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SUPPORTING DISCOMS IN
IMPLEMENTING AMENDMENTS
TO ELECTRICITY ACT
INSIGHTS FROM THE DISCOM TRANSFORMATION
PLATFORM WORKSHOP PART 1
A NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE COLLABORATIVE
JULY 2020 ABOUT NITI AAYOG
The National Institution for Transforming India, also called NITI Aayog, is the premier policy ‘Think Tank’ of
the Government of India, providing both directional and policy inputs. While designing strategic and long-term
policies and programs for the Government of India, NITI Aayog also provides relevant technical advice to the
Centre and States. An important evolutionary change from the past, NITI Aayog acts as the quintessential
platform of the Government of India to bring States to act together in national interest, and thereby fosters
cooperative federalism.
ABOUT RMI INDIA
RMI India is an independent nonprofit organization. RMI India takes inspiration from and collaborates with
Rocky Mountain Institute, a 40-year-old non-governmental organization. RMI India’s mission is to accelerate
India’s transition to a clean, prosperous and inclusive energy future.
ABOUT ROCKY MOUNTAIN INSTITUTE (RMI)
Rocky Mountain Institute (RMI)—an independent nonprofit founded in 1982—transforms global energy use to
create a clean, prosperous, and secure low-carbon future. It engages businesses, com-munities, institutions,
andentrepreneurs to accelerate the adoption of market-based solutions that costeffectively shift from fossil
fuels to efficiency and renewables. RMI has offices in Basalt and Boulder, Colorado; New York City; the San
Francisco Bay Area; Washington, D.C.; and Beijing. SUPPORTING DISCOMS IN
IMPLEMENTING AMENDMENTS
TO ELECTRICITY ACT
INSIGHTS FROM THE DISCOM TRANSFORMATION
PLATFORM WORKSHOP PART 1
A NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE COLLABORATIVE
JULY 2020 AUTHORS AND
ACKNOWLEDGMENTS
AUTHORS
NITI Aayog
Rajnath Ram, Adviser (Energy)
Manoj Kumar Upadhyay, Senior Research Officer
(Energy)
RMI India
Akshima Ghate, Director
Jagabanta Ningthoujam, Senior Associate
Rocky Mountain Institute
Clay Stranger, Senior Principal
Garrett Fitzgerald, Manager
CONTACTS
For more information, please email info.india@rmi.org
SUGGESTED CITATION
NITI Aayog, Rocky Mountain Institute, and RMI India.
Insights from the Discom Transformation Platform
Workshop Part 1. 2020.
Available at RMI India:
www.rmi-india.org/insight/supporting-discoms-in-
implementing-amendments-to-electricity-act
Available at RMI:
www.rmi.org/insight/supporting-discoms-in-
implementing-amendments-to-electricity-act
Images courtesy of iStock/Adobe Stock unless
otherwise noted.
“The views and opinions expressed in this document
are those of the authors and do not necessarily
reflect the positions of the institutions or governments.
While every effort has been made to verify the data
and information contained in this report, any
mistakes or omissions are attributed solely to the
authors and not to the organizations they represent.”
ACKNOWLEDGMENTS
NITI Aayog
TERI
RAP India
AEEE
WRI
IEA
Prayas (Energy Group)
CSTEP
CPI
EPIC-India
CUJ
FSR
CSIS
CEEW
RMI India
Rocky Mountain Institute TABLE OF CONTENTS
01. ABOUT THIS REPORT......................................................................................................................................................6
02. EXECUTIVE SUMMARY ....................................................................................................................................................8
03. CONTEXT............................................................................................................................................................................10
04. POWER SECTOR DEVELOPMENTS .............................................................................................................................12
About DISCOMs.........................................................................................................................................................13
Overview of the Electricity (Amendment) Bill, 2020..........................................................................................14
The Discom Transformation Platform workshop series, part I..........................................................................16
05. BREAKOUT SESSION ONE ............................................................................................................................................18
Opportunities to support DISCOMs......................................................................................................................19
Key learnings.............................................................................................................................................................22
06. BREAKOUT SESSION TWO ...........................................................................................................................................23
Energy efficiency, demand side measures, and customer participation (EE, DSM, CP).............................26
New business models, wholesale markets, and operational changes.........................................................27
Renewable generation............................................................................................................................................28
Energy storage..........................................................................................................................................................28
07. RECOMMENDED NEAR-TERM STAKEHOLDER ACTIONS .....................................................................................30
Civil society and think tanks..................................................................................................................................31
Philanthropy......................................................................................................................................................31
DISCOMs..........................................................................................................................................................31
Multi- and bilateral agencies..................................................................................................................................31
08. MOVING FORWARD TOGETHER .................................................................................................................................32 01 ABOUT THIS REPORT
6 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 7
ABOUT THIS REPORT
Financially viable electricity distribution companies
(DISCOMs) are essential to the future stability of
India’s economy. But many DISCOMs are currently
suffering from a number of financial and infrastructure
challenges. These challenges have persisted before
the COVID-19 pandemic and many have been
exacerbated by the pandemic. Lockdowns have
lowered demand for electricity across all consumer
groups causing significant reduction in DISCOM
revenue putting even great strain on their finances.
The Government of India has responded quickly
with MoP issued draft amendments to the Electricity
Act in April and the Prime Minister announcing a
90,000 crore liquidity boost for DISCOMs in May. The
supportive measures create an enabling environment
for DISCOMs to get back on track and build back to a
stronger and more financially sustainable power sector.
How the sector rebounds will have far-reaching
implications for many stakeholders. The new enabling
conditions such as liquidity boost, amendments to the
Electricity Act, and privatization of DISCOMs in the
Union Territories will impact the progress towards
the clean energy transition. Stakeholders of all types
can adjust and adapt to these changes as stimulus
and legislation is implemented and the economy
recovers. Ensuring that all stakeholders are aligned
and prepared to support DISCOMs’ needs over the
coming months and years is essential to a quick
sector turnaround.
——————
Ensuring that all stakeholders
are aligned and prepared to
support DISCOMs’ needs over
the coming months and years
is essential to a quick sector
turnaround
——————
To ensure that civil society and think tanks are best
prepared to support DISCOMs and to elevate and
accelerate the communities’ collective work, RMI
and NITI Aayog convened 16 leading civil society
organizations (CSOs) from across India to identify
new ways to collaborate in supporting DISCOMs.
The workshop was designed to create alignment
and increase coordination and dialogue amongst this
stakeholder group. The first workshop hosted on 11
th
June was the starting point for continued and expanded
coordination on the Discom Transformation Platform.
This report offers a reflection of the discussions that
took place on the 11th June 2020 e-workshop and a
summary of the prioritized opportunities for CSO’s
and think tanks to help DISCOMs navigate the recent
developments. It details the opportunities, including
key insights and lessons learned, in order to leverage
the complementary ongoing and new efforts across
civil society and the think tank community. 02 EXECUTIVE SUMMARY
8 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 9
This report offers a reflection of the discussions that
took place at the 11th June 2020 e-workshop and a
summary of the prioritized opportunities for CSOs
and think tanks to help DISCOMs navigate the recent
developments. Across the different group discussions
and in plenary sessions, three important themes
emerged through group consensus.
Capacity building needs to be a core component of
any roadmap for smooth implementation of sector
reform. Trainings are needed across all stakeholder
groups including SLDCs, SERCs, DISCOMs, and within
certain customer classes. CSOs and think tanks can
support this by first helping stakeholders understand
the benefits and subsequently providing capacity
building resources to support transition planning and
implementation.
Demonstration of the tangible benefits associated
with aspects of reform are required to achieve real
buy-in and sincere engagement from stakeholders.
CSOs and think thanks need to go beyond studies
and capacity building on the theoretical benefits and
take a wholistic approach to demonstrate those
benefits as pilots and eventually at scale. It is critical
that adequate monitoring and evaluation of such pilots
be instituted to clearly distill key learnings from them.
Increased alignment between different stakeholder
groups and within stakeholder groups emerged as a
meaningful near-term opportunity. Participants
identified the setting of state and centre goals and
policy through more coordination and with consensus
building as a major opportunity and challenge.
Additionally, participants noted a need to better
understand the linkage between India’s macroeconomic
and developmental goals and power sector reforms
and policy.
Rocky Mountain Institute and NITI Aayog will work
with platform participants to address issues and
opportunities identified at the 11
th
June workshop
and begin the transition towards action. The platform
will continue to solicit collaboration and partnerships
through subsequent workshops, insight briefs, and
other engagement opportunities. The immediate
actions we will take includes:
EXECUTIVE SUMMARY
A mapping exercise to identify, document,
and visualize the stakeholder ecosystem as
it exists today
1
A research paper that will distill the key
issues that the electricity distribution
sector has been facing. The paper will
further delve into what efforts have
resulted in performance improvement and
where and why such reforms and efforts
have failed2
A research and pilot tracking initiative to
aggregate past and ongoing projects to
create increased awareness and improve
the learning and scaling between peer
DISCOMs
3
Discom Transformation Platform workshop
part II
4 10 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
03 CONTEXT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 11
CONTEXT
Over the past decade the collective ecosystem of government agencies, private sector, academia,
development agencies, and civil society has made good progress in advancing DISCOM operations,
reducing losses, and preparing them for advanced technologies and market reform. There is an
opportunity to ensure the progress and learnings of the highly diverse actors are leveraged to enable
the most efficient use of resources and to create a pathway to replicate DISCOM improvement at
scale across the nation as quickly and smoothly as possible.
To facilitate meaningful collaboration and coordination across the sector, NITI Aayog, RMI India, and
Rocky Mountain Institute partnered to launch The DISCOM Transformation Platform. The platform
encourages coordination, collaboration, and sharing of learnings and experiences across the diverse
actors already engaging with DISCOMs and other stakeholders in the power sector.
The Platform operates as both a virtual information hub to host and organize the diverse set of
projects, funders, schemes, and key actors engaging in decarbonization across India, and as a
physical convening mechanism to assemble the stakeholder ecosystem to address critical
institutional, regulatory, business, and technical barriers in a more coordinated way. The Platform
is designed around three guiding pillars:
1. INCREASE COORDINATION, COLLABORATION, AND SHARING
BETWEEN KEY ACTORS
3. SUPPORT DECARBONIZATION THROUGH OPERATIONAL,
TECHNOLOGICAL AND BUSINESS MODEL ADVANCEMENTS
2. ACCUMULATE, PROMOTE, AND REPLICATE SUCCESS AT SCALE 04 POWER SECTOR
DEVELOPMENTS
12 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 13
POWER SECTOR DEVELOPMENTS
About DISCOMs
DISCOM performance and financial health remains
the most challenging factor in providing better access
and greening up India’s grid. National average
aggregate technical and commercial (AT&C) losses
remains at 19.2%. Despite initial improvement in debt
reduction through the UDAY scheme, DISCOM debt
is set to rebound to almost the pre-UDAY level of 2.6
lakh crore INR (US$35 billion) in 2020.
1
While debt restructuring measures like UDAY and
recently announced 90,000 crore INR (US$12 billion)
stimulus is meant to allow DISCOMs breathing room
to undertake structural changes to turn around their
performance, most efforts haven’t yielded the desired
results. The sector remains afflicted by issues of
cross-subsidies in their tariffs, the increasing cost of
power purchases, poor billing and collection efficiency,
and most importantly issues of governance and
on-ground political economy.
1
Square One: Discom Debt to Reach Pre-UDAY Levels This Fiscal, CRISIL Ratings, May 6, 2019.
www.crisil.com/content/dam/crisil/pr/press-release/2017/12/square-one-discom-debt-to-reach-pre-uday-levels-this-fiscal.pdf
2
Report on Short-term Power Market in India: 2018–19, Central Electricity Regulatory Commission.
www.cercind.gov.in/2019/market_monitoring/Annual%20Report%202018-19.pdf
Market reform that can accelerate sector
transformation remains sluggish. While electricity
distribution has been unbundled in most states,
privatization has only been successful in few cities
like Delhi, Mumbai, Ahmedabad, Surat, and Agra.
Power procurement also remains largely tied to long-
term power purchase agreements (PPAs). This is
despite the introduction of an active wholesale
power market that has the potential to optimize their
power purchase costs. Only 12% of power from 2018
to 2019 was procured through the wholesale market.
2
This doesn’t mean that the sector hasn’t seen
improvement all together. Most of the private
DISCOMs are operating with much reduced AT&C
losses and are looking towards building a utility of
the future. Some public sector DISCOMs have
managed to be operationally profitable and are
increasingly looking towards the benefits of a clean
energy portfolio in their system. NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
14 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
FIGURE 1
Performance map of electricity DISCOMs in India (Source: CEA, UDAY, Discom Tariff Orders)
But this improvement hasn’t been uniform (Figure 1).
The majority of DISCOMs remain stuck with poor
financial and operational performance. This also means
that the impact of and the ability to adapt to new
challenges that COVID-19 and the various recent
sector developments have thrown will not be the same.
There is a need for coordination to scale the lessons
learned from individual DISCOM’s improvement and
support efforts efforts to the larger sector.
Overview of The Electricity (Amendment)
Bill, 2020
In April, the Ministry of Power introduced the
Electricity (Amendment) Bill, 2020, to address issues
related to generation, transmission, distribution, and
trading of electricity. This represents the third set of
reforms to the Electricity Act of 2003. The proposed
amendments can be loosely sorted into four
categories: contract and payment security, renewable
generation, tariff and subsidy, and institutional reform.
In Figure 2 we present a non-exhaustive overview of
the proposed amendments.
1 Andhra Pradesh: APSPDCL
2 Andhra Pradesh: APEPDCL
3 Bihar: NBPDCL
4 Bihar: SBPDCL
5 Chhattisgarh: CSPDCL
6 Gujarat: UGVCL
7 Gujarat: DGVCL
8 Gujarat: MGVCL
9 Gujarat: PGVCL
10 Haryana: UHBVNL
11 Haryana: DHBVNL
23 Maharashtra: MSEDCL
24 Punjab: PSPCL
25 Rajasthan: JdVVNL
26 Rajasthan: AVVNL
27 Rajasthan: JVVNL
28 Tamil Nadu: TANGEDCO
29 Telangana: TSNPDCL
30 Telangana: TSSPDCL
31 Uttar Pradesh: PuVVNL
32 Uttar Pradesh: MVVNL
33 Uttar Pradesh: DVVNL
45 Dadar & Nagar Haveli:
45 DNHPDCL
46 Delhi: BRPL
47 Delhi: BYPL
48 Delhi: TPDDL
49 Assam: APDCL
50 Manipur: MSPDCL
51 Meghalaya: MePDCL
52 Tripura: TSECL
53 Sikkim: EPDGS
12 Himachal Pradesh: HPSEB
13 Jharkhand: JSEB
14 Karnataka: HESCOM
15 Karnataka: BESCOM
16 Karnataka: MESCOM
17 Karnataka: GESCOM
18 Karnataka: CESCOM
19 Kerala: KSEBL
20 Madhya Pradesh: MPMKVV
21 Madhya Pradesh: MPPoKVV
22 Madhya Pradesh: MPPKVVCL
34 Uttar Pradesh: PVVNL
35 Uttar Pradesh: KESCO
36 Uttarakhand: UPCL
37 West Bengal: WBSEDCL
38 Goa: GoaED
39 Odisha: NESCO
40 Odisha: WESCO
41 Odisha: SOUTHCO
42 Odisha: CESU
43 Puducherry: PED
44 Daman & Diu: DDED
1
5
6
7
8
9
10
11
12
13
14
15
16
17
18
21
22
20
19
2
4
3
23
28
36
49
50
51
52
53
43
37
44
38
45
29
30
31
32
33
34
35
24
25
4039
46
26
41
47
27
42
48 NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 15
FIGURE 2
The proposed amendments of the Electricity (Amendment) Bill
CONTRACT + PAYMENT SECURITY
• Establishment of Electricity Tribunal and strengthening of Appellate Tribunal
for Electricity for contract enforcement
• Empower load dispatch center to oversee the payment security mechanism before
scheduling dispatch of electricity; this is to be made mandatory
RENEWABLES
• Establish a National Renewable Energy Policy for the promotion of generation of
electricity from renewable sources of energy and prescribe a minimum percentage
of purchase of electricity from renewable and hydro sources of energy
• Hydro sources of energy have been recognized as renewable sources of energy. It is
proposed to expand the scope of renewable power purchase obligations to include
hydro sources
INSTITUTIONAL
• CERC to regulate the cross border transactions of electricity
• Non functioning SERC’s duties to be discharged by other states or a joint SERC
• The Distribution licensee can recognize and authorize a person as “Distribution
sublicensee” to distribute electricity on its behalf in a particular area within its area
of supply, with the permission of the appropriate state commission
TARIFF AND SUBSIDY
• Tariff should reflect the cost of supply of electricity and cross-subsidies to
be reduced
• State commissions to determine tariff for retail sale of electricity without any subsidy
under section 65 of the Act NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
16 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
The Discom Transformation Platform
workshop series, part I
Over 35 participants from more than 15 organizations
participated in the workshop. The participants
represented critical stakeholders across the
international civil society and think tank ecosystem.
——————
Workshop participants discussed
and developed near-term opportunities
to support implementation of proposed
amendments to the Electricity Act
——————
FIGURE 3
Nearly 40 participants from 16 organizations participated in the 11
th
June 2020 virtual facilitated e-workshop NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 17
The remaining sections of this report offer a summary
of the two breakout sessions held at the event. In
breakout session one, participants were divided into
five groups, each group discussed the same prompt.
“To enable successful implementation of amendments
to the Act, what three things do you think need to
happen to ensure all stakeholder groups benefit?” In
the second breakout session, participants were divided
into four groups to discuss specific opportunities
for civil society and think tanks to support different
thematic components of the Discom Transformation
Platform. During breakout sessions participants were
guided through a facilitated discussion by RMI
facilitators who supported the development of report
templates that were shared back to the full group at
the end each breakout session.
PARTICIPATORY ORGANIZATIONS
NITI AAYOGTERIRAP INDIAAEEE
WRIIEAPRAYAS (ENERGY
GROUP
CSTEP
CPIEPIC-INDIACENTRAL UNIVERS-
ITY OF JHARKHAND
FLORENCE SCHOOL
OF REGULATION
CSISCEEWROCKY MOUNTAIN
INSTITUTE
RMI INDIA 05 BREAKOUT SESSION ONE
18 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 19
Workshop participants discussed and developed
near-term opportunities to support implementation
of proposed amendments to the Electricity Act. In
breakout groups, participants also identified the
elements of the amendments that are most relevant
to the opportunities identified. Table 1 presents the
top opportunities discussed during the workshop.
Opportunities to support DISCOMs
TABLE 1
Summary of opportunities identified by working group participants
OPPORTUNITIESDETAILSAMENDMENT
ELEMENTS
UNDERSTANDING
POLICY IMPACTS
• Identify different implications for different
stake-holders and create a conduit of
conversation to begin a path forward together;
help states and DISCOMs understand the near-
term challenges and long-term benefits of the
proposed amendments
• Support pilot program design and implement-
ation to demonstrate optimal benefits
• Partner with DISCOMs to design the monitoring
and verification mechanisms to review pilots and
scale them if successful
Tariffs and subsidy,
new business models,
institutional, renewables
IDENTIFYING
MACROECONOMIC
+ DEVELOPMENT
BENEFITS
• Begin linking India’s macroeconomic objectives
and specific power sector reforms and encourage
greater proactive alignment between them
• Identify points of complementarity and points
of complication between socio-economic
development goals and DISCOM reform (e.g.,
DBT and cost reflective tariffs, etc.)
Tariffs and subsidy,
new business models,
institutional, renewables
Continued >
NEAR-TERM OPPORTUNITIES TO SUPPORT
IMPLEMENTATION OF AMENDMENTS TO
ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
20 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
OPPORTUNITIESDETAILSAMENDMENT
ELEMENTS
ARTICULATING THE
BENEFITS
• Identify value of flexible generation and bring
in knowledge-base from private sector to
develop implementation plans focused on
operational efficiency
• Support DISCOMs in understanding specific
long-term revenue and cost recovery benefits
associated with different aspects of the act
• Identify near-term opportunities to maximize cost
savings and distribute risk across stakeholders
(e.g., private sector, Centre, State, customers)
Renewables, tariffs and
subsidy
CAPACITY BUILDING
AND TRAININGS
• Work with DISCOMs operational, planning, and
procurement departments to train them on how
to maximize benefits of real-time markets
• Continue engagement to support implementation
of policies that help DISCOMs improve power
procurement practices and reduce power costs
RTM
PILOT IMPLEMENTATION
OF DIRECT BENEFIT
TRANSFER (DBT)
• Develop a roadmap that proposes details of how
subsidies will be transferred directly to intended
consumers and describe the phasing of such a
transition
• Understand specific challenges and implications
for agricultural and industrial consumer mix and
begin to address state-specific issues
• Acknowledge and plan for political implications if
there are delays in transfer
• Monitor and evaluate resulting pilots
Tariff and subsidy
DESIGNING COST-
REFLECTIVE TARIFFS
• Provide technical assistance and guidance to
DISCOMs, SERCs, and other relevant agencies
in determining new electricity tariffs that are both
cost reflective and incorporate greater use of
time-dependent characteristics
Tariff and subsidy
Continued > NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 21
OPPORTUNITIESDETAILSAMENDMENT
ELEMENTS
WHOLE-SYSTEM
PLANNING
• Work with MoP and Centre to bring more clarity
to the implementation of the NREP specifically
around separate obligations for each state
• Provide thorough and comprehensive
consultation to states to inform NREP obligations
• Work with relevant agencies to encourage NREP
to include space and opportunity for innovative/
disruptive new technologies
• Encourage inclusion of all types of DERs to meet
state obligations; consider including storage
component in NREP
• Bring a focus on “climate-resilient grid
infrastructure” into conversation around system
planning and procurement
Renewables
DATA + TRANSPARENCY • Map activities of peers for better resource
utilization and leverage complementary aspects
of different efforts
• Develop a knowledge sharing platform/portal
that can be used by all stakeholders as a “one-
stop shop” to understand activities, priorities,
and opportunities to collaborate
Tariffs and subsidy,
new business models,
institutional, renewables
PLANNING FOR THE
RIGHT FUTURE DEMAND
PROFILES
• Provide technical assistance and capacity building
for load forecasts so DISCOMs can begin to
optimize the types of contracts that are best
matched to their medium- and long-term
operational needs (e.g., LT peak, base, hybrid
RTC, etc.)
INTEGRATION +
IMPLEMENTATION
PLATFORM
• Create a platform for stakeholders of all
types to come together to addresses near-term
implementation barriers NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
22 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
Key learnings
Each working group generated a diverse set of
opportunities that collectively touched on all aspects
of recent developments in the sector. Across the
different group discussion and in the plenary,
three important themes emerged through group
consensus.
Capacity building
The first step to creating a shared understanding of
the long-term benefits associated with reform require
stakeholders to understand how their organization
or department will be specifically impacted by the
proposed reforms, both immediately and long-term.
Capacity building needs to be a core component of
any roadmap for smooth implementation of sector
reform. Trainings are needed across all stakeholder
groups including SLDCs, SERCs, DISCOMs, and within
certain customer classes. CSOs and think tanks can
support in first helping stakeholders understand the
benefits and subsequently providing capacity-building
resources to support transition planning and
implementation.
Across working groups in the workshop there was
resonance that capacity-building efforts should be
designed to educate and train at all levels of DISCOM
staff. This includes leadership/MD positions to support
strategic long-term vision setting and system planning,
operations to understand near-term practical
implications and longer-term planning requirements,
and customer engagement/customer education to
encourage participation in new tariffs and new
customer facing programs.
Local piloting
Demonstration of the tangible benefits associated
with aspects of reform are required to achieve real
buy-in and sincere engagement from stakeholders.
CSOs and think thanks need to go beyond studies and
capacity building on the theoretical benefits and take
a wholistic approach to demonstrate those benefits
as pilots and eventually at scale. Pilot projects and
pilot programs are beneficial across the entire value
chain and should be designed to clearly test and
demonstrate benefits availed to specific stakeholder
groups. Pilots should be designed with a focus
on documentation, verification, and a clear path for
dissemination and scaling. Further adequate
monitoring and evaluation of such pilots need to be
instituted to clearly distill key learnings from them.
Alignment
Multiple groups noted the opportunity to increase
alignment between different stakeholder groups and
within stakeholder groups. Participants identified the
setting of State and Centre goals and policy through
more coordination and with consensus building as
both a major opportunity and challenge. Additionally,
participants noted a need to better understand the
linkages between India’s macroeconomic and
developmental goals and power sector reforms and
policy.
Specifically, an opportunity exists to focus on the
complementary aspects of power sector reform and
macroeconomic development goals by identifying
areas where increased use of productive energy and
power reliability improvements can support economic
growth in medium and small enterprises. 06 BREAKOUT SESSION TWO
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 23 NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
24 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
After discussing broad opportunities to support implementation, the participants were organized into
multistakeholder working groups around the four thematic areas identified through the pre-workshop needs
assessment survey.
In breakout groups, participants discussed the specific opportunities that exist for CSOs and think tanks to
support DISCOMs in their respective thematic area. The participants identified the areas where collaboration,
coordination, and alignment were critical to the success of the opportunity.
FIGURE 4
The four multi-stakeholder working groups
FIGURE 5
Summary of proposed actions by thematic area
ENERGY EFFICIENCY, DEMAND-SIDE MEASURES, AND CUSTOMER PARTICIPATION
• Document existing Indian experiences and identify international successes that are applicable to India
• Increase awareness of benefits through education, awareness campaigns, and capacity building at both the
DISCOM and consumer level
• Support pilot design and implementation with a focus on measurement and verification of operational and
financial improvements
• Continue to elevate efficiency and demand-side measures as the lowest costs/low-hanging fruit
ENERGY EFFICIENCY,
DEMAND-SIDE
MEASURES + CUSTOMER
PARTICIPATION
ENERGY STORAGE
NEW BUSINESS MODELS,
WHOLESALE MARKETS +
OPERATIONAL CHANGES
RENEWABLE
GENERATION + SYSTEM
INTEGRATION
OPPORTUNITIES FOR THINK TANKS,
CSOs TO SUPPORT DISCOMs NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 25
NEW BUSINESS MODELS, WHOLESALE MARKETS, OPERATIONAL CHANGES
• Organize a convening of stakeholders to encourage a transformative perspective on possible new business models
• Identify a few innovative business models that can be piloted at various DISCOMs with sustained support from
design to documentation and scaling phases
• Continue to capitalize on the availability of blended finance to de-risk some experimental pilots that will allow
some “out-of-the-box” thinking around new business models
• Conduct capacity building that supports stakeholders in navigating the transition from long-term PPAs to a
liquid wholesale market. It should also take a longer-term perspective on integrated system planning to make
use of real-time markets
• Establish ways to engage the consumer in the discussions around new tariffs and consumer new business models
to bridge the central—end consumer disconnect and ensure programs are designed with the consumer in mind
RENEWABLE GENERATION AND SYSTEM INTEGRATION
• Aggregate data, lesson learned, successes, and operational best practices from past and on-going projects
and make use of evidence-based success stories to duplicate successes and avoid recreating pilots when solution
scaling is appropriate
• Identify and articulate concise benefits and the business case for renewables to DISCOMs and their customers
• Continue to remove procedural barriers and create instruments for transparent trading to enable better use of
markets and power trading
• Conduct capacity building with DISCOMs, state load dispatch centers, and state electric regulatory commissions
to increase the use and effectiveness of integrated resource planning
• Bring GENCOs, TRANSCOs, DISCOMs, and Nodal Agencies together for improved coordination and planning at
the system level and create an integrated plan to implement the National Renewable Energy Policy
• Consider and elevate the importance of contract enforcement and payment security across all future work with
stakeholders
ENERGY STORAGE
• Identify and evaluate opportunities to use small behind the meter storage systems to bridge the reliability gap
for the 26 million new connections made under the Saubhagya scheme
• Continue to explore cost effective use cases to replace diesel backup systems in large-scale data centers and
other industrial applications where reliability is very valuable/costly
• Support CERC and DISCOMs to plan for and implement a comprehensive ancillary service market that offers accurate
compensation for high-performing energy storage systems
• First optimize generation, transmission, and demand flexibility to minimize the need for energy storage and then
identify areas where storage is necessary and cost-effective NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
26 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
Energy efficiency, demand side measures,
and customer participation (EE, DSM, CP)
Key takeaways and insights from the working group
Working group participants generated a list of
opportunities to ensure successful deployment
of EE, DSM, and increased customer participation.
The following list provides a summary of the
opportunities discussed:
1. Assist in addressing the knowledge gap around
the DISCOM and consumer-facing benefits of
energy efficiency and demand-side measures.
Stakeholders of various types are currently not
aware of the full set of benefits that these
measures can provide. CSOs and think tanks
can work with DISCOMs to quantify the benefits
and identify the highest, medium, and lowest
impact opportunities for developing EE and DSM
utility programs.
2. Partner with consumer advocacy groups to
ensure effective participation of communities by
educating each consumer group on the benefits
of EE and DSM.
3. Partner with DISCOMs to design pilot programs
centered around the business case for DISCOMs.
Extend support beyond the design phase and
provide sustained engagement through the
implementation, monitoring and verification,
documentation, and program scale up.
4. Work with policy and regulatory stakeholders to
ensure new policy or reforms are aligned with the
most impactful and lowest-cost measures.
5. Support the use of demand-side aggregation
and address current barriers to aggregated
participation in markets and utility programs to
allow greater private sector participation in new
business models.
Areas where collaboration or coordination is
most important
• Conduct a mapping exercise that documents
ongoing activities of peer organizations for
better resource utilization and cross-learnings.
• Develop, populate, and use a knowledge portal
as a one-stop shop for resource sharing best
practices, successes, tools, and resources.
• Maintain continuity of our efforts through partner
engagements and discussion forums that are
organized around local participation.
• Collaborate to develop insight briefs that explore
the multidimensional understanding of various
barriers and potential solutions to accelerate
adoption of known technology.
IMMEDIATE OPPORTUNITY FOR ACTION
Participants identified an immediate need
to increase the level of coordination and
engagement between CSOs and think tanks to
minimize duplication of efforts and best align
organizational strengths. The group discussed
the near-term opportunity to conduct a joint
mapping exercise to generate an overview of
existing activities, programs, and tools. Several
organizations will be collaborating to develop
the ecosystem map to be hosted on the Discom
Transformation Platform knowledge hub. NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 27
New business models, wholesale markets,
operational changes
Key takeaways and insights from the working group
Working group participants generated a list of oppor-
tunities to encourage the use of wholesale markets,
make use of new business models, and support
DISCOM operational changes. The following list
provides a summary of the opportunities discussed:
1. Conduct rigorous technical and economic
evaluation of several innovative and distinct
business models that span privatization, PPP,
and separation of content and carriage.
2. Work with DISCOMs to leverage saving
opportunities through significantly increased
market participation by educating key decision
makers on benefits. In parallel, DISCOMs will
need support in restructuring existing long-term
PPAs and help in navigating the transition to
increased use of market signals for long-term
integrated planning.
3. Work with DISCOMs, customers, and government
to develop a roadmap to tariff reform that
addresses the need for subsidy and identifies
the steps required to implement a successful
transition to Direct Benefit Transfer.
4. Over the coming years conduct impact
evaluations, access pilot successes and failures,
and conduct course corrections as necessary to
ensure the gradual transformation of the sector
is informed by learnings along the way. Create
feedback loops between pilots, scaling, and
new policy or regulatory reform.
Areas where collaboration or coordination is
most important
Working group participants identified a strong need
to better align the ongoing work across the different
states and DISCOMs. To avoid replication and ensure
effective communication, the community should
develop a mechanism to increase knowledge
sharing through data hosting, convenings, and more
collaboration on joint funding opportunities.
Participants noted the importance of making use of
such a platform and the challenges that have arisen
in past efforts. Having NITI Aayog and Ministry
of Power as central partners on the coordination
platforms has been highly successful in the path and
should continue to be leveraged.
IMMEDIATE OPPORTUNITY FOR ACTION
The community of civil society and think
tanks need to formalize the approach to
collaborating, sharing, partnering, and learning
from peers. The Discom Transformation
Platform was identified as a starting platform
to begin this work. NITI Aayog and RMI will be
taking feedback from the working group and
incorporating it into the platform design.
Renewable generation
Key takeaways and insights from the working group
The working group participants discussed the near-
term opportunities to ensure successful deployment
of renewable generation and optimized system
integration. The following list provides a summary of
the opportunities discussed:
1. Build platforms to bring in think tanks and civil
societies to engage and coordinate with different
state regulators and nodal agencies in planning
for meeting government renewable generation
targets. Consider the state-specific financial
and operational implications of planning for and NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
28 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
implementing the National Renewable Energy
Policy and support DISCOMs in developing a
long-term planning strategy.
2. Conduct Discom-specific analysis to identify
and quantify the benefits of distributed energy
resources on their network and work with them
to develop programs that enable better revenue
recovery.
3. Support DISCOMs with specification and
compliance with RPOs.
4. Work across stakeholder groups to maintain the
sanctity of contracts while creating a transition
plan to move from reliance on long-term PPAs to
increased market participation.
5. Continue to support and advocate for supportive
policy that puts all stakeholders on a path towards
increased renewable deployment.
6. Enhance the capacity of DISCOMs, SLDCs, SERCs,
and other nodal agencies to make use of
international best practices for integrated system
planning and increased market participation.
7. Continue to support CERC and others in
developing new frameworks and markets that
will enhance interstate power transfer.
Areas where collaboration or coordination is most
important
• Coordination across states and between states
and central agencies such that targets, policies,
and roadmaps are consistent in timeframe and
ambition and reflective of state-specific
considerations. This is particularly important for
integrated resource planning at the transmission
and generation level.
• Consistency and alignment on capacity building
and policy guidance to State, Centre, and nodal
agencies to encourage convergence towards a
shared set of desired outcomes.
IMMEDIATE OPPORTUNITY FOR ACTION
• Prioritize sharing of data and information
on pilot programs, policy advisory,
and other areas of DISCOM support to
leverage existing work and avoid duplicity
of efforts. Identify the areas where CSOs
and think tanks have shared goals and
map the different approaches for policy
advisory and technical support to maximize
complementary components of the
community’s efforts.
• Develop a consortium of civil societies,
think tanks, and policy advisors or create
cross-functional working groups that
engage staff from different CSOs and
think tanks. NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 29
Energy storage
Key takeaways and insights from the working group
The working group participants discussed the near-
term opportunities to ensure successful deployment
of energy storage. The following list provides a
summary of the opportunities discussed:
1. Understanding the role of electric vehicles in
both providing possible grid flexibility or
requiring additional system upgrades (including
storage) to manage peak charging requirements.
Civil society can work with DISCOMs to build
awareness of opportunities and challenges
related to EVs and energy storage and help
them prepare for integration planning on the
system.
2. Creating the right market frameworks and
sending the appropriate price signals to
encourage a diversity of use cases for energy
storage that is inclusive of transmission,
distribution, and behind-the-meter connected
storage systems.
3. Conducting battery storage pilots in rural
households to provide reliability services for both
domestic and commercial applications and
identifying use cases that are economic today
and can save DISCOMs network upgrade costs
and enable greater willingness or capacity to pay
for more reliable service.
4. Supporting the planning, development, and
implementation of ancillary service markets and
working with DISCOMs in parallel to ensure they
are well prepared to maximize cost savings and
performance-improving benefits of the new
market framework.
5. Increase the engagement of customer/end
user in the deployment of small scale behind-
the-meter storage.
6. Evaluate the techno-economic feasibility of inter-
state trading based on differentiated demand
profiles (daily and seasonal).
7. Develop a program to accelerate the transition
from diesel backup to solar plus storage or
storage-only backup for key commercial and
industrial customers.
Areas where collaboration or coordination is most
important
Designing pilots and demonstration projects that
show DISCOMs specific benefits and how they can
capture those benefits. Coordination between CSOs,
bilaterals, consultancies, and DISCOMs is required
to ensure testing and sharing of different applications
between DISCOMs and minimizing duplication of
demonstrations. CSO and think tanks can play a central
role in aggregating and disseminating learnings and
supporting the design of new additive pilot programs
and the creation of capacity-building programs to
scale pilot learnings to other DISCOMs. 07 RECOMMENDED NEAR-TERM
STAKEHOLDER ACTIONS
30 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 31
RECOMMENDED NEAR-TERM
STAKEHOLDER ACTIONS
CIVIL SOCIETY AND THINK TANKS
• Leverage collective convening power to bring together the stakeholder ecosystem
to create broader alignment of efforts.
• Develop a coordinated strategy to provide a wide range of complementary but
distinct pilot and demonstration projects with various DISCOMs.
PHILANTHROPY
• Leverage private sector interest in project finance through blended finance
to enable early risk piloting of new business models with a few DISCOMs.
• Encourage complementary strategy development across civil society by
incentivizing collaboration and coordination between grant recipients.
DISCOMS
• Collaborate with civil society and think tanks to quickly assess state-specific
implications of sector developments and work with relevant agencies to identify
major issues and opportunities.
• Embrace early opportunities to increase use of wholesale markets, tariff reform,
and supportive policy for clean energy portfolios.
• Partner with private sector and civil society to conduct joint venture explora-tory
pilots with rapid testing cycles and clearly defined scaling paths.
MULTI- AND BILATERAL AGENCIES
• Help DISCOMs scale and adapt to new challenges and sector reform through
focused technical assistance funding, in tandem with efforts from the think tank
community.
• Identify and channel financing for key technologies and business model
transitions through development policy financing as well as more focused project
financing. 08 MOVING FORWARD
TOGETHER
32 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 33
MOVING FORWARD TOGETHER
The Discom Transformation Platform is an initiative
designed to elevate the impact of complementary
efforts across the diverse stakeholder ecosystem and
adapt to the evolving needs of DISCOMs. The platform
aims to provide a transparent space for collaborative
discussion and collective action. Rocky Mountain
Institute is committed to creating an impactful and
dynamic platform through close collaboration with all
stakeholder groups over the coming years.
Rocky Mountain Institute and NITI Aayog will work
with platform participants to address issues and
opportunities identified at the 11
th
June workshop and
begin the transition towards action. The platform will
continue to solicit collaboration and partnerships
through subsequent workshops, insight briefs, and
other engagement opportunities. The immediate
actions we will take include:
• A mapping exercise to identify, document,
and visualize the stakeholder ecosystem as it
exists today. The exercise will focus on elevating
the organizational efforts, approaches, and
priorities of organizations and agencies across
the ecosystem. The initial phase of mapping will
include civil society and think tanks that share
the mission to support DISCOMs and enable
deployment of clean energy portfolios. The scope
of mapping will be expanded in subsequent phases.
• A research paper that distills the key issues that
the electricity distribution sector has been facing.
The paper will further delve into what efforts
have resulted in performance improvement and
where and why such reforms and efforts have
failed. Further, it will provide potential solutions to
address underlying structural challenges to the
sector’s improvement.
• A research and pilot tracking initiative to
aggregate past and ongoing projects to create
increased awareness and improve the learning
and scaling between peer DISCOMs.
• Discom Transformation Platform Workshop Part 2.
Together we can leverage our complementary
efforts to address critical institutional, regulatory,
business, and technical barriers to support DISCOMs
and accelerate clean energy portfolios. The RMI team
has an open-door policy and welcomes ideas and
opportunities to collaborate. www.niti.gov.in www.rmi-india.org www.rmi.org
JULY 2020 | A NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE COLLABORATIVE
IMPLEMENTING AMENDMENTS
TO ELECTRICITY ACT
INSIGHTS FROM THE DISCOM TRANSFORMATION
PLATFORM WORKSHOP PART 1
A NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE COLLABORATIVE
JULY 2020 ABOUT NITI AAYOG
The National Institution for Transforming India, also called NITI Aayog, is the premier policy ‘Think Tank’ of
the Government of India, providing both directional and policy inputs. While designing strategic and long-term
policies and programs for the Government of India, NITI Aayog also provides relevant technical advice to the
Centre and States. An important evolutionary change from the past, NITI Aayog acts as the quintessential
platform of the Government of India to bring States to act together in national interest, and thereby fosters
cooperative federalism.
ABOUT RMI INDIA
RMI India is an independent nonprofit organization. RMI India takes inspiration from and collaborates with
Rocky Mountain Institute, a 40-year-old non-governmental organization. RMI India’s mission is to accelerate
India’s transition to a clean, prosperous and inclusive energy future.
ABOUT ROCKY MOUNTAIN INSTITUTE (RMI)
Rocky Mountain Institute (RMI)—an independent nonprofit founded in 1982—transforms global energy use to
create a clean, prosperous, and secure low-carbon future. It engages businesses, com-munities, institutions,
andentrepreneurs to accelerate the adoption of market-based solutions that costeffectively shift from fossil
fuels to efficiency and renewables. RMI has offices in Basalt and Boulder, Colorado; New York City; the San
Francisco Bay Area; Washington, D.C.; and Beijing. SUPPORTING DISCOMS IN
IMPLEMENTING AMENDMENTS
TO ELECTRICITY ACT
INSIGHTS FROM THE DISCOM TRANSFORMATION
PLATFORM WORKSHOP PART 1
A NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE COLLABORATIVE
JULY 2020 AUTHORS AND
ACKNOWLEDGMENTS
AUTHORS
NITI Aayog
Rajnath Ram, Adviser (Energy)
Manoj Kumar Upadhyay, Senior Research Officer
(Energy)
RMI India
Akshima Ghate, Director
Jagabanta Ningthoujam, Senior Associate
Rocky Mountain Institute
Clay Stranger, Senior Principal
Garrett Fitzgerald, Manager
CONTACTS
For more information, please email info.india@rmi.org
SUGGESTED CITATION
NITI Aayog, Rocky Mountain Institute, and RMI India.
Insights from the Discom Transformation Platform
Workshop Part 1. 2020.
Available at RMI India:
www.rmi-india.org/insight/supporting-discoms-in-
implementing-amendments-to-electricity-act
Available at RMI:
www.rmi.org/insight/supporting-discoms-in-
implementing-amendments-to-electricity-act
Images courtesy of iStock/Adobe Stock unless
otherwise noted.
“The views and opinions expressed in this document
are those of the authors and do not necessarily
reflect the positions of the institutions or governments.
While every effort has been made to verify the data
and information contained in this report, any
mistakes or omissions are attributed solely to the
authors and not to the organizations they represent.”
ACKNOWLEDGMENTS
NITI Aayog
TERI
RAP India
AEEE
WRI
IEA
Prayas (Energy Group)
CSTEP
CPI
EPIC-India
CUJ
FSR
CSIS
CEEW
RMI India
Rocky Mountain Institute TABLE OF CONTENTS
01. ABOUT THIS REPORT......................................................................................................................................................6
02. EXECUTIVE SUMMARY ....................................................................................................................................................8
03. CONTEXT............................................................................................................................................................................10
04. POWER SECTOR DEVELOPMENTS .............................................................................................................................12
About DISCOMs.........................................................................................................................................................13
Overview of the Electricity (Amendment) Bill, 2020..........................................................................................14
The Discom Transformation Platform workshop series, part I..........................................................................16
05. BREAKOUT SESSION ONE ............................................................................................................................................18
Opportunities to support DISCOMs......................................................................................................................19
Key learnings.............................................................................................................................................................22
06. BREAKOUT SESSION TWO ...........................................................................................................................................23
Energy efficiency, demand side measures, and customer participation (EE, DSM, CP).............................26
New business models, wholesale markets, and operational changes.........................................................27
Renewable generation............................................................................................................................................28
Energy storage..........................................................................................................................................................28
07. RECOMMENDED NEAR-TERM STAKEHOLDER ACTIONS .....................................................................................30
Civil society and think tanks..................................................................................................................................31
Philanthropy......................................................................................................................................................31
DISCOMs..........................................................................................................................................................31
Multi- and bilateral agencies..................................................................................................................................31
08. MOVING FORWARD TOGETHER .................................................................................................................................32 01 ABOUT THIS REPORT
6 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 7
ABOUT THIS REPORT
Financially viable electricity distribution companies
(DISCOMs) are essential to the future stability of
India’s economy. But many DISCOMs are currently
suffering from a number of financial and infrastructure
challenges. These challenges have persisted before
the COVID-19 pandemic and many have been
exacerbated by the pandemic. Lockdowns have
lowered demand for electricity across all consumer
groups causing significant reduction in DISCOM
revenue putting even great strain on their finances.
The Government of India has responded quickly
with MoP issued draft amendments to the Electricity
Act in April and the Prime Minister announcing a
90,000 crore liquidity boost for DISCOMs in May. The
supportive measures create an enabling environment
for DISCOMs to get back on track and build back to a
stronger and more financially sustainable power sector.
How the sector rebounds will have far-reaching
implications for many stakeholders. The new enabling
conditions such as liquidity boost, amendments to the
Electricity Act, and privatization of DISCOMs in the
Union Territories will impact the progress towards
the clean energy transition. Stakeholders of all types
can adjust and adapt to these changes as stimulus
and legislation is implemented and the economy
recovers. Ensuring that all stakeholders are aligned
and prepared to support DISCOMs’ needs over the
coming months and years is essential to a quick
sector turnaround.
——————
Ensuring that all stakeholders
are aligned and prepared to
support DISCOMs’ needs over
the coming months and years
is essential to a quick sector
turnaround
——————
To ensure that civil society and think tanks are best
prepared to support DISCOMs and to elevate and
accelerate the communities’ collective work, RMI
and NITI Aayog convened 16 leading civil society
organizations (CSOs) from across India to identify
new ways to collaborate in supporting DISCOMs.
The workshop was designed to create alignment
and increase coordination and dialogue amongst this
stakeholder group. The first workshop hosted on 11
th
June was the starting point for continued and expanded
coordination on the Discom Transformation Platform.
This report offers a reflection of the discussions that
took place on the 11th June 2020 e-workshop and a
summary of the prioritized opportunities for CSO’s
and think tanks to help DISCOMs navigate the recent
developments. It details the opportunities, including
key insights and lessons learned, in order to leverage
the complementary ongoing and new efforts across
civil society and the think tank community. 02 EXECUTIVE SUMMARY
8 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 9
This report offers a reflection of the discussions that
took place at the 11th June 2020 e-workshop and a
summary of the prioritized opportunities for CSOs
and think tanks to help DISCOMs navigate the recent
developments. Across the different group discussions
and in plenary sessions, three important themes
emerged through group consensus.
Capacity building needs to be a core component of
any roadmap for smooth implementation of sector
reform. Trainings are needed across all stakeholder
groups including SLDCs, SERCs, DISCOMs, and within
certain customer classes. CSOs and think tanks can
support this by first helping stakeholders understand
the benefits and subsequently providing capacity
building resources to support transition planning and
implementation.
Demonstration of the tangible benefits associated
with aspects of reform are required to achieve real
buy-in and sincere engagement from stakeholders.
CSOs and think thanks need to go beyond studies
and capacity building on the theoretical benefits and
take a wholistic approach to demonstrate those
benefits as pilots and eventually at scale. It is critical
that adequate monitoring and evaluation of such pilots
be instituted to clearly distill key learnings from them.
Increased alignment between different stakeholder
groups and within stakeholder groups emerged as a
meaningful near-term opportunity. Participants
identified the setting of state and centre goals and
policy through more coordination and with consensus
building as a major opportunity and challenge.
Additionally, participants noted a need to better
understand the linkage between India’s macroeconomic
and developmental goals and power sector reforms
and policy.
Rocky Mountain Institute and NITI Aayog will work
with platform participants to address issues and
opportunities identified at the 11
th
June workshop
and begin the transition towards action. The platform
will continue to solicit collaboration and partnerships
through subsequent workshops, insight briefs, and
other engagement opportunities. The immediate
actions we will take includes:
EXECUTIVE SUMMARY
A mapping exercise to identify, document,
and visualize the stakeholder ecosystem as
it exists today
1
A research paper that will distill the key
issues that the electricity distribution
sector has been facing. The paper will
further delve into what efforts have
resulted in performance improvement and
where and why such reforms and efforts
have failed2
A research and pilot tracking initiative to
aggregate past and ongoing projects to
create increased awareness and improve
the learning and scaling between peer
DISCOMs
3
Discom Transformation Platform workshop
part II
4 10 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
03 CONTEXT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 11
CONTEXT
Over the past decade the collective ecosystem of government agencies, private sector, academia,
development agencies, and civil society has made good progress in advancing DISCOM operations,
reducing losses, and preparing them for advanced technologies and market reform. There is an
opportunity to ensure the progress and learnings of the highly diverse actors are leveraged to enable
the most efficient use of resources and to create a pathway to replicate DISCOM improvement at
scale across the nation as quickly and smoothly as possible.
To facilitate meaningful collaboration and coordination across the sector, NITI Aayog, RMI India, and
Rocky Mountain Institute partnered to launch The DISCOM Transformation Platform. The platform
encourages coordination, collaboration, and sharing of learnings and experiences across the diverse
actors already engaging with DISCOMs and other stakeholders in the power sector.
The Platform operates as both a virtual information hub to host and organize the diverse set of
projects, funders, schemes, and key actors engaging in decarbonization across India, and as a
physical convening mechanism to assemble the stakeholder ecosystem to address critical
institutional, regulatory, business, and technical barriers in a more coordinated way. The Platform
is designed around three guiding pillars:
1. INCREASE COORDINATION, COLLABORATION, AND SHARING
BETWEEN KEY ACTORS
3. SUPPORT DECARBONIZATION THROUGH OPERATIONAL,
TECHNOLOGICAL AND BUSINESS MODEL ADVANCEMENTS
2. ACCUMULATE, PROMOTE, AND REPLICATE SUCCESS AT SCALE 04 POWER SECTOR
DEVELOPMENTS
12 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 13
POWER SECTOR DEVELOPMENTS
About DISCOMs
DISCOM performance and financial health remains
the most challenging factor in providing better access
and greening up India’s grid. National average
aggregate technical and commercial (AT&C) losses
remains at 19.2%. Despite initial improvement in debt
reduction through the UDAY scheme, DISCOM debt
is set to rebound to almost the pre-UDAY level of 2.6
lakh crore INR (US$35 billion) in 2020.
1
While debt restructuring measures like UDAY and
recently announced 90,000 crore INR (US$12 billion)
stimulus is meant to allow DISCOMs breathing room
to undertake structural changes to turn around their
performance, most efforts haven’t yielded the desired
results. The sector remains afflicted by issues of
cross-subsidies in their tariffs, the increasing cost of
power purchases, poor billing and collection efficiency,
and most importantly issues of governance and
on-ground political economy.
1
Square One: Discom Debt to Reach Pre-UDAY Levels This Fiscal, CRISIL Ratings, May 6, 2019.
www.crisil.com/content/dam/crisil/pr/press-release/2017/12/square-one-discom-debt-to-reach-pre-uday-levels-this-fiscal.pdf
2
Report on Short-term Power Market in India: 2018–19, Central Electricity Regulatory Commission.
www.cercind.gov.in/2019/market_monitoring/Annual%20Report%202018-19.pdf
Market reform that can accelerate sector
transformation remains sluggish. While electricity
distribution has been unbundled in most states,
privatization has only been successful in few cities
like Delhi, Mumbai, Ahmedabad, Surat, and Agra.
Power procurement also remains largely tied to long-
term power purchase agreements (PPAs). This is
despite the introduction of an active wholesale
power market that has the potential to optimize their
power purchase costs. Only 12% of power from 2018
to 2019 was procured through the wholesale market.
2
This doesn’t mean that the sector hasn’t seen
improvement all together. Most of the private
DISCOMs are operating with much reduced AT&C
losses and are looking towards building a utility of
the future. Some public sector DISCOMs have
managed to be operationally profitable and are
increasingly looking towards the benefits of a clean
energy portfolio in their system. NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
14 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
FIGURE 1
Performance map of electricity DISCOMs in India (Source: CEA, UDAY, Discom Tariff Orders)
But this improvement hasn’t been uniform (Figure 1).
The majority of DISCOMs remain stuck with poor
financial and operational performance. This also means
that the impact of and the ability to adapt to new
challenges that COVID-19 and the various recent
sector developments have thrown will not be the same.
There is a need for coordination to scale the lessons
learned from individual DISCOM’s improvement and
support efforts efforts to the larger sector.
Overview of The Electricity (Amendment)
Bill, 2020
In April, the Ministry of Power introduced the
Electricity (Amendment) Bill, 2020, to address issues
related to generation, transmission, distribution, and
trading of electricity. This represents the third set of
reforms to the Electricity Act of 2003. The proposed
amendments can be loosely sorted into four
categories: contract and payment security, renewable
generation, tariff and subsidy, and institutional reform.
In Figure 2 we present a non-exhaustive overview of
the proposed amendments.
1 Andhra Pradesh: APSPDCL
2 Andhra Pradesh: APEPDCL
3 Bihar: NBPDCL
4 Bihar: SBPDCL
5 Chhattisgarh: CSPDCL
6 Gujarat: UGVCL
7 Gujarat: DGVCL
8 Gujarat: MGVCL
9 Gujarat: PGVCL
10 Haryana: UHBVNL
11 Haryana: DHBVNL
23 Maharashtra: MSEDCL
24 Punjab: PSPCL
25 Rajasthan: JdVVNL
26 Rajasthan: AVVNL
27 Rajasthan: JVVNL
28 Tamil Nadu: TANGEDCO
29 Telangana: TSNPDCL
30 Telangana: TSSPDCL
31 Uttar Pradesh: PuVVNL
32 Uttar Pradesh: MVVNL
33 Uttar Pradesh: DVVNL
45 Dadar & Nagar Haveli:
45 DNHPDCL
46 Delhi: BRPL
47 Delhi: BYPL
48 Delhi: TPDDL
49 Assam: APDCL
50 Manipur: MSPDCL
51 Meghalaya: MePDCL
52 Tripura: TSECL
53 Sikkim: EPDGS
12 Himachal Pradesh: HPSEB
13 Jharkhand: JSEB
14 Karnataka: HESCOM
15 Karnataka: BESCOM
16 Karnataka: MESCOM
17 Karnataka: GESCOM
18 Karnataka: CESCOM
19 Kerala: KSEBL
20 Madhya Pradesh: MPMKVV
21 Madhya Pradesh: MPPoKVV
22 Madhya Pradesh: MPPKVVCL
34 Uttar Pradesh: PVVNL
35 Uttar Pradesh: KESCO
36 Uttarakhand: UPCL
37 West Bengal: WBSEDCL
38 Goa: GoaED
39 Odisha: NESCO
40 Odisha: WESCO
41 Odisha: SOUTHCO
42 Odisha: CESU
43 Puducherry: PED
44 Daman & Diu: DDED
1
5
6
7
8
9
10
11
12
13
14
15
16
17
18
21
22
20
19
2
4
3
23
28
36
49
50
51
52
53
43
37
44
38
45
29
30
31
32
33
34
35
24
25
4039
46
26
41
47
27
42
48 NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 15
FIGURE 2
The proposed amendments of the Electricity (Amendment) Bill
CONTRACT + PAYMENT SECURITY
• Establishment of Electricity Tribunal and strengthening of Appellate Tribunal
for Electricity for contract enforcement
• Empower load dispatch center to oversee the payment security mechanism before
scheduling dispatch of electricity; this is to be made mandatory
RENEWABLES
• Establish a National Renewable Energy Policy for the promotion of generation of
electricity from renewable sources of energy and prescribe a minimum percentage
of purchase of electricity from renewable and hydro sources of energy
• Hydro sources of energy have been recognized as renewable sources of energy. It is
proposed to expand the scope of renewable power purchase obligations to include
hydro sources
INSTITUTIONAL
• CERC to regulate the cross border transactions of electricity
• Non functioning SERC’s duties to be discharged by other states or a joint SERC
• The Distribution licensee can recognize and authorize a person as “Distribution
sublicensee” to distribute electricity on its behalf in a particular area within its area
of supply, with the permission of the appropriate state commission
TARIFF AND SUBSIDY
• Tariff should reflect the cost of supply of electricity and cross-subsidies to
be reduced
• State commissions to determine tariff for retail sale of electricity without any subsidy
under section 65 of the Act NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
16 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
The Discom Transformation Platform
workshop series, part I
Over 35 participants from more than 15 organizations
participated in the workshop. The participants
represented critical stakeholders across the
international civil society and think tank ecosystem.
——————
Workshop participants discussed
and developed near-term opportunities
to support implementation of proposed
amendments to the Electricity Act
——————
FIGURE 3
Nearly 40 participants from 16 organizations participated in the 11
th
June 2020 virtual facilitated e-workshop NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 17
The remaining sections of this report offer a summary
of the two breakout sessions held at the event. In
breakout session one, participants were divided into
five groups, each group discussed the same prompt.
“To enable successful implementation of amendments
to the Act, what three things do you think need to
happen to ensure all stakeholder groups benefit?” In
the second breakout session, participants were divided
into four groups to discuss specific opportunities
for civil society and think tanks to support different
thematic components of the Discom Transformation
Platform. During breakout sessions participants were
guided through a facilitated discussion by RMI
facilitators who supported the development of report
templates that were shared back to the full group at
the end each breakout session.
PARTICIPATORY ORGANIZATIONS
NITI AAYOGTERIRAP INDIAAEEE
WRIIEAPRAYAS (ENERGY
GROUP
CSTEP
CPIEPIC-INDIACENTRAL UNIVERS-
ITY OF JHARKHAND
FLORENCE SCHOOL
OF REGULATION
CSISCEEWROCKY MOUNTAIN
INSTITUTE
RMI INDIA 05 BREAKOUT SESSION ONE
18 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 19
Workshop participants discussed and developed
near-term opportunities to support implementation
of proposed amendments to the Electricity Act. In
breakout groups, participants also identified the
elements of the amendments that are most relevant
to the opportunities identified. Table 1 presents the
top opportunities discussed during the workshop.
Opportunities to support DISCOMs
TABLE 1
Summary of opportunities identified by working group participants
OPPORTUNITIESDETAILSAMENDMENT
ELEMENTS
UNDERSTANDING
POLICY IMPACTS
• Identify different implications for different
stake-holders and create a conduit of
conversation to begin a path forward together;
help states and DISCOMs understand the near-
term challenges and long-term benefits of the
proposed amendments
• Support pilot program design and implement-
ation to demonstrate optimal benefits
• Partner with DISCOMs to design the monitoring
and verification mechanisms to review pilots and
scale them if successful
Tariffs and subsidy,
new business models,
institutional, renewables
IDENTIFYING
MACROECONOMIC
+ DEVELOPMENT
BENEFITS
• Begin linking India’s macroeconomic objectives
and specific power sector reforms and encourage
greater proactive alignment between them
• Identify points of complementarity and points
of complication between socio-economic
development goals and DISCOM reform (e.g.,
DBT and cost reflective tariffs, etc.)
Tariffs and subsidy,
new business models,
institutional, renewables
Continued >
NEAR-TERM OPPORTUNITIES TO SUPPORT
IMPLEMENTATION OF AMENDMENTS TO
ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
20 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
OPPORTUNITIESDETAILSAMENDMENT
ELEMENTS
ARTICULATING THE
BENEFITS
• Identify value of flexible generation and bring
in knowledge-base from private sector to
develop implementation plans focused on
operational efficiency
• Support DISCOMs in understanding specific
long-term revenue and cost recovery benefits
associated with different aspects of the act
• Identify near-term opportunities to maximize cost
savings and distribute risk across stakeholders
(e.g., private sector, Centre, State, customers)
Renewables, tariffs and
subsidy
CAPACITY BUILDING
AND TRAININGS
• Work with DISCOMs operational, planning, and
procurement departments to train them on how
to maximize benefits of real-time markets
• Continue engagement to support implementation
of policies that help DISCOMs improve power
procurement practices and reduce power costs
RTM
PILOT IMPLEMENTATION
OF DIRECT BENEFIT
TRANSFER (DBT)
• Develop a roadmap that proposes details of how
subsidies will be transferred directly to intended
consumers and describe the phasing of such a
transition
• Understand specific challenges and implications
for agricultural and industrial consumer mix and
begin to address state-specific issues
• Acknowledge and plan for political implications if
there are delays in transfer
• Monitor and evaluate resulting pilots
Tariff and subsidy
DESIGNING COST-
REFLECTIVE TARIFFS
• Provide technical assistance and guidance to
DISCOMs, SERCs, and other relevant agencies
in determining new electricity tariffs that are both
cost reflective and incorporate greater use of
time-dependent characteristics
Tariff and subsidy
Continued > NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 21
OPPORTUNITIESDETAILSAMENDMENT
ELEMENTS
WHOLE-SYSTEM
PLANNING
• Work with MoP and Centre to bring more clarity
to the implementation of the NREP specifically
around separate obligations for each state
• Provide thorough and comprehensive
consultation to states to inform NREP obligations
• Work with relevant agencies to encourage NREP
to include space and opportunity for innovative/
disruptive new technologies
• Encourage inclusion of all types of DERs to meet
state obligations; consider including storage
component in NREP
• Bring a focus on “climate-resilient grid
infrastructure” into conversation around system
planning and procurement
Renewables
DATA + TRANSPARENCY • Map activities of peers for better resource
utilization and leverage complementary aspects
of different efforts
• Develop a knowledge sharing platform/portal
that can be used by all stakeholders as a “one-
stop shop” to understand activities, priorities,
and opportunities to collaborate
Tariffs and subsidy,
new business models,
institutional, renewables
PLANNING FOR THE
RIGHT FUTURE DEMAND
PROFILES
• Provide technical assistance and capacity building
for load forecasts so DISCOMs can begin to
optimize the types of contracts that are best
matched to their medium- and long-term
operational needs (e.g., LT peak, base, hybrid
RTC, etc.)
INTEGRATION +
IMPLEMENTATION
PLATFORM
• Create a platform for stakeholders of all
types to come together to addresses near-term
implementation barriers NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
22 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
Key learnings
Each working group generated a diverse set of
opportunities that collectively touched on all aspects
of recent developments in the sector. Across the
different group discussion and in the plenary,
three important themes emerged through group
consensus.
Capacity building
The first step to creating a shared understanding of
the long-term benefits associated with reform require
stakeholders to understand how their organization
or department will be specifically impacted by the
proposed reforms, both immediately and long-term.
Capacity building needs to be a core component of
any roadmap for smooth implementation of sector
reform. Trainings are needed across all stakeholder
groups including SLDCs, SERCs, DISCOMs, and within
certain customer classes. CSOs and think tanks can
support in first helping stakeholders understand the
benefits and subsequently providing capacity-building
resources to support transition planning and
implementation.
Across working groups in the workshop there was
resonance that capacity-building efforts should be
designed to educate and train at all levels of DISCOM
staff. This includes leadership/MD positions to support
strategic long-term vision setting and system planning,
operations to understand near-term practical
implications and longer-term planning requirements,
and customer engagement/customer education to
encourage participation in new tariffs and new
customer facing programs.
Local piloting
Demonstration of the tangible benefits associated
with aspects of reform are required to achieve real
buy-in and sincere engagement from stakeholders.
CSOs and think thanks need to go beyond studies and
capacity building on the theoretical benefits and take
a wholistic approach to demonstrate those benefits
as pilots and eventually at scale. Pilot projects and
pilot programs are beneficial across the entire value
chain and should be designed to clearly test and
demonstrate benefits availed to specific stakeholder
groups. Pilots should be designed with a focus
on documentation, verification, and a clear path for
dissemination and scaling. Further adequate
monitoring and evaluation of such pilots need to be
instituted to clearly distill key learnings from them.
Alignment
Multiple groups noted the opportunity to increase
alignment between different stakeholder groups and
within stakeholder groups. Participants identified the
setting of State and Centre goals and policy through
more coordination and with consensus building as
both a major opportunity and challenge. Additionally,
participants noted a need to better understand the
linkages between India’s macroeconomic and
developmental goals and power sector reforms and
policy.
Specifically, an opportunity exists to focus on the
complementary aspects of power sector reform and
macroeconomic development goals by identifying
areas where increased use of productive energy and
power reliability improvements can support economic
growth in medium and small enterprises. 06 BREAKOUT SESSION TWO
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 23 NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
24 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
After discussing broad opportunities to support implementation, the participants were organized into
multistakeholder working groups around the four thematic areas identified through the pre-workshop needs
assessment survey.
In breakout groups, participants discussed the specific opportunities that exist for CSOs and think tanks to
support DISCOMs in their respective thematic area. The participants identified the areas where collaboration,
coordination, and alignment were critical to the success of the opportunity.
FIGURE 4
The four multi-stakeholder working groups
FIGURE 5
Summary of proposed actions by thematic area
ENERGY EFFICIENCY, DEMAND-SIDE MEASURES, AND CUSTOMER PARTICIPATION
• Document existing Indian experiences and identify international successes that are applicable to India
• Increase awareness of benefits through education, awareness campaigns, and capacity building at both the
DISCOM and consumer level
• Support pilot design and implementation with a focus on measurement and verification of operational and
financial improvements
• Continue to elevate efficiency and demand-side measures as the lowest costs/low-hanging fruit
ENERGY EFFICIENCY,
DEMAND-SIDE
MEASURES + CUSTOMER
PARTICIPATION
ENERGY STORAGE
NEW BUSINESS MODELS,
WHOLESALE MARKETS +
OPERATIONAL CHANGES
RENEWABLE
GENERATION + SYSTEM
INTEGRATION
OPPORTUNITIES FOR THINK TANKS,
CSOs TO SUPPORT DISCOMs NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 25
NEW BUSINESS MODELS, WHOLESALE MARKETS, OPERATIONAL CHANGES
• Organize a convening of stakeholders to encourage a transformative perspective on possible new business models
• Identify a few innovative business models that can be piloted at various DISCOMs with sustained support from
design to documentation and scaling phases
• Continue to capitalize on the availability of blended finance to de-risk some experimental pilots that will allow
some “out-of-the-box” thinking around new business models
• Conduct capacity building that supports stakeholders in navigating the transition from long-term PPAs to a
liquid wholesale market. It should also take a longer-term perspective on integrated system planning to make
use of real-time markets
• Establish ways to engage the consumer in the discussions around new tariffs and consumer new business models
to bridge the central—end consumer disconnect and ensure programs are designed with the consumer in mind
RENEWABLE GENERATION AND SYSTEM INTEGRATION
• Aggregate data, lesson learned, successes, and operational best practices from past and on-going projects
and make use of evidence-based success stories to duplicate successes and avoid recreating pilots when solution
scaling is appropriate
• Identify and articulate concise benefits and the business case for renewables to DISCOMs and their customers
• Continue to remove procedural barriers and create instruments for transparent trading to enable better use of
markets and power trading
• Conduct capacity building with DISCOMs, state load dispatch centers, and state electric regulatory commissions
to increase the use and effectiveness of integrated resource planning
• Bring GENCOs, TRANSCOs, DISCOMs, and Nodal Agencies together for improved coordination and planning at
the system level and create an integrated plan to implement the National Renewable Energy Policy
• Consider and elevate the importance of contract enforcement and payment security across all future work with
stakeholders
ENERGY STORAGE
• Identify and evaluate opportunities to use small behind the meter storage systems to bridge the reliability gap
for the 26 million new connections made under the Saubhagya scheme
• Continue to explore cost effective use cases to replace diesel backup systems in large-scale data centers and
other industrial applications where reliability is very valuable/costly
• Support CERC and DISCOMs to plan for and implement a comprehensive ancillary service market that offers accurate
compensation for high-performing energy storage systems
• First optimize generation, transmission, and demand flexibility to minimize the need for energy storage and then
identify areas where storage is necessary and cost-effective NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
26 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
Energy efficiency, demand side measures,
and customer participation (EE, DSM, CP)
Key takeaways and insights from the working group
Working group participants generated a list of
opportunities to ensure successful deployment
of EE, DSM, and increased customer participation.
The following list provides a summary of the
opportunities discussed:
1. Assist in addressing the knowledge gap around
the DISCOM and consumer-facing benefits of
energy efficiency and demand-side measures.
Stakeholders of various types are currently not
aware of the full set of benefits that these
measures can provide. CSOs and think tanks
can work with DISCOMs to quantify the benefits
and identify the highest, medium, and lowest
impact opportunities for developing EE and DSM
utility programs.
2. Partner with consumer advocacy groups to
ensure effective participation of communities by
educating each consumer group on the benefits
of EE and DSM.
3. Partner with DISCOMs to design pilot programs
centered around the business case for DISCOMs.
Extend support beyond the design phase and
provide sustained engagement through the
implementation, monitoring and verification,
documentation, and program scale up.
4. Work with policy and regulatory stakeholders to
ensure new policy or reforms are aligned with the
most impactful and lowest-cost measures.
5. Support the use of demand-side aggregation
and address current barriers to aggregated
participation in markets and utility programs to
allow greater private sector participation in new
business models.
Areas where collaboration or coordination is
most important
• Conduct a mapping exercise that documents
ongoing activities of peer organizations for
better resource utilization and cross-learnings.
• Develop, populate, and use a knowledge portal
as a one-stop shop for resource sharing best
practices, successes, tools, and resources.
• Maintain continuity of our efforts through partner
engagements and discussion forums that are
organized around local participation.
• Collaborate to develop insight briefs that explore
the multidimensional understanding of various
barriers and potential solutions to accelerate
adoption of known technology.
IMMEDIATE OPPORTUNITY FOR ACTION
Participants identified an immediate need
to increase the level of coordination and
engagement between CSOs and think tanks to
minimize duplication of efforts and best align
organizational strengths. The group discussed
the near-term opportunity to conduct a joint
mapping exercise to generate an overview of
existing activities, programs, and tools. Several
organizations will be collaborating to develop
the ecosystem map to be hosted on the Discom
Transformation Platform knowledge hub. NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 27
New business models, wholesale markets,
operational changes
Key takeaways and insights from the working group
Working group participants generated a list of oppor-
tunities to encourage the use of wholesale markets,
make use of new business models, and support
DISCOM operational changes. The following list
provides a summary of the opportunities discussed:
1. Conduct rigorous technical and economic
evaluation of several innovative and distinct
business models that span privatization, PPP,
and separation of content and carriage.
2. Work with DISCOMs to leverage saving
opportunities through significantly increased
market participation by educating key decision
makers on benefits. In parallel, DISCOMs will
need support in restructuring existing long-term
PPAs and help in navigating the transition to
increased use of market signals for long-term
integrated planning.
3. Work with DISCOMs, customers, and government
to develop a roadmap to tariff reform that
addresses the need for subsidy and identifies
the steps required to implement a successful
transition to Direct Benefit Transfer.
4. Over the coming years conduct impact
evaluations, access pilot successes and failures,
and conduct course corrections as necessary to
ensure the gradual transformation of the sector
is informed by learnings along the way. Create
feedback loops between pilots, scaling, and
new policy or regulatory reform.
Areas where collaboration or coordination is
most important
Working group participants identified a strong need
to better align the ongoing work across the different
states and DISCOMs. To avoid replication and ensure
effective communication, the community should
develop a mechanism to increase knowledge
sharing through data hosting, convenings, and more
collaboration on joint funding opportunities.
Participants noted the importance of making use of
such a platform and the challenges that have arisen
in past efforts. Having NITI Aayog and Ministry
of Power as central partners on the coordination
platforms has been highly successful in the path and
should continue to be leveraged.
IMMEDIATE OPPORTUNITY FOR ACTION
The community of civil society and think
tanks need to formalize the approach to
collaborating, sharing, partnering, and learning
from peers. The Discom Transformation
Platform was identified as a starting platform
to begin this work. NITI Aayog and RMI will be
taking feedback from the working group and
incorporating it into the platform design.
Renewable generation
Key takeaways and insights from the working group
The working group participants discussed the near-
term opportunities to ensure successful deployment
of renewable generation and optimized system
integration. The following list provides a summary of
the opportunities discussed:
1. Build platforms to bring in think tanks and civil
societies to engage and coordinate with different
state regulators and nodal agencies in planning
for meeting government renewable generation
targets. Consider the state-specific financial
and operational implications of planning for and NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
28 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT
implementing the National Renewable Energy
Policy and support DISCOMs in developing a
long-term planning strategy.
2. Conduct Discom-specific analysis to identify
and quantify the benefits of distributed energy
resources on their network and work with them
to develop programs that enable better revenue
recovery.
3. Support DISCOMs with specification and
compliance with RPOs.
4. Work across stakeholder groups to maintain the
sanctity of contracts while creating a transition
plan to move from reliance on long-term PPAs to
increased market participation.
5. Continue to support and advocate for supportive
policy that puts all stakeholders on a path towards
increased renewable deployment.
6. Enhance the capacity of DISCOMs, SLDCs, SERCs,
and other nodal agencies to make use of
international best practices for integrated system
planning and increased market participation.
7. Continue to support CERC and others in
developing new frameworks and markets that
will enhance interstate power transfer.
Areas where collaboration or coordination is most
important
• Coordination across states and between states
and central agencies such that targets, policies,
and roadmaps are consistent in timeframe and
ambition and reflective of state-specific
considerations. This is particularly important for
integrated resource planning at the transmission
and generation level.
• Consistency and alignment on capacity building
and policy guidance to State, Centre, and nodal
agencies to encourage convergence towards a
shared set of desired outcomes.
IMMEDIATE OPPORTUNITY FOR ACTION
• Prioritize sharing of data and information
on pilot programs, policy advisory,
and other areas of DISCOM support to
leverage existing work and avoid duplicity
of efforts. Identify the areas where CSOs
and think tanks have shared goals and
map the different approaches for policy
advisory and technical support to maximize
complementary components of the
community’s efforts.
• Develop a consortium of civil societies,
think tanks, and policy advisors or create
cross-functional working groups that
engage staff from different CSOs and
think tanks. NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 29
Energy storage
Key takeaways and insights from the working group
The working group participants discussed the near-
term opportunities to ensure successful deployment
of energy storage. The following list provides a
summary of the opportunities discussed:
1. Understanding the role of electric vehicles in
both providing possible grid flexibility or
requiring additional system upgrades (including
storage) to manage peak charging requirements.
Civil society can work with DISCOMs to build
awareness of opportunities and challenges
related to EVs and energy storage and help
them prepare for integration planning on the
system.
2. Creating the right market frameworks and
sending the appropriate price signals to
encourage a diversity of use cases for energy
storage that is inclusive of transmission,
distribution, and behind-the-meter connected
storage systems.
3. Conducting battery storage pilots in rural
households to provide reliability services for both
domestic and commercial applications and
identifying use cases that are economic today
and can save DISCOMs network upgrade costs
and enable greater willingness or capacity to pay
for more reliable service.
4. Supporting the planning, development, and
implementation of ancillary service markets and
working with DISCOMs in parallel to ensure they
are well prepared to maximize cost savings and
performance-improving benefits of the new
market framework.
5. Increase the engagement of customer/end
user in the deployment of small scale behind-
the-meter storage.
6. Evaluate the techno-economic feasibility of inter-
state trading based on differentiated demand
profiles (daily and seasonal).
7. Develop a program to accelerate the transition
from diesel backup to solar plus storage or
storage-only backup for key commercial and
industrial customers.
Areas where collaboration or coordination is most
important
Designing pilots and demonstration projects that
show DISCOMs specific benefits and how they can
capture those benefits. Coordination between CSOs,
bilaterals, consultancies, and DISCOMs is required
to ensure testing and sharing of different applications
between DISCOMs and minimizing duplication of
demonstrations. CSO and think tanks can play a central
role in aggregating and disseminating learnings and
supporting the design of new additive pilot programs
and the creation of capacity-building programs to
scale pilot learnings to other DISCOMs. 07 RECOMMENDED NEAR-TERM
STAKEHOLDER ACTIONS
30 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 31
RECOMMENDED NEAR-TERM
STAKEHOLDER ACTIONS
CIVIL SOCIETY AND THINK TANKS
• Leverage collective convening power to bring together the stakeholder ecosystem
to create broader alignment of efforts.
• Develop a coordinated strategy to provide a wide range of complementary but
distinct pilot and demonstration projects with various DISCOMs.
PHILANTHROPY
• Leverage private sector interest in project finance through blended finance
to enable early risk piloting of new business models with a few DISCOMs.
• Encourage complementary strategy development across civil society by
incentivizing collaboration and coordination between grant recipients.
DISCOMS
• Collaborate with civil society and think tanks to quickly assess state-specific
implications of sector developments and work with relevant agencies to identify
major issues and opportunities.
• Embrace early opportunities to increase use of wholesale markets, tariff reform,
and supportive policy for clean energy portfolios.
• Partner with private sector and civil society to conduct joint venture explora-tory
pilots with rapid testing cycles and clearly defined scaling paths.
MULTI- AND BILATERAL AGENCIES
• Help DISCOMs scale and adapt to new challenges and sector reform through
focused technical assistance funding, in tandem with efforts from the think tank
community.
• Identify and channel financing for key technologies and business model
transitions through development policy financing as well as more focused project
financing. 08 MOVING FORWARD
TOGETHER
32 | SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE
SUPPORTING DISCOMS IN IMPLEMENTING AMENDMENTS TO ELECTRICITY ACT | 33
MOVING FORWARD TOGETHER
The Discom Transformation Platform is an initiative
designed to elevate the impact of complementary
efforts across the diverse stakeholder ecosystem and
adapt to the evolving needs of DISCOMs. The platform
aims to provide a transparent space for collaborative
discussion and collective action. Rocky Mountain
Institute is committed to creating an impactful and
dynamic platform through close collaboration with all
stakeholder groups over the coming years.
Rocky Mountain Institute and NITI Aayog will work
with platform participants to address issues and
opportunities identified at the 11
th
June workshop and
begin the transition towards action. The platform will
continue to solicit collaboration and partnerships
through subsequent workshops, insight briefs, and
other engagement opportunities. The immediate
actions we will take include:
• A mapping exercise to identify, document,
and visualize the stakeholder ecosystem as it
exists today. The exercise will focus on elevating
the organizational efforts, approaches, and
priorities of organizations and agencies across
the ecosystem. The initial phase of mapping will
include civil society and think tanks that share
the mission to support DISCOMs and enable
deployment of clean energy portfolios. The scope
of mapping will be expanded in subsequent phases.
• A research paper that distills the key issues that
the electricity distribution sector has been facing.
The paper will further delve into what efforts
have resulted in performance improvement and
where and why such reforms and efforts have
failed. Further, it will provide potential solutions to
address underlying structural challenges to the
sector’s improvement.
• A research and pilot tracking initiative to
aggregate past and ongoing projects to create
increased awareness and improve the learning
and scaling between peer DISCOMs.
• Discom Transformation Platform Workshop Part 2.
Together we can leverage our complementary
efforts to address critical institutional, regulatory,
business, and technical barriers to support DISCOMs
and accelerate clean energy portfolios. The RMI team
has an open-door policy and welcomes ideas and
opportunities to collaborate. www.niti.gov.in www.rmi-india.org www.rmi.org
JULY 2020 | A NITI AAYOG, RMI INDIA AND ROCKY MOUNTAIN INSTITUTE COLLABORATIVE