AT&C losses to be reduced from 34-15pc

BANGALORE, INDIA: “The government aims at bringing down AT&C (Aggregate Technical and Commercial) losses in the power distribution sector from 34 to15 percent, at 1 percent per year rate, by the end of the 11th Five-Year Plan,” said Montek Singh Ahuwalia, Deputy Chairman, Planning Commission, Government of India.

He was speaking at the release of 'Technology: Enabling the Transformation of Power Distribution in India', report recently. The report, commissioned by the Ministry of Power, the Government of India, and prepared by the Centre for Study of Science, Technology and Policy (CSTEP) and Infosys, proposes a roadmap to ensure the energy security of India.

The report observes that India's power sector, in particular the distribution sector, must undergo a fundamental transformation to serve India's economic growth and societal needs. The report also puts forth the suggestion of a national institution to drive this motive.

Growing demand for power and issues

Nandan Nilekani, co-chairman, Infosys, said: "In the coming times, a five-fold increase is expected in terms power generation to suffice the growing demand and to keep up with the current economic growth. India has an installed capacity of 140GW and it is estimated that by 2030 the need would grow to 800GW. As of now India's national power consumption average stands very low at (700kwh) with comparison to that of the world's (2,600kwh). This has to be increased." 

"With an accelerating demand for power, power distribution will grow to be a great business opportunity in the coming times. However, at this hour, power distribution is facing the most pressing need for transformation. Nevertheless, the road ahead promises several hindrances," Nilekani added.

Major issues that haunt DISCOMs are high AT&C losses (of the 34 percent, 20-24 percent is due to theft), aging and poorly maintained system, unreliable and overloaded system, low demand side management (DSM) initiative, corporate governance challenges and lack of skilled resources and training.

On the one hand, when states like Himachal Pradesh (13 percent), Andhra Pradesh (12.5), Karnataka (12 percent) and Tamil Nadu (20 percent) showcase a very low AT&C loss rate, there are states like Maharashtra, Madhya Pradesh, Bihar, Uttar Pradesh that have a loss rate of 40-45 percent, respectively.

Jairam Ramesh, Minister of State of Commerce and Power, Govt. of India, added: "Moreover, states need not be apprehensive in terms of players entering private sectors. TN has showcased that even public sectors can fare better if the plan is carried out successfully. There should be a healthy competition among public and private sectors."

It is high time that India adopts technology and unified metering to bring down the loss rate. It is found that power distribution has the most pressing need for transformation and it has the highest return of investment RoI for technology.

However, there is a huge disparity across DISCOMs in maturity of technology adoption. Technology has to be applied in harmony with social, political and economic context specific to the DISCOM. IT, communication and automation/control must be planned and implemented in synergy to achieve optimal results.

But major complexities are in terms of economic and business issues, such as energy efficiency, tariff structure and complex pricing, consumer involvement and choice in transparency and quality of service and climate change as of clean energy sources, distributed generation and bi-directional flow.



The road ahead

“It is to be noted that technology alone cannot address all these issues. However, digital technology can serve as a catalyst to transform the power sector in India,” the minister added.

Recently the Ministry of Power has entered into two other initiatives with regard to the distribution sector and has earmarked an investment of Rs 51,000 crore for APDRD of which Rs 10,000 crores is for the IT sector.

The ministry is working along with TCS that has developed world's fastest supercomputer at Pune. This will speeden up the computing works at BHEL, NTPC. TCS, along with NTPC, HTPC, has launched India's third power trading exchange recently.

“Each distributor must develop its own technology adoption roadmap depending on its priorities and current business and technology maturity level. For this trajectory to be realised, interoperability among systems is critical, similar to the practice in mobile communications, banking and other networked industries. A national level standard covering all these aspects have to be established to ensure the success of this transformation. Moreover, a distribution technology trajectory (DTT) is the way ahead. However, this needs a huge investment,” Nilekani added.

 

It is high time that India adopts technology and unified metering to bring down the loss rate. It is found that power distribution has the most pressing need for transformation and it has the highest return of investment RoI for technology.

However, there is a huge disparity across DISCOMs in maturity of technology adoption. Technology has to be applied in harmony with social, political and economic context specific to the DISCOM. IT, communication and automation/control must be planned and implemented in synergy to achieve optimal results.

But major complexities are in terms of economic and business issues, such as energy efficiency, tariff structure and complex pricing, consumer involvement and choice in transparency and quality of service and climate change as of clean energy sources, distributed generation and bi-directional flow.