No. 271312017- APDRP

Government of India Ministry of Power

Shram Shakti Bhavan Rafi Marg, New Delhi Dated 07 May, 2018

OFFICE MEMORANDUM

Subject: Continuation of "National Smart Grid Mission" (NSGM) beyond March, 2017 upto March, 2020-reg.

In continuation with Ministry's earlier Order No. 20/13(2)/2009-APDRP dated 27.03.2015(copy enclosed), sanction of the Competent Authority is conveyed for continuation of National Smart Grid Mssion (NSGM) beyond March 2017 for accelerating the Smart Grid Activities in India with estimated outlay of Rs 990 crore (GBS of Rs. 312 crore) for 1 ^st April, 2017 to 31 ^st March, 2020. The details of outlay and CBS are in the Annexure-I.

2. During the currency of NSGM in the above period, the implementation of Smart Grid projects shall be expedited and timelines adhered to so as to showcase the demonstrated benefits of these pro,ects on ground. NSGM should continue its focus on sustainable deployment models of Smart Grids

3. Considering that Smart Grids would supplement the efforts in Smart Cities, efforts would be made to initiate and complete Smart Grid Projects in the identified smart cities as well.

4. Other terms and conditions shall remain the same as approved for Xll plan vide 0M dated 27/03/2015 (copy enclosed).

5. This issues with the concurrence of Finance Branch of the Ministry of Power vice their Dy. NC.  113/Fin/2018 dated 02.05.2018.

(G Swan Za L an)

Under Secretary (IPDS) Tel: 23708051

To

Chief Secretaries of all States

1. Energy/Power Secretaries of all the State Governments
2. CMDs of State Power Utilities
3. Chairman & Managing Director, Power Finance Corporation Ltd. New Delhi.
4. CMD, PGCIL, Gurgaon.

Copy to:

1. Director, Cabinet Secretariat, Rashtrapati Bhavan, New Delhi.
2. Ministry of Finance, Department of Expenditure (Director, Plan Finance Division-I), North Block, New Delhi.
3. Ministry of Finance, Department of Economic Affairs, North Block, New Delhi.
4. NITI Aayog, New Delhi.
5. Chairperson, Central Electricity Authority, R.K. Puram, New Delhi.
6. Finance/Budget Section, Ministry of Power, New Delhi.
7. Controller of Accounts, Ministry of Power, New Delhi.
8. Principal Director of Audit, Economic & Services Ministries, AGCR Building, I.P. Estate, New Delhi.
9. 14^th Finance Commission, Ministry of Finance, 9^th Floor, Jawahar Vyapar Bhavan, STC Building, New Delhi-110001.

Copy also to:

1. PS to Minister of State for Power (Independent Charge)
2. PPS to Secretary (Power)
3. PS to Joint Secretary (Dist) / JS&FA / All JSs.
4. US(Finance)/US(Budget), Ministry of Power
5. Director, NIC Cell, Ministry of Power with a request to upload the same on website of Ministry of Power.

Annexure-I

Estimated Expenditure Outlay for April, 2017 to March, 2020

(Rupees in Crore)

No. 20/13(2)/2009 API)RP

Government of India Ministry of Power

Shram Shakti Bhavan, Rafi Marg,

New Delhi, Dated 27 March, 2015

OFFICE MEMORANDUM

Subject: "National Smart Grid Mission'^t(NSGM)

Sanction of the President of India is hereby conveyed for establishment of a National Smart Grid Mission (NSGM) in Power Sector to plan and monitor implementation of policies and programmes related to Smart Grid activities in India. NSGM will be housed under Ministry of Power (MOP) considering the thct that most of the prominent stakeholders (DISCOMs, Regulators, Electrical Manufactures, Central Electricity Authority' etc.) för Smart Grid are associated with MOP. Other concerned Ministries like Ministry of New and Renewable Energy (MNRE), Ministry of Urban Development (MoUD) and Ministry of Heavy Industry (MoHl) would also be associated with the Mission.

2. The total estimated cost for all the projects and NSGM activities for 12^th Plan is Rs 980 crore including a budgetary support of Rs 338 crore. Details are given in Annexure-I.

3. It is important to note that Smart Grid is a dynamic and evolving concept due to constant technological innovations. Therefore, the objectives, structure and functioning of NSGM must be such as to allow sufficient freedom and flexibility of operations without needing to refer the matter to different Ministries / Agencies frequently. Accordingly, NSGM will have a three tier structure (Annexure-Il). Details are as follows:

a)      At the apex level, NSGM will have a Governing Council headed by the Minister of Power. The structure and membership of the Council is at Annexure-Ill. The Governing Council will have necessary functional and financial autonomy within the overall budgetary allocation for meeting its objective of rolling out Smart Grid operations in ditTerent parts of the country. Towards this end, the Council will carry out the following functions:

(i)        To approve policies and programme for smart grid implementation in the country.

(ii)       To approve the administrative and financial procedures from time to time for the effective functioning ofNSGM

(iii)      To approve the annual budget of NSGM

(iv)      To cause the audit to be done and to adopt the audited accounts.

(v)       'Vo review the implementation of NSGM's policies and programmes.

(vi)      To take such other steps for meeting NSCJM's objectives as are considered necessary, within the overall approval.

The Council will meet on a halfyearly basis.

b)      At the second level, the NSGM will have an Empowered Committee headed by Secretary (Power). The structure and membership of the Empowered Committee is at Annexure-IV. The Empowered Committee will carry out the following functions:

(i)        To provide policy input to Governing Council

(ii)       To approve specific Smart Grid projects and subsequent revisions/ modifications.

(iii)      To approve procedures / guidelines for Smart Grid projects

(iv)      To approve procedures / guidelines for recruitment, hiring of consultants / advisers / experts, funds allocation etc.

(v)       To monitor implementation of Smart Grid projects.

(vi)      To approve the detailed structure, powers, procedures and guidelines from time to time for the smooth functioning and operation ofNSGM Project Management Unit (NPMU).

(vii)    To permit mobilization of resources from bilateral and multilateral agencies, financial institutions etc., over and above the budgetary allocation

(viii)  To take other steps as directed by the Governing Council to meet objectives of NSGM.

The Committee will meet on a quarterly basis.

c)      In a supportive role, it is proposed to have an NSGM Technical Committee headed by Chairperson (CEA). The structure and membership of the Technical Committee is at Annexure-V. The Technical Committee will support the Empowered Committee on technical side and will carry out the following functions:

(i)        To develop standards, technology selection guidelines,

(ii)       To carry out technical review of projects / activities / documents,

(iii)      To prepare guidelines and procedures for training & capacity building etc.

(iv)      To take other steps as directed by the Governing Council / Empowered Committee to meet objectives ofNSGM.

The Committee will meet as per requirement.

d)      For day-to-day operations, NSGM will have a NSGM Project Management Unit (NPMU) headed by the Director NPMU. He will be a Member of the Governing Council and Empowered Committee, and Member Secretary of Technical Committee. NPMU will be the implementing agency for operationalizing the Smart Grid activities in the country under the guidance of Governing Council and Empowered Committee mentioned above. NPMU will also interact with development partners and mobilise international cooperation as per direction of Empowered Committee.

e)      NPMIJ will be housed at POWERGRID. The present India Smart Grid Task Force (ISGTF) Secretariat will be merged with the NPMU, to be headed by an Executive Director level officer, who will be designated as the Director NPMU. This body will be set up in POWERGRID exclusively for NSGM. NPMU will report directly to the Empowered

Committee and Governing Council of NSGM through MOP. Director NPMU (i.e. head of NPMU) will report to Empowered Committee through the Joint Secretary (Distribution), MOP

f)       The NPMU will not undertake any permanent recruitment. Instead, it will be managed by officers and staff on secondment from POWERGRID and other organisations (including PSUs) or through contract appointment on temporary basis either directly or through manpower supply agencies.

g)      NPIVTU will have all necessary resources including requisite manpower to facilitate taking up of Smart Grid activities on a large scale in the country, and the Empowered Committee will have the necessary authority in this regard as indicated in para 3 (b) above. For smooth and proper implementation of Smart Grid activities, suitable experts, consultants and agencies can be appointed by NPMU after approval by the Empowered Committee. The services of Energy Efficiency Services Limited (EESL), which is a Joint Venture ofNTPC, PFC, REC & P()WERGRID may also be utilized in this regard. The EESL works as ESCO (Energy Service Company), as Consultancy Organization for Clean Development Mechanism (CDM), Energy Efficiency etc. The performance of NPMU will be reviewed by the Empowered Committee.

h)      The operational charges for smooth functioning of NPMU which include salary, perks & allowances, performance incentives ete of the deployed manpower along with other administrative & establishment expenditure like tour, travel etc, for Smart Grid activities would be paid to NPMU from the funds of NSGM and modalities for the same will be finalized by the Empowered Committee of NSGM. In respect of officers and staff on secondment to NPMU, their entitlements in the parent organizations will be fully protected. POWERGRID and other PSUs employees will be posted in NSGM for smart grid activities on "secondment" basis and will be eligible för PRP payment as applicable in their parent organisation.

i)       Corresponding to the NSGM, each of the States will also have a State Level Mission which would be chaired by the Power Secretary of the State. The administrative / operation and maintenance expenses in this regard would be borne by respective States. NSGM will provide support for training & capacity building to State Level Project Monitoring Units (SLPMUs) for smart grid activities. NSGM will not support any expenditure towards new posts, created if any by the states for smart grid activities. A typical structure of State Level Mission is at Annexure-VI.

j)       The Smart Grid Knowledge Center (SGKC) being developed by POWERGRID with funding from MOP will act as a Resource Centre for providing technical support to the Mission in all technical matters, including development of technical manpower, capacity building, outreach, suggesting curriculum changes in technical education etc. Ministry of Power has already sanctioned Rs 9.8 crore in this regard. Expenditure on civil works is being borne by POWERGRID. The SGKC will maintain adequate training infrastructure facilities and a cumulative support of Rs 10 crore in 1 2^th Plan is proposed to be provided to it from NSGM budget. Possibility will also be explored for bilateral and multilateral financial support from various national and international agencies in this regard. The SGKC shall undertake programs and activities envisaged for it as per Ille guidance from NPMU. The Head of SGKC will report to Director NPMU. A typical structure of SGKC is at Annexure-VII.

k)      The support from NSGM for implementation of Smart Grid projects would primarily consist of the following indicative (not exhaustive) list of activities:

    Assistance in formulation of projects including pre-feasibility studies, technology selection, cost-benefit analysis, financing models etc.

    Funding of these projects, together with State Discoms and other financing agencies.

    Training and Capacity Building for SLPMUs & Project Implementation teams

    Technology selection guidelines and best practices  Facilitate Consumer Awareness initiatives

    Project Appraisal post implementation.

l)       To start the above activities, upto 30% of the project cost of smart grid for most of the components will be provided as grant from the NSGM budget. For certain selected components such as training & capacity building, consumer engagement etc, the funding will be 100% grant as indicated at Annexure-I. The extent of ftlnding from NSGM budget will be finalized by the Empowered Committee of the NSGM. The balance project cost (hardware, software applications, erection testing commissioning, integration etc.) is to be funded through innovative financing models which may include PPP model.

m)    Details of indicative interventions for Smart Grids for 1 2^th Plan and its implementation methodology are at Annexure-VIII.

1. The outlay of the scheme/the requirement of GBS for 12th Plan as well as year wise requirement will be met out of existing 12^thplan outlay of the Ministry of Power and annual Plan allocation indicated by Ministry of Finance respectively.
2. The NPMU will submit monthly progress report indicating both financial and physical progress on the implementation of the scheme to Ministry of Power.
3. This issues with the concurrence of Finance Branch of the Ministry of Power vide their Dy. No. 48/Fin/15 dated 27.3.2015.

Detailed guidelines for the implementation will be issued separately.

v3 ^p ts

(B.N. Sharma

Joint Secretary Tel: 23710199

To

1. Chief Secretaries of all States
2. Energy/Power Secretaries of all the State Governments
3. CMDs of State Power Utilities
4. Chairman & Managing Director, Power Finance Corporation Ltd., New Delhi.

Copy forwarded to:

1. Director, Cabinet Secretariat, Rashtrapati Bhavan. New Delhi.
2. Ministry of Finance, Department of Expenditure (DS, Plan Finance Division-Il), North Block, New Delhi.
3. Ministry of Finance, Department of Economic Affairs. North Block, New Delhi.
4. NITI Aayog, Yojana Bhavan, New Delhi.
5. Chairperson, Central Electricity Authority, R.R. Puram, New Delhi.
6. Finance/Budget Section, Ministry of Power, New Delhi.
7. Controller of Accounts, Ministry of Power, New Delhi.
8. Principal Director of Audit, Economic & Services Ministries, AGCR Building, I.P. Estate, New Delhi.
9. 13 ^th Finance Commission, Ministry of Finance, Jawahar Vyapar Bhavan, New Delhi.
10. Department of Programme Implementation, Sardar Patel Bhavan, New Delhi.

Copy to:

PS to Minister of State for Power (Independent Charge)

PPS to Secretary (Power)

PS to SS(RNC) / SS (DC)

PS to Joint Secretary (Dist) / JS&FA / All JS

Annexure-I

^{_{Estimated Expenditure Outlay for 12th Plan}}

(Figures in Rs crore)

+4SuccessfuI Smart Grid Deployment will require consumer engagement and participation right from the start. A structured approach is necessary to achieve this. The understanding and adapting to consumer behaviors is critical for deployment Q/ smarl grid. Huge investments a/•e being made on studies, research and consumer education and participation initiatives world"'ide and same need to be promoted under NSGM. structured approach designed to cover key dimensions consumer involvemenf shall include behavioral studies, market research, understanding consumer profile, identifying various mediums (o reach (prinr, A F, social media, focused campaigns, meetings, etc).A model consumer engagement 'nodule along M'ith lessons from global cases Qfsuecessful deployments andfailures is proposed to be developed It'hich need to be coupled with strong communication (internal and external) for maximum impact. The Rules for Consumer Privacy and L)ata Protection in parallel shall also be taken up to ensure consistency in approaches adopted by various states.

National Smart Grid Mission — Institutional Framework

Annexure-Ill

Annexure-IV

Annexure-VI

State Level Smart Grid Mission

Annexure-Vll

^{_{A Typical Structure of Smart Grid Knowledge Centre (SGKC)}}