Lighting Up Bihar. Robin Burgess, LSE and IGC Michael Greenstone, MIT Nicholas Ryan, Harvard Anant Sudarshan, Harvard and JPAL

Similar documents
northeast group, llc India Smart Grid: Market Forecast ( ) January group.com

Rural Energy Access: Promoting Solar Home Systems In Rural Areas In Zambia A Case Study. O.S. Kalumiana

Off-Grid Renewable Energy Program in Myanmar. Pradeep Tharakan, PhD Senior Energy Specialist (Climate Change) Asian Development Bank

A Forward March towards an Energy Empowered Nation Case Study in Sri Lanka

Anil Agarwal Dialogue 2014

Tackling Power Theft through Meter Data Management and Quality Analysis. Results from NPCL s AMR roll out and AMI trial

Net Metering in Missouri

ROAD-MAPPING CUSTOMER FACING APPLICATIONS TO ENABLE SMART GRID

Submission to Select Committee on Electric Vehicles - inquiry into the use and manufacture of electric vehicles in Australia

Prospects for Rural Electrification in Africa

Utility Rate Design for Solar PV Customers

Nehru National Solar Mission, Phase II

India: the Power Sector; what you also need to know

Uganda s Experience with Promotion of Rural Electrification - Connection subsidies

REGIONAL MEETING ON SUSTAINABLE ENERGY

Workshop on International Good Practices of Sustainable Energy Technologies. Beirut Energy Forum 9-11 Sep 2015

Submission to the Transport and Public Works Committee s inquiry into the operations of toll roads in Queensland

Prospects for Rural Electrification in Africa

Utility Operator Model

Electricity Access in Lao PDR

Innovation in Transport. Mike Waters

Review of Retail Electricity Tariffs

Senate Standing Committees on Economics 27 June 2014 PO Box 6100 Parliament House CANBERRA ACT 2600 By

RE: Comments on Proposed Mitigation Plan for the Volkswagen Environmental Mitigation Trust

USAID Distributed PV Building Blocks

Analysis of Indian electricity distribution systems for integration of high shares of rooftop PV By Joerg Gaebler, IGEN Solar, GIZ India

Tariff Design Issues: Approaches for Recovering Grid and System Costs

PLANNING TO START OR EXPAND A BUSINESS?

Service-based business models for circular economy in the solar power sector.

Reducing transport emissions in Ireland: supporting ambitious new EU vehicle standards as a vital first step. Thomas Earl & James Nix

Basic tariff guiding principles

Solid Waste Management

5 th NEAESF. Outline

Success Story Scaling Up Energy Efficiency An Indian Experience

Vermont Public Power Supply Authority 2018 Tier 3 Annual Plan

EUCL AMI Project Experience Share

Future Funding The sustainability of current transport revenue tools model and report November 2014

ENERGY FOR ALL: An Update. JIWAN ACHARYA Senior Energy Specialist

Transportation Electrification: Reducing Emissions, Driving Innovation. August 2017

Government of Sierra Leone. Directions in. Energy. Opportunities for Investment and Partnerships

Submission to Greater Cambridge City Deal

Car Sharing at a. with great results.

2017 Colorado Phase 2 Regulatory Rate Review Frequently asked questions

Electric Vehicle Charging Workshop Pride Park Stadium 7 March 2018

Global Energy Network for Urban Settlements

Net Metering and Solar Incentive Proposed Framework

GEODE Report: Flexibility in Tomorrow s Energy System DSOs approach

Final Report. LED Streetlights Market Assessment Study

northeast group, llc Southeast Asia Smart Grid: Market Forecast ( ) Volume II October group.com

Progress and Challenges in Philippine Energy Sector Reform

A FIT FOR PURPOSE DISTRIBUTION NETWORK -Mini Grids- By Werikhe Godfrey Deputy Executive Director REA Uganda

Regional Meeting on Sustainable Energy for Asia -Pacific Least Developed Countries Kathmandu, Nepal. Surendra Rajbhandari

EXPERIENCES IN ASIA FOR INTEGRATION OF SMART GRIDS AND RENEWABLES: THE SINGAPORE STORY

ENERGY STRATEGY FOR YUKON. Net Metering Policy DRAFT FOR CONSULTATION

Session 1: Implementing SDG 7 and Achieving Target 7.1 CAMBODIA CHHE LIDIN

General overview of The Gambia s Electricity Market and Regulatory Framework for Renewable Energy. M.L Sompo Ceesay

CII National Conference Capital Goods Industry: Emerging Opportunities Attached to Power Sector. Date , New Delhi

CNG as a Transport Fuel - Economic Benefits 17 th November 2011

Electric vehicle charging. Enabling the switch

A systematic approach to scale up FSM services Case of Government of Maharashtra

Feed in Tariffs. What is the feed-in tariff? Guaranteed for 25 years - by the UK Government. How do I claim the feed-in tariff?

Evaluation and modelling of demand and generation at distribution level for Smart grid implementation

The ACT s Transition to Zero Emissions Vehicles Action Plan Anna McGuire Senior Policy Officer, Climate Change Policy

Building on our strong position in China

Achievements and Perspectives of smart grids projects and deployments. M. de Nigris

Strategies for expanding shared use of ultra low emission vehicles in GB. Chas Ball, Chief Executive, Carplus e-bridge Conference Berlin

KANSAS CITY POWER AND LIGHT COMPANY P.S.C. MO. No. 7 Fourth Revised Sheet No. 39 Canceling P.S.C. MO. No. 7 Third Revised Sheet No.

Shared-Use Mobility: First & Last Mile Solution. Sarah Nemecek Project Manager

Power Sector Trends: Focus on States

A green economy of biofuels in whose benefit?

Challenges Facing the City of Cape Town in Meeting Renewable Energy Targets

Zero-Emission Vehicles:

Summer Reliability Assessment Report Electric Distribution Companies Perspective

UfM Ministerial Declaration on Energy

Enhancing Grid Stability in India

building liveable cities

SIZE, SAFETY & KNOWLEDGE NINO NIZIC MANAGING DIRECTOR SOLARWATT AUSTRALIA

Opening Address By. Programme Director: Mr Chris Yellend, Dr. Fereidoon Sioshansi, Menlo Energy Economics, USA

Spreading Innovation for the Power Sector Transformation Globally. Amsterdam, 3 October 2017

Electric Vehicle Charge Ready Program

Denver Car Share Permit Program

Ketchum Energy Advisory Committee Annual Update and Recommendation for Electric Vehicle Charging Station

BIRMINGHAM CONNECTED Anne Shaw Tuesday 20 January 2015

northeast group, llc Central America & Caribbean Smart Grid: Market Forecast ( ) July Northeast Group, LLC

Implementing Transport Demand Management Measures

E-Mobility in Planning and Operation of future Distribution Grids. Michael Schneider I Head of Siemens PTI

Jatropha Initiative KAKUTE EXPERIENCE Northern Tanzania.

Voith Group On a good footing for future growth

Linu Mathew Philip. Centre for Trade and Development (Centad), New Delhi, India

All of Texas Has Excellent Solar Resources. United States Solar Installed (as of mid 2013): 10 GW Germany Solar Installed (end of 2013): 35.

California Transportation Electrification and the ZEV Mandate. Analisa Bevan Assistant Division Chief, ECARS November 2016

Implementing Net Metering to Meet Policy Objectives

Yukon Resource Gateway Project

Contents 1. Country Background 2. Lao Power Sector 3. Power Sector Policy 4. Current Electric Power Situation (statistics) 5. Demand Forecasting 6. Ex

State Zero-Emission Vehicle Programs Memorandum of Understanding

northeast group, llc Southeast Asia Smart Grid: Market Forecast ( ) Volume III March 2016

Findings from the Limassol SUMP study

How to make urban mobility clean and green

National Grid New Energy Solutions (NES)

Spreading Innovation for the Power Sector Transformation Globally. Amsterdam, 3 October 2017

Transcription:

Lighting Up Bihar Robin Burgess, LSE and IGC Michael Greenstone, MIT Nicholas Ryan, Harvard Anant Sudarshan, Harvard and JPAL 21 July, 2013 IGC Bihar Growth Conference J-PAL (Poverty Action Lab) International Growth Centre (IGC)

Part I WHAT ARE WE TRYING TO DO? THE BIG PICTURE

What Are We Trying to Do? Bihar is making strides on the generation side and in purchasing electricity from out of state But major problems on the distribution side remain this is where we want to work with the Bihar Energy Department and in state distribution companies Commitment to electrification very strong in Bihar and extends from Chief Minister downwards Scope for jointly developing new models of electricity delivery that could be taken in other states in India facing similar problems

Household Electrification In India Has Not Kept Pace with Generating Capacity

What Are We Trying to Do? Electricity provision in Bihar is low (i.e. it is a relatively dark state) Infrastructure and economic changes needed Infrastructure investments well underway So by changing incentives for consumers to pay for electricity, for collectors (either state or private) to collect electricity charges there may be scope to light up Bihar relatively quickly

Extremely Uneven Consumption Across the Country Average Per Capita Consumption: Bihar 122 kwh India 626 kwh USA 13,325 kwh Source: CIA World Factbook (2010); Govt. of Bihar

Bihar One of the Darkest States Punjab Bihar Per Capita Power Consumption (2009-10) : Punjab (1527 kwh) Bihar (122.11kWh) Source : http://www.eai.in/club/users/dheen/blogs/7285

Grid Electricity is Cheaper Than Decentralised Alternatives Cost of energy from grid electricity about onethird that from diesel generator or decentralised biomass/solar Scope to improve economic efficiency through electrification therefore enormous Consumers should be willing to pay for grid electricity, if it could be effectively delivered

What Are We Trying to Do? To make matters concrete, consider an electricity feeder servicing five villages, a small town or a section of a city In Bihar, little or no electricity may not be flowing to these consumers Why?

What Are We Trying to Do? (1) Lines/equipment connecting feeder station to households/businesses may have been stolen/vandalized/not properly maintained (2) Consumers not paying for electricity making it uneconomical to provide

What Are We Trying to Do? Repair to last mile delivery infrastructure is provided by electricity distribution companies (this is being done) So key elements (1) electricity and (2) and infrastructure to get it to consumers are falling into place The big challenge is to get people to pay for it (which in turn will generate investment to further expand provision)

Some Ideas Starting point would be to map all the distribution losses at feeder level (electricity in/revenue back) and to supplement this with customer billing information This provides Bihar Energy Department/Distribution companies with picture of where the greatest offenders are and where the greatest gains are possible

Some Ideas As electricity consumers may be colluding with collectors there is scope to reduce losses by changing collector incentives Performance pay Rewarding better performers with better posts Threat of loss of job for worse collectors

Some Ideas In more extreme version electricity bill collection would be sub-contracted to private sector These private utility companies are profit making will want to reduce theft and enhance collections Scope in Bihar to test across different franchising models using randomized design

Some Ideas Put perhaps the most powerful idea is to link the supply at the feeder or community level to hours of payment Core idea is to link power to payment

Some Ideas As payments flow in then electricity can flow out And revenue can be use to invest in expanding the grid further Together these two processes will be critical to lighting up Bihar This in turn will allow us to study whether/how the lives of citizens are affected by this rapid expansion in electrification

Part II THE PLAN FOR ENERGY INDEPENDENCE IN BIHAR

Structure of the Electricity Sector Generation Central allocation State generation Renewables Imports Short-term purchase Transmission Natural monopoly Distribution Natural monopoly, in each area

Structure of the Electricity Sector Generation Central allocation State generation Renewables Imports Short-term purchase Revenue Transmission Natural monopoly Revenue Revenue Distribution Natural monopoly, in each area

Structure of the Electricity Sector: Unbundling From November, 2012 Bihar State Power Holding Company Limited Generation Bihar State Power Generation Company Transmission Bihar State Power Transmission Company Revenue Revenue Distribution North and South Bihar Power Distribution Companies

Bihar Has a Substantial Energy Deficit Balance of Electricity Demand and Supply in Bihar

And Demand is Growing Quickly

Government of Bihar Planning on All Fronts to Close this Gap Generation Planned three-fold rise in supply in three years Every possible source: Own state generation, renewables, purchases and central allocation Transmission Investment in grid to convey power from new sources Distribution Service quality and technical upgrades Universal customer metering plan nearly complete Franchising of urban circles and rural feeders Source: Business Plans of Bihar State Power Companies

Distribution Losses are The Most Important Target for Sustainability

Distribution Is the Key to a Sustainable Electricity Sector Shorter Time Horizon Distribution reform can see results faster Distribution a Source of Revenue Revenue investment in power supply Gains Proportional to Power Demand Growth not sustainable without loss reduction

Part III PILOTING STRATEGIES TO BRING LOSSES DOWN

What Does Loss Mean? Aggregate technical & commercial loss Power bought for which revenue not collected Technical Unavoidable but need not be large Commercial Outright theft Unmetered power (agricultural pumps) Unbilled power Billed but not collected

Maharashtra Has Made Great Progress

Pilot Strategies to Bring Down Distribution Losses 1. Where does power go? : Energy accounting 2. How to bill for that power? : Collector Incentives 1. Who should bill for that power? : Franchising 2. Where should the power go? : Group Incentives

Strategies Give Incentives at Different Levels of Grid Energy Accounting Franchising Group Incentives Collector Incentives

Strategies to Reduce Losses: 1. Energy Accounting Energy accounting Measurement and analysis of where energy flows Balancing against billing and collections Discoms making investments in measurement 100% metering of customers near completion in North and South Bihar Metering of grid elements close behind Basic Research: Analyse where power is lost, and where the benefits of expansion are the greatest.

Over 300,000 Meters Added in Only 16 Divisions of North Bihar

Strategies to Reduce Losses: 2. Collector Incentives Ground-level commercial losses through: Theft Lack of billing Lack of collections on bills Discoms to require customer verification / signature on every bill Incentivize / monitor performance of ground-level staff Incentive pay based on bills issued and collections per customer, accounting for customer mix and energy use Recent experience with govt. incentives positive

Strategies to Reduce Losses: 3. Franchising Why does government have to collect every bill? Private companies may give stronger incentives Franchising program underway in Bihar Input-based franchise pays increasing rate based on share of energy paid for. Urban model for circle / towns, rural model for feeder Clear area for evaluation Scheme just beginning but with large potential See if/how private companies are able to increase collections. What is the best contract? Previous experience in odd cases (e.g. Delhi discoms)

Strategies to Reduce Losses: 4. Group Incentives Billing and metering address some sources of loss Outright theft, unbilled power, meter circumvention may remain stubborn problems Group incentive pioneered in Maharashtra Link power supply to payment / collections Similar to govt. implementation of input-based franchise Research to adapt and pilot in Bihar Use Maharashtra experience and Bihar energy accounting / customer mix to design Pilot in high-loss areas to encourage improvement

MSEDCL Distribution and Collection Losses (DCL) Scheme: You Get What You Pay For Group Non-Agricultural Area Agricultural Area Definition Power Supply Definition Power Supply A 0 18% 20:45 0 21% 13:00 B 18 26% 20:00 21 29% 12:30 C 26 34% 19:15 29 37% 12:00 D 34 42% 18:30 37 45% 11:30 E 42 50% 17:45 45 53% 11:00 F 50 55% 17:00 53 58% 11:00 G1 55 60% 16:15 58 63% 10:30 G2 60 65% 15:30 63 68% 10:00 G3 > 65% 14:45 > 68% 10:00

Group Incentive Can Work Only at a Local Level Voltage No of Sub Stations/fee der Number of Customers / Node 220 kv (PSS) 132 kv (PSS) 11 kv Feeder 9 444,000 76 52,000 1721 2,300

Piloting Loss Reduction in Bihar Phase Activity Key Outcome I. Diagnosis (2 months) Use Energy Audit and Collections to Identify Highloss, High-return Classes Categorisation of Losses and Projection of Revenue II. Planning (2 months) Draw up Schedule of Load Shedding in Line with Loss Approval of Schedule III. Piloting (8 months) Roll-out for High-loss Classes and Areas Phased implementation to evaluate scheme effects in high-loss urban areas IV. Scaling Bihar-wide implementation Collections of NBPDCL / SBPDCL, power availability

Research Design: Feeder-level Randomized-controlled Trial Activity Feeder Categorisation Group High-loss (e.g. >50%) Feeders in Urban / Town Areas with 100% feeder metering Pilot Treatment: Adopt incentive schedule, post notices in neighborhood and in power bills Control: Status quo schedule of power supply Measurement Monthly feeder-level losses, collections, and power supply

Prerequisites for Success Technical side Fine-grained metering Operational control over power supply and strict monitoring Economic side Simple, transparent schedule Promotion: every bill, pole with notices of group

Conclusion: Sustainable Electrification Requires Financial Sustainability

Conclusion: Sustainable Electrification Requires Financial Sustainability Era of wishful thinking in electrification failed Lines laid, no power flowed Total losses of distribution companies 1-1.5% of Indian GDP, crippling any electrification efforts Reducing losses therefore precondition of sustainable expansion Bihar is well-placed to expand its electricity sector Necessary technical conditions being rolled out Revenue growth will enable simultaneous and meaningful electrification in rural areas