SANTOSH KUMAR SAHUDIRECTOR (Finance) OHPC

CONCEPT VISUALIZED BY

Management of Cost in Power Sector for Sustainability of The Electricity

Distribution in the Country

Santosh Kumar SahuDirector (Finance), OHPC Ltd.

Saw the Happiness among the villagers while accessibility of Electricity

Realized Electricity as a commodity

Dreaming for Electricity Business to be an franchisee

Theme of Dreams (Win Win situation fo a Franchisee, Supplier, Transmiter & Generator)

Electricity distribution in India are still making losses, even after:-

(i) Enactment of Electricity Act 2003 ( E. Act 2003)

(ii) Several Amendment(s) of Electricity Act 2003,

(iii) Declaration of National Tariff Plan and National Tariff Policy,

(vi) Un-Bundling of State Electricity Board(s),

(vii) Independency in Load Dispatch Centre - NLDC, RLDCs, SLDCs,

(vi) Establishment of Independent Regulators in Centre and State (CERC/SERC),

(vii) Establishment of Grievance Redress Forum like, GRF, OMBUDSMAN and ATE (Appellate Tribunal for Electricity)

(viii) Establishment of Enforcement Mechanism through Energy Police Station and imposition of penalty under the E Act-2003(ix) Privatization of Discoms

(x) Establishment of Ultra Mega Power Plant(s) (UMPP)

(xi) De-Monopoly of Generation / Induction of IPPs

(xii) Procurement of Power through Competitive Bidding

(xiii) Introduction of Franchise in Electricity Distribution

(xv) Reduction in rate of Interest on loan

(xvi) Provision of Incentives to the stake holders including Employee(s)

(xvii) Energy Audit/ Feeders Management in Distribution

(xviii)Implementation of Govt. Schemes with Capital Grant and Interest Subsidy

(xix) Implementation of different Energy Conservation Scheme(s) and Building Code

(xx) Implementation of Recommendation(s) of different Expert(s) Committee(s)

Theme of Dreams

What can be done by an CMA to put Electricity Distribution Sector on a fiscally sustainable path and bring investment in distribution, given the intense of political pressure to supply power cheaply and access of Electricity to all ?

(A) THERMAL POWER

Impact of COAL as a primary FUEL in Thermal

Re-Visiting of Long Term Coal Linkage policy

Allotment of Coal Blocks/ Mines through Auction/ Bidding Process

Allotment of Coal Blocks through Reverse- Bidding Process

Action Plan and mid term review of the Action Plan for Achieving Planned Targets from Captive Mines

Plan to reduce Cost of Imported Fuel Price

Establishment of Independent or Third Party International Laboratory for evaluation of Calorific value of Imported Coal for determination of the Price of Coal.

Evacuation of Power instead of Coal to save the Cost of transportation.

Approach for Generation to reduce the cost of power which is 70-80% for distribution utility :-

SELECTION OF PIT HEAD SITE TO EDUCE THE CARRYING COST

Re-visiting the Land Acquisition issues

Improving R&R Policy with Long term Dividend Sharing

Simplification of Environment Clearance for Power Projects to reduce the Cost Over-Run

Merry Go round of Railway Transportation

Combined and Shared Railway Corridor for transportation of Coal Plan

Selection of Ash Pond in appropriate place to save future continuous claim from Farmers

Water Storage and re-cycling plant

SLECTING APPROPRIATE TECHNOLOGY AND MANUFACTURER

Mega / Ultra Mega Power Project

Increase of Existing Installed Capacity and change of technology.

Capacity Building in of BoP (Balance of Project) Qualifiers

Reduction of Time for Annual Plant Maintenance through Professional Outsourcing Agency

Annual Supply Contract for Spare parts

Adequate and Appropriate Insurance for the project for un-foreseen

(B) HYDRO

Reservoir Management in Multiple Project

Treatment of Catchments Area for reduction of silt

Spinning Reserve to maintain the Frequency level and Grid Stability

Time Management in Annual Maintenance through Professional Agency

Maximising generation in peak period / peak season

100% Machine availability of Machine during Rainy season with Back up spares

Adequate Plant insurance

(C) SOLAR

Selecting Right Site with higher CUF for Solar

Development of Mega Solar Park with Evacuation

Selecting the Right Technology, Module and Cell and other Equipment like Inverter, Transformer etc.

Use of Balance unused land of existing Factories, Dam Sites, Institutions, Railway, Airport etc

Manufacturing of Mega PV Modules for use of floating Solar Panel in the Reservoir.

Capacity Building of Professional Maintenance Contractor

Use of Roof Top for Solar

Regulation for Net Metering arrangement in Roof Top Solar

PV System Architecture

14

Relatively simple to install, operate and maintain. Most popular and globally accepted configuration. No availability when grid is down, safety for grid

maintenance

Meter 1: Conventional Electricity Consumption

Transformer Grid

Photovoltaic Panel(Approx. 1 - 5kWP)

Grid-tied

inverter

Meter 2: Solar Electricity Generation

Approach in Transmission which is about 10%-15% cost to the Distribution Utility

Policy for Compensation of land used for Evacuation of Power like R&R

Balancing of Generation & Evacuation Capacity

Capacity Building of Qualified 765/400 KV Executors Re-visiting the Deviation Settlement Mechanism which has restricted the generators to inject power or Distribution Companies to draw power. R&M with capacity addition of Generating & Transmitting equipments Capacity Building for sufficient Higher Capacity Transformer Manufacturing in the Country Up-Gradation 400KV line to 765KV /1200 KV Installation of Ultra High Voltage (UHV) Transmission lines Use of Compact Tower/ Bi-Pole Development of 1200 KV AC System Evacuation of NER Power or Bi-lateal Trade

to Adjacent Country Re-visit for fixation of Inter regional

Transmission Point of Charges (PoC)

Approach in Developing Power Market

The factors affecting markets as follows: Flexibility in Deviation Settlement Mechanism.

Correct Delivery Point of Power Policy for Power Banking

Simplification of Open Access

Model Bilateral Trade/ agreement.

Approach For Franchisee in Distribution

Franchisee of 33/11 KV Primary Distribution / Sub-Station level

Franchisee for 33 and 11 KV Feeders Level

Franchisee for Distribution Transformer level

Fixation of Bulk Tariff rate for Franchisee at different level with different Voltage level

Franchisee for Wire Business

Franchisee for Maintenance

Approach in Distribution to Reduce the Cost

Input based Franchisee in Rural Area at different level

Outsourcing of Operation & Maintenance at 33/11KV Sub-station

BOOT Model franchisee for Semi Urban Area

Mid Term Visit for change in CERC Norms for computation of Generation, Transmission Tariff in regard to (i) Reduction of % on Return on Equity or introduction of Return on Capital Employed instead of ROE (ii) Change of O&M Norm (iii) reduction on rate of interest on working capital loan

Extension of the Integrated Power Development Snt S Scheme (IPDS) to Franchisee

Extension of IPDS to Each Panchayat level

Stopping of manufacturing of Candescent Bulb

Radio Frequency based metering in all Single phase

AMR in all 3 phase Consumers

Encouragement of Online payment with more Rebate.

Installation of Capacitor Banks for improvement of Voltage

Bifurcation and re-routing of feeder

Erection of appropriate Distribution transformers

Strengthening of conductors across all voltage levels.

Best practices to reduce Cost in Distribution :-

High voltage Distribution System (HVDS).

Network reconfiguration.

Network re-conductring.

Segregation of feeders with agricultural loads and supplying them with HVDS is proposed in all the Distribution regions.

Reconfiguration, Re-conduct ring of network and Optimal location of DTs

The reconfiguration of the distribution network to be done by Identifying over loaded feeders, and distribution transformers. The feeders are bifurcated, to form new feeders thereby to reduce the losses. The loads on the DTs are reduced by proposing additional DTs.

APPOINTMENT OF REGULATOR FOR LENDING AGENCY IN POWER SECTOR

Regulation for Lending Agencies for fixation of margin like trading of Power being 70% of Capital is invested by them in the project.

Relaxation in Allowing Generation, Transmission & Wire Business to avail External Commercial Borrowing and FDI

Arrangement of Inter Ministry meeting for liberalization of Hedging in case of Foreign Borrowings or Foreign Contracts

Allowing cheaper FIG (Financial Institution Guarantee) instead of Bank Guarantee (BG)

New Approach for Carriage and Content Business

Distribution Reform

Transferring of the existing financial losses of distribution company to a Special Purpose Vehicle (SPV) before reform to carriage and content business.

Reorganization of regulatory asset by the regulator .

Fixing the life line rate for Below Poverty Line consumer.

Capacity Building in Franchisee.

Tamper proof IT implementation.

Future Multiple Distribution Business

"A CMA having Vision, Dedication, Imagination can create Win-Win- Situation to reduce the Cost of the Organization and Save Billion"

" CMA can also reduce the Tension of the Nation”

Slogan of the day

Finally the CMA win over the dreams