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MR. SHRIRANG KARANDIKAR CEO, INDIA POWER CORPORATION LIMITED Indian Power Sector’s Transmission & Distribution Trends The Distribution Franchisee (DF) model has emerged as a key solution for cash-strapped and loss-making utilities, who can tie up with private players with strong management skills in the distribution business as well as the financial muscle to incur the capex required for infrastructure For decades now, augmenting generation capacity to cope with the burgeoning demand has been the fulcrum of activity in the power sector, with all eggs going into the production basket. However, it seems we largely forgot to heed a vital link in this ecosystem, which is addressing the inadequate power evacuation infrastructure that has always dragged the Indian power sector down. This has opened up a huge chasm between the beefed up generation capacity and the quantum of electricity that can be evacuated and supplied to the last-mile consumer. The inadequate evacuation infrastructure has also hamstrung us in the realm of balancing the grid by feeding deficient regions like the South from surplus zones like the East. Distribution is the final link in the chain of electric power, connecting the transmission system to the consumers, and we have ignored it at our own peril. Historically, power distribution has been a monopoly of government-owned utilities, and is actually in the realm of 29 state governments, with the private sector playing only a limited part. The abysmal financial health of the state electricity discoms, which are perennially plagued by subsidised tariffs, is a major roadblock towards improving evacuation efficiency. It is estimated that these discoms are bleeding annual losses to the tune of about Rs 60,000 crore, which has also adversely impacted public sector banks. The government has rolled out a financial restructuring plan of Rs 2 lakh crore for the beleaguered discoms, which comes in the wake of a Rs. 10,000-crore bailout package in 2002. The time has probably come to pop the question, ‘how much succour can we afford for the discoms?’ Given the ground reality that the state discoms hardly have the wherewithal to cater to the country’s need for electricity on their collective strength and financial resources, the idea of a national power distribution company has also been mooted in some quarters. This may not seem such a utopian concept if we consider that the Centre’s vision of achieving the goal of 24x7 power supply is primarily imperilled by the poor financial health of discoms across the country, with their collective dues now pegged at a whopping Rs. 15,700 crore. If it’s any silver lining, there has been some recent progress towards privatisation of power distribution. Till date, 255 towns have been identified by the Shunglu Committee for the implementation of distribution franchises, and the B.K. Chaturvedi report has introduced the PPP as a viable model. Indeed, the distribution franchisee (DF) model has emerged as a key solution for cash-strapped and loss-making utilities, who can tie up with private players with strong management skills in the distribution business as well as the financial muscle to incur the capex required for infrastructure. This will surely result in a reduction of AT&C losses, improved collection and higher customer satisfaction, it is hoped. As a thumb rule, for every megawatt of power generated, an evacuation capacity of approximately 7 MVA is required. Taking the current installed capacity of 275 GW, we would need an equivalent power distribution infrastructure, and there’s a gaping hole here. To plug this gap and make Distribution is the final link in the chain of electric power, connecting the transmission system to the consumers, and we have ignored it at our own peril POWER SECTOR 76 energética INDIA · MAY | JUN16


energetica-india-57_asiapowerweek
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