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Issues in Indian power distribution and faulty approach by consultants

Issues in Indian power distribution and faulty approach by consultants

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  • National rural electric Co-op Association Univ of minnosota ‘s agricult deptt and dist utility in red wing farms area experiment.

Internship presentation anudeep-final Internship presentation anudeep-final Presentation Transcript

  • Issues & Challenges in Rural Electrification Presented by Anudeep Yadav, Roll No-10 MBA (III Sem )Power Management National Power Training Institute
  • Background Study report is based on participation in live project for implementation of rural distribution franchisee model under RGGVY In Jharkhand
  • Why Care about it?
      • Industrial development
      • Improvement in education.
      • Increased facilities in social infra.
      • Higher economic activity.
      • Improved life standards,
      • Increased Disposable incomes…
      • Reduced migration to cities, load on
      • resources, infrastructure
    Rural Electrification
      • What it means… For around 70 % People
    Overall………………..Difference between Developing & Developed nation.
  • About the Presentation
    • Rural Electrification –a backgroun d .
    • Rajeev Gandhi Grameen Vidyutikaran Yojna(RGGVY)-An introduction
    • Issues in RGGVY Franchisee Implementations.
    • Franchisee Model Analysis. What is missing?
    • Rural electrification, analysis
    • International Experiences
    • Proposed Solution- a modified model
  • Rural Electrification –a background To finance RE schemes and promote rural electricity co-operatives for funding rural electrification projects across the country. Provide a single point light connection (60w) to all Below Poverty Line (BPL) households in the country.100% grant for one time cost Provided additional financial assistance for minimum services by the central government to all states on a 90% loan and 10% grant basis. These included basic need areas.
      • Establishment of REC ( 1969)
      • Kutir Jyoti Program (1988-89) )
      • Pradhan Mantri Gramodaya Yojna (2000,01)
    Key initiatives
  • Rural Electrification –a background
      • Minimum Needs Program (MNP)
    Exclusively targeted states with less than 65% rural electrification (by the old definition), provides 100% loans for last mile connectivity. Provides an interest subsidy of 4% to states for RE programs. The AREP covers electrification of un-electrified villages and household electrification Objective was the electrification of all villages and households progressively by year 2012 through local renewable energy sources and decentralized technologies, along with the conventional grid connection .
      • Accelerated Rural Electrification Program (AREP)(2002)
      • Rural Electricity Supply Technology Mission (REST)(2002)
  • Rajeev Gandhi Grameen Vidyutikaran Yojna (RGGVY) An introduction
    • Launched in April-05 by merging all ongoing schemes.
    • 90% grant is provided by Govt. of India and 10% as loan by REC to the State Govts.
    • Aims at:
    • Electrifying all villages and habitations as per latest Defn.
    • Providing electricity Connection to Below Poverty Line (BPL) families free of charge .
  • Rajeev Gandhi Grameen Vidyutikaran Yojna (RGGVY)- An introduction
    • Infrastructure under RGGVY
    • Rural Electricity Distribution Backbone (REDB).
    • Village Electrification Infrastructure (VEI).
    • Decentralized Distributed Generation (DDG).
  • Rajeev Gandhi Grameen Vidyutikaran Yojna (RGGVY)- An introduction
    • Implementation Steps
    • Preparation of District based DPRs .
    • Involvement of CPSUs in implementation of projects.
    • Certification of electrification by Gram Panchayat.
    • Deployment of franchisee for management .
    • Undertaking by States for electricity supply standards.
    • Provision of requisite revenue subsidy by the state.
    • Determination of Proper Bulk Supply Tariff (BST) for franchisee.
    Back
  • Issues & Challenges in Current RGGVY Franchisee Implementations Why Bother ? Franchisee system is going to be the ultimate agent responsible for delivery of rural electrification’s sustainability. Franchisee’s Failure means ….. All Tax payers money involved in capital subsidy ends up in this after few years …….. Rs 70 billion additional allocated in latest budget
  • Issues & Challenges in Current RGGVY Franchisee Implementations
    • Technical
    • Health of Dist System.
    • Status of Energy Accounting.
    • Ring Fencing of Energy Consumption .
    Structural Consumer Mix issues. Franchisee Units. Commercial Viability of Franchisees. Institutional Capacity building. RGGVY issues. Key Concerns
  • Issues & Challenges in Current RGGVY Franchisee Implementations
    • Technical
    • Health of Distribution System.
    • --Clarification not available about the existing rickety infra .
    • Status of Energy Accounting.
    • --Exclusive provision a must requirement for infrastructure in place before Franchisee starts.
    • Ring Fencing of Energy .
    • --Matter need to be looked into by utilities according to level of subsidies afforded .
    Defunct Cap Banks Shaky Transformer terminations
  • Issues & Challenges in Current RGGVY Franchisee Implementations
    • Consumer Mix issues .
    Structural
    • Franchisee Units.
    • Need to be decided case to case basis with flexible norms
    • Commercial Viability of Franchisees.
    • Utility need to adhere to the policy guidelines
    • Institutional Capacity building.
    • Exclusive focus is required on urgent basis
    • RGGVY issues.
    • Standard norms required for project implementing agencies handover .
  • Franchisee Model Analysis. What is missing? Representativity- Few criterion for Benchmarking. Affordability- Sustainability- Replicability-
  • Comparative Analysis Models >> Model A Model B Model C Model D Model E Model F Benchmarks Representativity Better Low Lower Lowest Best Best Affordability Neutral Neutral Neutral Neutral Neutral Neutral Sustainability Limited Limited Better Best Limited Better Replicability Better Limited Limited Limited Best Best
  • Rural electrification, a in depth analysis Attributed to US psychologist Kurt Lewin, it analyzes the change factors for subject under consideration.
        • Force Field Analysis
    Proposes the concept of Enabling forces and restraining forces .
  • Rural electrification, a in depth analysis Sustainable Rural Power Distribution Corruption in utility & Consumers Consumer’s dissatisfaction Utility Staff Connivance Remote Locations Political patronage for malpractices Socio political pressure groups Issues related to law & order Misgovernance in Utility Central Govt Development Plans Funding Support From Govt Consumer’s attitude for free electricity. Perceived benefits of development by community Successful Int’l Experiences Enablers Restrainers
  • Rural electrification, a in depth analysis
        • Gap Analysis
    Common Business process used to map the variance between required and existing conditions. Gap 1- Main nodal Agency REC’s focus & Requirement. Mission & Vision statements of REC say, “To facilitate availability of electricity for accelerated growth and for enrichment of quality of life of rural and semi-urban population” Focus need to be added to “ facilitating sustainable rural electrification” Gap 2- Lack of Regulatory participation. Gap 3- Working Agencies & Community Perception. Gap 4- State Utilities & Consumers Perception
  • Rural electrification, a in depth analysis
    • Biggest enabling force comes from community.
    • Focus needs to be shifted by nodal agency.
    • Regulatory needs to be more participative.
    • Affordability needs to be ensured by govt. in early phases
    In Nutshell Back
  • International Experiences
    • USA
    • Faced similar conditions in 1930s, successfully demonstrated feasibility of sustainability by “red wing project”
    • Adopted community participating based modes thorough ly since 1936. NRECA is the main agency
    Latin Americas Costarica functions with cooperative model, funding them with soft loans. Mexico however doesn’t uses the participative model, subsidy levels remain higher. Rural Systems are in losses. Asia Bangladesh ,Philippines have successfully implemented cooperative models with performance based subsidies. Africa Ethiopia, Uganda are successfully using community owned micro hydro DDG systems
  • Indian Experiences Input based franchisee model & its Variants have been proposed !
    • Suffers on account on issues related to
    • Participation.
      • Tech inadequacy.
    • Replicability
    Survival chances of Present System aren’t bright after initial few years.
  • Proposed Solution- a modified model
    • Improving R epresentability , S ustainability , and R eplicability.
    • Rural Electricity Co operative Society ( RECS)
    • Provision for financial assistance - from soft loans & subsidy be provided.
    • Comphrensive capacity bldg programs -
    • Permanent representation -by serc nominee and a utility on deputation (of willing) of officer rank, reputed NGO nominee.
    • Dual Professional managed administration -by hiring of professional Manager by Gov .board, provision for performance based compensation to them. With O & M Contracts managed separately.
    Existing Model F has been chosen as guidance
  • Proposed Solution- a modified model
    • Rural Electricity Co operative Society ( RECS)
    • Expenses assessment should be independent based on system needs and consumer mix should be balanced.
    • Provision for annual independent serc appointed (multimember committee, including a member from Transparency Intl, India chapter) functional and financial audit of functions of RECS
    • Rural Electricity Co operative Society ( RECS)
    • Expenses assessment- should be independent based on system needs and consumer mix should be balanced.
    • Provision for annual independent Audits-
    • (multimember committee, including a member from Transparency Intl, India chapter) functional and financial audit of functions of RECS.
  • Proposed Solution- a modified model Rural Electricity Co operative Society ( RECS)-Benchmark Review Sustainability- Comphrensive treatment, provides for technical and commercial excellence through outsourcing. Model >> RECS Benchmarks Representativity Best Affordability Neutral Sustainability Best Replicability Best
  • back Thank You Queries are welcome
  • Franchisee Model Analysis. What is missing? Representativity- Provides ample scope for decentralized decision making due to limited scope of work .
        • Model -A Revenue Franchisee Collection based
    Affordability- The point remains unaffected. Sustainability- No Comphrensive treatment, very limited scope, not recommended for long period. Replicability- Limited Scope increases the replicability with different players adapting to the requirements fast. Back
  • Franchisee Model Analysis. What is missing? Representativity- Levels of Participation remains limited, as scope is widened higher levels are required
        • Model – B: Revenue Franchisee – Input based
    Affordability- Affordability remains unaffected with utility determining the prices. Sustainability- Sustainability has been increased considerably as. But far away from comphrensive focus. Replicability- Replicability becomes limited as players success would depend on the various socio-cultural ,political trends. Back
  • Franchisee Model Analysis. What is missing? Representativity- No change in the extent of decentralized decision making,& is a major constraint.
        • Model – C : Input based Franchisee
    Affordability- Unaffected. Sustainability- Franchisee operations get more improved focus. Replicability- On account of more comphrensive scope, it becomes further limited due to similar reasons as in model B. Back
  • Franchisee Model Analysis. What is missing? Representativity- Status quo in the extent of decentralized decision making,& is a major constraint.
        • Model – D : Operation & maintenance franchisee
    Affordability- Unaffected. Sustainability- Franchisee operations get more comphrensive focus, desirable Replicability- Further reduces to a new low. Back
  • Franchisee Model Analysis. What is missing? Representativity- Improves participation to requisite standards.
        • Model – E : Rural Electric Co-operative Societies
    Affordability- Unaffected. Sustainability- Franchisee operations have limited scope not desirable levels. Replicability- Attains a much improved levels, a desirable position. Back
  • Franchisee Model Analysis. What is missing? Representativity- Maintains participation to requisite standards.
        • Model – F: Rural Electric Co-operative Societies operations management through contracting
    Affordability- Unaffected. Sustainability- Franchisee operations have improved scope , more comphrensive focus required. Replicability- Maintains improved levels, a desirable position. Back