Importance of 'Measurements based' Technical Due Diligence

Source: Mr. Hemant Diddee, Heta DataIn

Operating Distribution Franchisee are of the opinion that there is need of strong technical due diligence of Distribution network and equipment to arrive at realistic estimation of investment needed in infrastructure & assets. Some recent discussion points in this regard are:

".....Due-Diligence is of utmost important, as in case of Agra, the AT&C losses were of the magnitude of 51-52%(On paper) before Torrent Power took over the charge in April'10. However these losses has risen to 58% after takeover. Now, it is realized that the PVVNL's baseline data were all wrong and holds no significance, the actual losses were of the order of 64-65%." (Power DF LinkedIn Group Member)

".....Spanco, Nagpur faced several infrastructure issues like Transformer Breakdown/Failure, Meters not working, etc. since the evaluation of assets and losses was done approximately and not accurately." (See our earlier blog from Mr. Rajinder Kachroo, Business Head, Spanco)

The above comments raised an important question:

Why is it necessary to do a technical due diligence of Distribution network and equipment?

• To form a realistic Base line data: The data available or provided in RFPs is not very accurate because of the fluid nature of the distribution network. Example: The distribution network connected to a transformer will / may vary with time, and end of month / year reports have lacks foundation.

• Input on Technical losses: The technical losses are due to energy dissipated in the conductors and equipment used for transmission, transformation, sub- transmission and distribution of power. These technical losses are inherent in a system and can be reduced to an optimum level. 
• Losses in Sub-transmission system & step-down to distribution voltage level vary from 2% to 4.5%
• Losses in Distribution lines and service connections vary from 3% to 7%.

• Input on Commercial losses: Theft and pilferage account forms a substantial part of the high commercial losses in India. Unmetered energy consumption, defective meters, errors in meter reading, etc also accounts for considerable portion of losses. Most of the methods employed by SEBs for estimating commercial losses are:
• Load Factor based estimation
• Estimation based on feeder wise theoretical calculation of losses
• Estimation based on readings of meters installed at all the Distribution Transformers located on a feeder

However, above methods do not provide correct estimation of unmetered consumption.

Thus, a clear understanding on the magnitude of technical and commercial losses is the first step in the direction of reducing T&D losses.

In an effort to address the above, pManifold, with its partner base, has started a new service offering to perform 'measurement base' technical due diligence at the site. We will integrate other primary and secondary information from key opinion leaders, utility grounds team, socio-economic indicators, and other sources to help bidders estimate the capex, opex, true AT&C losses, load growth and other key bid parameters, with higher confidence.