Making the right power play

29 Nov 2022

LAUNCHED IN JULY 2021, the Revamped Distribution Sector Reform Scheme (RDSS) is the latest of many central government grant-based programmes towards electric- ity distribution network investments. Others include urban loss reduction schemes such as the Accelerated Power Development Programme and rural con- nections and network expansion focussed schemes such as SAUBHAGYA. These have played a significant role in increasing access and improving performance.

RDSS's outlay of Rs 3 lakh crore for five years can enable financially-strained electric- ity distribution companies to get similar sup- port. Half of the outlay is for better feeder and transformer metering and pre-paid smart consumer metering. The remaining half, 60 per cent of which will be funded by central government grants, will be spent on power loss reduction and strengthening networks.

But RDSS has inherited several design is- sues from its predecessors. These include complex processes and conditions for fund disbursal Only 60 per cent of the total Rs 2.5 lakh crore grants allocated in past schemes were disbursed. Lack of public review and regulatory oversight in states is another is- sue. The prescriptive approach of the scheme design impedes effective implementation. For example, RDSS emphasises loss reduc- rtion investments over system strengthening However, high losses are typically connected to sustained poor quality service which, About 25 per cent of electricity sales is to highly subsidised, agricultural consumers who also receive erratic, poor quality supply. Under the national KUSUM scheme, day- time, low-cost supply can be provided to a large number of farmers by installing megawatt scale solar plants, which supply eight hours of quality power directly to ded- icated agricultural feeders. This would ad- dress farmers' demand for reliable supply and almost halve the discom's cost and subsidy requirements. For this to work separate feed- ers for agricultural consumers are needed. RDSS prioritises investments and grants to- wards dedicated agricultural feeders to ac- celerate feeder solarisation. States must lever- age this grant support to provide reliable supply and reduce subsidy requirements.

Third is the need for "automatic" meter- ing of distribution feeders. Despite efforts, un- metered consumers and non-functional me ters at the consumer and feeder level persist. Without functioning meters, accurate energy accounting and loss monitoring is a challenge. Often, discoms under-estimate losses by over-estimating unmetered consumption in a bid to demonstrate loss reduction. For greater veracity, all feeders must be equipped with meters capable of communicating read- ings without manual intervention. States should leverage RDSS's emphasis on auto- matic meter reading for this.So far, the experience with smart meter- works. ing and pre-paid metering has been limited. Sign is- RDSS prescribes a phase-wise roll-out of con- nclude sumer smart meters, starting with commer- r fund cial and industrial consumers and urban ar- Rs 2.5 eas. Such an approach provides states with an opportunity to understand implementa- tion issues, adopt suitable strategies for me- ner is- tering and evolve frameworks for assessing heme benefits vis-a-vis the costs. This is possible if ation. discoms, the state regulator and consumers -duc- play an active role in designing the roll-out to ning. suit state realities,

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