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FICCI – ICA launch report on Self-Sustainable Power Distribution Sector

Dec 21, 2023

New Delhi, 21 December 2023: FICCI, in conjunction with the International Copper Association India (ICA), today launched a report Self-Sustainable Power Distribution Sector. The report sheds light on potential pathways for Discoms to enhance their operational and financial efficiencies, along with technological advancements. The report provides critical recommendations for overhauling the regulatory and policy framework, market structure, infrastructure, and technology landscape, offering a comprehensive guide to revitalising the power distribution sector. 

Speaking during the launch ceremony, Mr Alok Kumar, Former Secretary, Ministry of Power, Government of India, underscored the importance of clean and affordable energy as a cornerstone for India’s growth and development. He stressed that the prosperity of the Indian power sector is inextricably linked to the financial and operational health of the Discoms. Kumar emphasised the pivotal role of Discoms in the country's energy transition, essential for combating climate change and achieving the goal of 'Viksit Bharat'. 

In India's rapidly advancing economy, electricity remains a crucial pillar, with Power Distribution Companies (Discoms) at the forefront of ensuring effective delivery to the last mile. However, Discoms' performance has been a consistent concern, with issues such as high Aggregate Technical and Commercial (AT&C) losses, non-cost reflective tariffs, and ageing infrastructure posing significant challenges. 

Kumar also highlighted the instrumental role of AB Cabling and smart meters in reducing distribution losses and projected that India’s energy supply is set to double by 2047, with the share of electricity expected to quadruple in the same period. He advocated for states to adopt Direct Benefit Transfer (DBT) for electricity subsidies, facilitating efficient subsidy delivery and power savings, and called for feeder separation to ensure adequate power for farmers and consistent supply to consumers, thereby enabling optimal load management and reliable power delivery. 

On occasion, Mr Atul Kumar Bali, Director of the National Smart Grid Mission, Ministry of Power, called for the implementation of cost-reflective tariffs to ensure fairness, efficiency, and sustainability in the power sector. Bali noted the significant reduction in AT&C losses and outstanding dues, a testament to the positive changes underway.  

Mr Ganesh Srinivasan, Co-Chair of the FICCI Power Committee and CEO of TPDDL highlighted the importance of assessing the socio-economic impact of power distribution in sectors like agriculture, health, and education. He emphasised that self-sufficiency in power distribution is crucial for the country's overall growth. 

Mr Prabir Neogi, Mentor of the FICCI Power Committee and Advisor at GMR Energy stressed that achieving last-mile connectivity and energy transition depends on the self-sufficiency and viability of Discoms. Neogi also underscored the need for reliable power to facilitate socio-economic improvements and universal access to electricity. 

Mr Sunil Jain, Founding Partner of Sundev Renewables, observed that while power distribution reforms have been ongoing for over a decade, there is now a noticeable shift towards energy-efficient solutions. He lauded smart meters as a transformative tool in the power distribution ecosystem and advocated for the establishment of a Power Council to align policies between central and state governments. 

The event also welcomed contributions from key industry leaders including Mr Mayur Karmarkar, Managing Director, International Copper Association India; Mr  Rohit Kumar, Secretary General, Carbon Markets Association of India; and Mr Somesh Kumar, Partner at E&Y, reflecting a united commitment to building a robust, efficient, and sustainable power distribution network in India.

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