Distribution is a critical link in power sector. The distribution segment of India is in bleak condition. There is a huge pile of losses in this segment. Mostly in India there are majorly state discoms. Private discoms are still meager in number as compare with public discoms. The main reason of discoms inefficiency is high AT&C losses. In India there are approximately 23.5% of AT&C losses. The gap between cost of supply and the revenue is increasing i.e. cost is higher than revenue .AT&C losses is increasing due to many technical and commercial reasons.
In technical part, there are not much of investments in replacing old conductors, distribution transformers, etc. Commercial losses are due to unmetering, power theft, etc. Power theft is a big issue in power sector. To curb this issue government initiated many programs but it was not successful in many parts of India. So, the issue is big but it can be solved. Distribution franchisee is one of the solutions for improving the situation.
Distribution franchisee is a PPP(Public private partnership) model. In this distribution licensee will give part of its work to any private firm to improve the efficiency of the area. There are different models of distribution franchisee in which Input based franchisee model is quite common. The ideal example of distribution franchisee is Bhiwandi in Maharasthra. In Bhiwandi the AT&C losses were about 60% before giving it to Torrent Power Limited( Distribution Franchisee).
After 3 years of completion of TPL in bhiwandi the losses came below 20%. In India 250 towns are selected for Distribution franchisee. However there are some failures like Nagpur where the franchisee was not able to pay the money to distribution licensee. Recently amendments in electricity act 2003 came into talk which is still under progress. In amendments there is a talk about segregation of carriage and content in distribution. If this amendment will pass, there will be a carriage part which is natural monopoly and content part in which lot of competition will come. Due to this factor competition will arise and efficiency of distribution segment will increase.
IT is playing pivotal role in distribution segment. Call centers, smart meters, SCADA are some of the initiatives which are playing major role. There are many private distribution licensees such as reliance Infra, Tata taking part in major cities of India. NDPL in Delhi proved that private licensee can also gain profit in distribution segment. It’s a saying that “Nothing Is Impossible”. There are many success stories from which each and every distribution licensee should take lessons. Innovative ideas in distribution segment can add helping hand to the cash starved utilities. I read one article in which it was written that distribution sector in India is like a leaking bucket. Government should concentrate more on distribution sector. The allocation of funds to distribution sector is quite less as compare to generation and transmission sector. In 2015-16 budget, government thought of adding 175 GW of renewable energy, 5 UMPP’s. In my point of view if you have to improve the power scenario of India then first agenda/target should be on distribution segment.
If you have any innovative ideas / suggestion please comment below.
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