Energy Conclave 2006 Energy and Sustainable Development July 2006.
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Transcript of Energy Conclave 2006 Energy and Sustainable Development July 2006.
Energy Conclave 2006Energy and Sustainable DevelopmentJuly 2006
Slide 2July 2006
Agenda / Contents
• Rural poverty and sustainable development- achievement on MDGs require significant improvement in
the quality and quantity of energy services• Electricity: and the challenge to support growth and equity• Issues in terms of access, security, reliability, and price and
key responses • Local participation in village energy system• Implementation challenges
Slide 3July 2006
Achievements and unfinished Agenda
• 75% villages electrified; but only 46% households have access to electricity (77 million households un-served)
• About 63 lakh poor households (12%) have lifeline access under Kutir Jyoti; but 82% BPL HH are not yet covered
• Per capita usage increased from 15.6 (1951) to 612.5 kWh (2005) but well below developing cos.
• Groundwater irrigation accounts for 70% of irrigated area; but poor quality of supply
0
100000
200000
300000
400000
500000
600000
19
47
I F
YP
(1
95
1-5
6)
II F
YP
(1
95
6-6
1)
III
FY
P (
19
61
-66
)
19
68
-69
IV F
YP
(1
96
9-7
4)
V F
YP
(1
97
4-7
8)
19
78
-79
VI
FY
P (
19
80
-85
)
VII
FY
P (
19
86
-91
)
19
91
-96
19
96
-20
01
20
01
-20
05
20
05
- 2
00
6
0
10
20
30
40
50
60
70
80
90
100
Villaged Electrified % of all Villages
Source: Ministry of Power and CEA – various reports
Slide 4July 2006
Defining requirements
Jaipur Discom
10%
15%
20%
25%
30%
35%
40%
45%
30% 35% 40% 45% 50% 55% 60% 65% 70% 75%
Village Electrification
Dholpur
Saw ai Ma'pur
Jhalaw arBundi
Baran
Kota
TonkJaipur
Alw arBharatpur
DausaKarauli
Jaipur Discom
10%
15%
20%
25%
30%
35%
40%
45%
30% 40% 50% 60% 70% 80% 90% 100%Village Electrification
Hou
seho
ld E
lect
rific
atio
n
Karauli
Baran
Jhalaw ar
Saw ai Mad'pr
Kota
Alwar
J aipur
Dausa,
Dholpur
Earlier Definition: 98% villages electrified across 12 districts of Jaipur Discom• total villages : 14690• electrified : 14401
New Definition: 60% villages electrified but in terms of households, <30% electrified in 12 districts• total villages : 14690• electrified : 8829• rural households : 2.3 million• electrified : 0.68 million
Slide 5July 2006
Source: Sinha 2006
1952
1969 2002 2004
Centralised generation and grid extension
RE programme started
Rural Electrification Corporation formed for financing rural electrification
1973-77
Cross -subsidisation
Flat rate tariff : irrigation pump sets
RE under Minimum Needs Programme (1974)
1980-90
Massive expansion of RE (village electrification)
Kutir Jyoti programme started (1988-89) for rural poor households
1991-93
Private sector participation in power generation opened
Electricity sector reforms started
1996
Act to set up Electricity Regulatory Commission passed
Reforms in Orissa started
1997
1999-2000
Distribution privatised in Orissa
Government emphasises on distribution reforms
Other states corporatise distribution
2000
Electrification of remote villages by MNES
Electricity included in PMGY
Electricity for all by 2012
Rural Electricity Supply Technology (REST) Mission started
2003
Electricity Act 2003 enacted
New RE programme: target of one lakh villages and one crore households in 2 years
National Policy:a. Rural Electrificationb. Distributed generation including renewable
Chief Minister's Conference pass resolution to initiate power sector reforms
Launch of Rajiv Gandhi Grameen Vidyuteekaran Yojana (RGGVY) for complete Household electrification and Village electricity infrastructure
Remote Village Electrification Programme (RVEP) for remote/inaccessible village through Renewable energy
2005-06
RE and sector initiatives
Slide 6July 2006
Key challenges
Financial sustainability• Capital• Operations• Primary energy
Management requirements• Under-managed, commercial
approach• New institutional arrangements• Quality of supply
Demand side and Supply side
Pricing• Residential and Industrial
Targeting • Subsidy• Performance
Slide 7July 2006
Financial viability
Build-up of Rural Supply Subsidy requirement
-
200
400
600
800
1,000
1,200
1,400
Rs
Cro
res
New Consumers; Enhanced Supply 2 9 48 73 222
New Consumers; Existing supply 81 187 281 354 367
Existing Consumers; Enhanced Supply 16 35 106 110 270
Existing Consumers; Current Sp. Cons 613 636 589 516 447
FY06 FY07 FY08 FY09 FY10
Source: Financial model output from one of the state utilities
Slide 8July 2006
Financial viability
Key issues:• Annual financial gap of utilities is
increasing again with higher cost of power purchases, O&M, and financing of past losses
Response:• Business plan (IEP8.1.6)• New institutional framework to
enhance local involvement, scale, and quality of rural supply, and to reduce commercial losses
Responses (cont’d)• Franchisee initiatives must be
supported by capacity building, regulatory, and utility actions
• Notify rural areas under EA2003- competitive distribution- can integrate other renewable
options
Slide 9July 2006
Institutional Framework to support rural electric ventures
Slide 10July 2006
Quality of Supply
Key issues:• Quality of supply differs
across regions• Significant improvement
on standard measures in recent times
• Supply rationing • Cost implications – poor
staff deployment, limited use of productivity tools
Supply Interruptions
0
1
2
3
4
5
6
7
8
9
Rural Semi-Urban
Urban Rural Semi-Urban
Urban Rural Semi-Urban
Urban Rural Semi-Urban
Urban
CPDCL EPDCL NPDCL SPDCL
Nos / Month
ALIFI - Planned ALIFI - Sustained Unplanned
Slide 11July 2006
Quality of Supply
Key issues• Commercial quality
performance lags in rural, semi-urban areas; even as the norms are lax
Complaints Rectified as per Standards
47%44%
92%89%
70%
95%
100% 100% 100%
45%
58%
100%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Rural Semi-Urban
Urban Rural Semi-Urban
Urban Rural Semi-Urban
Urban Rural Semi-Urban
Urban
CPDCL EPDCL NPDCL SPDCL
Standards to address metering complaints: Urban: in 7 days; Rural: in 15 days; Replace in 15 days of inspection
Slide 12July 2006
Demand side initiatives
Responses:• Regulatory
- TOD tariffs (IEP6.1.9)- Fuel surcharge pass-through
• Differentiating the Urban and Rural services- Tariffs, metering, subsidy
• DSM incentives- outturn and case for utility
investments
100
61
17
0
39
83
0 20 40 60 80 100
Group - III
Group - II
Group - I
Consumer Benefit Licensee Benefit
Tariff: 0 with DSM, 20 p w/o DSM
Tariff: 20p with DSM, 50 p w/o DSM
Tariff: 100p with DSM, 200 p w/o DSM
100
61
17
0
39
83
0 20 40 60 80 100
Group - III
Group - II
Group - I
Consumer Benefit Licensee Benefit
Tariff: 0 with DSM, 20 p w/o DSM
Tariff: 20p with DSM, 50 p w/o DSM
Tariff: 100p with DSM, 200 p w/o DSM
Group I: Dry Land < 3 connections & Wet Land < 2.5 Acres
Group II: Dry Land > 3 connections & Wet Land > 2.5 Acres
Group III: Corporate & IT Assesses
Sharing of DSM benefit with consumer investment
Slide 13July 2006
Supply side management
Responses • Decentralised supply management
- MBMS: capacity allocation to unbundled Discoms: brings better power procurement and capacity utilisation, scheduling, and load management
- Intra-state ABT and impact on flattening load curve
• Benchmarking and review- Plant performance metrics- Distribution construction and
maintenance standards
IPPs
CPSU
RVUN
Discom
Discom
Discom R't'lTariff
Consumers
RVPN(STU/SLDC)
Discoms'Centre
ReallocatedContracts
Slide 14July 2006
Pricing – Residential and Agriculture
108%
79%76%
74%
61% 61%57%
51%54%
50%47%
124%
107%104%
96% 94%92%
86%89%
91%
84%
79%
39%
38%
31% 35%
34%
36%
34%
33%
33%
33%
31%
0%
20%
40%
60%
80%
100%
120%
140%
FY92 FY94 FY97 FY99 FY00 FY01 FY02 FY03 FY04 FY05 FY06
Tariff as % of average CoS
Domestic Metered (0-100 kWh) Domestic Metered (300 kWh +) Domestic Unmetered Supply Agriculture
Slide 15July 2006
Pricing - Industrial
Consumption in MU Effective Tariff in Rs / kWh
0
2000
4000
6000
8000
10000
12000
14000
16000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
0
1
2
3
4
5
6
SEB/Discom Sale Captive Wheeling Average Tariff
Source: PwC analysis
Slide 16July 2006
Cross-subsidies and implications on viability
Note: Size of the bubble represents the energy sales to the category
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
-1 0 1 2 3 4 5 6
Realisation Rs/kWh
Cos
t of S
uppl
y R
s / k
Wh Subsidized
Subsidizing
DOM
AGR
COM
HT 1
HT 2
LT IND
RLY
Key issues• Impact of open
access and retail competition
• Contestable load from 58% (AP) to 80% (RAJ) of HT load
• Experiences from group captives
• Tariff rationalisation and targeting
Slide 17July 2006
Subsidy Targeting
Key issues• Subsidy for lifeline users is poorly
targeted in current slab structure. • Case: 80% of slab 1 consumption
is drawn by users with > 50 kWh. T>COS applied for δ =c-150kWh
Response • Direct payment options (IEP8.3)• Tariff re-design• Time-limited; shift to metered use
20%34%
46%
50 kWh 50-100 kWh > 100 kWh
Lifeline Other than lifeline users
Recovery for consumption in Slab 1
COS = 395, Tariff = 145
34%66%
50-100 kWh > 100 kWh
Recovery for consumption in Slab 2
COS = 395, Tariff = 280
Slide 18July 2006
Performance and Tariff regime
• Prevailing tariff regimes are focused more on minimising disparity than promoting efficient behaviour; need for redesign to long-term performance based regime
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
2002 2003 2004 2005 2006
Licensees' Losses vs. State-wide Licensee BST vs. Avg BST
Slide 19July 2006
In conclusion
• To differentiate institutional arrangements for rural and urban electricity supply
• Change from State “Administered Reforms” to “Stakeholder influenced” reform process
• Change from “Monopoly” to “Competitive Market” by providing choice to consumers
• To address financial, management, regulatory and utility requirements of rural supply for sustainable growth
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