Investments and lookouts to power distribution strive to cut AT&C losses

The power distribution system is critical in the energy value chain by delivering electricity from power plants to end-users. Its primary function is to supply power to customers at a low voltage level. In India, the power distribution sector is mainly dominated by the private sector, in contrast to transmission. Following the restructuring of the state power board, the power distribution industry has received increased investment and attention, with the launch of various initiatives and a precise regulatory framework aimed at reducing aggregate technical and commercial (AT&C) losses.
Double the outlay to 15,000 Crores 
The main goal of the RDSS is to enable DISCOMs to concentrate on system enhancement initiatives, particularly in the IT sector. Approximately half of the funding is allocated to the smart metering project, while the remaining half is dedicated to distribution systems. This program aims to improve feeder segregation and solarisation, enabling DISCOMs to eliminate technical inefficiencies. The timely deployment of these various CAPEX strategies by DISCOMs has resulted in a progressive decrease in AT&C loss numbers. However, India’s overall figure remains high, accounting for about 22 percent of all AT&C losses.
When looking at this data across the states and various state DISCOMs, there is a significant range, ranging from less than 10 percent to 40 percent. These AT&C loss figures still exceed regulatory targets, resulting in a disallowance of power purchase expenses, directly impacting revenue and cash flows. To address this issue, DISCOMs must be proactive and prompt in implementing CAPEX, complex measures, IT efforts, and soft measures to minimise inefficiencies while adhering to regulatory guidelines.
Senior Vice President and Co-Group Head of Corporate Ratings at ICRA Limited, Girishkumar Kadam, notes that the policy allows DISCOMs to improve operationally, impacting cost structure and revenue recovery. Smart meters are seen as an enabler for DISCOMs to reduce AT&C losses. Gautam Seth, joint managing director of HPL Electric & Power Pvt. Ltd., highlights the need to reduce these losses. He sees smart meters as a solution for recording energy consumption and bringing savings on Capex costs.
Ratna Garapati, Managing Director and CEO of CyanConnode India, is concerned about power consumption and payment discrepancies that put DISCOMs in debt. He stresses the importance of smart meters in covering all meters, including those used in agriculture. The goal is to reduce unapproved loss numbers and AT&C loss levels, and the RDSS schemes will aid in the growth of DISCOMs.
Moreover, if there is a reduction in the loss over and above the approved AT&C loss level, then there is a cost-saving that can be retained by the distribution entity, and better performance can be expected for the distribution entities. So, the idea is to address unapproved loss numbers and reduce AT&C loss levels, and these RDSS schemes will undoubtedly aid in the growth of DISCOMs.
Companies such as HPL, CyanConnode, and EESL are equipped with the technology to manufacture smart meters, which are seen as a critical component of the government’s RDSS scheme. There is already a significant level of interest and inquiries about these programs.
Addressing bottlenecks in T&D 
The government’s Late Payment Surcharge (LPS) policy is backed by strong data points. The policy has two components, the EMI plan and the current payment. As of May 22, EMI handles instalments to repay the delinquent balance. If DISCOMs fail to make current payments within the grace period of 45 plus 30 days, several deterrent rules are triggered, reducing the electricity supply.
Expanding on this, Kadam adds that in addition to open access rules that allow DISCOMs to access power from short-term, medium-term, and long-term power markets, they must also make timely payments to GENCOs and TRANSCOs. Therefore, DISCOMs must improve their liquidity and cash flow position by obtaining improved rates and timely and substantial government subsidy support.
Strengthening T&D efficiencies
To ensure reliable and efficient power delivery to customers, improving transmission and distribution (T&D) systems is essential. To achieve India’s clean energy goals, the modernisation of T&D networks is necessary due to the increasing electricity consumption. A more flexible and robust grid is needed as renewable energy use continues to grow.
According to Sanjay Udgirkar, Director – Projects, Manav Energy Pvt. Ltd., achieving a balanced energy system is critical. To achieve this, India must invest in upgrading its T&D infrastructure. By utilising technologies such as smart grids, advanced sensors, communication systems, and energy storage, the grid’s efficiency and reliability can be improved. Udgirkar also believes these investments can help reduce transmission and distribution losses, a significant issue in India.
Enhancing T&D and DISCOMs’ efficiency through smart metres and AMI
The RDSS initiative has been a success, despite the government’s initial investment of only Rs. 900. Utilities will allocate the next ten years to AMISPs, who will provide the meters. This has resulted in 97-meter months being achieved. Payment instruments have been a challenge in the past, with utilities lacking funds, but government promises have enabled AMISPs to continue their work. Garapati is optimistic about the initiative’s success and believes the costs can be covered with current power pricing. However, there are still questions about how consumers will pay for the meters and whether they can afford the tariffs.

Factors that contribute to India’s sustainable energy transition
India has great potential to become a global leader in the renewable energy sector, with relevant technologies projected to generate an $80 billion market by 2030. Urgirkar highlights the need for an average annual investment of $160 billion in India’s energy industry by 2030 to reach net zero emissions by 2070. Meanwhile, Kadam from ICRA explains that the state utilities’ rating assessment is based on a bottom-up fundamental risk analysis that considers business, financial, and management quality.
Ajithkumar Kesavan, Director of Sales at Lucy Electric, shares the Indian government’s goal for 2047 to generate 80 percent of power from renewable sources and bring electricity to every corner of the country within 1000 days. Lucy Electric is contributing a futuristic Smart RMU to ensure an efficient and adequate power supply to the end customer.
In modern society, the transmission and distribution (T&D) sector plays a significant role in economic development and the integration of renewable energy. With the increase in the use of fragile electronic equipment and the need for a consistent power supply, the industry can improve by implementing automated earth monitoring and upgraded lightning protection systems to enhance the dependability and quality of electrical systems.
With the state power board reform, the industry has begun to get more attention and investment (SEBs). Several new initiatives and a precise regulatory framework have been launched to decrease aggregate technical and commercial (AT&C) losses.
Mr. Girishkumar Kadam, Senior Vice President & Co-Group Head – Corporate Ratings, ICRA Limited
DISCOMs finances impact the cost structure and the revenue recovery in a bigger way.
Gautam Seth, Joint Managing Director, HPL Electric & Power Pvt. Ltd.
Smart metres are a big enabler for making the DISCOMs much healthier.
Ajithkumar Kesavan, Director – Sales, Lucy Electric
India will have 100 percent access to power throughout the country.
Sanjay Udgirkar, Director – Projects, Manav Energy Pvt. Ltd. (spokesperson changed)
India needs to invest in modernising its T&D infrastructure.
Ratna Garapati, Managing Director & CEO, Cyanconnode India.
Free power is not an appropriate way to accomplish anything.