power distribution reforms road less travelled agenda
Post on 07-Apr-2018
218 Views
Preview:
TRANSCRIPT
-
8/4/2019 Power Distribution Reforms Road Less Travelled Agenda
1/7
Conference on
Power Distribution Reforms:
Road Less Travelled
Hotel Shangri-La, New Delhi
September 14, 2011
Organised by Knowledge Partner
Knowledge Redefined
-
8/4/2019 Power Distribution Reforms Road Less Travelled Agenda
2/7
Conference on
Power Distribution Reforms: Road Less Travelled
September 14, 2011 Hotel Shangri-La, New Delhi
In a recent meeting convened to discuss the
state of Indias power sector, the union ministerfor power announced that the country needs to
take definiti ve steps in strengthening distribution
to attain growth for the entire power sector value
chain.
Electricity is one of the key inputs to fuel and
sustain the countrys rapid economic and
industrial growth. Per capita consumption of
electricity is one of the key indicators for
assessing the level of progress a society has
accomplished and is also a factor for
determining the Human Development Index.
In 2008-09 the per capita consumption of India
was 733 kWh, which is very low compares to the
world average of approximately 3000 kWH.
Developed countries like US, Australia, China
have high per capita consumption at 13616
kWh, 11216 kWh and 1900 kWh respectively[1]
.
This highlights the gap that India needs to cover
in terms of developing power distribution in the
country.
Electricity being a concurrent subject is
governed both at the Central and the State level
in the country. Power distribution is the function
of selling electricity to end use consumers. This
sector is a key link in the power sector value
chain as it completes the last step in the
revenue cycle. Distribution in India works with
the main aim of providing access of low cost
power to all in a reliable manner.
Over the years, the state of the distribution
sector in India has degraded despite a reformprocess in place. The growth and improvement
in this segment of the value chain is not in
accordance with that experienced in generation
and transmission. We have seen major changes
happening in power generation with the passing
of the Electricity Act in 2003. The opening up of
the sector has lead to increased investment
flows converting into massive capacity addition.
However the same cannot be said about
[1] Figures are for the year 2007.
distribution, with high losses, low penetration,
failing health of public utilities being still a majorpart of the sector.
Distribution sector reform: a failed step
Reforms are a basic and crucial step in the
development of a sector in the long run. Globally
many important markets such as US, Europe
among others have experienced reforms which
have further helped them advance. The reforms
in a country are guided by the unique
governmental structure and institutions,
demographics, socio-economic and politicalenvironment and resource availability.
Traditionally electricity has been treated as an
important public good in the country and was
affected by high political intervention.
Distribution infrastructure was also in a bad
shape, with high commercial and technical
losses being a common sight in the country.
Liberalisation and Globalisation in the 1990s
brought about a change mainly in power
generation with an influx of private investment.
However, the disastrous affect of the failed
investments further sank the sector into losses.
Delhi and Orissa proved to be a good starting
point for distribution reforms. However, the true
reforms journey began with the passage of the
EA in 2003. However, in India, the success of
the distribution reforms initiated with the
Electricity Act, 2003 has been limited.
Unbundling of state electricity boards, move
towards enabling retail competition via openaccess, gradual reduction in cross subsidy,
creation of independent and autonomous
regulatory commissions for regular
determination of tariffs, etc. were the key
changes that were advocated for reforming the
sector.
Despite all the steps being taken, the distribution
sector is still plagued by many problems,
foremost and most important one being the
failing health of distribution utilities. So far, 20
Organised by Knowledge Partner
Conference Background
-
8/4/2019 Power Distribution Reforms Road Less Travelled Agenda
3/7
This is adequately been highlighted by the lack-
lustre performance of the discoms which alone
cannot survive on restructuring. Correctional
steps need to be implemented in a fast-tracked
manner for the long-term survival of these
utilities. The provisions of the reform process are
still not followed on a pan India basis with some
key states yet to unbundle their utilities.
Globally many examples exist where
privatisation and market competition have
enhanced the viability of the sector. Involvement
of private utilities was a key step of the reform
process; however, the resistance from variousangles has dampened the advantages of the
same.
India has a wide scope in involving private
players in various functional areas of a state
discom apart from a licensee such as a
distribution franchisee, O&M Contracts, EPC &
IT Implementation via Smart Grid, equipment
supply amongst others. There is an urgent need
for policy makers to bring together a new
management structure for improved operations.
Pilot studies conducted in the past have
provided ample ground for the implementation of
new and advanced market models keeping in
mind the uniqueness of the Indian market.
Market development alone cannot sustain the
reform process and a key enabler required to
further drive the sector is a stable regulatory
model. India at present lacks innovative tariff
mechanisms with flexibility to adjust to market
conditions. The rising fuel prices and shortages,
delayed clearances, etc. have created a dent inthe developers pocket, thereby affecting the
viability of the projects. With existing high
losses, discoms- the main buyers are will soon
be unable to buy high cost power, in light of the
low tariffs being charged. Tariff revision is a
dreaded process in the country with high political
involvement. There is a need to demarcate the
importance of tariff revision and strictly penalise
discoms delaying the same. The case of Delhi
and Tamil Nadu further highlights the plight of
the discoms.
Conference on
Power Distribution Reforms: Road Less Travelled
September 14, 2011 Hotel Shangri-La, New Delhi
Organised by Knowledge Partner
states have been unbundled. States like
Jharkhand, Bihar, Kerala and Electricity
Departments in Arunachal Pradesh, Jammu and
Kashmir, Goa, Manipur, Mizoram, and
Nagaland, all six union territories, and NDMC in
Delhi have not been unbundled. As a result of
the unbundling the country has 73 distribution
utilities including private entities as well.
The aim of the reforms of supplying power in an
efficient manner is yet to materialise. Barring a
few, financial health of discoms is deteriorating
at an alarming rate. The cumulative losses of
discoms till 2009 were INR 74,977 crores. Theprojected losses of the discoms is expected to
touch INR 1,16,089 crores by 2014-15.
The main reasons for the poor financial health of
discoms can be summed up as:
Inadequacy of tariff as approved by SERCs:o Widening of gap between the
Average Cost of Supply (ACS) and
the Average Revenue Realised(ARR)
o Compounded annual growth rate(CAGR) of tariff is less than theCAGR of power purchase cost
o No tariff revision in states on aregular basis
o Non-filing of ARR for tariff revisionby state utilities
Non-payment or delayed disbursement ofsubsidy amount by state governments
High level of cross subsidisation
No timely audit of accounts by utilities
High technical and commercial losses
Non- performance of SERCs as per the
mandate
The Way Forward
Overall restructuring is a necessary but not a
sufficient condition for the turnaround of the
power sector. Restructuring is only the
beginning and not the end of the process. It
must be a continuous and complimentary
process to enhance efficiency in distribution
companies or discoms.
-
8/4/2019 Power Distribution Reforms Road Less Travelled Agenda
4/7
Conference on
Power Distribution Reforms: Road Less Travelled
September 14, 2011 Hotel Shangri-La, New Delhi
Organised by Knowledge Partner
Another aspect to be considered is the
resistance to the implementation to open accessby states fearing a fall in the revenues from high
paying industrial consumers.
Loopholes in existing regulations are a
drawback in promoting competition and
efficiency in the market.
Retail supply infrastructure in the country is a
key area of distress. The EA has provided for
competition at the retail level as well. To develop
the same, there is a need to understand the
impact of the evolving power markets in Indiaalong with a focus on balancing the renewable
energy portfolio by various states in light of
increased climate concerns.
On the other hand, the technical and physical
infrastructure lacks robustness in the country to
enable reliable supply of low cost power.
Enhancement of technical infrastructure with
better grid connectivity, sub-stations,
transformers, metering, etc at both urban and
rural levels is the main concern for the sector.
Smart grid holds potential to be taken as a
solution for reliable supply of power.
-
8/4/2019 Power Distribution Reforms Road Less Travelled Agenda
5/7
Conference on
Power Distribution Reforms: Road Less Travelled
September 14, 2011 Hotel Shangri-La, New Delhi
Organised by Knowledge Partner
9AM 10 AM Registration and Morning Tea
10AM 11:15AM
Session 1: Distribution Reforms, a choice or necessity?
Open Discussion
11:15AM
11:30AM
Networking Tea / Coffee break
11:30AM
1PM
Session 2: Structural solutions for reforming distribution
Open Discussion
1PM 2PM Networking Lunch
2PM3:30PM Session 3: Reforming regulatory model, the way forward
Programme Agenda
Keynote Address / Session Chairman: Dr Pramod Deo, Chairperson, CERC
Weak financial health of SEB's / Distribution Companies?Shri Satnam Singh, CMD, Power Finance Corporation*
Flaws in regulatory model for distribution covering subsidy and tariff management?Shri Sudhir Kumar, Joint Secretary, Ministry of Power*?Shri H L Bajaj, Former Member, Appellate Tribunal for Electricity?Shri Balawant Joshi, Director, ABPS Infrastructure Advisory
Inefficient physical and technical infrastructure?Shri Rakesh Mehta, Former Chief Secretary, Delhi Government & Former Chairman, Delhi
Transco?Shri Ramesh Naraynan, CEO, BSES Yamuna Power Ltd.
Session Chairman:Shri Rakesh Mehta, Former Chief Secretary, Delhi Government & FormerChairman, Delhi Transco
Enhancement of market structure- analysing global perspective?Shri Anish De, CEO, AF-Mercados EMI
Scope for involving private participation for better and efficient working?Shri Vidur Sehgal, CEO - Govt. & Power, Spanco Ltd.
Case study on Bhiwandi and Pune model?Shri Girish Sant, Group Coordinator, Prayas Energy group
Designing a new management structure for distribution sector- a discussion?Shri Ashish Khanna, South Asia Energy & Infra, World Bank*
Session Chairman: Shri J P Singh, Member, Delhi Electricity Regulatory Commission
Globally accepted tariff models?Dr Harish K Ahuja, President Strategy & Corporate Affairs, Moser Baer Projects?Dr Leena Srivastava, Executive Director (Operations), TERI
Designing innovative tariff mechanism?Vijay L Sonvane, Member (Technical), MERC or Director (Tariffs), MERC
Need of the hour regulations?Shri Sunil Wadhwa, MD & CEO, NDPL
Reforms in existing system- open access?Shri S K Chatterjee Deputy Chief (Regulatory Affairs), CERC
Case study by TNERC (Tamil Nadu Electricity Regulatory Commission)Open Discussion
-
8/4/2019 Power Distribution Reforms Road Less Travelled Agenda
6/7
3:30PM-
3:45PM
Networking Tea/Coffee break
3:45PM 5:25PM
Session 4:Developing retail supply infrastructure
Open Discussion
5:25PM-
5:30PM
Vote of Thanks
*Under confirmation
Organised by Conference on
Power Distribution Reforms: Road Less Travelled
September 14, 2011 Hotel Shangri-La, New Delhi
Knowledge Partner
Session Chairman: Shri Sher Singh Khyalia, Executive Director (Finance), GUVNL
Impact of Power Markets?Smt Rupa Devi Singh, MD & CEO, PXIL*
Balancing renewable portfolio?Shri Sher Singh Khyalia, Executive Director (Finance),GUVVNL
Enhancement of technical infrastructure with better grid connectivity?Senior Representative from REC/SBI
Smart Grid implementation?Dr Gursharan Bhatia, Regional General Manager (T&D), GE
-
8/4/2019 Power Distribution Reforms Road Less Travelled Agenda
7/7
For cheque/demand draft:I am enclosing a cheque / demand Draft of Rs.:
vide cheque / DD no.:
drawn on:
dated:
in favour of:
Metis Business Solution Solutions Private Limited
Electronic Transfer / RTGSAccount No.:
Metis Business Solution Solutions Private Limited
Bank Name:
Kotak Mahindra Band Ltd.
Bank Address:
Bank Account No.:
02072000003413
IFSC Code:
KKBK0000207
NAME (Block Letters)
Designation
Company
Mailing Address
Telephone Fax
Mobile
E-Mail
Registration Form
4893, Phoota Road Opp Westend Cinema,Sadar Bazar Delhi - 110 006
Conference on
Power Distribution Reforms: Road Less Travelled
September 14, 2011 Hotel Shangri-La, New Delhi
Knowledge Partner
rganised by
CONTACT USCONTACT US
INR 12,000/- Plus TaxNon Subscribers
INR 9,000/- Plus TaxSubscribers
top related