The electric distribution sector in India is struggling financially. This is not a new problem, and its primary causes are well understood. The distribution utilities (discoms) have long faced challenges in revenue collection and shortfalls stemming from important cross-subsidies of residential and agricultural customers. There is, as a consequence, an over-dependence on revenues from the commercial and industrial (C&I) rate classes. Despite this, the Indian power sector has made substantial progress towards decarbonization as the share of renewable energy resources in the supply mix grows. Efforts toward energy efficiency driven though the labelling and standards initiatives have also contributed to the overall reduced carbon footprints.
Deeper decarbonization, achieved at the lowest cost, will require, among other things, investment in end-use energy efficiency, renewables, and storage solutions for all consumer categories. Discoms can take advantage of such opportunities if they see clear benefits (or, at least, no harm) to their businesses through accrued returns on equity. As India comes out of the pandemic-induced economic downturn, there is a clear need to support electricity infrastructure development at the transmission and distribution system levels. One key attribute of investments in efficiency, dispersed renewables, and storage solutions (behind the meter as well as front of the meter) is the avoided investments in network upgrades, particularly those in the distribution system.
RAP believes that there is real value in pilots that can demonstrate the efficacy and economic value of these kinds of investments to utility managers, regulators, and other policymakers. Our team worked with ps Collective to develop a spreadsheet tool that enables analysts to create detailed investment scenarios and compare different strategies even at the level of individual feeders. This granularity will allow discoms and regulators to test whether targeted interventions will not only produce economic and environmental benefits, but also relieve the financial burdens on the discoms and their C&I customers.
We invite interested parties to use the spreadsheet tool and assess its usefulness. We welcome your feedback. The tool and a manual are available for a download here.
Reach out to Rick Weston with specific questions and to provide feedback.
