Thread by @energelectrik

Reforms are coming to India's power sector. #DISCOMs in union territories are proposed to be privatized. What has India learnt from privatizing #electricity #distribution #utilities in the past?

Some food for thought >

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#ElectricityTwitter #EnergyTwitter #privatization

Private/PPP DISCOMs operate in a few cities of India—most notably in #Delhi (Tata Power Delhi Distribution, #BSES Rajdhani & Yamuna), although among others, #Kolkata (CESC) and #Mumbai also receive power from privatized #DISCOMs.

What benefits accrue from #privatization?

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Improvements in performance are best outcomes of #DISCOMs' #privatization—AT&C losses have fallen from 50+% in 2002 to ~8% in '19 for Delhi's DISCOMs, and CESC incurs 9.8% as against the 14.3% allowable in Kolkata.

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Privatized #DISCOMs have been able to reduce losses to levels better than those of wholly state-owned DISCOMs.

#PowerTheft #privatization

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Privatized #DISCOMs are regulated monopolies within their territories, and can recover costs incurred and generate additional incomes by enhancing efficiencies. By capitalizing on these, DISCOMs can better deliver results to the promoters.

#privatization

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However, a bigger benefit of #DISCOMs' #privatization is access to inexpensive capital. DISCOMs would be in a better position to diversify away from traditional sources of capital for the power sector e.g. Power Finance Corporation (#PFC), India's largest #NBFC, and banks.

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This has been demonstrated in the investment by Qatar Investment Authority in Adani Electricity Mumbai Limited.

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#DISCOMs #privatization

In the long run, privatized #DISCOMs are also better positioned to adopt emerging technologies in the power grid, which is at the cusp of another paradigm shift towards energy storage and electric mobility—best demonstrated by #TPDDL's Smart Grid Lab.

#privatization

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