Are we ready for energy audits today?

May 01, 2021 5:10 AM

These are reliant on smart-metering, whose penetration is very low at the moment. And, discoms don’t have the wherewithal to ensure greater smart-meter penetration

The power purchase cost comes to around Rs 60,000 crore per annum, against this, the revenue mopped up is approximate Rs 40,000 crore per annum.The power purchase cost comes to around Rs 60,000 crore per annum, against this, the revenue mopped up is approximate Rs 40,000 crore per annum.

By Somit Dasgupta

Recently, the Union government published the draft regulations for mandatory conduct of energy audits of distribution companies (discoms) on a yearly basis. The government, at present, is seeking comments on the draft from all stakeholders. The proposed energy audit will be a complete audit, beginning right from the periphery of the discom where it receives power from the transmission lines till the end-consumer. So, audits would be conducted on the 33 kv lines, 11 kv lines, at the feeder level and also at the distribution transformers (DTs). The DT level metering, incidentally, is the last-stage metering since DTs are connected to end-consumers. Such audits will give the exact losses at different voltage levels, and also identify the areas where losses are high and/or where the system is overloaded and will help the management to take corrective action.

Usually, when we talk about losses in the distribution sector, the oft-used parameter is the ‘aggregate technical and commercial’ (AT&C) losses. AT&C is derived through an amalgamation of the technical and commercial parameters of the discom. Commercial parameters would include billing efficiency and collection efficiency of the discom. Hence it is possible to improve upon the AT&C loss figure (meaning a lower figure) through a higher billing and collection efficiency.

Consequently, the AT&C estimate for a discom varies throughout the year since billing and collection efficiency usually improves manifold towards the end of a financial year. As against the AT&C estimate, the energy loss figure which will be obtained through the proposed energy audit will be free of any commercial parameters. It will simply tell us how many units of electricity are unaccounted for after deducting pure technical losses vis-à-vis what was delivered at the discom’s periphery. Some amount of technical loss will always be there in any system, and reducing technical losses beyond a point is a very capital-intensive process.

There is no doubt that we need to know the correct loss levels at each voltage level in the distribution business and, to that extent, the draft regulations cannot be faulted. The issue is given the available infrastructure, can we really conduct energy audits of our discoms? To conduct an energy audit, it has to be done simultaneously across all voltage levels right till the end-consumer, in real time. One can’t do an energy audit at 33 kv level at one point of time, then do the energy audit at the DT level after the end-consumers meters have been read which may take place after a month.

To read all the meters simultaneously, we would need the facility of smart-meters that can be read off-site, or at least the data should be logged, which can be retrieved subsequently. While exact figures regarding the installation of smart-meters at the consumers’ end is not available, it is rumoured that it will not be more than 1%. In fact, some sectors like agriculture don’t have meters at all to a large extent, let alone smart-meters! This is not all. A large part of our DTs are also not metered. As far as 11 kv feeders are concerned, though they are metered, a large percentage consists of manual meters which cannot be read off-site.

Second, to have any meaningful energy audit, all the end consumers need to be indexed. This means that one should know which consumer is getting electricity supply from which DT. Only if this is known, will it be possible to determine the loss level of that DT. The fact is that in most cases, the DTs are a mesh of wires and little is known as to who all are connected to that DT.

It is only in the case of a few privatised discoms, for example, the discoms in Delhi who have successfully indexed their consumers. For the remaining, trying to link their consumers with the correct DT will be nothing short of a nightmare. This is not to suggest that indexing should not be done. It’s just that it has not been done for most discoms.

As is evident, in order to make energy audit a reality, one will have to invest a lot of money on infrastructure, especially smart-meters. Considering the fact that we have more than 1.5 crore DTs and more than 2 lakh 11 kv feeders, the quantum of money required is enormous.

Here lies the problem. The poor financial position of the discoms really deters them into going in for such investments. The fact is that the discoms can barely pay for their power purchase and require a stimulus at regular intervals. So, at the end of the day, we see little hope of seeing any action on the energy audit regulations once they are finalised.

Senior visiting fellow, ICRIER, and former member (economic & commercial), CEA

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