New Revenue Opportunities for Utilities

The eighth thematic session was on new revenue opportunities for utilities. The session was focused on discussing and delineating new revenue opportunities for utilities in the backdrop of rapidly shifting dynamics between customers and utilities. The increasingly favourable cost economics of renewable energy and the unrealised potential for operational efficiency can be unlocked by rightly harnessing technology and catering to emerging customer segments in new ways.

The session was chaired by Raj Pratap Singh, Chairman, Uttar Pradesh Electricity Regulatory Commission, and moderated by Reji Kumar Pillai, President, ISGF. The session included presentations and addresses by Marc Boillot, Ambassador, Global Smart Energy Federation; Ganesh Das, Head, Innovations, Tata Power Delhi Distribution Limited; Rammohan Rayaprole, National Manager, EMS, CMS Computers Limited; and Abhishek Ranjan, Assistant Vice-President, System Operations (ST and ABT), BSES Rajdhani Power Limited.

Singh began by stating that discoms are under severe financial stress and in this scenario it is vital to explore new areas of revenue generation. He added that there is a strong reason for discoms to focus on their existing tariff-based sources since there is immense potential for discoms to increase their revenues from that. Also, new connections under the Saubhagya scheme do not have their meters installed so connecting them with the meter becomes imperative for discoms to increase their coverage ratio. He further noted that billing and collection efficiency needs to be done properly to realise the discom revenue.

Pillai stated in his note that new services and revenue opportunities can arise from unlocking the existing infrastructure and services such as the sale of rooftop PV systems and promotion of prosumers, sale of energy efficient and smart appliances, promotion of electric cooking and sale of cooking appliances, sale of electric vehicle chargers, and sale of batteries for energy storage and other appliances.

According to Rammohan, utilities should be to prepared to procure power at low costs and manage short-term power requirements, increase the distributed energy resource installations and integrate more renewables, maintain high reliability of supply, introduce consumer-centric business models, increase consumer engagement and participation, and provide value-added services to customers. He also discussed the use of digital connectivity in the implementation of the ABT/DSM mechanism. He concluded by saying that digital technologies can play an enabling role and help power utilities address their needs.

Ganesh Das prefaced his address with the simple idea that in a rapidly evolving scenario, the utilities have two broad strands of opportunities to maximise their profitability – either maximise their revenue accrual or minimise the cost incurred by them. Some methods of increasing their intake includes catering to the newly emerging electric vehicle category by building charging stations or by catering to distributed emerging resources such as establishments or organisations with rooftop solar by providing them analytics and avenues for energy storage for electricity generated more than their requirement. Conversely, the utilities could also minimise the cost incurred by promoting schemes of energy efficiency while employing the EESL business model, wherein the utilities could provide efficiency-enhancing devices and software in exchange for payments contracted over several years.

Bouillot spoke at length on the advantages that can be enjoyed by the organised utilities in the future, when much of the energy consumed would be generated through decentralised energy sources. He suggested that in the current energy market, almost all of the utilities are shackled by excessive governmental regulations and controls on their profitability. However, in the future, with distributed energy architecture and deregulated policy design, the organised utilities that have a massive capital in their balance sheets, larger market and greater market experience could leverage this deregulated architecture to their benefit. They could look at diversifying into newer industries/markets such as co-generation and trigeneration by providing a heat or cooling system as required by customers, and by being the market intermediary and market maker by setting the electricity prices to their benefit, factoring in the newer prosumers dynamics. They could also enter the O&M and installation market of solar and other renewables.

Ranjan commenced his remarks by elaborating on the upcoming trends in the energy sector and the opportunities for utilities. These include the rising demand for electricity owing to the high ownership or component of EVs in the vehicle market, and a potential to enter the market of intermediating prices for electricity in a prosumer dynamic by facilitating energy trading between that have demand for electricity and those that have generated excess electricity. He added that currently the utilities utilise a substantial level of analytical software and technology to maximise their generation and efficiency. In the future, with a substantial DER system, these utilities could lease or sell their data services by bundling them alongside connected homes.



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