Active Electrical Distribution Network. Группа авторов
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for attracting private investors, etc.
Hence, many distribution utilities across different countries are characterized as inefficient with a low productive system. To overcome technical- as well as governance-related difficulties, basic and radical restructuring of the power sector has become imperative [7]. Unbundling, corporatization, privatization, and outsourcing were the major initiatives under restructuring. As a result, four different models to carry out the function of power distribution have evolved across the globe, viz. government-owned Distribution Company, privately owned Distribution Company, Public–Private–Partnership Model, and Distribution Franchisee, as shown in Figure 1.1.
Figure 1.1 Different distribution models evolved.
1.3.1 Government-Owned DISCOM
In this case, ownership of the distribution company (DISCOM) lies with the government. Government-owned DISCOM can again be categorized into two categories, a single vertical structure and an unbundled (corporatized) structure. In the case of a single vertical structure, a single entity that is government owned performs all the tasks of power generation, transmission, and distribution. However, following the trends of reform, unbundling this single vertical structure led to segregation of generation, transmission, and distribution as distinct companies. Again this segregation was done either to single generation, single transmission, and single distribution companies or to multiple generation, multiple transmission, and multiple distribution companies. Some utilities unbundled their single vertical structure into two entities – one dedicated to transmission and another dedicated to both generation and distribution. Similarly, some utilities unbundled their single vertical structure into two entities – one dedicated to generation and another dedicated to both transmission and distribution. Figures 1.2 and 1.3 show various forms of government owned distribution companies.
Figure 1.2 Single vertical structure.
Figure 1.3 Unbundled structure.
From Figure 1.2, it is clear that the task of generation, transmission, and distribution is under the purview of a single entity, irrespective of whether there are single or multiple subsidiaries in generation or transmission or distribution.
Figure 1.3 consists of six different blocks where all the six blocks represent a distinct pattern of unbundled power distribution structure. In the first block, more than one subsidiary are being shown for both the generation and distribution segments whereas transmission has been shown as a single subsidiary because most of the countries kept a single transmission utility while undergoing unbundling. Although a vertical integrated structure and unbundled (corporatized) structures are different in structures no significant differences are found in their operations and functions. The relative concerns relating to this model are:
High technical losses in distribution.
No theft handling mechanism.
No proper fault handling mechanism.
Lack of sourcing and management.
Overstaffing.
Poor collection efficiency.
High rate of outages, blackouts, device failures, etc.
Losses are not established.
Commercial losses are not accountable.
No outage handling and transactional mechanisms.
Lack of enterprise resource planning (ERP) practice.
Poor managerial efficiency.
High fiscal deficit.
No asset management and facility management.
High political interferences.
1.3.2 Privately Owned DISCOMs
In this case, the ownership of the distribution lies with a private company. As a measure of private participation and introducing competition, the following steps were implemented:
More than two licensees were allowed to sell power in the same area.
Provision was made for different tariff rates based on different technical factors like load demand, voltage demand, power factor, etc.
Licensees were allowed to do other business required for optimal utilization of assets but with prior permission.
The relative concerns with this model are:
The private companies started running the power distribution business without bothering government norms and provisions.
They failed to protect consumer interests.
The tariff rate was high.
They faced political resistance as privatization is not welcome in public services.
The number of consumer protests increased.
1.3.3 Public–Private Partnership (PPP) Model
By leaving the distribution business totally in the hands of private players, government lost its control on the distribution sector and was not able to interfere when some norms or guidelines were being violated by the private companies. As a result, different governments kept some share in the distribution utility instead of giving the entire stake to the private player. This initiative led to the development of the concept of a Public–Private Partnership (PPP) model in the power distribution business. The PPP model encompasses various functions and obligations related to electricity supply in a licensed area. In the case of the PPP model, competitive bidding is the criteria used to select the concessionaire. Selected players would be responsible for operation, management, and maintenance related works. Apart from these tasks, the electricity supply, loss reduction, and looking after the interest of the consumers by maintaining quality of supply are also taken care by the concessionaire [8]. The ownership of the assets is not given to the concessionaire, rather the exclusive use of the distribution assets is allowed. Concession agreement and the applicable laws regulate the use of distribution assets.
The relative concerns with this model are:
Tariff will be fixed separately for the PPP project area; this will bring multiple tariffs in the same state.
May face political resistant as privatization is not welcome in public services.
The PPP model needs attention for structuring, as it is complex in nature, so more conscious efforts are required from the government.
The tariff may be different for urban and rural areas, so for uniform tariffs the government needs to provide subsidies.
1.3.4 Distribution Franchisee (DF) Model
This model is a hybrid arrangement between a concession and a management contract, which enables private players to carry out some power-related functions without letting the ownership of the distribution sector go to the private player. In the case of the DF model, a distribution licensee is legally allowed through the regulatory provisions to authorize a person/entity for electricity distribution in a specific area under its licensee area [9].