Power distribution is the crucial link and the weakest in the electricity supply chain. It assumes great significance as this segment has a direct impact on the sector’s commercial viability, and ultimately on the consumers who pay for power services. The sector has been plagued by high distribution losses coupled with theft of electricity, low metering levels and poor financial health of utilities with low cost recovery. Due to this, the distribution companies have not been able to undertake corresponding investments in infrastructure augmentation.
The sector has started receiving greater attention and investment with the restructuring of the state electricity boards. Several new initiatives have been introduced to reduce aggregate technical and commercial (AT&C) losses along with a definitive regulatory framework. Electricity Act 2003, National Electricity Policy 2005 and National Tariff Policy 2006 are important regulations governing the sector today with an aim to bring competition in the sector and improve the services to the end consumers.
The GoI has also made heavy investments in the distribution sector through the RGGVY and APDRP during the Tenth Plan and has continued to extend the same in the Eleventh Plan as well. The aim of these programs is to provide access of electricity to all and bring down the AT&C losses to a level of around 15% across the country. The various policies and regulations introduced by the government are set to increase competition and bring about commercial viability. Participation of private players into the distribution sector has also been encouraged.
The distribution segment continues to carry electricity from the point where transmission leaves off, that is, at the 66/33 kV level. The standard voltages on the distribution side are, therefore, 66 kV, 33 kV, 22 kV, 11 kV and 0.4kV/o.230 kV, besides 6.6 kV, 3.3 kV and 2.2 kV. Depending upon the quantum of power and the distance, lines of appropriate voltages are laid. The main distribution equipment comprises HT and LT lines, transformers, substations, switchgears, capacitors, conductors and meters. HT lines supply electricity to industrial consumers while LT lines carry it to residential and commercial consumers. Several performance indicators deciding the power distribution are discussed in this article.
Following are the main factors in deciding the Indian power distribution sector.
Continued Demand for Power: The Integrated Energy Policy predicts that in order to eradicate poverty, the country’s economic growth needs to be at least 8 per cent annually until 2032 and in that time frame, the power capacity needs to rise to as high as around 800 GW.
Distribution Reforms: Unbundling of the vertically integrated SEBs into functional entities is a key requirement of the EA 2003. While most of the States have unbundled their utilities, the real benefit of unbundling can be derived only through bringing in best practices and professional management through PPP models. Given the political sensitivity and issues on valuation of assets on transfer together with employee reservations, states are looking at the Distribution Franchisee as a middle path for securing efficiencies while addressing the above political/social issues. However, in the long run, privatization seems to be a sustainable solution.
Supply Codes and Performance Standards: Supply Code lays down standards and procedures for recovery of electricity charges, billing cycles, disconnections, and restoration of service and metering among other things. To protect consumer interests, the EA 2003 requires the SERCs to specify standards of performance for distribution licensees. The commissions also have to specify the penalty and compensation to be paid by the licensees to the affected parties if the former fails to meet the standards. Both supply codes and standards of performance help in improving efficiency in power distribution operations.
Growing Consumer Awareness: For both SEBs and private companies, consumer interest is becoming a high priority. Connections are far easier to come by, bill payments are being streamlined, and complaints are addressed more promptly and effectively. Call centers have been set up to address supply and billing complaints. It has put in place a SMS based-fault management system whereby complaints are addressed through SMS. This has resulted in increased customer satisfaction across all segments, especially, among urban domestic consumers, thereby, improving the customer’s willingness to pay for better services. A virtuous cycle of better customer satisfaction resulting in more revenues for the discoms, who in turn are investing in better services, seems to be finally coming into play.
Focus on IT: All the discoms are adopting IT systems and practices to improve operations and customer service. SCADA is being used for better management of distribution networks. Spot billing, call centers, remote meter reading, automated billing, and energy accounting are some of the IT mechanisms being incorporated. Advanced technologies are being deployed particularly, in billing, fault reporting, remote metering and substation operations, enterprise solutions involving employees and commerce, consumer servicing through the internet and telephones, and MIS. Energy auditing and accounting are also being taken up assiduously.
Move towards DSM: Realising the benefits of introducing DSM measures in reducing overall electricity demand, several state regulators are encouraging DSMs in their states. Many SERCs have introduced time-of-day with differential tariffs for usage in different times, particularly, for HT consumers. Discoms and regulators are also encouraging the use of energy efficient devices, including efficient pumpsets in agriculture, and efficient lighting and appliances. Farmers are being encouraged to use electricity in non-peak hours. They are also encouraging the use of energy efficient devices, including efficient pumpsets in agriculture, and efficient lighting and appliances.
Environmental and Social Pressures: As a result of increasing environmental pressures, both local and global, the country’s power mix is increasingly becoming green. Since power from renewable energy is intermittent, these require a well interconnected grid with adequate spinning reserves and transfer capabilities. Further, as per policy objectives, discoms have to procure a certain percentage of their power requirement through renewable
Tariff Rationalization: The tariff rationalisation will result in commercial viability of the discoms and hence lead to corresponding investments in related infrastructure. With tariff rationalisation, the HT consumer, who currently bears the burden of higher tariffs, will increasingly find it competitive to buy power from the grid rather than through captive generation. This will further help the discoms in improving their consumer mix, and hence their financials. The consumers below BPL, who consume a small quantity of electricity, shall continue to receive special support through cross-subsidised tariffs.
Improving Grid Standards: The regulatory mechanisms of the availability-based tariff (ABT) and unscheduled interchange (UI) have created a solid base for maintaining grid standards. These should improve further with the newly notified draft for the amendment of the Indian Electricity Grid Code by the Central Electricity Regulatory Commission (CERC). Thus, the utilities will have to focus on demand forecasting, and predict their long-term requirement of power in order to benefit from the ABT regime.
Accelerated Power Development Reforms Program: The scheme was launched in 2002-03 as Additional Central Assistance to the States for strengthening and up-gradation of sub-Transmission and Distribution systems. 50% incentives were given to SEBs / Utilities to reduce their financial losses for actual cash loss reduction.
Key Parameters of Implementation
Other key parameters of implementation to be addressed are as follows:
• AT&C Losses High: AT&C losses are coming down only in the case of a few reforming. Utilities/SEBs while the national average continues to remain high. There are several pockets of excellence but overall state-wide reduction in AT&C loss remains and a consistent downward trend is not yet visible. Power theft is rampant in some of these states resulting in high non-technical losses. Other causes include faulty meters and unmetered supply. Greater influx of professional services within the limitations of state owned discoms would go a long way in improving system wide AT&C losses.
• Economic Recovery: Of the total electricity generated, less than 50 per cent is paid for. Electricity is stolen or not billed or electricity bills are not paid at all or not paid on time. The anti-theft legislation passed by the Parliament in June 2007 provides a more stringent framework to check electricity theft and non-payment of bills.
• Tariffs Continue to Suffer: Most of the problems arise from incorrect pricing of power whereby there are large cross subsidies built into tariff structures which provide incorrect economic signals to the consumers. Populist policies such as free power have proved to be a big dampener with the state governments unable to compensate the discoms for the additional costs they have to bear as a result of these measures. Not only do these measures put an additional financial burden on the discoms but they also lead to wastage of power by the farmers.
• Investment in Infrastructure: Investment in the distribution sector has not kept pace with investment in generation, which has led to high T&D losses, poor networks, and delays in projects. Due to distribution network constraints, power cannot be fully transported from surplus to deficit areas, and open access transactions cannot be effectively facilitated.
• Open Access in Nascent Stages: According to the mandate of the EA2003, open access in transmission was operationalised with immediate effect, and that in distribution was to be implemented in phases. All the SERCs have passed final regulations for implementation of open access in distribution in phases; however, the actual implementation of open access is still very nascent. Until the issues in open access are resolved, the intent of competition in the retail segment shall never materialize.
Role of Information Technology & Automation
A number of utilities have now started focusing on IT based applications to bring about efficiency in distribution. Moreover, the Restructured APDRP encourages IT enabled applications and automation for reduction of losses as well as energy accounting and auditing. Some of the automation and IT enablement in the Power Distribution Sector are:
• Customer indexing and GIS based Database: Consumer indexing based on GIS applications needs to be given priority in the Eleventh Plan to enable the respective utilities to increase their customer coverage, regularize unregistered or unauthorized connections, conduct audits at the feeder level by comparison of energy sent out on a 11kV feeder with total energy meter readings of all HT/LT customers in that particular feeder.
• Energy Accounting and Auditing: A robust Energy Accounting and Auditing framework shall help the utilities in prioritization of loss reduction measures and bringing about aggressive reduction in loss levels.
• Reliability Monitoring of Power Distribution Systems: There are a number of reliability indices which measure the outage in terms of, consumer hours and number of consumer interruptions etc. Reliability monitoring will become more fruitful once ‘Consumer Indexing’ is completed and will provide a direct index for customer satisfaction.
Supervisory Control and Data Acquisition (SCADA)
A well planned and implemented SCADA system not only helps utilities deliver power reliably and safely to their customers but it also helps to lower the costs and achieve higher customer satisfaction and retention.
• Distribution and Grid Station Automation: Distribution automation (DA) optimizes a utility’s operations thus, improving the reliability of their distribution system. Adding targeted distribution automation capabilities can be economical when they are an extension of your existing SCADA investments and the communication infrastructure. The success or failure of an automation program hinges on proper selection of equipment and communications to seamlessly integrate data into the utility control room. The key is to choose equipment that leverages your current assets wherever possible. With the latest in high speed communication technology, there has never been a better time for utilities to extend their automation beyond the substation. Substation automation goes beyond traditional SCADA to provide added capability and information that can further improve operations and maintenance, increase system and staff efficiencies, and leverage and defer major capital investments.
• Outage Management Systems: An Outage Management System (OMS) provides the capability to efficiently identify and resolve outages and to generate and report valuable historical information. It also helps the utility inform the customer of the outage situation and restoration status. An OMS typically works in conjunction with a GIS, the utility’s CIS, and automated call handling systems, such as an Interactive Voice Response (IVR) system.
• Distribution Network Planning: Inadequate network planning is one of the reasons for haphazard and scientific development of the distribution system. The utility should move to proper distribution network planning both for demand forecasting on a medium and long term basis, and for determining the need for system expansion and improvement to meet load growth. This will help in reducing the short term power purchase costs. Utilities should prepare a perspective plan for a 10 year period, and this should become part of the conditionality’s for sanction of grants under various programs.
• Automated Meter Reading: Automated Meter Reading of high revenue consumers helps the utilities protect their revenues and keep a continuous track of any anomalies at the consumer premises through a remote location. GPRS, GSM and CDMA are being used as the communication medium for these technologies. Advanced metering infrastructure (AMI) is defined as the communications hardware and software, and associated system and data management software that creates a network between advanced meters and utility business systems, and which allows collection and distribution of information to customers and other parties such as competitive retail providers, in addition to providing it to the utility itself. AMI is the wave of the future in distribution sector.
• Prepaid Metering: Pre-paid meters enable efficient use of power for agricultural use and also eliminate adverse impact on the water table due to excessive exploitation of ground water. Though it involves huge capital costs, the gains from the system can offset such costs in the long run. It is expected that large scale use will bring down the cost of the technologies. Further, prepaid metering can act as an effective tool against defaulters and those found involved in dishonest abstraction of energy. Further, these meters find a prominent use in Govt accommodations.
• HVDS Systems: Apart from reducing theft, HVDS systems improves the quality of power significantly thereby, improving customer satisfaction. HVDS systems should be given a special focus to get immediate results in loss reduction. The investment on conversions from conventional systems to HVDS is recovered by way of loss reduction within a period of 3 to 5 years in most cases.
• Enterprise Resource Planning: Employing an enterprise asset management solution will help utilities free work management from tedious and manual data entry and streamline new service initiation through improved dispatch, scheduling and tracking. The utilities can also improve management and tracking of capital invested and reduce spares inventory.
• Smart Grid: A smart grid delivers electricity from suppliers to consumers using two-way digital technology to control appliances at consumers’ homes to save energy, reduce cost and increase reliability and transparency. Such a modernized electricity network is being promoted by many governments as a way of addressing energy independence, global warming and emergency resilience issues. Smart meters may be part of a smart grid, but alone do not constitute a smart grid. A smart grid includes an intelligent monitoring system that keeps track of all electricity flowing in the system. When power is least expensive a smart grid could turn on selected home appliances such as washing machines or factory processes that can run at arbitrary hours. At peak times it could turn off selected appliances to reduce demand.
Power distribution is regularly monitored, complex system requiring attention. All the stakeholders of distribution viz, Government of India, State Distribution companies, Industries, R&D institutes, practicing engineers and academicians are striving hard in this direction to meet the increasing demands. Programs are simultaneously working on many fronts to ensure technical up-gradation of distribution network, to ensure stability of power supply to consumers. However, new challenges need to be addressed in the context of ongoing dynamic global restructuring of energy industries with local context.
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