ISGF White Paper

FEASIBILITY STUDY FOR CONVERTING AIR

INSULATED SUBSTATIONS TO GAS
INSULATED SUBSTATIONS
Abstract
 The objective of this paper is to highlight the feasibility for converting Air Insulated Substations (AIS) to
Gas Insulated Substations (GIS) by commercialising the land that would be saved. GIS requires as little
as 15% to 20% of the land required by conventional AIS. GIS also has the advantage of huge savings in
annual operation and maintenance expenditure which is only 20% of a comparable AIS. The final
conclusions of this study is: (1) If 132 kV AIS is located at a place having land rates of around 450 lakh
rupees (4.5 Cr rupees) per acre and above then NPV will be positive with payback period of 3 to 4
years and it would be beneficial to convert it into GIS; (2) If 220 kV AIS is located at a place having
land rates of around 750 lakh rupees (7.5 Cr rupees) per acre and above then NPV will be positive
with payback period of 3 to 4 years and it would be beneficial to convert it into GIS; and (3) If 400 kV
AIS is located at a place having land rates of more than 700 lakh rupees (7 Cr rupees) per acre and
above then NPV will be positive with payback period of 3 to 4 years and it would be beneficial to
convert it into GIS.

Disclaimer Author
The information and opinions in this document were Bhaumik Trivedi - Intern
prepared by India Smart Grid Forum (ISGF). ISGF has no
obligation to communicate with all or any readers of this
Karanjot Singh – Intern
document when opinions or information in this Akshay Ahuja – Business Analyst
document change. We make every effort to use reliable Bridgit Hartland Johnson - Consultant
and comprehensive information but we do not claim that
it is accurate or complete. In no event shall ISGF or its Reji Kumar Pillai- President
members be liable for any damages, expenses, loss of India Smart Grid Forum (ISGF)
data, opportunity or profit caused by the use of the
CBIP Building, Malcha Marg
material or contents of this document.
New Delhi, India
www.indiasmartgrid.org
About India Smart Grid Forum
India Smart Grid Forum (ISGF) is a public private initiative of the Ministry of Power (MoP), Government of India for accelerated
development of smart grid technologies in the Indian power sector. ISGF was set up in 2010 to provide a mechanism through
which academia, industry; utilities and other stakeholders could participate in the development of Indian smart grid systems
and provide relevant inputs to the government’s decision making.

Document Number: ISGF – WG 8/2014/00001 Version 1.0 Dated June 2014 1

Table of Contents
1. Introduction ........................................................................................................................... 3
1.1 Air Insulated Substation (AIS)...................................................................................... 3
1.2 Difficulties with Air Insulated Substations (AIS) .............................................................. 3
1.3 Gas Insulated Substation (GIS) .................................................................................... 4
2. Feasibility Analysis of converting AIS to GIS .......................................................................... 5
2.1 Assumptions ..................................................................................................................... 5
2.2 Operation & Maintenance Expense ............................................................................ 5
2.3 Capital Cost of GIS ............................................................................................................ 6
2.4 Calculation Method.......................................................................................................... 6
2.5 NPV including land cost ............................................................................................... 7
2.6 Payback Period ................................................................................................................. 8
3. Conclusions ............................................................................................................................ 9

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1. Introduction
The target for power generation capacity addition in the 12th Five Year Plan in India
(2012-2017) is fixed at 88,000 MW and in 13th Five Year Plan in India (2017-2022) is
fixed at around 1,00,000 MW. This will require humungous transmission capacity
addition as well. During the 1financial year 2013-14, at the transmission level substation
capacity addition was 13,700 MVA at 220 kV, 9630 MVA at 400 kV and 34000 MVA at 765
kV. The total transformation (substation) capacity in India as of May 2014 is 257614 MVA
at 220 kV, 179727 MVA at 400 kV and 83000 MVA at 765 kV levels. The minimum land
required for setting up conventional substations of 132 kV and 220 kV is 12 acres and
land required for that of 400 kV substations is 20 acres. New transmission capacity will
further need more and more land to meet the ever increasing demand of electricity.

Economic growth will propel demand for electricity as well as cost of land. Cost of the
land is the major factor to be considered now if a utility wants to set up a new substations
or upgrade the existing ones. Apart from the cost of land, right of way acquisition is a very
cumbersome process and consumes a lot of time and money.

Gas Insulated Substation (GIS) provides the benefit of land savings as it requires as little
as 15% to 20% of the comparable land required by conventional Air Insulated Substation
(AIS). GIS has the biggest advantage of very little operation and maintenance expenditure
with respect to conventional substations and GIS also provides very high reliability.

1.1 Air Insulated Substation (AIS)

An AIS uses atmospheric air as insulation between ground and the electrical phase which
require certain minimum distances to be kept at different voltage levels. The equipment
of an AIS substation is easily sourced and has a short lead-time; this means that the
required future expansion bays need not be built immediately, unlike GIS where it must
be considered. The main disadvantage of the AIS substation is its overall size.

1.2 Difficulties with Air Insulated Substations (AIS)

Severe environmental conditions listed below result in high maintenance costs for AIS:

 In costal sites, saline deposits can cause corrosion to the contacts of the
switchgears and insulators
 If AIS is in the vicinity of industrial zone then heavy industrial particles get
deposited on the insulators, metallic components, flanges and electrical joints
which will require frequent/regular cleaning or hot line maintenance
 If AIS is in the remote rural areas then also the burning of residues from crops
after harvest can cause the same problem as mentioned above

1
http://www.cea.nic.in/reports/proj_mon/pspm/exec_summary_sub.pdf

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  If AIS are at very high altitudes than it will require additional costly insulation to
prevent breakdown due to low air density, snow loading and sub-zero
temperature
 Extreme climatic conditions and seismic considerations would require additional
measures such as extensive mechanical support and bracings while physical
design of GIS allows seismic criteria to be more easily achieved at lower cost

1.3 Gas Insulated Substation (GIS)

A Gas Insulated Switchgear substation (GIS substation) uses sulphur hexafluoride gas
(SF6 gas) whose dielectric strength is higher than air, to provide the phase to ground
insulation for the switchgear. The conductors and contacts are insulated by pressurised
SF6 gas, meaning clearances required are much smaller than that of AIS substations.

GIS with SF6 gas is now a well-established technology and numerous GIS substations
have been in service since the 1960’s. The first GIS substations were installed in
Switzerland and Germany in the year 1967. The one installed in Germany is still under
operation while that in Switzerland has been dismantled after successful operation for
35 years.

GIS are used where there are constraints for space or land is very expensive. World over
all new substations in urban areas are being constructed as GIS. Existing AIS in urban
areas in India are now in prime locations where land has huge commercial value. If these
are converted to GIS, 70% of the land can be freed and that value can fund the cost of the
substation modernization. Moreover the commercialization of the excess land can bring
in alternate revenue streams for the utilities. The overall size of a GIS is about 15% to
20% of the comparable AIS. Adding on to it, there are various advantages of GIS over AIS,
such as:
 GIS is more reliable and safer
 It is aesthetically superior to AIS
 GIS is not affected by atmospheric pollution
 GIS required very low maintenance

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2. Feasibility Analysis of converting AIS to GIS
The decision of converting existing AIS into a GIS depends mainly on the following factors:
 The location where the AIS is situated i.e. urban or rural area
 The price of the land where it is situated
 The age of the AIS i.e. condition of the substation and the extent of renovation and
modernization required to keep the substation in running condition
 Existing load of the substation, spare load handling capacity of the substation and
the future estimation of the increase in load Or additional BAYS in the substation
 The criticality of the substation i.e. whether the substation is transmission
substation or an industrial substation of a cement factory/steel plant etc.
 Operation and maintenance cost of the substation

2.1 Assumptions

Following assumptions have been made in the financial model:

 Interest on long term loan is taken as 13% (SBI base rate + 300 base points)
 Interest During Construction (IDC) is considered as 13%
 Conversion period of AIS to GIS is considered as 3 years
 It is assumed that commercial value of the land vacated will be realized in 4th year
 4 cases are considered for land rates depending upon classification of cities
(Metro, Class A1, Class B1 and other cities)
 Depreciation on substation as 5.28%
 Feasibility analysis is done for the AIS of voltage levels:
o 400 kV
o 220 kV
o 132 kV

2.2 Operation & Maintenance Expense

Operation & Maintenance (O&M)cost of the AIS is taken as per the Central Electricity
Regulatory Commission (Terms and Conditions of Tariff) Regulations, 2014 as shown in
the table below. The following normative O&M expenses shall be admissible for the
transmission system:

Norms for substation 2014-15 2015-16 2016-17 2017-18 2018-19

(Rs Lakh per bay)
400 kV 60.30 62.30 64.37 66.51 68.71
220 kV 42.21 43.61 45.06 46.55 48.10
132 kV and below 30.15 31.15 32.18 33.25 34.36
400 kV Gas Insulated Substation 51.54 53.25 55.02 56.84 58.73
Table 1: O&M expense of AIS as per CERC norms

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  The AIS under consideration is believed to be more than 25 years old and hence
the applicable normative O&M expenses per bay of different voltage levels are
taken as it is from the CERC regulations
 The O&M expenses of GIS for 400 kV are also specified in the CERC regulations as
shown in the table above. After interaction with several stakeholders like Reliance,
Sterlite Grid, Siemens and other researchers, it is found that the actual O&M
expense for GIS are about 10% to 20% of the admissible O&M expenses of AIS
specified in the CERC regulations.
 Hence, following things are considered for calculation of O&M expense:
o As per vendor experience O&M expenses of GIS are about 10% to 20% of
admissible O&M expenses of AIS; hence in this study it is taken as 20% of
the admissible O&M expense of AIS for the calculation purpose.
o O&M escalation rate as 5.72% per annum (as per CERC norms)

2.3 Capital Cost of GIS

Capital cost of GIS has been taken as flows after discussion with various vendors (without
IDC):

Voltage Level Switch Gear cost in EPC and Civil Cost in Rs. Total Cost in Rs. Crores
Rs. Crores (per bay) Crores (per bay) (per bay)
132 kV 2 1 3
220 kV 3 2 5
400 kV 5 3 8
Table 2: Capital cost considered for GIS

2.4 Calculation Method

Net cash flow is calculated in the excel sheet. The method adopted is as follows:

Cash Outflow:
 O&M expense is considered as 20% of AIS O&M expense given in CERC guidelines
 Total capital cost considered is given in table 2. Phasing of capital cost is
considered as 20% in year 1, 40% in year 2, 20% in year 3 and 20% in year 4
Cash Inflow:
 Savings in O&M expense if AIS is replaced with GIS
 Land cost (case wise) which is included in 4th year as it is assumed that land will
be commercialized in 4th year

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2.5 NPV including land cost

NPV is calculated including land cost for each voltage level with 5 different land rates:

Voltage Level Land Rate (Per Acre) NPV (Rs. Lakhs)

(Rs. Crore)
132 kV
50 (Metro Cities) 291.35
25 (Class A1 Cities) 131.80
15 (Class B1 Cities) 67.98
4.5 9.73
1 (Other Cities) -21.36
220 kV
50 (Metro Cities) 273.45
25 (Class A1 Cities) 113.91
15 (Class B1 Cities) 50.09
7.5 2.22
10 (Other Cities) -39.26
400 kV
50 (Metro Cities) 459.33
25 (Class A1 Cities) 193.42
15 (Class B1 Cities) 87.03
7 1.97
1 (Other Cities) -61.84
Table 3: NPV for different land rates

Minimum land rates required for NPV to be positive

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2.6 Payback Period

In a 10 bay substation, total capital cost including IDC (interest during construction), area of land saving, its approximate value (in Metro
cities, class A1 cities, class B1 cities and other cities) and payback period are summarized below:

Voltage Typical land area Area of land Value of land saved (Rs Crore/Acre) Cost of Payback Period (Years)
Level of a 10 bay s/s saving by Other Class B1 Class A1 Metro conversion Other Class B1 Class A1 Metro
(Acres) GIS (Acres) Cities Cities cities cities to GIS (Rs Cities Cities cities cities
Lac)
including
IDC
132 kV 12 9.6 1 15 25 50 3239.26 NF 3 to 4 3 to 4 3 to 4
220 kV 12 9.6 1 15 25 50 5398.76 NF 3 to 4 3 to 4 3 to 4
400 kV 20 16 1 15 25 50 8638.02 NF 3 to 4 3 to 4 3 to 4

Table 4: Payback period for various cases

NF: Not Feasible (Life considered for substation is 25 years and payback was not received till that time, hence it is considered as not feasible)

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3. Conclusion
NPV for 132 kV, 220 kV and 400 kV workout out to be very convincing when cost of land
saved is above X crore/Acre for 132kV, Y crore/Acre for 220kV and z crore/Acre for
400kV substations.

Internationally multi-storeyed buildings have GIS in their basements for meeting the
power requirements. India should also start adapting to the change in technology to make
the Indian grid smarter, more reliable and with less environmental footprint.

Final conclusion is:

 If 132 kV AIS is located at a place having land rates of around 450 lakh rupees
(4.5 Cr rupees) per acre and above then NPV will be positive with payback
period of 3 to 4 years and it would be beneficial to convert it into GIS.

 If 220 kV AIS is located at a place having land rates of around 750 lakh rupees
(7.5 Cr rupees) per acre and above then NPV will be positive with payback
period of 3 to 4 years and it would be beneficial to convert it into GIS.

 If 400 kV AIS is located at a place having land rates of more than 700 lakh
rupees (7 Cr rupees) per acre and above then NPV will be positive with
payback period of 3 to 4 years and it would be beneficial to convert it into GIS.

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