Delhi, without missing a chance, stakes it claims to become a world-class city, offering its citizens round the clock utility services. In 2003, the city introduced electricity reforms with an eye to reduce the AT&C losses, power cuts, power theft and other problems that the sector was reeling from.
6 years from then, the reforms, having progressed slowly amidst lots of setbacks and hiccups have largely succeeded in achieving most of, if not all, their targets. Distribution and Generation were privatized, while transmission was given to separate govt. owned company, Delhi Transco Limited. It should be noted that when power is produced at the plant, it is transmitted to cities by Transmission Companies at high voltages (440000 V to 33000 V), while it is distributed to end consumers at low voltages (220 Volt) by Distribution Companies.
While Distribution has been able to reduce power cuts as well as AT&C losses, generation is still yet to see any large investment in Delhi, primarily because of fuel costs involved (transporting oil/coal or gas up-till NCR is expensive) and environmental concerns associated with constructing thermal power plants in already polluted NCR region. Though, Delhi has invested in power projects (Thermal, Hydel) outside NCR region and will get power from these projects in the coming years. The largest of these projects, Damodar Valley Project, will add upwards of 2000 MW to Delhi’s capacity and will certainly make Delhi power sufficient. This project, along with other long-term power purchase agreements (PPAs) have assured Delhi’s administrators and given them the confidence to claim power sufficiency by 2012.
But the average user still has to suffer from frequent power cuts. This is mostly due to shortfall in generation capacity especially during peak demand times, which occurs around afternoon and in evening in summers.
The distribution method followed currently allocates supply from the entire northern grid to various states depending upon the demand schedule given to CEA (Central Electric Authority) by various state load dispatch centers (SLDCs). This demand schedule divides the entire day into 96 slots of 15 minutes each. Ideally, the demand and the supply should be matched for each of these slots.
These SLDCs get these demand schedules from distribution companies (public or private). The distribution companies in turn, prepare these schedules depending upon anticipated demand which is dependent upon lots of uncertain factors, biggest of them being the climate. If it rains, the demand will suddenly drop, it gets hot the demand spikes up. But by exactly what amount, is a subject of guess.
CEA gets a similar supply schedule from different power suppliers, and then allocates this supply to different states based on their demand. The states which still fall short of the supply can arrange for their energy needs through Indian Energy Exchange (IEX), which functions like a commodity market where power is bought and sold, just like a normal commodity. States, whose demand fell short of their allocated share, can sell excess power to states whose demand exceeded their allocated share. Also States who are purchasing fixed and assured amount of power through long-term power purchase agreements also sell excess power through IEX. The only rider is that since power cannot be stored, it has to be used or sold as soon as it is bought or supplied. But as supply is always outstripped by demand, the producers never resort to distress sale.
For Delhi, the demand schedule is prepared by State Load Dispatch Centre, Delhi whose mission is, “To facilitate intra and interstate transfer of power with Responsiblity, Security and Economy on sound commercial principles”. It displays the dynamic data on its website, updating it every 15 minutes, to display the current demand, supply, shortage, domestic production, frequency etc.
If the power from IEX is also insufficient then load shedding becomes inevitable. In the summer time, when the demand for power peaks up, the reservoir levels in various dams in the Northern region are at their lowest and generation is low. Excessive heat also puts a lot of pressure on transformers and other grid components. Thus, the entire system suffers from pressures on the demand side, supply side and the transmission as well. The results are unscheduled power cuts, outages, and transformer tripping and grid failures.
The claims and the preparations fail when they face these pressures. The condition is still better than the yesteryears, when these power cuts were much more frequent and the quality of power supplied was low. Thus, reforms have succeeded only in plugging some of the leaks of the network.
The only solution to the current situation is capacity addition, giving more freedom to consumers to choose their discoms (distribution companies) and supply side management. If supply situation can improve, the prices will no longer be needed to be regulated. And if customers have the freedom to choose their discoms, they will prefer the discom offering best quality and price. Sufficient supply will also make sure that discoms don’t end up buying expensive power through IEX, where power is sometimes purchased at rates as high as Rs. 14/unit. In order to improve the supply situation, Delhi has to invest in power plants outside NCR, or enter into more long term PPAs. Current budgetary allocation of only 431 crores is insufficient for this purpose.
In order to manage the growing demand, Delhi needs demand side management. The growing demand should be curbed by various measures (different charges for peak-time usage and off-peak usage, more energy-efficient equipments, green buildings which use less energy). The first step could be the introduction of Smart Metering Technologies, which also allow for real-time monitoring of power consumption through an internet connection. It can also be used to control power consumption remotely and allows for comparison of electricity prices with other energy sources. For example, it can be used to calculate whether, at current prices, it is cheaper to use electricity or gas to heat water. Many such possibilities exist for smart metering technologies, and it is still evolving. In UK, the electricity consumption reduced by as much as 15% once these technologies were introduced. It was because people were able to micromanage their consumption.
Also, the Government has to increase the existing energy conservation awareness campaigns, as international experience shows they are one of the most cost-effective and easily implementable policy based solution to energy crisis.
[Image courtesy: http://www.flickr.com/photos/80375783@N00/3252316731/sizes/l/]