Electricity crisis in India

Is privatization is the solution to the ailing power sector

Is privatization is the solution to the ailing power sector. This seems to be a question needing a thorough analysis and transparent intention of the government. Any thing done in the good spirit will yield fruits, but if intention is not good the success of any attempt is doubtful.

Privatization is the means to introducing competition in the electricity market, not an end in itself. Genuine competition would imply that electricity consumers are actually free to choose from competing service providers: this is simply not the situation in case of franchisees.

In the state of Uttar Pradesh, the government has decided to hand over the urban feeders to the franchisee; this partially is a welcome step but partially is because the intensions of the government are not transparent again. The loss in the urban feeder is much less as compared to the losses in rural feeders. The government should impose a pre condition that the revenue input based franchisee interested in taking up urban substation should also take proportionate rural feeder on the revenue input based franchisee basis.

The government is trying to hand over those feeders which are already generating revenues, where the density of consumer is quite good and where the theft is not the primary reason for the losses, on the other hand the rural area having very low consumer density with a lot of line loss and theft are left with the ailing power utility. The government will fail to improve the situation until a mechanism to arrive at a transparent and justified tariff based on import of power at low frequencies and UI charges are incorporated to arrive at the rationale bulk tariff to be decided for the franchisee. With the advent of the ABT regime and with newly functional energy exchanges the rationale tariff is the requirement of the time. The electricity utility is required to generate return on equity to be decided by CERC, this was 14% for the tariff year 2008-09 but this was not taken into account by the UPERC while arriving at the tariff due to poor performance of this sector. Return on equity measures a corporation’s profitability by revealing how much profit a company generates with the money shareholders have invested. This rate on return on equity must be taken into account to arrive at the tariff for bulk supply while handing over the distribution to the franchisee so that the huge cost of investment on assets may be realized from the better managed franchisees.

The faulty planning of unplanned massive rural electrification under RGGVY has already started yielding the results. Many villages are still unelectrified despite the entire needed infrastructure being erected; where thousands of crores of hard earned tax paid money has been invested just to increase the losses. Due to this non productive electrification on the one hand hard earned money is blocked, on the other hand this has resulted in increased power theft, theft of line material and other technical losses such as transformation and transmission losses besides other distribution losses. Any one having a little knowledge of electricity may very well know a transformer say for example a 5 MVA will consume about 5kW of power if it is just energized, in this way where thousands of such transformers are left energized without delivering a single ampere of current due no load is adding losses to the system. Further the franchisees appointed for villages are not revenue input based but are collection based, thus they are not the part of loss reducing mechanism. These are least bothered about the power theft in the villages, but where ever they find theft the ask for their share to just keep mum and not to tell the distribution utility about the theft, further they have started to install katiya connection for certain amount . Since the distribution licensee already short of staff is not able to detect such pilferage involving the (licensed franchisee) thieves as they have become the new masters of the business.

posted by srijan at 4:48 am 3 comments

wednesday, august 20, 2008

RAJEEV GANDHI GRAMIN VIDYUTIKARAN YOJANA –ELECTRIFICATION WITHOUT ELECTRICITY

The Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)– Scheme for Rural Electricity Infrastructure & Household Electrification launched on 4th April, 2005 by Hon. Prime Minister, Dr.Manmohan Singh, Government of India with the objective of providing access to electricity to all households and improving rural electricity infrastructure . Under the programme 90% grant is provided by Govt. of India and 10% as loan by REC to the State Governments. this indeed is an ambitious scheme aiming to provide electricity to all rural house holds keeping in mind the National Electricity Policy aiming "Power to All by 2012"
The RGGVY aims at:

• Electrifying all villages and habitations as per new definition
• Providing access to electricity to all rural households
• Providing electricity Connection to Below Poverty Line (BPL) families free of charge
  Salient feature of the scheme are

1. Rural Electricity Distribution Backbone (REDB) with 33/11KV (or 66/11 KV) sub-station of adequate capacity in blocks where these do not exist.
2. Village Electrification Infrastructure (VEI) with provision of distribution transformer of appropriate capacity in villages/habitations.
3. Decentralized Distributed Generation (DDG) Systems based on conventional & non conventional energy sources where grid supply is not feasible or cost-effective
4. Certification of electrified village by the concerned GramPanchayat.
5. Deployment of franchisee for the management of rural distribution for better consumer service and reduction in losses.
6. Undertaking by States for supply of electricity with minimum daily supply of 6- 8 hours of electricity in the RGGVYnetwork.
7. Making provision of requisite revenue subsidy by the state.
8. Determination of Bulk Supply Tariff (BST) for franchisee in a manner that ensures commercial viability.

As per MoP so far 47826 un-electrified Villages have been electrified and free electricity connection to 22.93 Lakh BPLhouseholds has been release with construction of 130 new sub stations.
Definition of Electrified Village
Prior to October 1997
“A Village should be classified as electrified if electricity is being used within its revenue area for any purpose whatsoever.”
After October 1997
“ A village will be deemed to be electrified if the electricity is used in the inhabited locality, within the revenue boundary of the village for any purpose whatsoever.”
New definition of village electrification came into effect from the year 2004-05 wef 17 February 2004
As per the new definition, a village would be declared as electrified, if :

1) Basic infrastructure such as Distribution Transformer and Distribution lines are provided in the inhabited locality as well as the Dalit Basti/ hamlet where it exists.
2) Electricity is provided to public places like Schools, PanchayatOffice, Health Centers, Dispensaries, Community centers etc.
3) The number of households electrified should be at least 10% of the total number of households in the village.
This scheme looks to be ambitious who will deny the fact that the basic necessity of life ie electricity should be denied to any body...? But with the prevailing crisis of electricity when we are not able to provide electricity to even the urban house hold despite the fact that the most of the urban population is prepared to pay for the electricity. Further with the existing availability of power we are not able to feed the rural consumer with more than 8 hours of electricity then electrifying virgin villages with already cripplinginfrastrure and excessive line losses already burdening the electricity tariff for the existing consumer is not a wise step. We do not deny the importance of electricity but the villagers who even after getting the village electrified and still not getting electricity are more frustrated than the villagers without electrified village. Further due to large scale electrification of un electrified villages at one go resulted in exorbitant price rise in the equipments pertaining to the electrification for example the cost of a 5 MVAtransformer inclusive of erection for APDRP project in 2003-04 was around Rs 15,00,000 this cost increased to Rs 33,00,00 to Rs 40,00,000 similarly cost of other equipments like poles, conductor, insulators, swithgears etc also increased tremendously,obviously due to simply supply and demand gap or may be pooling of rates by big suppliers. this all resulted in increased cost of other electrification including O&M expenses of the distribution licensee.

if see the ground level reality, i have seen many villages which are electrified many years back but still the villagers are not ready to take electricity connection even after the subsidised rates. when persuaded they say even if their house is given free connection with a free bulb they shall not be able to purchase another in case it becomes defunct, further they argue that they need money to meet both ends meet not electricity even if this is subsidised. Now as per new definition the village where at least 10% households are electrified shall be treated as electrified will pose a great challenge to distribution licensee to persuade the villagers to take electricity connection of course free...!

distribution licensee has many problems ahead due to this large scale electrification, with huge net work to cover, without electricity the problem of safeguarding the installation including conductor and small transformers in remote villages is of course a big challenge how the licensee faces and protects its installation once it is handed over by the working agency is to be seen.

the line losses which are alarmingly high 30%-35% in most of the states and even 50%-60% in north east states including J&K will certainly increase, when we are having 80% of cost under ARRtowards the power purchase this cost is certainly likely to go upwards leaving very little scope to reduce the already increased tariff. The efforts to reduce the cross subsidy will also go hay wire. The poor consumer is likely to face increase in tariff in coming years due to this electrification. The cost of depreciation(7.5%) including the return on equity (14%) will further increase the tariff.

With the slow growth of generation, we need to add 78500MW in 11th five year plan ie by the end of 2012 to make energy available to all, the dream seems to be distant seeing the historical plan andachievements. The GoI has desired Guarantee by State Government for a minimum daily supply of 6-8 hours of electricity in the RGGVYnetwork with the assurance of meeting any deficit in this context by supplying electricity at subsidized tariff as required under the Electricity Act, 2003. The state government ahead will face the consequences of this un planned electrification by arranging finances to subsidise the electricity to rural consumers. Quality of supply already at the worst condition with voltage as low as 30% of rated voltage may further deteriorate with this huge electrification.

The GoI has provisioned Deployment of franchisees for the management of rural distribution in projects financed under the scheme and to undertake steps necessary to operationalize the scheme.
As per GoI
"The management of rural distribution would be through franchisees who could be Non-Governmental Organizations (NGOs), Users Association, Panchayat Institutions, Cooperatives or individual entrepreneurs. The franchisee arrangement could be for system beyond and including feeders from sub-station or from and including Distribution Transformer(s). The franchisee should be preferably input based to reduce AT&C losses so as to make the system revenue sustainable."
Based on the consumer mix and the prevailing consumer tariff and likely load, the Bulk Supply Tariff (BST) for the franchisee would be determined after ensuring commercial viability of the franchisee. Wherever feasible, bidding may be attempted for determining theBST. This Bulk Supply Tariff would be fully factored into the submissions of the State Utilities to the State Electricity Regulatory Commissions (SERCs) for their revenue requirements and tariff determination. The State Government under the Electricity Act is required to provide the requisite revenue subsidies to the State Utilities if it would like tariff for any category of consumers to be lower than the tariff determined by the SERC. While administering the scheme, prior commitments may be taken from the State Government regarding –

a) Determination to bulk supply tariff for franchisees in a manner that ensures their commercial viability.
b) Provision of requisite revenue subsidy by the State Government to the State Utilities as required under the Electricity Act.

Model – A : Revenue Franchisee- collection based
This kind of franchisee may be developed with the intended role limited to billing, revenue collection, complaints redressal, facilitating release of new service connection and keeping vigil on the status of distribution network in the franchised area for providing appropriate feedback to the utility.
Such Collection Franchisee would be appointed for an area and be given a target for revenue collection every month which depends on the baseline collection in the area.
The remuneration methodology involves:

• paying the franchisee margins (which will be a percentage of collections) on achievement of the target,
• levy of penalty for not achieving the target
• Incentives for exceeding the target.

Drawback of this system is that the franchisee is not a partner in loss reduction – since its compensation is linked to the revenue collections made – and not on the energy input coming into the area. This model is thus not preferred for adoption.
Model – B : Revenue Franchisee – Input based
In case of the input based franchisee, the input energy into the area covered by the franchisee is measured by the utility and the target for revenue collection are set based on the collections made as a percentage of the input energy supplied to the consumers beyond the point of metering by the utility.
The operations and remuneration methodology of the input based franchisee is similar to that of the collection franchisee. The basic difference is in the target setting mechanism by the utility.
The input based franchisee’s area may be decided based on:

• Energy supplied by the utility through 11 kV feeder(s) as a point / location of measurement of energy supplied to franchisee and will need a metering unit in the individual 11kV feeders.
• Above system can also be distribution transformer wise located in the villages having smaller area of franchisee operation.
  The additional advantage of this method as compared to that of the collection franchisees is that the franchisee also becomes a partner in loss reduction and tries to reduce theft in the system.

Model – C : Input based Franchisee
This model is similar to the Revenue Based Model – with one significant difference that the franchisee will also buy the electricity from the utility and shall pay the energy charges to the utility at apre-determined rate. The energy supplied / purchased will be as shown in the 11 kV metering unit. The franchisee will have to collect revenues from the consumers through raising bills so as to have sustainable commercial operation.
Model – D :Operation & maintenance franchisee
In this model, in addition to the franchisee operation indicated in model C above, the Utility may also hand over the operation and maintenance of 11 kV & LT feeders including distribution transformers to the franchisee based on monthly retainer basis or at an adjusted energy purchase price (of the utility), factored appropriately considering O & M cost of the franchisee.
Model – E : Rural Electric Co-operative Societies
This approach calls for the State to authorize the creation of traditional electric cooperative society that is organized, owned and operated by its members. The society owns the distribution utility assets and is responsible for all utility functions including operations and maintenance, metering, billing and collections, accounting and finance, procurement, stores and system planning and expansion.
The operations of the co-operative society involve:

• Organizes the community and recruits membership.
• Owns the distribution system and carries any debt on the assets.
• responsible for all facets of managing and operating the utility.
• Purchases power from the state power utility.
  The society is formed through memorandum of association (MOA) and has the following key features:
• every household within the jurisdictional area of the society is member of the co-operative society,
• at the helm of the management is the Board of Directors elected by the members of the co-operative society (one member one vote),
• net profit of the co-operative are to be shared amongst the members,C
• Co-operatives are the “licensee.”

Model – F : Electric cooperative society – operations management through contracting
This is a variant of the above model - E, keeping the formation procedure of the society unaltered. The BOD of the society may decide to run the operations of the society through an external experienced agency / organization with suitable fee structure, instead of operating the system itself with the concurrence of the state / utility. This can be achieved through an appropriate “operations contract” with built-in performance criteria.
Deployment of efficient operation contractor ( or managing agency / organization) may considerably help proper day to day operations of the electric co-operative society.

Out of the all models discussed above in majority of cases only first type of franchisee ie Revenue Collection based is coming forward as no body wants to be the part of loss reducing mechanism which needs thorough devotion, a lot of commitment and a lot of support of public and district administration. With licence to distribute bill and collect the revenue on behalf of the distribution licensee the Revenue Collection based franchisee will have access to huge distribution net work of the distribution licensee and we are afraid that he may also involve in power theft as distribution licensee has no infrastructure to check the theft even in the urban area.

The GoI instead of propagation the franchisee model after village electrification should have asked for active participation of traditional electric cooperative society that is organized, owned and operated by its members. The society owns the distribution utility assets and is responsible for all utility functions including operations and maintenance, metering, billing and collections, accounting and finance, procurement, stores and system planning and expansion. Villagers intending to take electric connection being the active member of the society become the part of electric net work and own responsibility of reducing the line losses including the theft. Further the added advantage of the precondition of electrification with electric cooperative society would have reduced burden of massive electrification at one go and would have induced sense of responsibility among the rural consumers. The time cushion would have resulted in meeting the demand supply gap with propotionate increase in generation and equivalentevacuation system of electricity.

posted by srijan at 4:51 am 0 comments

saturday, august 2, 2008

COMMERCIAL LOSS MEASURMENT .....NOT SO SIMPLE

The following are the Commercial Losses need to be segregated as per MoP, GoI

• Metering inefficiency including defective meter
• On account of billing inefficiency
• On account of poor collection
• On account of theft and pilferage

Metering efficiency including defective meters covers all aspects of correct metering of electricity consumed. This theoretically is defined as the ratio of metered consumer to the total number of consumers. As far as looses on account of metering are concerned these include the losses due to incorrect metering. Defective metering may be on account of defects in meters, defect in CT/PT in case of HT consumers, CT in case of LT consumers. Since assessment of defective meters on regular basis is most important to calculate the losses on account of defective meter and the distribution licensee owing to its huge network is not able to calculate exact number of defective meters/defective metering. Although in some of the states the metering of small and medium power consumers having load more than 25KW is based on indoor and out door meters, indoor being the main meter and out door being the check meter. The consumption of these two meters must match for the proper metering . This has to some extent reduced the loss on account of defective metering but again due to negligence of theemployee of the distribution licensee still the energy is not being matched, further the consumption on the basis of Meter Reading Instrument (MRI) is not being watched by not analysing the MRI reports this further results in the commercial losses for not billing the energy consumed due to CT, PT circuit open or short. Obviously the losses on account of defective metering is not an easy task to calculate. The distribution licensee needs to first of all find the number of defective meters in its area, then he also needs to find out the number of consumers un- metered, the actual consumption of all these un-metered consumers, the energy billed against these defective plus un- metered consumers. Since all these data are not available or even if available are least authentic so we can say at present there is no way to effectively calculate the commercial loss on account of defective meters or on account of poor metering efficiency.

The losses on account of billing inefficiency can be calculated if a thorough audit of all the billing parameters is carried out by the distribution licensee. The audit should be carried out by some expert group who can analyse the loss on account of billing inefficiency with the help of MRI report and consumption pattern of the consumers where energy is being assessed due to un-metered supply. The analysis further needs to be done on correct application of tariff on the consumer. This has been observed that an effective method of audit is not applied by the distribution licensee for finding out the errors of the billing . There are lapses also in reconciliation of revenue receipts and actual revenue transferred in the account of the the distribution licensee. The effective reconciliation of this may improve billing efficiency.

Poor collection can be segregated by using statistical tools as the poor collection is not actually the total loss of the revenue this in fact results in mounting arrears thus the impact of this can be calculated if we find out the average realization period of the un-realized revenue and then simply using the the time value of money formulae taking into account the average rate of return of prevailing market conditions. Though this loss can be segregated but need a serious thought to work out plan with proper action.

The losses on account of theft cannot be calculated as already detailed in post Power Theft, if we find energy on distribution transformers, the energy billed on that particular transformer, provided 100% indexing of consumer is done, even than the losses will containing technical losses on that particular distribution net work feeding energy to metered consumers. How ever if we are bent upon we can calculate them with following-

• All the Distribution transformers are metered from LT side, so as to avoid transformer losses
• All consumers fed from this transformer are indexed.
• All consumers are metered with 100% correct metering
• Feeder length along with size of conductor, and the technical losses based on current flow is known.

From the above analysis we can understand the distributionlicensee with its financial constraints and with huge net- work consisting of rural , un-metered consumers like Public Lights, STW, rural PTW, pump canals etc. segregating the losses is not an easy task. Further some losses as desired by MoP, GoI cannot be segregated.

Right now we can calculate the over all losses ie AT&C losses with energy input and revenue realized.

posted by srijan at 9:37 am 0 comments

thursday, july 31, 2008

DISTRIBUTION LOSS ...CAN WE MEASURE..?

The distribution segment of the Indian power sector – dominated by state government sponsored utilities – had reached a point of near collapse in 2000, but the initiatives taken by Government has started bringing some change in aggregate level.Reduction in technical and other losses is still a major issue before the State government on account of restructured but still unmanageable distribution’s monopolistic structure.

The MoP, GoI has rightly thought to manage the crisis by pin pointing the loss making areas with this intent the MoP issued instructions to segregate the AT&C losses.

As far as the losses from 33/11kV sub station to 11kV feeders are concerned these too are not measurable at present. The following are the reasons for the non measurment of losses

1. The indexing of consumer is not feeder wise there fore the energy billed for that particular feeder is not known.
2. The meters of most of the 11kV feeders are not working due to poor metering of sub staion as already mentioned the main metering equipment ie CT/PT are not properly working, the sub station staff is also least bothered about the proper metring of the feeder.
3. Trnasformer LT side losses are also not measureable for the follwing reasons

• Meters on transformer (lacs in number) are not installed
• Consumers are not indexed as per the transformer.

The main reson for the high non-technical losses ie avoidable losses in 11 kV and below are more or less the same as of 33 kV line and substaion ie

1. Poor up keep of11 kV line.
2. Improper size conductor.
3. Use of GI wire in place of conductor in some of the feeders pertaining to theft prone rural area .
4. Improper jointing of conductor.
5. Line passing through green trees.
6. Very long length of feeders some times the feeder is as long as 20KM or even more.
7. Poor quality of distribution transformer. It has been observed that even the new transformers purchased has more than prescribed guaranteed losses, what to say about repaired transformers who have out lived their lives. To verify this some of the new transformers were put into load tests with the help of auto analyzer and it was shockingly found that the losses were more than 70% of guaranteed losses.
8. Improper up keep of distribution boxes. Most of the distribution boxes have LT cables connected to bus bar without proper lugs, the loose joints of the cable with bus bar result in non technical losses.

From the above this is clear that if we have to make a data bank as per requirement of MoP for the segregated losses , the following need immediate action:-

• Meters on all 11kV feeders be made functional.
• Meters on all Distribution transformers be installed.
• All consumers should be indexed feeder wise/distribution transformer wise.
• 100% metering of consumers be insured.
• Meter reading of all the feeders, Distribution Transformers and consumers be insured on the same date.

Considering above this is obviously not an easy task for the distribution licensee to come out with immediate solution for their huge net work where even consumer metering is still not 100% correct.

Further there is no specific authentic value for guiding the distribution licensee to maintain the level of non avoidable technical losses.

India is power stressed. The increasing vibrancy and flexibility of the Indian economy is not matched by the power sector, which continues to be mired in mismanagement and poor governance. Experience and casual empiricism is vindicated by analysis that suggests electricity supply by government monopolies is the most important infrastructure constraint on overall economic growth, and is significant in growth regressions and investigations of FDI determinants. Keeping the important of this sector vis a vis industrial acceleration Energy Accounting is the main area of focus but how come this important area gets proper attention is yet to be seen........

posted by srijan at 2:33 am

sunday, july 27, 2008

HOW TO CALCULATE...SUB TRANSMISSION LOSSES

In this part we try to analyze the Sub Transmission losses ( up to 33 kV and in 33 kV substation)
Transmission loss up to 132 kV substations is measurable as theSTUs (State Transmission Utilities) have the proper metering. There may be a little bit of exceptions. but when we come down to Sub Transmission losses calculations the things are not easy. The meters of 33kV emanating from 132kV sub station under STU may be functional but in most of the 33/11 kV substations the meter on incoming of 33kV feeder is not installed, or are not working, as a result the loss of energy upto 33kV cannot be measured for this at least meter on incoming side needs to be installed.
Further to know the bus bar loss we need to know the consumption of energy in substation transformer and equipments including 33kV bus bar, 11kV bus bar and switch gear. For this purpose if sub station is a radial sub station then meters of all out going 11 kV feeders should be under working conditions, and if the substation is not radial the apart from proper working of 33kVincoming meter and 11kV out going feeder meters the out going 33kV meter should also be functional. It has been found that in most of the substations the meters of these feeders are not working.
Further for proper working of meters both CT/ PT units should be working properly with proper ratio, but it is found in most of the cases the CT/ PT units purchased by distribution licensee are of sub standard quality leading to improper metering. More over in door type bus or line PTs are installed at substations which are often put out of circuit by the operating staff of distribution licensee, since the PT’s ouster from the circuit does not result in any break down in the supply, neither it effects the protection of the switch gears, the operating staff is least bothered to keep these instrument working in the circuit. May be they too are not interested in proper recording of energy in their sub stations. In one of the posts published in this web site it was pointed out that a SERC on survey by private agency found that about 100% metering of 33/11 kV substation was defective on account of defective CT/PT units.
If out door combined CT/PT metering units of good quality are used then at least the substation loss can be calculated provided the incoming/outgoing side meters of 33 kV are also working.
The technical loss including no load loss/ load loss of the transformer cannot be avoided as it is the part of the system but non technical losses are due to inefficiency of distribution licensee and can be avoided, therefore we will talk only about the non technical losses.
Losses in 33kV line are because of improper size of conductor, non technical joints in the conductor and poor up keep of line resulting in leakage of the current due to HT line passing through the green branches of the trees.
Substation losses are because of the poor up keep of equipment, improper joints in bus bar, bus bar jumpers, improper size of bus bar, poor quality of power transformers .

In the published photo you will find GI pipe has been used in place of proper size conductor. These non technical methods adopted by the un-trained staff of distribution licensee tells the truth itself about the concren of distribution licensee towards reducing the sub station losses.

Further the reactive power compensation at distant located sub station is not provided as most of the high cost capacitor bank though installed liedefunct due to apathetic attitude of the distribution licensee and the sub station staff. Since the capacitor banks do not effect the supply they only effect the quality of supply therefore the staff of the sub station is hardly interested to take proper care of this effective devise. Non functioning of capacitor increases the current flow in the circuit and un nessesarily over loads the line and transformers resulting in more sub transmission losses.
These non technical losses can be reduced if proper care is taken. However there is no prescribed nor for these losses, therefore to judge the performance of a substation the norms of these losses should be specified. The poor quality of power transformer results in high reactive power and low power factor. It has been observed that a transformer draws considerable current even though it is disconnected from the load side. This all is on account of the poor quality of equipment.
Further the improper joints in bus bar, jumpers also result in power loss this further results in voltage drop of the system. The Government should come out with strict norms regarding the specific technical loss.
It is clear from above analysis that the parameter desired by MoPcannot be achieved without proper metering of 11kV & 33kVfeeders, till than the dram of Government to make a data base of these losses seems to be distant……….

posted by srijan at 4:14 am

friday, july 25, 2008

KEY AREA TO FOCUS...AT&C LOSSES

Reform process started in India's power sector more than a decade back, in some of the states energy sector got privatized while in some states DISCOMs formed but this could not create a competetion, instead of creating competition between DISCOMs, the privatisation process has led to the creation of private monopolies. This is the reason why India's power sector is saddled with several shortcomings. Firstly, it is internationally uncompetitive and poor quality power imposes a heavy burden on trade and industry. Second, The efficiency of the distribution system as measured by the extent of AT&C losses remains low, aggregate technical and commercial (AT&C) losses exceed 40 per cent. Thirdly, the State electricity boards (SEBs) are financially sick. , adding that CPSUs receive guaranteed 14-16 per cent post tax returns under a cost-plus tariff regime. Such high guaranteed returns on a non-competitive basis are unique to India and more crucially cannot be sustained with the extant high level of AT&C losses. The return on equity should be reduced when we donot get more than 8% even from the ivestment in banks than the return from unviable sector should certainly come down from present level to more sustainable realistic level.
While distribution reforms remain key to improving the viability of the sector, the generation and transmission investments continue to dominate the sector with a share surpassing 90 per cent of the investment.

We are building a superstructure without the foundation. Although power sector reforms have been under way for over a decade, with a few milestones reached in crucial areas, the sector remains locked in a situation that is "fundamentally unsustainable". Despite recognising the criticality of the distribution sector to the efficiency of the power sector, actual investments in the distribution sector remain low. The distribution sector has been neglected in the past and based on the experience so far with APDRP, it is reckoned that an investment exceeding Rs 1,00,000 crore could easily be absorbed in the short to medium term to improve distribution efficiency.

But it has been observed that the overall power sector performance in India has been compared to a "leaky bucket", where the more funds are invested into the system, the more quickly they spill out without considerable benefits. Improving the efficiency of the country's power distribution system could bring enormous benefits from the savings, which could be applied to other sectors of the society. Those savings could well be used by the government to further strenthen this sector .
Factors which contribute to such astronomical energy losses are a combination of technical and non-technical issues. Poor metering, lack of investments in distribution networks resulting in overloaded feeders, ill-maintained substations with aging transformers, and other technical shortfalls are further amplified by inefficient billing and inadequate revenue collection as well as simply un-metered supply and wide spread electricity theft. The lack of consumer education in the rural sector, rampant political interference, and inefficient electricity use, among other factors, only further diminish the already weakened power sector.

MoP, GoI had realized the need of segregating the AT&C losses not only into technical and commercial losses but also to clearly identify the losses occurring on account of the faulty metering, poor billing, inefficient collection and pilferage and theft. The MoP had desired way back in July 2005 that a national level data base be created to clearly bring about the extent of losses occurring in the electricity sector, be it at transmission, sub-transmission, distribution or commercial levels , but the desired data base is not yet been made since the instruction does not contain the method and specific guidelines to segregate these losses.

MoP desired the information for following:-

Technical Losses

(a) Transmission

1. Up to 33kV
2. in 33 kV sub station

(b) Distribution

1. 11kV feeder level
2. Distribution Transformer Level
3. L.T.Side

Commercial Losses

1. Metering inefficiency including defective meter
2. On account of billing inefficiency
3. On account of poor collection
4. On account of theft and pilferage

The desired information looks simple theoretically but in practice it is not as simple to find out for such a huge set up containing thousands of transmission sub stations (132 kV and above), lacs of 33/11 kV substations and millions of Distribution Transformers all over India. Even a small distribution lisencee has hudereds of 33/11kV substations containing thousands of 11kV feeders and distribution transformers.

In one of the posts we have seen the reasons of large scale theft and pilferage of electricity (Theft), this though is a major component of AT&C losses yet there exist other technical and non technical reasons. These factors shall be taken one by one for deep analysis in next posts.

posted by srijan at 9:30 am

tuesday, july 22, 2008

Power Blues.....The Poor Quality Control

In one of the posts I have talked about the poor quality control of the material/equipments which leads to frequent interruptions of power supply. Now at least the regulator are coming up to resolve this ground level reality, a welcome step to see the truth of reform themselves.....a perfect way to judge the implementation of distribution code and see the pathetic condition of the consumer on this account. Recently a news item in this regard was pulished inTOI dated 18, July'08.

A five member committee called Quality Control Authority (QCA), was constituted by the Electricity Regulatory Commission of UP to find out the reasons of large scale transformer damage rate (30%) and Quality of equipments and other material.The five-member committee, was headed by SC Srivastava, dean and professor of electrical department, Indian Institute of Technology, Kanpur (IIT-K), . The task of committee was not easy, the committee was asked to submit its report within three months, the committee, however, was unable to adhere to the time frame because of ‘lack of help extended by various discoms and its tenure was to be extended three times, and finally submitted its report after about nine months. The SERC once forced to issue a notice to one of thelicences under Section 142 of the Central Electricity Act to divulge details. It was found out by the committee

• The transformers and cables of substandard quality is beingused .
• Serious lapses in their procurement and maintenance are main reasons of poor power scenario .
• The damage caused to transformers and transmission cables is a result of ‘improper testing’ and ‘lack of protective equipment’.
• The equipment was ‘poor calibrated’ and used by ‘untrained staff’.
• Conditions of transformers in the stores were not up to the mark with evidences of oil leakages.
• Around 20% transformers do not complete their life-cycle which is ‘abnormally high’ as compared to the national average of 2%.
• Most of the distribution transformers are in a bad condition with complaints of oil which acts as a coolant being pilfered by miscreants. This causes damage to transformers leading to power failures
• procedure adopted in the procurement of equipment as also in the selection of vendors for their installation is questionable.

It is not until power authorities stop compromising with the quality of equipment that the power situation in the state would not improve.The distribution licensee will have to adopt a strong ‘equipment monitoring system’ and ‘adherence to safety measures’ to ensure uninterrupted power supply.

The basic idea of investigation of SERC was testing the quality of equipment for the requisite specifications, SERC strongly endorsed the people’s grievances on the power front, came down heavily on lackadaisical approach of authorities in preventing breakdowns.

This is indeed a welcome step of any SERC, infact this seems to be right approch to judge the implementation of distribution code andgudelines issued by SERCs to the distribution licensee. Although there is a long way to go but at least processes has started.........distribution licensees are waking up from the slumber.