power distribution overview

1Presented at Optima 2007 IMC IIT Kharagpur

Power Distribution -POWER FOR ALL BY 2012

By Himadri Banerji

CEO EPC Distribution

Reliance Energy


11 Sector Overview

22 Opportunities & Concerns

33 Case Study: Delhi Network ModernizationCon

tent

s


Indian Electricity Distribution Sector

An Overview


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“There is a lack of accountability in distribution, outdated rules, regulations, management structures, and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


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)


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


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


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

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Regulator’s Role


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


• 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


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)


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


End Goals :Key Parameters

Existing

Target

Subsidy

Losses

Regulation

CommercialOrientation

Reliabily ofPower Supply



Opportunities & Concerns


Opportunities & Concerns


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


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


• 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


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.


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


“ “ If you can’t measure it, you can’t manage it.”If you can’t measure it, you can’t manage it.”


Delhi Discom: Project Management Case Study


Delhi Discom: Project Management Case Study


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


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


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


• 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


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


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


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


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


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)


Project Management

Project Management

Planning &Scheduling

SAP MIS

Primavera

L1,L2 & L3 Schedule

Contractor’s schedule Material Control

Budget Control

Purchase &Invoice

Project Systems


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


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


Thank youJuly 2006

power distribution overview

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