Discoms to turn around by next year thanks to UDAY, says power secretary

Centre working to improve energy efficiency and demand-side management

Power distribution continues to be an area of concern. However, with the implementation of Ujwal DISCOM Assurance Yojana (UDAY), aimed at making ailing power distribution companies (discoms) to operationally efficient, some are expected to witness a turnaround in a year, said Union Power Secretary Pradeep Kumar Pujari in a video presentation at a conference organised by the Indo American Chamber of Commerce.

Pujari said since the launch of UDAY in November the debt service liability of discoms has reduced because of the reduction in losses and a dip in generation cost.

The Centre has already extended the deadline for implementing UDAY by a year to March 31, 2017. About 15 states have joined.

“Discoms’ capacity to buy, purchase and supply power 24x7 is still a question. Lot of focus is being given to distribution so that discoms turnaround both financially and in operational efficiency. They have to improve operational efficiency, reduce aggregate transmission and commercial (AT&C) losses, which are quite high,” Pujari said. However, during January, February and March this year, the cost of power procurement has come down, leading to an improvement in discoms’ performance.

Pujari said the cost of generation of NTPC, which supplies 40 per cent of power, has come down by 39 paise per unit. For others, particularly private sector firms, too the cost of generation has reduced because of improved quality and increased availability of coal.

Further, of the 200,000 feeders, Pujari said 31,000 have been put on the national portal and discoms have been asked to look at individual feeders.

“The main emphasis in the next six months is working with discoms to improve energy efficiency and demand-side management. In the generation sector, the focus is on increasing energy efficiency through supply of better quality coal, better utilisation, and rationalisation of linkages. As far as transmission is concerned, the government is addressing issues faced by developers of ongoing project,” Pujari said.