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SANTOSH KUMAR SAHU DIRECTOR (Finance) OHPC CONCEPT VISUALIZED BY Management of Cost in Power Sector for Sustainability of The Electricity Distribution.

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Presentation on theme: "SANTOSH KUMAR SAHU DIRECTOR (Finance) OHPC CONCEPT VISUALIZED BY Management of Cost in Power Sector for Sustainability of The Electricity Distribution."— Presentation transcript:

1 SANTOSH KUMAR SAHU DIRECTOR (Finance) OHPC CONCEPT VISUALIZED BY Management of Cost in Power Sector for Sustainability of The Electricity Distribution in the Country Santosh Kumar Sahu Director (Finance), OHPC Ltd.



4 Saw the Happiness among the villagers while accessibility of Electricity Realized Electricity as a commodity

5 Dreaming for Electricity Business to be an franchisee

6 Theme of Dreams (Win Win situation fo a Franchisee, Supplier, Transmiter & Generator) Electricity distribution in India are still making losses, even after:- (i)Enactment of Electricity Act 2003 ( E. Act 2003) (ii)Several Amendment(s) of Electricity Act 2003, (iii) Declaration of National Tariff Plan and National Tariff Policy, (vi)Un-Bundling of State Electricity Board(s), (v)Independency in Load Dispatch Centre - NLDC, RLDCs, SLDCs, (vi) Establishment of Independent Regulators in Centre and State (CERC/SERC), (vii) Establishment of Grievance Redress Forum like, GRF, OMBUDSMAN and ATE (Appellate Tribunal for Electricity) (viii) Establishment of Enforcement Mechanism through Energy Police Station and imposition of penalty under the E Act-2003 (ix) Privatization of Discoms (x) Establishment of Ultra Mega Power Plant(s) (UMPP)

7 (xi) De-Monopoly of Generation / Induction of IPPs (xii) Procurement of Power through Competitive Bidding (xiii) Introduction of Franchise in Electricity Distribution (xv) Reduction in rate of Interest on loan (xvi) Provision of Incentives to the stake holders including Employee(s) (xvii) Energy Audit/ Feeders Management in Distribution (xviii)Implementation of Govt. Schemes with Capital Grant and Interest Subsidy (xix) Implementation of different Energy Conservation Scheme(s) and Building Code (xx) Implementation of Recommendation(s) of different Expert(s) Committee(s) Theme of Dreams

8 What can be done by an CMA to put Electricity Distribution Sector on a fiscally sustainable path and bring investment in distribution, given the intense of political pressure to supply power cheaply and access of Electricity to all ?

9 (A)THERMAL POWER Impact of COAL as a primary FUEL in Thermal  Re-Visiting of Long Term Coal Linkage policy  Allotment of Coal Blocks/ Mines through Auction/ Bidding Process  Allotment of Coal Blocks through Reverse- Bidding Process  Action Plan and mid term review of the Action Plan for Achieving Planned Targets from Captive Mines  Plan to reduce Cost of Imported Fuel Price  Establishment of Independent or Third Party International Laboratory for evaluation of Calorific value of Imported Coal for determination of the Price of Coal.  Evacuation of Power instead of Coal to save the Cost of transportation. Approach for Generation to reduce the cost of power which is 70-80% for distribution utility :-

10 SELECTION OF PIT HEAD SITE TO EDUCE THE CARRYING COST  Re-visiting the Land Acquisition issues  Improving R&R Policy with Long term Dividend Sharing  Simplification of Environment Clearance for Power Projects to reduce the Cost Over-Run  Merry Go round of Railway Transportation  Combined and Shared Railway Corridor for transportation of Coal Plan  Selection of Ash Pond in appropriate place to save future continuous claim from Farmers  Water Storage and re-cycling plant

11 SLECTING APPROPRIATE TECHNOLOGY AND MANUFACTURER  Mega / Ultra Mega Power Project  Increase of Existing Installed Capacity and change of technology.  Capacity Building in of BoP (Balance of Project) Qualifiers  Reduction of Time for Annual Plant Maintenance through Professional Outsourcing Agency  Annual Supply Contract for Spare parts  Adequate and Appropriate Insurance for the project for un-foreseen

12 (B) HYDRO  Reservoir Management in Multiple ProjectReservoir Management in Multiple Project  Treatment of Catchments Area for reduction of silt  Spinning Reserve to maintain the Frequency level and Grid Stability  Time Management in Annual Maintenance through Professional Agency  Maximising generation in peak period / peak season  100% Machine availability of Machine during Rainy season with Back up spares  Adequate Plant insurance

13 (C) SOLARSOLAR  Selecting Right Site with higher CUF for Solar  Development of Mega Solar Park with Evacuation  Selecting the Right Technology, Module and Cell and other Equipment like Inverter, Transformer etc.  Use of Balance unused land of existing Factories, Dam Sites, Institutions, Railway, Airport etc  Manufacturing of Mega PV Modules for use of floating Solar Panel in the Reservoir.  Capacity Building of Professional Maintenance Contractor  Use of Roof Top for Solar  Regulation for Net Metering arrangement in Roof Top Solar

14 PV System Architecture 14 Relatively simple to install, operate and maintain. Most popular and globally accepted configuration. No availability when grid is down, safety for grid maintenance Meter 1: Conventional Electricity Consumption TransformerGrid Photovoltaic Panel (Approx. 1 - 5kW P ) Grid-tied inverter Meter 2: Solar Electricity Generation

15 Approach in Transmission which is about 10%-15% cost to the Distribution Utility  Policy for Compensation of land used for Evacuation of Power like R&R  Balancing of Generation & Evacuation Capacity  Capacity Building of Qualified 765/400 KV Executors  Re-visiting the Deviation Settlement Mechanism which has restricted the generators to inject power or Distribution Companies to draw power.  R&M with capacity addition of Generating & Transmitting equipments  Capacity Building for sufficient Higher Capacity Transformer Manufacturing in the Country  Up-Gradation 400KV line to 765KV /1200 KV  Installation of Ultra High Voltage (UHV) Transmission lines  Use of Compact Tower/ Bi-Pole  Development of 1200 KV AC System  Evacuation of NER Power or Bi-lateal Trade to Adjacent Country  Re-visit for fixation of Inter regional Transmission Point of Charges (PoC)

16 Approach in Developing Power Market The factors affecting markets as follows:  Flexibility in Deviation Settlement Mechanism.  Correct Delivery Point of Power  Policy for Power Banking  Simplification of Open Access  Model Bilateral Trade/ agreement.

17 Approach For Franchisee in Distribution  Franchisee of 33/11 KV Primary Distribution / Sub-Station level  Franchisee for 33 and 11 KV Feeders Level  Franchisee for Distribution Transformer level  Fixation of Bulk Tariff rate for Franchisee at different level with different Voltage level  Franchisee for Wire Business  Franchisee for Maintenance

18 Approach in Distribution to Reduce the Cost  Input based Franchisee in Rural Area at different level  Outsourcing of Operation & Maintenance at 33/11KV Sub-station  BOOT Model franchisee for Semi Urban Area  Mid Term Visit for change in CERC Norms for computation of Generation, Transmission Tariff in regard to (i) Reduction of % on Return on Equity or introduction of Return on Capital Employed instead of ROE (ii) Change of O&M Norm (iii) reduction on rate of interest on working capital loan  Extension of the Integrated Power Development Snt S Scheme (IPDS) to Franchisee  Extension of IPDS to Each Panchayat level  Stopping of manufacturing of Candescent Bulb

19  Radio Frequency based metering in all Single phase  AMR in all 3 phase Consumers  Encouragement of Online payment with more Rebate.  Installation of Capacitor Banks for improvement of Voltage  Bifurcation and re-routing of feeder  Erection of appropriate Distribution transformers  Strengthening of conductors across all voltage levels.

20 Best practices to reduce Cost in Distribution :-  High voltage Distribution System (HVDS).  Network reconfiguration.  Network re-conductring.  Segregation of feeders with agricultural loads and supplying them with HVDS is proposed in all the Distribution regions.  Reconfiguration, Re-conduct ring of network and Optimal location of DTs  The reconfiguration of the distribution network to be done by Identifying over loaded feeders, and distribution transformers. The feeders are bifurcated, to form new feeders thereby to reduce the losses. The loads on the DTs are reduced by proposing additional DTs.

21 APPOINTMENT OF REGULATOR FOR LENDING AGENCY IN POWER SECTOR  Regulation for Lending Agencies for fixation of margin like trading of Power being 70% of Capital is invested by them in the project.  Relaxation in Allowing Generation, Transmission & Wire Business to avail External Commercial Borrowing and FDI  Arrangement of Inter Ministry meeting for liberalization of Hedging in case of Foreign Borrowings or Foreign Contracts  Allowing cheaper FIG (Financial Institution Guarantee) instead of Bank Guarantee (BG)

22 New Approach for Carriage and Content Business Distribution Reform  Transferring of the existing financial losses of distribution company to a Special Purpose Vehicle (SPV) before reform to carriage and content business.  Reorganization of regulatory asset by the regulator.  Fixing the life line rate for Below Poverty Line consumer.  Capacity Building in Franchisee.  Tamper proof IT implementation. Future Multiple Distribution Business

23 "A CMA having Vision, Dedication, Imagination can create Win-Win- Situation to reduce the Cost of the Organization and Save Billion" " CMA can also reduce the Tension of the Nation” Slogan of the day Finally the CMA win over the dreams

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