power distribution overview
DESCRIPTION
Privatization of the Power Distribution in Delhi and the exciting challenges and how they were met, a practical experience.TRANSCRIPT
1Presented at Optima 2007 IMC IIT Kharagpur
Power Distribution -POWER FOR ALL BY 2012
By Himadri Banerji
CEO EPC Distribution
Reliance Energy
2Presented at Optima 2007 IMC IIT Kharagpur
11 Sector Overview
22 Opportunities & Concerns
33 Case Study: Delhi Network ModernizationCon
tent
s
3Presented at Optima 2007 IMC IIT Kharagpur
Indian Electricity Distribution Sector
An Overview
Indian Electricity Distribution Sector
An Overview
“There is a lack of accountability in distribution, outdated rules, regulations, management structures, and
practices…..unless you establish accountability at all levels, you can never improve performance”.
Union Minister
Source: Financial Express 18 March 2002
4Presented at Optima 2007 IMC IIT Kharagpur
India’s Current state – A snapshot– Consumes 3.7% of the
world’s commercial energy
– 5th largest in energy demand
– Energy deficit 8%– Peak shortage 12.5% – PLF grown from 60% to
75%– T&D Losses amongst
highest– SEB losses > 22,000
crores– 78 Mn rural HHs not
serviced
Share in Total
All India 146,386 100%Utilities Segment 124,287 85%Captive Segment 22,099 15%Capacity by ownershipState Sector 70,224 57%Central Sector 39,924 32%Private Sector 14,139 11%Capacity by fuel mixThermal 82,410 66%Hydro 32,326 26%Nuclear 3,360 3%Renewables 6,191 5%Source: MoP
Total Installed Generation Capacity (MW) (as of April 3, 2006)
• Estimated level of billing efficiency of 55%
• Estimated collection efficiency of 41%
• 2001-2002 SEB losses of Rs 33000 crore = 1.5% GDP
• SEB lose 110 paise for every unit of electricity sold
(SOURCE: MINISTRY OF POWER APDRP OVERVIEW)
5Presented at Optima 2007 IMC IIT Kharagpur
Electricity to Fuel India’s Economic Growth
– A condition for growth, Human Development – Per capita consumption to increase from 606 to 1,000 kWh/yr by
2012– Power for all by 2012– 10% CAGR in capacity required to fuel targeted GDP growth
targets– 100,000 MW capacity addition planned– Inter-regional transmission capacity to grow from 9,000 MW to
37,150 MW
6Presented at Optima 2007 IMC IIT Kharagpur
Size of investment opportunity – Enormous
• Distribution
– private sector participation in privatization of discoms
– Rural electrification initiative : could involve INR 140,000 crores
• Nuclear Power
– Nuclear deal with US has opened opportunities
– Power generation, fuel supply, Plant design & technology etc
• Renewables
– Wind, Bio, Cogeneration etc.
– Potential 1,00,000 MW in mid term
Investor, Developer, EPC Contractor, Technology &Equipment supplier, Transmission & Dist Utility
7Presented at Optima 2007 IMC IIT Kharagpur
Structure Before TEA 03 (Post Reforms)
No Choice to Generating Co./Consumer, Limited Competition
DISTRI-BUTION
CONSUMERTRANS-
MISSION
PGCIL
TRANSCO
Pvt. Utilities
GENERA-TION
GENCOs
CPSU
IPPs
Pvt. Licensees
Excess Captive
?
Discom 1(Licensee 1)
Discom 2(Licensee 2)
Discom n(Licensee n)
LicenceArea 1
LicenceArea 2
LicenceArea n
TR
AN
SC
Os
(eg.
Del
hi T
ran
sco)
(In
tra-
Sta
te T
ran
smis
sion
, B
ulk
Pow
er P
urc
has
e fo
r L
icen
sees
)
Regulator’s Role
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82%
78%77%
71%69% 69%
60%
65%
70%
75%
80%
85%
1992-93 1994-95 1996-97 1998-99 2000-01 2001-02
Tariff as a % of cost of supply
Financial position of SEBs
There is need for a paradigm shift in the structure, conduct and performance of the sector to enable investment flows
Source: Annual Report 2001-02 on the Working of SEBs & Electricity Departments, Planning Commission
9Presented at Optima 2007 IMC IIT Kharagpur
• Electricity Act, 2003 aspires to create a liberal framework for the development of the power sector – “An Act to consolidate the laws…for taking measures conducive to development of electricity industry, promoting competition therein, protecting
interests of consumers and supply of electricity to all areas…”
Current situation End goal
Largely cost plus tariff
systems with limited
incentives for improving
efficiencies
A well functioning power market leading to free competition – rewards more efficient generators and reduce power procurement cost
Gradual transition path
The power sector needs to introduce competition into the power procurement process as
it gradually migrates to competitive markets across
electricity value chain
10Presented at Optima 2007 IMC IIT Kharagpur
Emerging Structure: Post TEA 03
Competitive, Flexible Structure enabling Choice to Consumer
DistributionLicensee 1
Consumers
GeneratingCompanies
OwnGeneration
DistributionLicensee 2
Captive GenerationFacilities
Power Traders would also be involved in some of the transactions
Distribution Network (Gradual Open Access)
Own Distribution System
Transmission Network (Immediate Open Access)
11Presented at Optima 2007 IMC IIT Kharagpur
New Markets Without Payment or Regulatory Risk
Regulated Markets
Unregulated Markets
SEBs/Distribution Companies
Traders
Captive Power
Open Access Consumers
1
2
3
4
Limited Credit Risk
12Presented at Optima 2007 IMC IIT Kharagpur
End Goals :Key Parameters
Existing
Target
Subsidy
Losses
Regulation
CommercialOrientation
Reliabily ofPower Supply
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Indian Electricity Distribution Sector
Opportunities & Concerns
Indian Electricity Distribution Sector
Opportunities & Concerns
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Distribution
Electricity Act 2003 provision
•Provision for private licensee in transmission and entry in distribution through an independent network
•Provision for license free generation and distribution in rural areas
•Open access in distribution allowed in phased manner as prescribed by regulator
•Surcharge levied by regulator
•Licensee can engage in other businesses including electricity trading
• 100% metering within two years from date fixed by Government
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Overview of private participation
• Distribution sector– Orissa was first state to attract private sector in state
distribution • State divided into 4 zones and 51% stake was sold to private
entities– BSES acquired north, south and western zones
– AES acquired central zone
– In Delhi, distribution business was hived off into 3 distribution companies recently
• BSES and Tata Power acquired 51% stake in the companies• Aggregate investment of Rs. 4750.0 million
16Presented at Optima 2007 IMC IIT Kharagpur
• An IPP can contract sale of electricity to a dedicated set of customers of an existing discom – within the State and outside the State
• Existing IPPs could establish trading arms to supply to paying customers, to the extent not vested
• Distributor could establish its own generation capacity (and, possibly, transmission line)
Trading and open access - opportunities
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Rural Electrification
National Electricity Policy and Plan
The Central Government shall, after consultation with the State Governments, prepare and notify a national policy, permitting stand alone systems (including those based on renewable sources of energy and other non-conventional sources of energy) for rural areas.
18Presented at Optima 2007 IMC IIT Kharagpur
Key concerns
• Financial health of utilities – with continued losses - capacity to pay for power purchased
• Lenders’ concern regarding payment security mechanism
• Regulatory uncertainty• High / divergent Open Access charges• Captives - Pricing of surplus power, grid support
charges• Renewables – reliability issues, grid connectivity• Fuel availability & price risks
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“ “ If you can’t measure it, you can’t manage it.”If you can’t measure it, you can’t manage it.”
Indian Electricity Distribution Sector
Delhi Discom: Project Management Case Study
Indian Electricity Distribution Sector
Delhi Discom: Project Management Case Study
20Presented at Optima 2007 IMC IIT Kharagpur
Unique Features Of Delhi Model
• Valuation Of Assets• Allaying Tariff Fears• Regulatory Comforts• Bulk Supply Tariff Comforts• Transitional Support• Bidding Criteria• Companies To Start With Clean Balance Sheet• Incentives For Performance• Transfer Policy
21Presented at Optima 2007 IMC IIT Kharagpur
Ideal Distribution System Design
• Low system losses• High power quality and
reliability • Less Maintenance• Low cost of infrastructure• Meet future load growth
DT should be placed
near to consumer Load centers
Ideal System Concept
22Presented at Optima 2007 IMC IIT Kharagpur
Requirement for CAPEX in Delhi
A. To improve System Reliability and Quality of Supply
B. To reduce Technical & Commercial Losses
C. System development to meet Load Growth and ongoing system
improvement.
Reliability CenteredCapex
Planning
MMP
NetworkOptimization
GIS
Engineering &Standardization
HVDS
SCADA-DMS
ProjectManagement
EHV
23Presented at Optima 2007 IMC IIT Kharagpur
24Presented at Optima 2007 IMC IIT Kharagpur
• EHV Schemes
– Power transformers augmentation
– Switchgears augmentation
– Cables replacement
– Conductor augmentation
• 11kv , LV
– D T augmentation
– RMU installation
– Cables replacement
– Package s/s installations
– ACB’s / LT panels replacement
– Feeder pillar/ Service pillar replacement
– Conductor replacement
• SCADA, DMS,GIS
A. System Reliability & Quality of Supply
25Presented at Optima 2007 IMC IIT Kharagpur
1. Use of High Voltage Distribution System to reduce
Technical losses
2. Meter Modernization Program to reduce Commercial
losses
Replacement of faulty / stop / slow meters & Mass
scale replacement of electromechanical to electronic
meters
B. Technical & Commercial Losses
26Presented at Optima 2007 IMC IIT Kharagpur
C. System development to meet Load Growth
New EHV grids planned in BRPL & BYPL to meet the load growth
•2004 –05 : BRPL : 9 new grids are planned
BYPL : 10new grids are planned
• APR’05 – SEP’05 :
BRPL : 2 new grid planned
BYPL : 2 new grids planned
27Presented at Optima 2007 IMC IIT Kharagpur
ManageThe CompleteNetwork Asset
Lifecycle
ManageThe CompleteNetwork Asset
Lifecycle
Bringing International Practices into Utility Business
Redundancy
• N-1 Criteria
• 100 % Reliability
Automation
• 100 % Automation• Integrated functions
with SCADA and GIS
Engineering
• Techno-Economical Design
• Standardization
Network Planning
• Optimal Network Design• Reliability centered
Network Planning
28Presented at Optima 2007 IMC IIT Kharagpur
Network Planning•Process to identify the least-cost option to meet the demands of load growth while maintaining system reliability
•Options include : – Power lines reconductoring – New power lines – New substation – Transformer additions to existing substation – Capacitors and line voltage regulators installation – Distributed generation options – Network Driven – DSM (Demand-side management)
Long term Plan with Least Cost and Maximum gain in Reliability
Cater to Load
Growth
Optimal Capex
Planning
Reduce AT&C
Losses
Leads toImprove
Reliability
29Presented at Optima 2007 IMC IIT Kharagpur
SCADA/DMS - GIS , a birds’ eye view
Geographical info, Schematic diagram availability at central location addresses key operational concerns
This ultimately leads to improvement in System Safety, Efficiency and Customer Service (Power Quality and Reliability)
30Presented at Optima 2007 IMC IIT Kharagpur
Project Management
Project Management
Planning &Scheduling
SAP MIS
Primavera
L1,L2 & L3 Schedule
Contractor’s schedule Material Control
Budget Control
Purchase &Invoice
Project Systems
31Presented at Optima 2007 IMC IIT Kharagpur
Project Monitoring System
REL
Director Level
Weekly Review
at site
Engg/Proc/Const
Weekly / Daily
Interface meeting
Contract Review
Major Packages
Weekly
Other packages
Fortnightly / Monthly
WAR Room
24x7 OperationsMIS
32Presented at Optima 2007 IMC IIT Kharagpur
33Presented at Optima 2007 IMC IIT Kharagpur
T&D Services by REL For Managing Complex Networks
GIS
Asset Management
WMS
DesignTools
AnalysisTools
CIS
Designers
Meter Readings
Engineers
Call CenterReps
Crews
VRU
Operations Management
Operations Model
SCADA
DMS
SubstationAuto
OMS
Dispatchers
IED’s
OperatingEngineers
Web Users
VRU
Crews
Call CenterReps
Service Centers
WebTools
Line Supervision
DataWarehouse
LineSupervision
DataWarehouse
Scheduling
•As-builts•Proposed Facilities•De-commissioned facilities•Attribute Changes•Land Changes•Meter Readings/ customer loads
•Load Profiles•Follow-up Work Orders•Facility Changes•Failed Device Data•Customer outage times•Switching Results
34Presented at Optima 2007 IMC IIT Kharagpur
35Presented at Optima 2007 IMC IIT Kharagpur
Thank youJuly 2006