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  • The government's most ambitious reform move for the distribution segment, the Ujwal Discom Assurance Yojana (UDAY), is now nearing the two-year mark. While there is still a long way to go, discoms have begun to show some tangible results on the ground.

  • Twenty-seven states (including union territories) are now on board UDAY. With financial re-engineering, the composition of discom debt has changed in favour of state-guaranteed debt. The average AT&C losses for UDAY states have come down by 4 percentage points to 20.2 per cent in 2016-17. There has also been a reduction in the gap between cost and revenues as well as in interest costs.

  • That said, the most pressing issue, the lack of power demand growth, is yet to be resolved. While there has been an absence of fresh long-term PPA tenders, discoms are also cancelling bids of previously tendered PPAs, or renegotiating contracts in favour of cheaper power from the short-term market. Slow regulatory progress in terms of issuance of tariff orders has been another concern.

  • Working in tandem with the UDAY scheme to fix the distribution segment are two other flagship programmes - DDUGJY and IPDS. Under DDUGJY, the current emphasis is on providing access to electricity to all households given that the village electrification targets are nearly met. Under the IPDS, the focus is on building IT infrastructure and strengthening distribution systems in more than 4,000 urban towns across India, much higher than the R-APDRP target, which was restricted to a select number of towns.

  • Since the launch of IPDS and DDUGJY, there has been a surge in discom spending on network modernisation, upgradation of transformers, feeder segregation, feeder metering, SCADA, metering, etc. This has created significant opportunities for equipment suppliers, technology providers and EPC contractors across the value chain.

  • In order to leverage the infrastructure created under these programmes and upgrade it to the next level to include smart grid capabilities, the National Smart Grid Mission has been a key initiative. Four new projects are currently being implemented under the mission, in addition to the 14 pilot projects approved by the power ministry in 2012. Once completed, these projects are expected to serve as business cases for the introduction of new technologies.

  • An integral component of the various government programmes are smart meters. Around 1 million smart meters are proposed to be deployed under the pilot projects and the National Smart Grid Mission projects, while another 1 million are being considered for deployment by various discoms and private utilities. To encourage the uptake of smart meters and remove the cost barrier, the government is working out a business model that would aggregate demand and bring down prices.

  • With the roll-out of smart meters and advanced solutions such as DAS, outage management, asset management software, IoT, big data analytics and cloud computing, utilities are expected to progressively move towards the goal of digital transformation. However, as most utilities are still at early stages of digitalisation, they need to evolve their business and operating models to address the issues of costs, skills, cybersecurity vulnerabilities, etc.

  • The mission of the conference is to analyse the key trends and developments in the distribution segment, discuss the impact and progress under key government programmes, and showcase best practices and new initiatives being taken by discoms. It will also highlight new and emerging technology trends and solutions, and examine the potential opportunities and challenges associated with digitalisation.
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