutral of Star connected Distribution Transformers in addition to normal 1-phase load currents ii) Neutral Current due to 3rd Harmonics; The wave shape of 3rd Harmonic current in the neutral is depicted by N-wave in the fig.10.

Fig. 10: Wave form of Triple N harmonic current. It may be noted that when any non-linear 3 phase load is fed through a 3 phase supply, then in addition to the 3-phase load currents there will be always 3rd and triple N harmonic currents through the neutral as shown in the fig.10. Further, if one or two-phases to ground fault occurs, the triple–N harmonic component shall add to the earth-fault current ie 3 I zero which are inherently zero sequence, raising the neutral current much higher. 6.2 Hazards due to above: i) Over a period of time due to excessive heating of the Distribution Transformers the life expectancy reduces by half with every 6OC. rise in temperature between 80OC to 140OC in case of mineral oil filled Distribution Transformers as stipulated in IS: 6600-1972 and IS: 2026 (Part 7)-2009 ii) Threat of fire hazard in the office complexes, residential complexes or Commercial complexes like shopping malls etc cannot be ruled out.

Fig 11: Such fire in the building complex may be because of fire in the neutral conductor of the DTR, attributed by Harmonics in the Electricity supply system. 7.0 Remedial measures: 1) The Distribution Utilities should monitor with PQ analyser from time to time if any consumer is exceeding the limit beyond as that mentioned in the Table 3 against stipulation in IEEE Std.519 (2014) at the PCC, failing which necessary penalty may be levied on him. 2) To avert pre-mature failures of the transformers procured confirming to IS: 1180 (part 1), it is essential to monitor the winding temperature of the DTRs and restrict the load on the same to the tune of say 70% of the capacity thereof. Thus, the cost of procurement of the DTRs shall increase. Note:a) Distribution Transformers confirming to IS: 1180 (part-1) are capable of feeding linear loads only. b) It a was established by experiments etc as stated in ANSI/ IEEE 57-110 that a de-rating of 70% of the transformer capacity is required to be done in case the Transformers manufactured, to feed linear loads are utilised for feeding Harmonic loads.

3) *Use of K-rated transformers, which are developed to carry triple N harmonics created due to the use of on-linear loads. Such transformers, though do not remove harmonics from the power supply but are made robust enough with increased neutral conductor size to withstand the expected hazards which otherwise a Distribution transformer of the same rating manufactured in confirmation to IS: 1180 (Part-1) shall not sustain. *Note: Salient points regarding K-rated transformers is narrated in Cl. 8.0 and algorithm for calculation of K -factor is narrated in Cl.9.0. 2) In the present day senario, the existing

DistributionTransformers in the Office and Commercial complexes may be rertofitted with Natural or Synthetic

Ester fluids which have flash point >300O C as against 140OC of conventional mineral oil, with neutral return cable capable of carrying double the Phase current. 3) Use of Harmonic Filters.

8.0 What are K-Type transformers:[8] UL (Underwriters Laboratories-A Global scientific Laboratory which issues Standards for equipment for equipment safety) has established K-factor ratings in the Std. UL1561: As K-1,4,9,13,20,30,40 & 50. Such, Transformers have the following salient features (i) Neutral connection leads are capable of carrying 150 to 250% times of current carrying capacity that of phase connection leads. (ii) Smaller parallel windings on the secondary side of the transformers to compensate for skin effect associated with high frequency harmonics. (iii) Transposed delta winding conductors. (iv) Electrostatic shielding between primary and secondary winding. The actual K-rating transformer describes the ratio of non-linear load to linear load it can handle. As the amount of non-linear load increases in respect to linear load higher K-rated transformers shall be required as detailed here under; • K-1 Transformer is capable of feeding 100% linear load only. • K-4 Transformer shall handle100% linear+50% non-linear load. • K-13 Transformer shall handle100% linear+100% non-linear load.

• K-20 Transformer shall handle100% linear+125% non-linear load. • K-30 Transformer shall handle100% linear+150% non-linear load. 9.0 Algorithm for calculation of K-factor [9];

Where fh is the frequency in Hz of harmonic h. 10.0 Conclusion; a) Strict monitoring by Distribution Utilities for limiting TDD of each consumer as defined in the IEEE 519. b) For averting failure of conventional Distribution transfromers installed for feeding office comlexes and commercial complexes, loading up to 70% is recommended ie for meeting any load demand, higher capacity DTRs are to be Installed.For procurement of such higher capacity

Transformers,enhanced financial burden has to be borne by DISCOMS & Distribution Utilities . Example:If the demand is 200KVA then adequacy of capacity would be; 200/0.70=285.71KVA, the nearest rating available is 300 KVA therefore instead of 200KVA ,a 300KVA Distribution Transformer is recommended to be installed. c) Considering the above discussion, it is felt that the

DISCOMS and Disribution Utilities in India must procure

K-13 rating transformers for the office complexs and commercial complexes, wherein the balanced neutral is equal to un-balanced neutral current.The neutral current in such transformers was caluculated as 173% of the phase current {ref:para;9.0,2 (b)} Therefore in this Distribution

Transformer the neutral conducer size is provided such that it can carry 200% of the Phase current. d) In the present day senario, the existing DTrs in the Office and Commercial complexes may be rertofitted with Natural

Ester fluids which have flash point >350 deg. C as against 140 deg. C of conventional mineral oil, with neutral return cable capable of carrying double the Phase current. References;

1. IS:1180 (part-1)-2014 for Distribution Transformers 2. IEEEC57.12.20-2017[2] for Distribution transformers 3. IEEE Std. 519-2014. IEEE Recommended Practices and

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Requirements for Harmonic Control in Electrical Power Systems. 4. IS: 17036-2018. “Distribution System Supply Voltage Quality 5. ABBs’ hand book on protection, control and electrical devices. 6. Dr.K.Rajamani ,of Power Linkers, presentation on “Power Quality Overview-Practical aspects” in SIT Bhubaneswar in Feb 2020. 39

7. Copper Development Association –Electrical Design, A good practice guide, CDA publication 123, 1997. 8. KeithLane, PE,Lane Coburn & Associates,LLC,Woodinville,Wa-Sizing neutrals for Transformers. 9. IEEE std. 1100-1999. EM • Holds a B.E.(Hons) degree in Elect. Engg. From the University of Jabalpur in the year 1968. • He is a member of India ’ s Society of Power Engineers (MSPE), a Fellow of Institution of Engineers, India (FIE),a Chartered Engineer (CE) and a member of CIGRE’India. • He was a former Chief Engineer and Head of Department (Testing & Commun.) in M. P. Power Transmission Co. Ltd. Jabalpur (India). • He was a member of the panel of Expert Professionals at the Central Power Research Institute (CPRI), Bangalore, from 2008 to 2012. • He had worked as an Advisor (Testing) at SOUTHCO, a DISCOM in the State of Odisha, • He was a Metering consultant to M. P. Electricity Regulatory Commission. • He was the Course Director for the Graduate Electrical Engineering Trainees at the Training Institute of MPPTCL, Jabalpur for 2 batches (2006 to 2008) • He has published many technical Aricles in the National and International journals and presented techical papers at various national and international conferences pertaining to the Power Transformers and other eqipments of power sector. • He had been awarded a plaque by the Institution of Engineers(India),Kolkata, in Oct. Author Er. K.K. Murty • 2015,in Enginee Enlisted r recogn ing at in the ition of his eminance a the National level. Transfromers Technology nd Co contribu sultants tion corn to er the as in profession ternational of Electrical Transformer Cosultant from India.

–Author–IMRAN KHAN

iii) Presence of Harmonic circulating currents in the Delta windings. As most of the Distribution and Sub-transmission Transformers in the DISCOMs and Distribution Utilities in India are Delta-Star wound ones. Though the third harmonic components are prevented from propagating to upstream network of the Power supply system, however due to circulation of 3rd harmonic and triple N harmonic currents in the delta winding gives rise to heating of the Distribution Transformers resulting into reduction in the life expectancy thereof. B) Increase in Neutral Current: i) 1-phase loads are fed from Phase & Neutral. Unfortunately, 1-phase non-linear loads give rise to very high triple-N harmonic currents. In fact, they are odd multiples of 3 times the fundamentals. Since Triple- N harmonic currents (h = 3, 9, 15, …) are purely zero sequence currents, thus they pass through the neutral of Star connected Distribution Transformers in addition to normal 1-phase load currents ii) Neutral Current due to 3rd Harmonics; The wave shape of 3rd Harmonic current in the neutral is depicted by N-wave in the fig.10. Imran Khan did his Graduation in Engineering from University Institute of Technology, affiliated Rajiv Gandhi Proudyogiki Vishwavidyalaya, Bhopal (M.P.) in 2006. Experience Fig. 10: Wave form of • Triple N Worked as Lecturer in Government Polytechnic, Seoni.harmonic current. It may be noted that when any • non- Worked as an Engineer in SEC Railway (S&T) Department, Bhilai from 2006 to 2007. linear 3 phase load is fed through a 3 phase supply, th • en in 16 years of rich experience in MP. East-zone DISCOM as Assistant Engineer/ Nodal addition to the 3-phase load currents there will be always 3rd Officer (HVDS)/ Executive Engineer. and triple N harmonic currents through the neutral as s• how Presently working as Executive Engineer (Store-M.P. East-zone DISCOM).n in the fig.10. Further, if one or two-phases to ground fault occurs, the triple–N harmonic component shall add to the earth-fault current ie 3 I zero which are inherently zero sequence, raising the neutral current much higher. 6.2 Hazards due to above: i) Over a period of time due to excessive heating of the Distribution Transformers the life expectancy reduces by half with every 6OC. rise in temperature between 80OC to 140OC in case of mineral oil filled Distribution Transformers as stipulated in IS: 6600-1972 and IS: 2026 (Part 7)-2009 ii) Threat of fire hazard in the office complexes, residential complexes or Commercial complexes like shopping malls etc cannot be ruled out.

S TRANSFORMER Fig 11: Such fire in the building complex may be because of fire in the neutral conductor of the DTR, attributed by Harmonics in the Electricity supply system. s 7.0 Remedial measures: 1) The Distribution Utilities should monitor with PQ analyser ehtgnideecxesiremnocynafiemitotemitmor uf limit beyond as that mentioned in the Table 3 against stipulation in IEEE Std.519 (2014) at the PCC, failing which necessary penalty may be levied on him. 2) To avert pre-mature failures of the transformers procured confirming to IS: 1180 (part 1), it is essential to monitor the winding temperature of the DTRs and restrict the load on the same to the tune of say 70% of the capacity thereof. Thus, the cost of procurement of the DTRs shall increase. Note:a) Distribution Transformers confirming to IS: 1180 (part-1) are capable of feeding linear loads only. b) It a was established by experiments etc as stated in ANSI/ IEEE 57-110 that a de-rating of 70% of the transformer capacity is required to be done in case the Transformers manufactured, to feed linear loads are utilised for feeding Harmonic loads.

INTERVIEW WIRE & CABLES MR. PRABHAJIT KUMAR SARKAR, MD & CEO, POWER EXCHANGE INDIA LIMITED

PXIL continues to have major market share in the Term Ahead Market. In FY22, our market share was 44% per cent and this year, till August 2022, the market share has been 52%. In this segment, PXIL has been providing various innovations in transactions, including implementation of Dynamic and Static contracts along with a digital transaction platform that allows anywhere, anytime access that has led to participants transacting more and more on the PXIL platform. The benefits of competition in terms of better services, innovation and efficiency are truly visible in the Term Ahead market in our country.

Q.Let's begin by gaining a grasp of recent PXIL trade volumes. How has the growth been in general?

PXIL’s trading volumes have been continuously increasing over the last few years. In the last financial year, FY 2021-22, the total transaction done on PXIL was 5,905 MUs, which itself was more than the previous year and substantially more than the year prior to that. The growth trajectory has continued in this financial year as well. By the end of August-2022, i.e. within four months of this FY 2022-23, the total volume traded is 5618 MUs, which is equivalent to volume traded in the entire last FY 2021-22. The Term Ahead Market and Green Term Market are major contributors for increased volume, and our aim is to more than double from existing levels by end of the year. PXIL has also been able to successfully demonstrate traction and viability of its Day Ahead Market, where continued transactions have taken place for several months now. While the volumes are muted, yet the need for competition in the Collective segment comprising of Day-Ahead and RTM is consistently demonstrated. Market participants across the country are looking forward to the implementation of market coupling to give a fillip to competitive efficiencies in this collective transactions segment. Q.What is the PXIL’s participant profile as of right now?

The market participants transacting at PXIL include trading licensees, State Electricity Distribution Companies (Discoms) and power procurement corporations, Independent Power Producers (IPPs) and Open Access (OA) consumers from across the country. All these participants regularly transact on the PXIL platform on a bouquet of products. On PXIL’s proprietary trading platform, ‘PRATYAY’, buyers such as Discoms, large industrial and commercial consumers, etc; and sellers such as Independent Power Producers (IPPs) and Captive Power Plants (CPPs)can purchase and sell electricity on a 24x7 basis. PXIL thus provides a digital platform for this purchase and sale for delivery of electricity as well as for settlement of all payments on a daily basis for such transactions. In addition to contracts for transactions of conventional electricity, with the introduction of Green Day Ahead Market, Green Term Ahead Market and Hydro Contracts, different entities from the Renewable space have also started transacting on PXIL platform e.g. Wind, Solar, Small Hydro and Large Hydro, etc. Q.Recently, the Green Term Ahead Market (GTAM) that PXIL launched reached its one-year anniversary. How did the performance go?

GTAM has enabled participants to meet their Renewable energy trading requirements. The GTAM Contracts were introduced on ‘PRATYAY’ system from 24th March 2021. During FY 21-22, nearly 1435 MUs of renewable energy was transacted in different GTAM Contracts. During the 5-month period ending 31st August 2022, nearly 770 MUs of renewable energy is transacted resulting in 56% market share in this segment. The trade volume in GTAM Contracts is expected to increase consistently as it is closely aligned to India’s voluntary commitment of ensuring 50% of installed generation capacity in 2030 from non-fossil fuel sources. The proposed long duration Contracts for transacting in Renewable energy would provide additional avenues for transacting in Renewable power for longer duration up to three months ahead. Q.PXIL saw about a year ago that it was experiencing increasing share in emerging market niches like the Term Ahead Market. Please talk about. Is this pattern still present?

PXIL continues to have major market share in the Term Ahead Market. In FY22, our market share was 44% per cent and this year, till August 2022, the market share has been 52%. In this segment, PXIL has been providing various innovations in transactions, including implementation of Dynamic and Static contracts along with a digital transaction platform that allows anywhere, anytime access that has led to participants transacting more and more on the PXIL platform. The benefits of competition in terms of better services, innovation and efficiency are truly visible in the Term Ahead market in our country.

Q.Tell us about the most recent developments on the Hydro Contracts, which was introduced in August this year.

PXIL introduced the Hydro bid type in TAM and Hydro Green Term Ahead Market (Hydro GTAM) contracts on August 8, 2022 on ‘PRATYAY’ software system after grant of approvalsfrom CERC. The Hydro bid-type in Intra-Day and Day-Ahead Contingency Contracts are subsets of Contingency contracts and the Hydro

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GTAM Contracts are subset of GTAM introduced by PXIL in March-2021. PXIL introduced Intra-Day and Day Ahead Contingency Contracts in this segments wherein Hydro energy can be transacted to meet current day’s and next day’s requirement. The salient features of Hydro Contracts are: a. Hydro GTAM: Purchase of Hydro power enables obligated entities to fulfill their Hydro Power Obligation (HPO) for the year. PXIL issues Hydro power purchase certificate to all Buyers purchasing Hydro power under Hydro GTAM

Contracts. Sellers in Hydro GTAM Contracts are Large

Hydro Plants (‘LHP’) commissioned after 8th March 2019 b. Hydro bid-type in TAM: Purchase of Hydro power will enable obligated entities to fulfill their ‘Other RPO’ requirement for the year as prescribed in MoP Order dated 22ndJuly 2022. Exchange issues Hydro power purchase certificate to all Buyers purchasing Hydro power under Hydro bid type in TAM Contracts. The Sellers in these Hydro Contracts are

Small Hydro, LHP and Discoms with surplus hydro energy Most of the sale in the Hydro Contracts is from specific sellers especially Hydro IPPs and State utilities and remains seasonal in nature with most transactions during April to September. PXIL is continuously engaging with Hydro plants and State utilities across the country to enhance the use of these contracts for meeting their Hydro purchase requirement. INTERVIEW

Q.Energy exchanges account for only about 7% of India's overall electricity usage, according to a recent study. Given that a large portion of India's electricity generation is enshrined in long-term PPAs, how can this be improved?

Discoms in India predominantly buy electricity from power generators under long-term (typically 25 years) contracts. For seasonal and daily variations in demand compared to their supply tie-ups, they use short and medium term contracts ranging from few hours to several months. Such shorter contracts are transacted bilaterally between Discoms or via Power exchanges or Traders. The purchase of power through power exchanges has reached 7.7% of the total electricity consumption. This growth has mostly been on the back of transparency in pricing of power as well as a payments framework which has ensured payments to be made and received on a daily basis without any defaults. There is a strong impetus to utilise the exchanges, given the benefits they have shown to development of the power sector in the country, by introducing more contracts of various tenures and segments. The draft National Electricity Policy has already mentioned the need to enhance the exchange based transactions to 25% of the total electricity consumption from the present levels. In the recent past, the Ministry of Power (MoP) has issued a discussion paper on ‘Market-based Economic Dispatch of Electricity’ (MBED). The paper proposes a day-ahead market where Discoms and Generators, both inter-State and IntraState generators, are to submit their demand and supply orders on Power exchange platform. The objective is to dispatch the power that costs the least, first, by giving Discoms the ability to source power from cheap generators at exchange-discovered price, irrespective of the location of the generator, as long as grid security is maintained. We believe all these efforts would soon translate into an overall improvement in the utilisation of power exchange platforms in the country.

Q.Furthermore, power exchanges accounted for more than half of the short-term energy market's 9–11% share of total electricity consumption. How can exchanges gain more market share in India's market for short-term energy?

The vision of our policy-makers, as well as the intent of our regulators towards expanding the role of power markets in our country is very clear. This has also been made evident in the draft National Electricity Policy which talks about expanding the power markets to 25 per cent by the year 2023-24. With the various initiatives that are in the pipeline, the breadth and depth of markets is expected to increase manifold over the next few years. The resolution of jurisdictional boundaries between SEBI and CERC related to electricity transactions has enabled introduction of longer duration delivery-based contracts on Power exchanges along with the introduction of derivatives in electricity to be regulated by SEBI jointly with CERC. The longer tenure Contracts enables participants to transact in conventional and/or Renewable power for duration up to 90 days / 12 weeks / 3 months, providing opportunity to participants to meet their demand/supply requirements for a longer horizon. The longer tenure Contracts allows Exchanges to play a key role in providing other short-term transactions (with

delivery duration greater than a week) through the Power exchanges, leading to greater transparency and efficiency in the transaction of such contracts. The market re-design developments would be initiated by implementation of MBED, wherein the spot market share is expected to increase from nearly 4 per cent to few multiples in a short span of time. The Market coupling among Power exchanges, Integrated Day Ahead Market, cross-border electricity transactions between India and neighbouring countries, market-based ancillary services contracts, National Open Access Registry (NOAR), General Network Access (GNA) Regulation, draft IEGC 2022, strengthening and deepening of REC mechanism, etc. are few initiatives leading the change in the Power Market in our country.

Q.A new private energy exchange has commenced operation. How do you anticipate private players' ability to compete? What is it that a participant in an energy exchange ultimately seeks?

PXIL welcomes competition in the Power exchange space. Competition will result in innovation and increase in service offerings of exchanges that will ultimately benefit market participants. The multi-exchange model that we have in the power market in our country is a unique structure worldwide. For such a market model to translate into actual competition on the ground, it is important that the market structure be corrected to foster competition in the collective segment. Some steps towards structural corrections like market coupling have already been taken. It is critical that these are implemented urgently so that competition can truly thrive, and market participants and electricity consumers across the country are benefited. PXIL has always been able to compete effectively and buyers and sellers across the country have validated the need for competition to thrive amongst exchanges. Customers find value in enhanced services, better connectivity, innovations in contracts and continuously improving digital transaction platforms all of which result in greater efficiency of transactions and better service to their end-customers. Q. PXIL has already completed 14 years of presence. What are your plans for the upcoming years? What is your overall outlook for the power sector?

PXIL has commenced its market operations in 2008 and is in its 14thyear of Exchange operations. It has renewed its focus to meet the requirements of market participants by innovating its technology offering and products. In January-2020, PXIL introduced the ‘PRATYAY’ software system to meet the ever-changing transacting needs to market participants. The ‘PRATYAY’ system is developed with modular approach that provides flexibility to introduce new Contracts in ‘plug-and-play’ model thereby reducing ‘time-to-market’ for any new Contract. PXIL has introduced Hydro Contracts recently and would shortly be introducing longer tenure Contracts for duration up to 90 days ahead with different price discovery mechanisms, e.g. Uniform Price similar to existing DAM / RTM / REC and Reverse auction similar to existing auction transactions opted by Discoms. New Contracts that are in Regulatory consultations are Ancillary Services Market Contract, Capacity Contracts and increased tenure of longer tenure Contracts up to 11 months ahead to meeting transaction requirements of market participants. As the short-term power market expands and the above contracts are introduced by PXIL, the business volume of the exchange would increase in a short period of time. As Discoms strengthen their internal system/process to undertake accurate demand-supply analysis they would concentrate their purchases through the Exchange platform instead of solely depending on the costlier power contracted under long-term PPAs, the outlook for PXIL remains encouraging. Furthermore, there are enabling regulatory provisions, which once implemented would enhance the competitive efficiencies of the power market. Ultimately, the Exchanges are marketplaces, where the buyer and seller can efficiently and transparently manage their portfolios better and we from PXIL continue to strive to make that experience better for all our participants every day. EM