indian power sector - akindelano. sanjay banga(tata delhi india... · indian power sector. mundra...

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2/25/2013

Indian Power Sector

Delhi Distribution - A successful public

private partnership Model TATA Power DDL - A case in point

Sanjay Banga TATA POWER –Delhi Distribution Ltd.

INDIA



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Structure of Presentation

• Indian Power Sector - resurgent & promising

• Delhi - Distribution Reforms

• TATA Power Delhi Distribution – a case in point



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Indian Power Sector- Inching towards a market driven structure



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Indian Power Sector

Electrification of households by 2012 – about 30% yet to be electrified.

Installed capacity over 2,10,000 MW ,Per capita availability of 1000

units

Quality and Reliable power supply – tremendous gaps.

Grid Discipline thru Availability Based Tariff.( ABT )

Govt. Initiatives to revive ailing state utilities . Tariff still not cost

reflective

Source: MoP, GoI

… Above throws tremendous opportunity on all gamut of activities.



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Distribution Sector

National average distribution loss – 32% . Most of state utilities are Govt

owned . PPP or franchise model initiated in major cities

Consumers to have supply choices through open access mechanism

through payment of :

Wheeling charges

Surcharge for cross-subsidy and

Distribution licensees do not require a separate license for trading of

electricity.

Dilapidated Network to match load growth , Absence of technology

Electricity Act 2003

Providing the Framework for Competitive Markets

CERC

SERC

CGSMega Power

ProjectsIPP/ CPP

Licensee

ownedGeneration State

Owned

Transmission PowerGrid (CTU) RPC/RLDC STU

Distribution

LicenseeDistribution Distribution

Licensee

Consumers

Trader



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Delhi Distribution Reforms

- Public private partnership



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T&D Losses increased from 27% in 1992 to over 50% in 2001;

Govt. Utility Revenue Gap increased to approx. USD 270 Mln (2002); funded by Govt. subsidy to prevent tariff hikes;

Inadequate growth in distribution network and capacity for maintaining quality of supply;

Huge Gap between demand and supply of power; Frequency of power cuts had increased tremendously; Despite several efforts, no generation capacity (either IPP or own) added.

No concept of consumer service delivery.

8

Triggers for reforms



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Reform Objectives

Reduction in

AT&C Losses

Customer Focus

Self

Sustainable Sector

Attract investment

in Sector

Improvement in

Quality of

supply

9



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Public Private Partnership Model

• License-based Regulated business for 25 years

• AT&C target prefixed for 5 years as per bid

• Guaranteed 16% RoE on meeting AT&CTargets.

• Overachievement gains shared withconsumers.

• Tariff set by regulator on cost plus RoE10

• Power purchase payment on residuaryprinciples

• Financial support of approx. 630 MillionUSD by Govt. to DTL to cover shortfall ofDTL till March 07 for all Discoms



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Self Sustaining System

Discom Revenues(Units Realized based on committed

Loss reduction X RST)

All Prudent Expenses

ROE @ 16% Post Tax

BST Payable

(Balance- Capacity to Pay)

Transco RevenuesActual BST

Commission

Commission to balanceconsumer interest andviability of structure

Requirement beyond USD 767Mln to be met through SystemEfficiencies / Tariff Adjustments/Additional Support from Govt.

Shortfall met byGovt. Tr. Support

RST Growth

BST as the balancing figure (Capacity to Pay), together with Transition Support by Govt. to Transco for

making-up its shortfall ensure individual Discoms’ costs recovery at identical RSTs11

R&M Establishment

A&GDepreciation

Interest Servicing



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Key success factor ….Government Support

Strong Govt. support instrumental to success of Reforms

Providing Police Support for assisting theft control;

Special Courts for faster redressal of theft related cases;

Facilitating Right of Way /Road Cutting Clearances;

Land for Grid Sub-Stations at concessional rates;

Waiver of past (Pre-Privatization) dues;

Mass campaigns to garner consumer support.

12



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Key Success factor …Statutory/ Regulatory Certainty

Clean Balance Sheet

Only Serviceable Liabilities passed on to private Discoms;

Liabilities arising due to litigations/ claims from events prior to transfer

capped at app. USD 200,000; recoverable through ARR.

Binding Policy Directions issued by Government prior to Bidding

Buy-in of Regulator obtained;

Committed Loss Reduction Levels, based on successful Bids;

Assured Post Tax Rate of Return and incentive mechanism

Transition Support to Transco

Normative BST Order issued by Regulator prior to Bidding.

13Statutorily Binding Policy Framework – No risk of moving goal post or change in rules of the game



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The TPDDL Case StudyBuilding a Sustainable Privatization Model in Distribution



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The TATA Group- 100 years of Leadership with Trust

• The Tata Group comprises over 100 operating companies , 32 publically listed including TATA Power , in seven business sectors.

• The Tata Group is one of India's largest and most respected business conglomerates, with revenues in 20011-12 of $90 billion . 58% of it comes from outside India .

• The Tata Group has operations in more than 80 countries across six continents.

TATA group was awarded “ Carnegie medal of Philanthropy “ for its recognition of long

history of Philanthropic activities



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TATA Power Company - Snapshot

Captive Power

Generation (“CPP”)

Generation

Independent Power

Generation (“IPP”)

Tala Project

Power

Transmission

Mumbai Area

generation

TATA POWER –Delhi

Distribution Ltd.

(TPDDL )

Distribution

1,797 MW

Mumbai Area

Transmission

NetworkMumbai Area

Distribution

TATA POWER –

JamshedpurPower Link

TATA Power Solar

TPC is the largest private sector player in Indian power sector.

Mundra Ultra mega

Power -4000 MW



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TPDDL - Geographic Description

TPDDL

BSES

Rajdhani

BSES

Yamuna

NDMCMES



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TPDDL Profile

Turnover (FY 2004-05) US $ 1000 million (up from US $ 275 million in FY 03)

Peak Load 1550 MW

Annual energy requirement

(FY 20011-12)

70000 Mn. Units

Total registered consumers (0.743Mn on T/o) 1.2 Mn.

Number of employees 3700 (5600 in July 2002)

Area 510 Sq Kms

Population serviced in Network area (approx) 4.5 Mn.

Per Capita Consumption (Units) 1245 (National Average of 606, Mumbai – close to 850)

Number of consumers per Sq.Kms 2100

Employees per `000 consumers 3.1

Employees per Mn. Unit input 0.51

Load / Energy Growth 06%



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Initial Challenges in July 2002

Change Management -

Working environment of offices & work

culture, a key area of concern

Dilapidated Distribution Network – the

supply system on the verge of collapse- an average consumer faced 110 hours of

supply interruption in a year.

Grievances on Revenue Cycle issues had crumbled without extra-ordinary interventions

New connections pending Pending - 100000 complaints in files more than 50% consumer records out of the total base of 7.43 lakhs received had some form of errors.

….. the challenges on take over were huge but consumer patience very little

INITIATIVES had to be taken that would deliver results quickly.

Sustained Network Improvements- towards enhanced Power Reliability

Each day witnesses concerted improvements in the Network.



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• Manned Grids

• Non communicable control panels

• DEBS - Billing

• Energize – Enterprise System

• E-mail and website

• IT Infrastructure

• Substation Automation & Interim

SCADA

• Communication Infrastructure

• GIS readiness for Sub transmission

• SAP-R3 (FICO, PM, MM, PS, HCM)

• Bulk Billing System

• BIRD

• AMR, Sakshat, Sanchay and RMS

• SCADA system

• DMS readiness

• GIS readiness for Distribution

Network

• SAMBANDH

• SAP-ESS, PMS

• DEBS Up-gradation

• Payment Gateway

• SAP-ISU, ESLA

• Secondary Data Centre (SDC)

• GIS readiness for LT network &

Consumers

• DMS & DA implementation

• Outage Management System

Smart Grid with Demand Response

• Enterprise Application Integration

(EAI)

• Mobile Workforce Management

(MWM)

• Smart Grid Roadmap

• Business Analytics

Operational Technology Information Technology2/25/2013

Proud of Technology Intervention - first in India/Delhi

2011-2012

2007-2010

2004-2007Integrated Automation road map formed & Implemented with KEMA consulting US and

Smart grid Roadmap with QUANTA technology US in progress



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MWM FSR Module

Customer calls

with service request

Enroute

Onsite

Worked

Call center generate call

tickets in

SAP-ISU

Outage Management System

Network Management …… Effective technology deployment



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System Interfaces

SCADA/DMS

GIS

Smallworld

Control Centre

Outage Management

System – for 1.8 million

Customers

CIS

WMS

•Provides location

•Provides circuit data

•Provides routing

•Takes trouble calls

•Informs customers of

restoration status

•Call assignment

•Trouble prediction

•Switching

•Dispatching

•Keeps OMS apprised

of status on monitored

devices

•Initiates work

•Tracks work status

•Closes jobs

•Meter

status

information

AMI

ASIAN Power utility award 2012 for best IT implementation award for Integrated

Outage management System .



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Change Management – Capability Building for the

Sector

• Creation of CENPEID for in-house training &

catering to competency building in entire

distribution sector by training employees of other

utilities

• Independent profit centre & recognized by

Ministry of Power as best institute in India

• Training Need Identification of employees

through the Performance Appraisal system,

Development Centre & 360 Degree Feedback

• Mandatory Training Policy formulation,

introduction of Group-level Training

Coordinators & systematic measurement of

effectiveness

• Mentoring for cultural assimilation & creation of

leadership pipeline.On-Job- Trainings for

continuous learning24



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Revamping Consumer Experience

25

• BPR of Revenue Management Cycle• Door Step delivery of new connections• Automatic Cash/ Cheque Collection Machines

• Video Conferencing for Consumers

• SMS based pull services

• Instant Connection

• Performance Assurance Standards

• Discount Coupons for Privileged and Paying Consumers

Business Process Reengineering of RCM

Call Center



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Change Management – Knowledge Management

Learning through Knowledge Management

– Online portal: SANCHAY & its various features e.g. Ask-The-Guru, Knowledge Café, Ndpl-O-pedia, etc

– Regular Knowledge Sharing Session (SEEKH ) sessions in each Group throughout the organization

– Corporate level Knowledge Sharing session (SEEKH ) sessions on themes: Safety, Strategy, Excellence, QC & Innovation.

– TATA innoverse - platform for innovative ideas across all TATA group companies

26



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Key Parameters…..Then & Now

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Parameter UoMJul-02

(On takeover)2011-12 % change

AT&C Losses % 53.1 11 77%

System Reliability – ASAI % 70 99.2 42%

Transformer Failure Rate % 11 0.8 93%

Length of Network Ckt. Km 6750 10253 51.8%

Street Light Functionality % 40 99.3 148%

Payment Collection Avenues Nos. 20 4599 22895%

Consumer Satisfaction Index - 88



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Key Parameters ………. Then & Now

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Parameter UoMJul-02

(On takeover)2011-12 % change

Mean Time To Restore Supply Hrs. 5.2 1.2 75%

Street Light restoration within 48

hrs.% 50 99.70 99%

New Connection Energization Time Days 51.8 6 88%

Faulty Meter Replacement Days 25 6 72%



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110

70

36

23

9.3 8.7 7.11 8.68 8.63 6.31 5.68

0

20

40

60

80

100

120

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12

Reliability Improvement in SAIDI(Hrs.)

55

35

18

12

6.3 85.48 5.93 5.69 4.48 4.03

0

10

20

30

40

50

60

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12

Reduction in SAIFI(Nos.)



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Power Sector Reforms Through PrivatisationTransitional Support Vs Continuing With Financial Loss

30%

35%

40%

45%

50%

55%

60%

65%

70%

AT

&C

Lo

ss (

%)

Scenario I

(Cumulative

Saving 716.14

mn)

Scenario II

(Cumulative

Saving 328.92

mn)

Scenario III

68.83 mn

FY 03

100.44 mn

89.91 mn

FY 04

162.33 mn

FY 05

197.76 mn

130.71 mn 143.04 mn

85.20 mn

26.01 mn

Pre-privatisation losses

burgeoning

Scenario I: Losses growing at same trend as in pre-privatisation &

stagnating 65%.

Scenario II: Losses maintained at the same level as at time of

privatisation.

Scenario III: Losses lowered post privatisation.

Jul 02Apr 01

Post-privatisation:

Lowering Losses leading to

reduced subsidy

Mar 03 Mar 04 Mar 05 Mar 06

30.02 %

FY 06

211.43 mn

145.29 mn

491.93

Scen-I

(Cum.

saving

US $

491.93

mn

Scen II

(Cum.

saving

US $

328.92

mn

Savings to the Government

If reforms were not undertaken and considering the prevalent scenario of the losses increasing consistently Reforms & privatization has actually saved the Govt. significant sums, which is now available for

Infrastructure, Education, Health, etc

This owes itself to the fact that losses have been reduced from 53.4% to 30.02% in three years.

All Figs in US $



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AT&C Loss Reduction- Benefit to Government

31

• Saved over USD 1.45 Billion for Govt. in 10 years; facilitated development of other infrastructure; lower taxes

• Repaid USD 100 Million loan to Govt.

• Paid Dividends to Govt. and Tata Power for four years (FY 2005-06 to FY 2008-09)

Extensive network improvement, commercial reengineering and IT intervention- major contributors to

AT&C loss reduction



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Entrepreneurship ..NDPL’s window to the world

Prestigious consultancy projects:

Technical consultant for Five states states in INDIA for

implementing SCADA/DMS and other IT systems .

Project Management for UP & Haryana in India for Network

revamping .

Restructuring of Transmission & Distribution sector of Mauritius

in association with M/s TCS Ltd.

Setting up of CENPEID under DRUM program in association

with USAID.



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Entrepreneurship ..NDPL’s window to the world

• TPDDL along with Consortium Partners has been selected as “Preferred Bidder” for Benin Disco.

• Management and Technical Services through dedicated employees in important areas like –– ATC&C Loss monitoring & Business Process Reengineering

– Network Planning Services

– Automation & IT Services etc

Collaborating with other consortium partners to replicate

Success story of Delhi.

Together we can make it



2/25/2013

Recognitions

Edison Award 2008 for GIS

Implementation

Balanced Scorecard Hall of

Fame

Asian Power Awards 2008,

2010,2011

National Award for Meritorious Performance by GoI

ICWAI National Award for Excellence in Cost Management 2007

India Power Awards 2008

SAP Ace Award 2008

Infra line Energy Award



2/25/2013

Thank You

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