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WRI India Workshop Aims at Helping DISCOMs Retain Commercial Customers, Plug Losses and Transition to Cleaner Energy

April 28, 2022, New Delhi: In an effort to help Indian electricity distribution companies (DISCOMs) retain their fast-migrating commercial and industrial (C&I) customers, stem losses and enhance their renewable energy (RE) offerings within the power system, WRI India organized a workshop aimed at regulators, DISCOMs, policy makers and other research groups in Delhi today. The workshop aimed to explore opportunities in existing regulations, address challenges and identify measures to scale and retrofit thereby enabling DISCOMs to offer higher levels of RE to its consumers. DISCOMs could also take advantage of their existing infrastructure, their knowledge of technological and market developments, and their ability to aggregate customers to optimize economies of scale.

The event was attended by 30 participants including Mr. Ghanshyam Prasad, Joint Secretary, Ministry of Power and Ms. Letha Tawney, Commissioner, Oregon Public Utility Commission. It also included a panel discussion moderated by Mr. Deepak Sriram Krishnan, Associate Director, Energy Program, WRI India and panellists - Mr. Himanshu Chawla, DERC, Mr. Shashi Goyal, ReNew Power, Mr. Sunil K Sharma, BYPL, and Dr. Vasundhara Sen, Symbiosis Centre for Management and Human Resource Development.

During the workshop, WRI India’s tool, ELEVATE, aimed at supporting DISCOMs understand grid impacts of electric vehicle (EV) charging on their distribution transformers was also released.

WRI India shared its experiences from the state and national levels at this workshop, with insights through our flagship initiative called the Green Power Market Development Group (GPMDG). In six years of its operation, the initiative has facilitated more than 750 MW of RE across India. We have also regularly studied and analysed the policy and regulatory landscape for RE in several states.

C&I consumers account for about 50% of all electricity used in India and are the primary source of revenue for DISCOMs. C&I customers also subsidize agriculture and residential consumers. Due to several challenges, mainly with reliability and quality of power supply, C&I consumers have relied on costly backup diesel generator sets. With the Electricity Act, 2003, coming into effect, some C&I consumers have utilized the enabling provision of open access to source electricity from independent power producers or captive generators. These options were earlier almost entirely thermal power contracts, but with increasing cost competitiveness of RE technologies, C&I consumers have been exploring this option too.

Over the past few years, some C&I consumers have been setting up on-site (primarily rooftop solar PV) and off-site RE (often, through third parties). Since C&I customers pay higher tariffs to help cross-subsidize residential and agricultural consumers, the shift to RE results in a double hit to DISCOM revenues. That is, a reduction in total revenues due to reduced C&I consumption; and a reduction in the cross-subsidy component of the C&I tariff, resulting in less revenue to cover subsidies needed for residential and agricultural consumers.

Recently, DISCOMs have resorted to measures like increasing cross-subsidy surcharge and open access fees, to prevent the exodus of C&I consumers. While this aims to retain DISCOMs' best paying clients, these measures have stopped C&I customers from procuring more RE. With competitive RE prices in the market today, and corporates looking to reduce their carbon footprints, these measures by DISCOMs go against India’s clean energy goals.

Mr. Tirthankar Mandal, Head, Energy Policy, WRI India set the context for the workshop. He said, “C&I customers are important players in India’s 500 GW non-fossil fuel journey and to make this a meaningful one, DISCOMs need to facilitate the ecosystem of RE adoption for them through innovative products.”

Speaking at the event Mr. Ghanshyam Prasad, Joint Secretary, Ministry of Power, Government of India, said, “renewable Energy came to rescue the electricity system during the recent demand spurt and supply crisis,” emphasising the need to scale renewables offered in the energy mix by DISCOMs.

Giving her perspective from the US, Ms. Letha Tawney, Commissioner, Oregon Public Utilities Commission said, “when key account managers started to understand just how important renewable energy was to large corporate buyers and began to get educated of the opportunities, new options started to open up, and some of the utilities realised it was important to meet the customer.

Mr. Deepak Krishnan, who leads WRI India's clean energy transition efforts, said, “what is needed today is a forward-looking perspective, one that takes into account the inclination of C&I consumers to procure RE and convert this into an opportunity for DISCOMs, so they get more involved in serving the needs of their higher-paying consumers.”

For media queries contact:

Kunal Shankar, WRI India, Energy Program,

(M) +91-98661-73803

Ahona Datta Gupta, WRI India, Energy Program, 

(M) +91 – 98180-55447 

WRI India is a research organization that turns big ideas into action at the nexus of environment, economic opportunity, and human well-being.

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