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Power Distribution Overview


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Privatization of the Power Distribution in Delhi and the exciting challenges and how they were met, a practical experience.

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Power Distribution Overview

  1. 1. Power Distribution - POWER FOR ALL BY 2012 By Himadri Banerji CEO EPC Distribution Reliance Energy
  2. 2. Contents 1 Sector Overview 2 Opportunities & Concerns 3 Case Study: Delhi Network Modernization
  3. 3. Indian Electricity Distribution Sector An Overview “ There is a lack of accountability in distribution, outdated rules, regulations, management structures, and practices…..unless you establish accountability at all levels, you can never improve performance”.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
  4. 4. India’s Current state – A snapshot <ul><ul><li>Consumes 3.7% of the world’s commercial energy </li></ul></ul><ul><ul><li>5th largest in energy demand </li></ul></ul><ul><ul><li>Energy deficit 8% </li></ul></ul><ul><ul><li>Peak shortage 12.5% </li></ul></ul><ul><ul><li>PLF grown from 60% to 75% </li></ul></ul><ul><ul><li>T&D Losses amongst highest </li></ul></ul><ul><ul><li>SEB losses > 22,000 crores </li></ul></ul><ul><ul><li>78 Mn rural HHs not serviced </li></ul></ul><ul><li>Estimated level of billing efficiency of 55% </li></ul><ul><li>Estimated collection efficiency of 41% </li></ul><ul><li>2001-2002 SEB losses of Rs 33000 crore = 1.5% GDP </li></ul><ul><li>SEB lose 110 paise for every unit of electricity sold </li></ul><ul><li>(SOURCE: MINISTRY OF POWER APDRP OVERVIEW) </li></ul>
  5. 5. Electricity to Fuel India’s Economic Growth <ul><ul><li>A condition for growth, Human Development </li></ul></ul><ul><ul><li>Per capita consumption to increase from 606 to 1,000 kWh/yr by 2012 </li></ul></ul><ul><ul><li>Power for all by 2012 </li></ul></ul><ul><ul><li>10% CAGR in capacity required to fuel targeted GDP growth targets </li></ul></ul><ul><ul><li>100,000 MW capacity addition planned </li></ul></ul><ul><ul><li>Inter-regional transmission capacity to grow from 9,000 MW to 37,150 MW </li></ul></ul>
  6. 6. Size of investment opportunity – Enormous <ul><li>Distribution </li></ul><ul><ul><li>private sector participation in privatization of discoms </li></ul></ul><ul><ul><li>Rural electrification initiative : could involve INR 140,000 crores </li></ul></ul><ul><li>Nuclear Power </li></ul><ul><ul><li>Nuclear deal with US has opened opportunities </li></ul></ul><ul><ul><li>Power generation, fuel supply, Plant design & technology etc </li></ul></ul><ul><li>Renewables </li></ul><ul><ul><li>Wind, Bio, Cogeneration etc. </li></ul></ul><ul><ul><li>Potential 1,00,000 MW in mid term </li></ul></ul>Investor, Developer, EPC Contractor, Technology & Equipment supplier, Transmission & Dist Utility
  7. 7. Structure Before TEA 03 (Post Reforms) No Choice to Generating Co./Consumer, Limited Competition DISTRI- BUTION CONSUMER GENERA- TION GENCOs CPSU IPPs Pvt. Licensees Excess Captive ? Discom 1 (Licensee 1) Discom 2 (Licensee 2) Discom n (Licensee n) Licence Area 1 Licence Area 2 Licence Area n TRANSCOs (eg. Delhi Transco) (Intra-State Transmission, Bulk Power Purchase for Licensees) Regulator’s Role TRANS- MISSION PGCIL TRANSCO Pvt. Utilities
  8. 8. Financial position of SEBs Tariff as a % of cost of supply 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
  9. 9. <ul><li>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 …” </li></ul>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
  10. 10. Emerging Structure: Post TEA 03 Competitive, Flexible Structure enabling Choice to Consumer Distribution Licensee 1 Licence Area Generating Companies Own Generation Distribution Licensee 2 Captive Generation Facilities Power Traders would also be involved in some of the transactions Distribution Network (Gradual Open Access) Own Distribution System Transmission Network (Immediate Open Access) Consumers
  11. 11. 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
  12. 12. End Goals :Key Parameters
  13. 13. Indian Electricity Distribution Sector Opportunities & Concerns
  14. 14. Distribution Electricity Act 2003 provision <ul><li>Provision for private licensee in transmission and entry in distribution through an independent network </li></ul><ul><li>Provision for license free generation and distribution in rural areas </li></ul><ul><li>Open access in distribution allowed in phased manner as prescribed by regulator </li></ul><ul><li>Surcharge levied by regulator </li></ul><ul><li>Licensee can engage in other businesses including electricity trading </li></ul><ul><li>100% metering within two years from date fixed by Government </li></ul>
  15. 15. Overview of private participation <ul><li>Distribution sector </li></ul><ul><ul><li>Orissa was first state to attract private sector in state distribution </li></ul></ul><ul><ul><ul><li>State divided into 4 zones and 51% stake was sold to private entities </li></ul></ul></ul><ul><ul><ul><ul><li>BSES acquired north, south and western zones </li></ul></ul></ul></ul><ul><ul><ul><ul><li>AES acquired central zone </li></ul></ul></ul></ul><ul><ul><li>In Delhi, distribution business was hived off into 3 distribution companies recently </li></ul></ul><ul><ul><ul><li>BSES and Tata Power acquired 51% stake in the companies </li></ul></ul></ul><ul><ul><ul><li>Aggregate investment of Rs. 4750.0 million </li></ul></ul></ul>
  16. 16. <ul><li>An IPP can contract sale of electricity to a dedicated set of customers of an existing discom – within the State and outside the State </li></ul><ul><li>Existing IPPs could establish trading arms to supply to paying customers, to the extent not vested </li></ul><ul><li>Distributor could establish its own generation capacity (and, possibly, transmission line) </li></ul>Trading and open access - opportunities
  17. 17. Rural Electrification <ul><li>National Electricity Policy and Plan </li></ul><ul><li>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. </li></ul>
  18. 18. Key concerns <ul><li>Financial health of utilities – with continued losses - capacity to pay for power purchased </li></ul><ul><li>Lenders’ concern regarding payment security mechanism </li></ul><ul><li>Regulatory uncertainty </li></ul><ul><li>High / divergent Open Access charges </li></ul><ul><li>Captives - Pricing of surplus power, grid support charges </li></ul><ul><li>Renewables – reliability issues, grid connectivity </li></ul><ul><li>Fuel availability & price risks </li></ul>
  19. 19. “ If you can’t measure it, you can’t manage it.” Indian Electricity Distribution Sector Delhi Discom: Project Management Case Study
  20. 20. Unique Features Of Delhi Model <ul><li>Valuation Of Assets </li></ul><ul><li>Allaying Tariff Fears </li></ul><ul><li>Regulatory Comforts </li></ul><ul><li>Bulk Supply Tariff Comforts </li></ul><ul><li>Transitional Support </li></ul><ul><li>Bidding Criteria </li></ul><ul><li>Companies To Start With Clean Balance Sheet </li></ul><ul><li>Incentives For Performance </li></ul><ul><li>Transfer Policy </li></ul>
  21. 21. Ideal Distribution System Design <ul><li>Low system losses </li></ul><ul><li>High power quality and reliability </li></ul><ul><li>Less Maintenance </li></ul><ul><li>Low cost of infrastructure </li></ul><ul><li>Meet future load growth </li></ul>DT should be placed near to consumer Load centers Ideal System Concept
  22. 22. Requirement for CAPEX in Delhi <ul><li>To improve System Reliability and Quality of Supply </li></ul><ul><li>To reduce Technical & Commercial Losses </li></ul><ul><li>System development to meet Load Growth and ongoing system improvement. </li></ul>Reliability Centered Capex Planning MMP Network Optimization GIS Engineering & Standardization HVDS SCADA- DMS Project Management EHV
  23. 24. <ul><li>EHV Schemes </li></ul><ul><ul><li>Power transformers augmentation </li></ul></ul><ul><ul><li>Switchgears augmentation </li></ul></ul><ul><ul><li>Cables replacement </li></ul></ul><ul><ul><li>Conductor augmentation </li></ul></ul><ul><li>11kv , LV </li></ul><ul><ul><li>D T augmentation </li></ul></ul><ul><ul><li>RMU installation </li></ul></ul><ul><ul><li>Cables replacement </li></ul></ul><ul><ul><li>Package s/s installations </li></ul></ul><ul><ul><li>ACB’s / LT panels replacement </li></ul></ul><ul><ul><li>Feeder pillar/ Service pillar replacement </li></ul></ul><ul><ul><li>Conductor replacement </li></ul></ul><ul><li>SCADA, DMS,GIS </li></ul>A. System Reliability & Quality of Supply
  24. 25. <ul><li>Use of High Voltage Distribution System to reduce Technical losses </li></ul><ul><li>Meter Modernization Program to reduce Commercial losses </li></ul><ul><ul><li>Replacement of faulty / stop / slow meters & Mass scale replacement of electromechanical to electronic meters </li></ul></ul>B. Technical & Commercial Losses
  25. 26. C. System development to meet Load Growth <ul><li>New EHV grids planned in BRPL & BYPL to meet the load growth </li></ul><ul><li>2004 –05 : BRPL : 9 new grids are planned </li></ul><ul><li> BYPL : 10new grids are planned </li></ul><ul><li>APR’05 – SEP’05 : </li></ul><ul><li>BRPL : 2 new grid planned </li></ul><ul><li>BYPL : 2 new grids planned </li></ul>
  26. 27. Bringing International Practices into Utility Business Manage The Complete Network Asset Lifecycle Redundancy <ul><li>N-1 Criteria </li></ul><ul><li>100 % Reliability </li></ul>Automation <ul><li>100 % Automation </li></ul><ul><li>Integrated functions with SCADA and GIS </li></ul>Engineering <ul><li>Techno-Economical Design </li></ul><ul><li>Standardization </li></ul>Network Planning <ul><li>Optimal Network Design </li></ul><ul><li>Reliability centered Network Planning </li></ul>
  27. 28. Network Planning <ul><li>Process to identify the least-cost option to meet the demands of load growth while maintaining system reliability </li></ul><ul><li>Options include : </li></ul><ul><ul><li>Power lines reconductoring </li></ul></ul><ul><ul><li>New power lines </li></ul></ul><ul><ul><li>New substation </li></ul></ul><ul><ul><li>Transformer additions to existing substation </li></ul></ul><ul><ul><li>Capacitors and line voltage regulators installation </li></ul></ul><ul><ul><li>Distributed generation options </li></ul></ul><ul><ul><li>Network Driven – DSM (Demand-side management) </li></ul></ul>Long term Plan with Least Cost and Maximum gain in Reliability Cater to Load Growth Optimal Capex Planning Reduce AT&C Losses Leads to Improve Reliability
  28. 29. 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)
  29. 30. Project Management Project Management Planning & Scheduling SAP MIS Primavera L1,L2 & L3 Schedule Contractor’s schedule Material Control Budget Control Purchase & Invoice Project Systems
  30. 31. 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 Operations MIS
  31. 33. T&D Services by REL For Managing Complex Networks GIS Asset Management WMS Design Tools Analysis Tools CIS Designers Meter Readings Engineers Call Center Reps Crews VRU Operations Management Operations Model SCADA DMS Substation Auto OMS Dispatchers IED’s Operating Engineers Web Users VRU Crews Call Center Reps Service Centers Web Tools Line Supervision Data Warehouse Line Supervision Data Warehouse Scheduling <ul><li>As-builts </li></ul><ul><li>Proposed Facilities </li></ul><ul><li>De-commissioned </li></ul><ul><li>facilities </li></ul><ul><li>Attribute Changes </li></ul><ul><li>Land Changes </li></ul><ul><li>Meter Readings/ </li></ul><ul><li>customer loads </li></ul><ul><li>Load Profiles </li></ul><ul><li>Follow-up Work Orders </li></ul><ul><li>Facility Changes </li></ul><ul><li>Failed Device Data </li></ul><ul><li>Customer outage times </li></ul><ul><li>Switching Results </li></ul>
  32. 35. Thank you July 2006