Saturday, December 24, 2011

Shunglu Panel report and Smart Grid Plans

RAPDRP Program Implementation is currently going on. The Shunglu Panel report on the financial condition of the DISCOM's is now out. The Panel has commented on the progress on R-APDRP in many states that have started implementing Part A. The Panel clearly indicates why the financial condition of the DISCOM's are bad, and also suggest many ways forward.

Given the poor financial situation, it is very important that we focus on getting the Part A and Part B of R-APDRP to be effectively implemented, before venturing out on ambitious smart grid programs. It is time, we stop tax payer money to be paid for funding these programs and focus equivocally on bringing financial stability to these utilities. We should take all steps possible to make that happen. And the data of private utilities and some of the franchises show that good management of the metering, billing and collection, together with better customer service and reliable power has enabled many of these privatized utilities to perform better. The example of Torrent Power in Bhiwandi investing capex to upgrade the network and the results are especially highlighted by Shunglu Panel report.

Given the serious nature of the Distribution Sector and how it is impacting the entire Industry, it is very clear that, our focus should be on improving the financial viability of the DISCOM's and have whole hearted focus on Part B of the R-APDRP, ensure these investments are rightly made, the Results of Part A and Part B are realized, together with improved billing and collection.

If some part of the Part A plan has not worked well in a given DISCOM, do not wait for that to be fixed, but to start utilizing the systems that are working. If one starts getting the metering data from the DT's and Feeder's and start utilizing that to make operation decisions, even in a rudimentary way, DISCOM's will start seeing tangible benefits. Together with this, if offline studies are made and use the Part B Investment judiciously one will see significant improvements in the losses. The reference to IT Outsourcing in DISCOM's should be taken very seriously, since it is high time that the DISCOM's start managing and taking over the systems that they have bought and not dependent on outsourcing of their entire operations, till they reach a level of maturity internally in understanding and benefiting from IT, before they can effectively manage outsourced IT systems, that really deliver tangible results.

However the current trend of changing the goal post to Smart Grid and expecting it to be the solution for the sector is worrying. I believe we should let only profit making / low AT&C loss utilities to venture into Smart Grid Initiatives and especially let PGCIL / NTPC etc., to take the lead than overload the current DISCOM's, who still have to realize the benefits of R-APDRP. One of the critical requirements to fund a utility's Smart Grid Pilot should be the track record of the utility on Project Implementations and IT Adoption, for those who are struggling in implementing Part A of APDRP should not be provided with Smart Grid Pilot Projects.

1 comment:

  1. dear sir
    i wholly agree with you that we should not wait for the part-A plan to be fixed and start utilizing the metering data to make operation decisions and planning decisions.
    and this is the reason that i differ from your opinion that smart grid option should be only for low AT&C Loss utilities.
    smart grid can not be implemented in short period.All utilities should strive to achieve it
    and meanwhile utilize the metering data fruitfully.

    Ajay Garg (UPPCL)