‘Indian power sector has been passing through a crucial phase’
Published on : Monday 30-11--0001
In a short span of 12 years, significant achievements – what energises ATL?
Adani Transmission has achieved the distinction of being the largest private sector transmission company in India, within a short span of 7-8 years, with more than 8,500 cktkm of transmission lines and approx 14,000 MVA of transformation capacity under operation. In addition, 8 projects totaling to line length of 2369 km and transformation capacity of 2215 MVA, won through tariff based competitive bidding during last 2 years are under various stages of construction. All these projects are likely to be completed in the calendar year 2018 itself. ATL happens to be the only private sector transmission company in the country having HVDC assets of 500 KV.
All this has been possible due to the clear vision of the group and its confidence in the long term viability of the power sector in the country. This can be gauged from the fact that Adani has been consolidating its position in the power sector brick by brick, even in these difficult times. Agility in decision making and expertise in project management are the inherent strengths of ATL, that have helped achieve these milestones in such a short time span.
Tomes have been written on India’s power sector. In a nutshell what ails it?
Indian power sector has been passing through a crucial phase, wherein the electricity demand has not risen as much as was expected, thus putting strain on existing as well as upcoming generation assets. The situation has come to the point that as per CEA’s projections, no additional capacity is required till 2027, apart from the one which are already under construction. The load factor of the power plants under operation has been on a decline year on year, which is likely to be worsened by the additional renewable capacity planned over the years.
Adding to the woes of the power sector are the Aggregate Technical & Commercial losses (AT&C) losses of the distribution companies in the country, which still stands at staggering high levels of around 25%. The situation has been brought under control to an extent by the UDAY scheme of Govt of India, which has been able to reduce the financial losses of the distribution companies, thus, improving their capacity to purchase additional power so as to be able to achieve the 24x7 power plan of GoI. However, the effect of UDAY in improving the operational efficiency of the Discoms remains to be seen.
In this gloomy scenario, transmission sector and renewable energy generation have been the silver lining in the power sector. An investment of approx Rs 2.60 lakh crore is envisaged in both central sector as well as state sector for strengthening of the transmission system during next 5 years period, which will help in boosting the investment in the sector. Further, the plan of 175,000 MW of renewable capacity by 2022 will provide some relief to the beleaguered power sector.
ATL has an impressive record in the transmission business that is rife with high percentage of losses. What makes the difference here?
The transmission projects in the country have generally been delayed in the past due to innumerable delays like delays in getting the Right of Way, Forest approvals, Clearances, etc., thus resulting into cost and time overruns for most of the projects. However, ATL has been an exception to this with all its existing projects been commissioned before time and even upcoming projects are likely to be commissioned ahead of schedule. The difference lies in the superior project planning and project management capabilities of Adani, which have been harnessed and sharpened over a period of last 10-12 years.
It is said that India is a power surplus country but plagued by T&D woes. Yet there is a talk of 300 million people without electricity. What is the reality?
It is true that India is a power surplus country and at the same time, 300 million people are without electricity is also a fact. To understand this anomaly, we need to analyse the situation a little more. The problem lies in the inefficiency of the distribution companies due to which the AT&C losses are hovering around 25% in India as a whole and in many states, the losses are as steep as 40-50% and the revenue realisation in some rural areas is less than even Re 1/- per input unit whereas the cost to supply rural consumers is considerably higher. This doesn’t mean that losses in urban areas are any lower. However, losses in urban areas can be curtailed to a great extent by taking forward the distribution reforms and one of the solutions to the problem is to go for Public-Private Participation (PPP) model, which has been successfully tried in Delhi and has yielded significant results. This may improve the financial situation of the Discoms and the funds generated can then, be used to subsidise rural consumers.
It is a sector driven with problems – more or lethargy than legacy?
Problems in the power sector can be attributed both to the lethargy as well as legacy, lethargy in carrying out the reforms due to lack of political will whereas the problems of legacy have been resolved to a great extent by UDAY scheme initiated by the present government. At the policy front, the government has been proactive in introducing competition in all the arenas of power sector but the implementation of those policies has been a challenge, e.g., the government has been pushing for competition in transmission sector and has come up with guidelines that all the transmission projects should be bid out on competitive basis but in reality, very few States have adopted it till date.
The Adani group started with power generation, entered transmission and is now into distribution as well. A sweet spot or a challenge to meet?
While this distinction of being a truly integrated power company starting from pit to plug is admirable, it brings with it a lot of additional responsibilities. The expectations of Consumers from such an integrated company are too high and to meet these expectations, we need to cover some ground in respect of process improvement and technological interventions especially in distribution sector, despite the fact that the Discom, which we are going to inherit is a highly efficient and consumer friendly organisation.
Tools of technology are available for better efficiency. IoT is making monitoring more effective. Is the industry making use of it?
Although there has been a significant improvement in adopting technology in all the arenas of power sector be it generation, transmission or distribution but we still have to go a long way. As far as generation sector is concerned, the country has adopted SCADA and associated technologies to a great extent but now, we have to go to the next step of diagnostics maintenance using the sophisticated tools of data analytics. There are very few power plants in the country, who have adopted diagnostic maintenance technology as of now. In distribution sector, we need to minimise the man to man interface, at least for the large consumer base and increase the man-machine interface, which can help in providing efficient and cost effective service to the end consumers.
What are the future plans for ATL?
We have now set a target of being a 20,000 cktkm company by 2021 and for achieving this, we are open to both organic growth as well as inorganic growth by acquiring the existing assets.
Adani Transmission Ltd
India