Report Summary Evaluating Current Dynamics Amid Implementation of UDAY Scheme and Examining Sector’s Outlook Basis Changing Power Procurement dynamics of Discoms
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The scheme of UDAY, arguably is turning out to be a saviour for most of the DISCOMs signed under it, with early signs of financial recovery being noticed. However, it won’t be easy for the DISCOMs to absorb the mandate under the new PPA norms, which binds them not to abandon any PPA irrespective of the falling power tariff witnessed in the auctions of the renewable energy on the country. Although, to strike a balance between the arms of generation and distribution, this change in the PPA norm was quintessential but, it might further lead to financial constraints of the DISCOMs specially for the states like Bihar, Jharkhand, Jammu & Kashmir, Haryana and the North Eastern States.
The distribution segment is in the most precarious situation in the electricity supply chain due to its interface with the public at large with different needs, expectations and varying degrees of capability to pay. The need to develop the segment was realised in the X Plan with emphasis on interventions to reduce the huge aggregate technical and commercial (AT&C) losses. Most important schemes, such as Accelerated Power Development and Reform Programme (APDRP) for urban areas and Rajiv Gandhi Grameen Vidyuthikaran Yojana (RGGVY) for rural areas, were initiated in the X Plan which aimed at bringing in investment and creating an efficient distribution infrastructure throughout the country. Further, Ministry of Power, GoI launched Ujwal DISCOM Assurance Yojana (UDAY) (which was approved by Union Cabinet on 5th November, 2015), envisaging Financial & Operational Turn around of Power Distribution Utilities (DISCOMs) of the country.
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