Reducing tariff giveaways can thrive revenue in DISCOMS

Electricity distribution is a low value – high volume of transactions for cash flow from customer, and any break in the revenue, put burden on the DISCOMS.

Discussing the irregularities taking place in the distribution and transmission sector, Maxon Lewis, Managing Diector, Magenta Power mentions some key areas to attract the eyeballs of DISCOMS which can help them in reducing their debt burden and have a flourished ecosystem.

Moving away from generation and focusing on supply. Your take?
India has done a great job in the generation side given the focus and spirit top down, especially in the renewable energy space. But we are still struggling on AT&C losses on the supply from both transmission and distribution side. I believe, we in some ways, have missed an opportunity to focus and upgrade the last mile connectivity and intelligence that a grid of this scale would require.

According to PRAAPTI portal, there has been a rise in the outstanding dues to GENCOs by the DISCOMs. Would this move to focus on supply, will bring a any relief to the debts?

What policy or tariff changes are you expecting to come under the UDAY 2.0 as it is supposedly aimed at improving operations?
From what we currently know of UDAY 2.0, under the new tariff policy the DISCOMS would have to pay a surcharge for delayed payment, which would be equivalent to the commercial rate of interest. Any DISCOM failing to take appropriate measures to reduce their losses won’t be granted any loan by the government of India. The intent is in the right step and will move the DISCOMs to get into reducing their losses and improve their recovery cycles. However, the issue will be when the government or, in other words the political bodies, may undue the intent by forcing these DISCOMs to align with some short sighted schemes.

Despite no publicly declared major incidents of cyber attack in the renewable energy sector to date, successful attacks on the wider energy industry are expected. What are your thoughts on how to curb off such attacks?
It is not a question of will it; it is a question of when. While the western world was impacted by cyber-attacks on their grids (it is actually a daily thing to ward off such attacks for many discoms). Since we are still relying on an ageing and unconnected transmission ecosystem, India has not been impacted as such. We are miles away from full deployment of SMART grid and other technological concepts in our grid. I do not mean that we should stay unconnected, but we should be prepared to be baked in the necessary firewalls, and protocols into our standards, and infrastructure we are putting in place, including at the lowest level of interception which is the smart meter.

Maxon Lewis,Managing Diector, Magenta Power