You are well aware of the challenges facing the power distribution sector in India and the reforms that have been initiated in the sector with the following objectives:
• Reduction in energy and revenue loss (AT&C Losses);
• Improved efficiency;
• Increased quality and reliability of supply;
• Increased consumer satisfaction; and
• Increased transparency in all areas of business operation.
The reforms in the power distribution sector have also underscored the need for treating electricity distribution as a profit making business enterprise. In order to appreciate the need for IT in the power distribution sector, you need to understand the changes brought about in the sector itself due to the reforms. Fig. compares the traditional electricity business environment with the emerging scenario. Traditionally all the interactions and transformations of data and communication took place within the single vertically integrated monolithic block called the State Electricity Board (SEB).However, the post-reforms environment and organisational structure havetaken a different shape with multiple participants interacting with each other to recreate the integrated electric utility.
• Reduction in energy and revenue loss (AT&C Losses);
• Improved efficiency;
• Increased quality and reliability of supply;
• Increased consumer satisfaction; and
• Increased transparency in all areas of business operation.
The reforms in the power distribution sector have also underscored the need for treating electricity distribution as a profit making business enterprise. In order to appreciate the need for IT in the power distribution sector, you need to understand the changes brought about in the sector itself due to the reforms. Fig. compares the traditional electricity business environment with the emerging scenario. Traditionally all the interactions and transformations of data and communication took place within the single vertically integrated monolithic block called the State Electricity Board (SEB).However, the post-reforms environment and organisational structure havetaken a different shape with multiple participants interacting with each other to recreate the integrated electric utility.
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| Changing Environment of the Electricity Business |
The SEBs have been unbundled and new generation, transmission and distribution companies have been created. As a consequence, information interchange needs have emerged necessitating the use of Information Technology. Initially, the utilities used stand-alone IT systems and the integration of the different business processes such as billing, finance, operations, etc. was non-existent. However, the changes brought about by the distribution reforms in the electricity business underscore the need for integrated IT interventions. You may like to understand this aspect in some detail.
It is also important for you to understand the nature of electricity as a business commodity. You may like to know about the physical and economic attributes of electricity that give it its unique and unusual character. These are given in Box .
Box : Attributes of Electricity as a Serviceable Commodity
• Electricity cannot be stored economically and demand must be cleared with “just-in- time” production from the generating capacity available to the network at (almost) exactly the same time that the electricity is consumed. Thus, supply and demand have to be cleared continuously at every location on the network.
• The short-run demand elasticity for electricity is very low and supply gets very inelastic at high demand levels as capacity constraints are approached.
• Loop flow, resulting from the physics of power flow in AC networks, introduces additional complex interactions between generators at
different points on the network.
It is also important for you to understand the nature of electricity as a business commodity. You may like to know about the physical and economic attributes of electricity that give it its unique and unusual character. These are given in Box .
Box : Attributes of Electricity as a Serviceable Commodity
• Electricity cannot be stored economically and demand must be cleared with “just-in- time” production from the generating capacity available to the network at (almost) exactly the same time that the electricity is consumed. Thus, supply and demand have to be cleared continuously at every location on the network.
• The short-run demand elasticity for electricity is very low and supply gets very inelastic at high demand levels as capacity constraints are approached.
• Loop flow, resulting from the physics of power flow in AC networks, introduces additional complex interactions between generators at
different points on the network.
The SEBs have been unbundled and new generation, transmission and distribution companies have been created. As a consequence, information interchange needs have emerged necessitating the use of Information Technology. Initially, the utilities used stand-alone IT systems and the integration of the different business processes such as billing, finance,operations, etc. was non-existent. However, the changes brought about by the distribution reforms in the electricity business underscore the need for integrated IT interventions. You may like to understand this aspect in some detail.It is also important for you to understand the nature of electricity as a business commodity. You may like to know about the physical and economic attributes of electricity that give it its unique and unusual character. These are given in Box.
Let us now study the reasons why IT is needed in the electricity distribution sector.
Need for IT Based Interventions
You may well be aware that the use of Information Technology has transformed the way business is conducted in several sectors of the economy such as banks, railways, air transport, and other service sectors. You must have yourself taken advantage of this technology while shopping, booking tickets, touring places, making phone calls or accessing information on the web. The same level of IT use is expected in the Electricity Business but the problem is that large numbers of villages have no access to electricity. The end-users of electricity like households, farmers, commercial establishments, industries are confronted with frequent power cuts, both scheduled and unscheduled.
Power cuts, erratic voltage and low or high supply frequency have added to the ‘power woes’ of the consumer. These problems emanate due to inadequate power generation capacity, lack of optimum utilization of the existing generation capacity, inadequate inter-regional transmission links,inadequate and ageing sub-transmission and distribution network leading to power cuts and local failures/faults, large scale theft and skewed tariff structure, slow pace of rural electrification, and inefficient use of electricity by
the end consumer and lack of grid discipline.We now briefly explain the need for IT interventions in the power distribution sector, which arises due to many reasons (Box).
Box : Why is IT needed in the Power Distribution Sector?
High theft and poor collection are obvious reasons for an IT solution to India’s power distribution. The nature of AT&C losses has been covered at various places in other courses. You have read that the major components ofthe loss are: Lack of metering, poor collection, lack of complete billing,outages, transformer losses, poor HT/LT ratio and power theft.
You know that electricity distribution is spread in a large geographical area within the control of any utility. Electricity is carried through overhead wires,which are mostly bare. In such a situation, quite often, there is a temptation in human beings to enjoy the benefits of electricity without paying for it, particularly, if there is no social stigma attached to it and it is easily possible.There are long spans of low-hanging fruit (no pun intended) in the form of Low Voltage (LV) distribution (or even Medium Voltage – MV – distribution). In the rural areas, most agricultural pump sets are un-metered, with flat-rate pricing based on nameplate capacity. Utilities have no physical means of knowing the losses in the system.
Most of the transmission systems within the utilities are reasonably secure, in that commercial losses are relatively low. Many utilities have invested in newer meters for increased accuracy, and the moves towards unbundling have mandated greater accounting accuracy as now power changes hands from the TransCo to the DisCom. In addition, it is vastly more difficult for consumers to steal power at higher voltages. So, while utilities often know the power entering a substation, from that point onwards they have three unknowns to account for: technical (distribution) losses, theft, and agricultural consumption. Thus, we can see that there is significant leeway for errors, both purposeful and best-effort.
These factors together with the rapid expansion of the distribution network in the last two decades have resulted in increased revenue loss in the business of power distribution. In such a situation, the introduction of IT in the business can lead to better information flow in real time about the extent of losses at various points and help in curbing them. The experience from the developed countries has shown that IT can be used effectively to check and control the losses due to these reasons at least to some extent. Even a small reduction, say, of 1-2% could mean effective addition of 800 MW to 1600 MW in capacity. This means that the savings could be of the order of Rs. 300 Crore to Rs. 5000 Crore!
The metering system is the most important process for a utility, because it deals with a large number of consumers and millions of units of electrical energy. The process has direct impact on the financial health of the utility as well as on its operational performance. Thus it is very important to have in place a process supported by technology which can monitor and record all the
electricity transactions, with timely delivery of bills to the consumers and timely collection of payment. The meter type and meter reading process impacts the cash flow cycle. The reduction in meter reading process cycle can reduce considerable time from the meter reading to bill submission and payment collection.At present, feeder meters installed for measuring the inflow and outflow of energy at 33/11 kV substations across various utilities are mostly static type having data downloading facility. Some of them are static meters without downloading facility and some are still of the electromechanical type. Meter data of feeder meters is recorded manually in log books in almost all substations of utilities across the country. In spite of installing feeder meters with data downloading facility, manual recording is continuing in most of the places. Some utilities are downloading meter data with Meter Reading Instruments (MRI) but the downloaded data are not utilised. A few utilities had implemented the Automatic Meter Reading (AMR) system only for feeder meters but without acquiring and using the comprehensive meter database for further monitoring, analysis, energy accounting, auditing and system planning and augmenting purposes. Also, the meters installed are of different make and
due to lack of inter-operability of meters, the data of different make of meters are not compatible on a common platform.Thus, there is an urgent need for IT interventions in this respect for the following reasons:
For the purpose of reducing AT&C losses, it is important to carry out proper energy accounting and auditing without human intervention to identify loss pockets for initiation of corrective actions by the utility. Instant and reliable information on power supply reliability and quality standards for the utility’s own monitoring as well as to meet the requirement of Regulators would be available. Moreover realistic load forecasting and system planning on short, medium and long term basis would also be possible. And it would increase transparency in system operation.
Secondly, the success of any business depends on the smooth interchange of information across the organisation, which helps in taking prompt and timely decisions for optimal utilization of the resources. With the rapid expansion of the distribution network and the increased consumer base, it has become unwieldy to manage and run the electricity business on traditional lines wherein by the time the information is made available, it is outdated and hence redundant.
In the present scenario, it becomes very difficult to get any information in the business processes of the utility. For example, it becomes difficult to get the data for energy, the health of the system, finance (collections) and assets.MIS collected and compiled manually are generally voluminous, and mostly not used by the management. Moreover, there are clerical and wilful mistakes in critical reports. You would agree that for any business to be successful, the accountability and responsibility at all levels with accurate reporting is absolutely essential. Improved availability of different modes of cheaper communication is an added advantage for making MIS available on real time basis to all stakeholders.
Thirdly, efficiency improvement can be brought about by appropriate energy accounting wherein the DTR level monitoring of the energy account leads to localization of the problem and thus fixing of accountability and responsibility.
Fig. presents, in a nutshell, the scope of IT involvement in the Distribution Business.
Let us now study the reasons why IT is needed in the electricity distribution sector.
Need for IT Based Interventions
You may well be aware that the use of Information Technology has transformed the way business is conducted in several sectors of the economy such as banks, railways, air transport, and other service sectors. You must have yourself taken advantage of this technology while shopping, booking tickets, touring places, making phone calls or accessing information on the web. The same level of IT use is expected in the Electricity Business but the problem is that large numbers of villages have no access to electricity. The end-users of electricity like households, farmers, commercial establishments, industries are confronted with frequent power cuts, both scheduled and unscheduled.
Power cuts, erratic voltage and low or high supply frequency have added to the ‘power woes’ of the consumer. These problems emanate due to inadequate power generation capacity, lack of optimum utilization of the existing generation capacity, inadequate inter-regional transmission links,inadequate and ageing sub-transmission and distribution network leading to power cuts and local failures/faults, large scale theft and skewed tariff structure, slow pace of rural electrification, and inefficient use of electricity by
the end consumer and lack of grid discipline.We now briefly explain the need for IT interventions in the power distribution sector, which arises due to many reasons (Box).
Box : Why is IT needed in the Power Distribution Sector?
High theft and poor collection are obvious reasons for an IT solution to India’s power distribution. The nature of AT&C losses has been covered at various places in other courses. You have read that the major components ofthe loss are: Lack of metering, poor collection, lack of complete billing,outages, transformer losses, poor HT/LT ratio and power theft.
You know that electricity distribution is spread in a large geographical area within the control of any utility. Electricity is carried through overhead wires,which are mostly bare. In such a situation, quite often, there is a temptation in human beings to enjoy the benefits of electricity without paying for it, particularly, if there is no social stigma attached to it and it is easily possible.There are long spans of low-hanging fruit (no pun intended) in the form of Low Voltage (LV) distribution (or even Medium Voltage – MV – distribution). In the rural areas, most agricultural pump sets are un-metered, with flat-rate pricing based on nameplate capacity. Utilities have no physical means of knowing the losses in the system.
Most of the transmission systems within the utilities are reasonably secure, in that commercial losses are relatively low. Many utilities have invested in newer meters for increased accuracy, and the moves towards unbundling have mandated greater accounting accuracy as now power changes hands from the TransCo to the DisCom. In addition, it is vastly more difficult for consumers to steal power at higher voltages. So, while utilities often know the power entering a substation, from that point onwards they have three unknowns to account for: technical (distribution) losses, theft, and agricultural consumption. Thus, we can see that there is significant leeway for errors, both purposeful and best-effort.
These factors together with the rapid expansion of the distribution network in the last two decades have resulted in increased revenue loss in the business of power distribution. In such a situation, the introduction of IT in the business can lead to better information flow in real time about the extent of losses at various points and help in curbing them. The experience from the developed countries has shown that IT can be used effectively to check and control the losses due to these reasons at least to some extent. Even a small reduction, say, of 1-2% could mean effective addition of 800 MW to 1600 MW in capacity. This means that the savings could be of the order of Rs. 300 Crore to Rs. 5000 Crore!
The metering system is the most important process for a utility, because it deals with a large number of consumers and millions of units of electrical energy. The process has direct impact on the financial health of the utility as well as on its operational performance. Thus it is very important to have in place a process supported by technology which can monitor and record all the
electricity transactions, with timely delivery of bills to the consumers and timely collection of payment. The meter type and meter reading process impacts the cash flow cycle. The reduction in meter reading process cycle can reduce considerable time from the meter reading to bill submission and payment collection.At present, feeder meters installed for measuring the inflow and outflow of energy at 33/11 kV substations across various utilities are mostly static type having data downloading facility. Some of them are static meters without downloading facility and some are still of the electromechanical type. Meter data of feeder meters is recorded manually in log books in almost all substations of utilities across the country. In spite of installing feeder meters with data downloading facility, manual recording is continuing in most of the places. Some utilities are downloading meter data with Meter Reading Instruments (MRI) but the downloaded data are not utilised. A few utilities had implemented the Automatic Meter Reading (AMR) system only for feeder meters but without acquiring and using the comprehensive meter database for further monitoring, analysis, energy accounting, auditing and system planning and augmenting purposes. Also, the meters installed are of different make and
due to lack of inter-operability of meters, the data of different make of meters are not compatible on a common platform.Thus, there is an urgent need for IT interventions in this respect for the following reasons:
For the purpose of reducing AT&C losses, it is important to carry out proper energy accounting and auditing without human intervention to identify loss pockets for initiation of corrective actions by the utility. Instant and reliable information on power supply reliability and quality standards for the utility’s own monitoring as well as to meet the requirement of Regulators would be available. Moreover realistic load forecasting and system planning on short, medium and long term basis would also be possible. And it would increase transparency in system operation.
Secondly, the success of any business depends on the smooth interchange of information across the organisation, which helps in taking prompt and timely decisions for optimal utilization of the resources. With the rapid expansion of the distribution network and the increased consumer base, it has become unwieldy to manage and run the electricity business on traditional lines wherein by the time the information is made available, it is outdated and hence redundant.
In the present scenario, it becomes very difficult to get any information in the business processes of the utility. For example, it becomes difficult to get the data for energy, the health of the system, finance (collections) and assets.MIS collected and compiled manually are generally voluminous, and mostly not used by the management. Moreover, there are clerical and wilful mistakes in critical reports. You would agree that for any business to be successful, the accountability and responsibility at all levels with accurate reporting is absolutely essential. Improved availability of different modes of cheaper communication is an added advantage for making MIS available on real time basis to all stakeholders.
Thirdly, efficiency improvement can be brought about by appropriate energy accounting wherein the DTR level monitoring of the energy account leads to localization of the problem and thus fixing of accountability and responsibility.
Fig. presents, in a nutshell, the scope of IT involvement in the Distribution Business.
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| Scope of IT in the Power Distribution Business |
India as a whole has done exceptionally well in bringing about technological advances in IT systems and using IT in various sectors. We have world class talent available but the penetration of the same is quite low as on date in the distribution business of our utilities. You may know that internationally, there has been heavy dependence on IT-enabled systems in this sector, e.g., in South Korea, South Africa, Europe, USA, Latin America, etc.We now present a few case studies that bring out the extent to which IT is being used by distribution utilities today.
IT Use by Bescom
Bescom, one of the four distribution companies formed out of Karnataka Power Transmission Corporation Limited (KPTCL) in 2002, is responsible for power distribution in six districts of Karnataka. There is a high level of IT use in the company. The company has call centres functioning under its central complaint division which receives billing and power supply complaints through the IVRS, landline telephones, SMS and e-mail. Billing is computerised using the BNC software. Spot billing is also implemented by the company in all the 98 subdivisions. A survey has revealed a rise in customer satisfaction from 47 per cent in 2000 to 92 per cent in 2005.
Bescom is also using IT to support its business processes. It has implemented the Management Information System (MIS), a cash management system, a works management system and a material management system. All financial transactions are computerised. The Geographical Information System (GIS) has been introduced and the company is planning to subscribe to an ERP system (see Unit 10). All rural divisions are connected through a wide area network (WAN).To improve its operational and commercial performance, Bescom has implemented many systems: feeder network analysis, transformer management, transformer-wise energy audit, automated meter reading and meter management. It prepared a project for online monitoring of power distribution in Bangalore. The entire supply network – including substations,feeders, distribution transformers and main power lines – will be linked to a computer network for online monitoring. The functioning of the system will be monitored from a control system. The IT team is very small – only two people – and most daily services such as network monitoring and maintenance of the website have been outsourced. For these IT initiatives, the company spent about Rs.100 million in 2005-06.
West Bengal State Electricity Board (WBSEB) and the Use of IT IT initiatives in WBSEB include the setting up of a zonal data warehouse and a call centre acting as a single-window service for prospective and existing consumers, remote metering for bulk consumers, and GIS mapping of electrical installations. In order to improve its billing and collection efficiency, the Board has introduced 100 percent computerised billing. Thirty percent of the cash collection is done through online transactions. An applicationn monitoring system has also been established.IT is being used to support and integrate WBSEB’s business processes. It has established an MIS, a material management inventory system (MMIS) for inventory, a personnel information system (PIS), and employee resource centres for effective administration. It has also introduced GIS and satellite communication (SATCOM).
The organisational setup for IT consists of three divisions: the Entrepreneurship Development Programme (EDP) cell, the EMC and SATCOM. The EDP cell controls most of the IT activities in WBSEB and is headed by a deputy chief engineer who is helped by senior and deputym engineers. The EMC division takes care of activities such as metering, GIS project and spot billing. The team consists of an additional chief engineer, a superintendent and deputy engineers. The SATCOM team, which is implementing IT initiatives such as V-SAT-Wan, MIS and MMIS, consists of a chief engineer, a superintendent, a deputy engineer and assistant engineers.In 2005-06, the Board spent Rs.139.8 million on IT, mainly on two projects: the electricity supply station modernisation project (Rs.75 million) and the GIS project (Rs.64.8 million).
Uttaranchal Power Corporation Limited and IT Use
Uttaranchal Power Corporation Limited (UPCL) manages and operates the transmission and distribution of power in 13 districts of Uttaranchal. It is making concerted efforts for more pervasive IT usage in the corporation. All its units are connected to the head office at Dehradun through a leased line network, which runs enterprise database applications and intranet workflow applications.UPCL is using IT to improve operational performance through computerising the consumer commercial database using GIS technology in the Dehradun and Roorkee distribution circles which are strategic from the revenue perspective. With the help of the GIS database, it has mapped every electrical consumer with the corresponding network element, right from the substation, feeder and distribution transformer up to the LT pole in these two circles.UPCL has also developed a software system for load-flow studies whereby it is in a position to identify feeders and distribution transformers having huge technical losses. IT usage also helps the management to make informed decisions on network reconfiguration and load management. In order to improve customer satisfaction, it is operating computerised billing centres where customers can lodge complaints or raise queries. It has also started an IVRS-based call centre in Dehradun, integrated with the consumer and substation database on a pilot basis. The case studies described so far would have given you some idea of the scope of IT usage by power distribution utilities. In the next section, we examine the potential role of IT in detail for improving the power distribution sector in India.
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