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The Ministry of Power has published draft amendments to the Electricity (Rights of Consumers) rules, 2021. The amendments focus on benchmarking reliability and efforts to reduce the use of polluting diesel generators for back-up power. Our comments and suggestions highlight the need for initiating these changes through amendment of regulations and the need to provide an enabling framework though FoR model regulations or policy provisions rather than rules for the same.

For the enabling framework, our suggestions highlight the need for:

  • Rural and urban benchmarks trajectories at the division level for tracking performance across several reliability indicators (SAIFI, SAIDI, Feeder reliability, DT failure etc.)
  • Better scrutiny of capital investments and detailed assessment of contribution to increasing reliability before the introduction of reliability charges to enable network investments for increased reliability
  • Government support, policy push and regulatory support for providing battery based storage options to ensure reliability for essential public services like health centers and hospitals.
  • Accounting for ground realities and technical feasibility while stipulating accelerated timelines for providing temporary connections, especially through pre-paid mode. 

 

In October 2021 Supreme Court allowed power exchanges to launch forward contracts, regulated by CERC and financial derivatives to be regulated by SEBI.

Forward contracts are different from ready delivery contracts that are currently available on the power exchanges in that the final delivery can take place after 11 days. This enables power exchanges to offer monthly and seasonal contracts which will greatly benefit DISCOMs and C & I consumers.

The judgement also allows for the launch of financial derivatives such as futures. Financial derivatives, unlike forwards do not translate to physical delivery of power and are transferable. Thus they are an effective instrument for hedging risk and can be an important input, among others, to assess electricity price. However such contracts are new and the market segment is relatively small, launch of such contracts must be approached with caution such as the prices discovered in this speculative market do not form the basis for regulatory decision making and investing in the power sector.Further, significant clarity should be provided on jurisdiction, sharing of information and communication between regulators before these contracts are launched.

This article discusses many of these challenges and opportunities in the context of this judgement.

A version of this article in the Moneycontrol on 8th November 2021.

 

Monday, 08 November 2021 17:27

New Discom audit norms will curb T&D loss

The Bureau of Energy Efficiency (BEE) notified regulations in October 2021 prescribing the manner in which the electricity distribution companies are required to conduct energy audits under the Energy Conservation Act, 2001. This article discusses the key features of these regulations and recommends some actions required for their effective implementation.

A version of this article in the Hindu Business Line on 5th November 2021.

The rapidly evolving energy sector needs a feature-rich, publicly accessible and usable analytical framework to examine and understand the sector to inform policy, investments etc. Prayas (Energy Group) has built an open-source, generic, customisable, free-to-use demand-oriented energy systems modelling platform called Rumi with this motivation, and built the PIER (Perspectives on Indian Energy based on Rumi) energy model of India through the decade of the 2020s.

The PIER modelling exercise identifies some interesting trends and policy insights for the Indian energy sector. There is a need for urgent policy attention to increase usage of modern cooking fuels, particularly in some states and regions. Systemic improvements in energy efficiency can help do ‘more-with-less’ in the form of providing better energy services with lesser energy. Consumer behaviour is identified as a key lever, since small changes in behavioural choices can significantly impact the country’s energy demand and supply mix. Regarding electricity supply, the study suggests caution in future coal capacity addition beyond what is in the pipeline as it could lead to undesirable lock-ins if India achieves its renewables targets. The PIER exercise also suggests that it may be desirable to revisit the relative shares of solar and wind in its planned renewables portfolio.

In addition to the above insights, the report presents various other results that may be of interest, such as the share of space cooling in residential demand and peak demand, the electricity generation mix in future years and India’s import dependence for various energy sources.

Rumi can be downloaded and used from https://github.com/prayas-energy/Rumi, and PIER can be downloaded and used from https://github.com/prayas-energy/PIER. In addition, the set of key outputs from PIER are available for download as a spreadsheet from this page.

We hope that the energy modelling community finds Rumi and PIER useful and will enrich them further using their own assumptions, data and methodology.

India’s Energy Conservation Act completed 20 years in October 2021. This article reviews the current policy discourse on energy efficiency in India and argues for an urgent and stronger policy push vis-à-vis electric vehicles and renewable energy.

A version of this article appeared under the title ‘Energy efficiency needs a policy charge’ in the Hindu Business Line on 18th October 2021.

Published in Energy Efficiency

The Bureau of Energy Efficiency (BEE) issued draft regulations on 15th April, 2021 related to the manner and intervals for conduct of energy audit (Accounting) in electricity distribution companies (DISCOMs) and requested public comments. The primary objective of these regulations is to measure and verify the DISCOMs’ compliance with the targets on Transmission and Distribution (T&D) losses notified to them under the Perform, Achieve, and Trade (PAT) scheme. However, DISCOMs can also be mandated to use the data from the detailed energy audit conducted under these regulations for all their regulatory fillings mandated under the Electricity Act, 2003. There should not be any inconsistency between the data submitted by the DISCOMs to different authorities. Our comments/suggestions have been grouped into two sets. The first set of comments are related to improving the process of conducting energy audits through increased transparency and accountability. The second set of comments are related to comprehensive recording of the data through different data forms and providing clear definitions and methodology to ensure accurate reporting of T&D losses. Both set of comments take into account the current practices employed by the DISCOMs on data collection and T&D loss estimation.

Published in Energy Efficiency

The Haryana Electricity Regulatory Commission invited comments for finalization of the Draft Haryana Electricity Regulatory Commission (Prepaid Smart Metering) Regulations, 2021. A few key recommendations provided by Prayas include foremostly the need to consolidate all metering related provisions and regulations in one metering regulations or the SoP. Our submission has also highlighted the need for addressing consumer concerns for application process, grievance redressal and data privacy. We have also suggested finer changes to the draft regulations in order to facilitate easier transition to smart meters for all consumers.

Rumi is an open-source energy-systems modelling platform developed by Prayas (Energy Group) with a focus on demand-oriented modelling. Rumi will complement and strengthen the eco-system of energy models in India, and contribute to enriching the understanding of possible future trajectories of the energy sector as it goes through a period of rapid transition. Rumi will soon be made available for free download and use by the wider energy research community.

This slide-deck provides details about the approach, methodology, assumptions and data sources used in the current version of Rumi. It also provides some insights and results obtained from the model, and comparisons of its results with a few other similar models.

Rising demand for space-cooling and particularly the use of ACs has the potential of putting enormous strain on India’s power system by not only pushing up the overall electricity demand but also requiring to build generation and distribution capacity to meet the demand at peak times. India already has a few policies/programmes to address this increasing demand from ACs. A systematic understanding of consumer behaviour is crucial to design these interventions effectively and to periodically assess their outcomes. In this report, PEG presents insights on questions related to the purchase and usage behaviour of room air-conditioners which are based on a survey of 1500 households in five Tier-2 cities across India. This study adds to the limited literature examining the household behaviour related to the purchase and use of AC in India.

Published in Energy Efficiency

CEA is revamping its website to improve data dissemination, particularly with respect to monthly and yearly data. As part of this upgrade, a dashboard is being developed, with visualisation of some of CEA’s data. In addition, APIs are being provided to a subset of the data. In this context, CEA sought feedback on the new website from data users and the general public through a Twitter message. Prayas (Energy Group) expressed interest in reviewing the site under development. In response, CEA shared login credentials to the site. The following comments are based on a review of the development site. The comments are largely focussed on the monthly and yearly data dissemination as well as the dashboard and APIs under development.

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