Launched in 2022, the Ministry of Power’s (MoP) flagship RDSS initiative aims to improve operational effÂiciencies and financial sustainability by offering results-linked financial assistanÂce to discoms. This assistance will strÂenÂgthen the supply infrastructure, contingent upon meeting pre-qualifying criteria and achieving basic benchmarks.
The scheme aims to allocate a total of Rs 3,037.58 billion, including gross budgetary support (GBS) of Rs 976.31 billion, for a period of five years (2021-22 to 2025-26). This financial assistance is intended for modernising and strengthening the distribution infrastructure, enhancing the reliability and quality of supply to end-consumers, and installing smart meters. Tendering activity for smÂaÂrt metering and loss reduction works under the scÂheÂme has gained momentum in receÂnt months. Contracts for the implementation of these works have been awarded, raising expectations for tangible progÂreÂss under the scheme.
Power Line takes a look at the status of the RDSS…
Targets under the programme
The main objectives of the RDSS are to reÂduce aggregate technical and commercial (AT&C) losses to 12-15 per cent and to eliminate the average cost of supply-average realised revenue (ACS-ARR) gap by financial year 2024-25. AddiÂtionally, the scheme aims to address several concerns related to regulations, governance, government support and technological issues in the power distribution segment.
The RDSS is divided into two key components: Part A, which provides financial support for prepaid smart metering, system metering and distribution inÂfrastructure upgrades; and Part B, which focuses on training, capacity builÂding, and other enabling and supporting activities. The sanctioned outlay for smÂart metering amounts to approximately Rs 1,349.86 billion, while for loss reduction works it is Rs 1,191.34 billion.
A key intervention envisaged under the RDSS is prepaid smart metering, with an estimated outlay of approximately Rs 1,500 billion and a GBS of Rs 230 billion. The scheme aims to install a total of 250 million smart meters by 2025-26. Smart metering projects are planned to be implemented under the design-build-finance-operate-transfer mode through the public-private partnership approach.
In addition to prepaid smart metering for consumers, advanced metering infrastructure and system metering will be implemented at the feeder and distribution transformer levels, equipped with communicating features. FurtherÂmoÂre, the RDSS promotes the adoption of advanced information and communication technologies, such as artificial intelligence and machine learning, to analyse data generated by smart meÂters and information technoloÂgy/opÂeÂratioÂnal technology devices.
Under the RDSS, capital investment has also been allocated for loss reduction works, system strengthening to accommodate load growth and modernisation required to establish a smart distribution syÂstem. Loss reduction works inÂvolve replacing conductors with aerial bunchÂed cables, implementing high voltage distribution systems (HVDS), and feeder bifurcation. Similarly, system strengthening involves creating new subÂstations and feeders, upgrading traÂnsformation caÂpacity, and improving caÂble infrastructure. Modernisation effÂorts include imÂplementing supervisory control and data acquisition, distribution management systems, information technology/operational technology, enÂterÂÂprise resource planning, geographic information system-enabled applicatiÂons and advanced distribution management systems. These initiatives aim to enÂhance distribution systems.
To ensure a consistent and uninterrupted supply of electricity to farmers, the RDSS includes provisions for the segregation of agricultural feeders where the agricultural load exceeds 30 per cent. A convergence with the KUSUM programme has also been envisioned. As of now, Rs 299.45 billion has been sanctioned for the segregation of agricultural feeders.
Progress so far
According to a recent Lok Sabha report (March 2023), the utilisation of funds unÂder the scheme during 2021-22, 2022-23 stood at Rs 53.7 billion against the budÂÂgeted outlay of Rs 85.65 billion. Under the RDSS, detailed project reÂporÂts (DPRs) totalling Rs 1,191.34 billion, inclusive of GBS of Rs 758.84 billion, have beÂen sanctioned. Out of the total sanctioÂnÂeÂd funds, as proposed by state/discoms, Rs 145.09 billion has been sanctioned for districts of every state (excluding Odisha, KarnaÂtaÂka and Telangana) for works such as HVDS implementation, cabling and feeder segregation.
According to a Lok Sabha report (FebruÂary 2023), 204.62 million prepaid smart meters, 5.41 million distribution transÂforÂmer meters and 198,826 feeder meters have been sanctioned across 28 states (46 discoms) under the RDSS, for apÂpÂroxiÂmaÂtely Rs 1.35 trillion. Tenders have been issued for smart metering works, covering approximately 103 million prepaid smart meters for consumer metering, as well as 3.8 million system meters for distribution transformers and feeders. FurÂther, tenders have been issÂued for distribution infraÂstrucÂture/loss reduction works amounting to Rs 788.27 billion.
In the past month, several states/UTs haÂve been onboarded to the scheme. ThÂeÂse inÂclude the NDMC area of New Delhi wiÂth a project cost of Rs 3.37 billion, Ladakh with a sanctioned cost of Rs 6.87 billion (including grid connectivity of the ChanÂgthang region, downline inÂfrastructure in the Zanskar region and other loss reduction works in Leh and Kargil districts of Ladakh) and Nagaland.
Conclusion
The strategic measures of the RDSS are anticipated to improve the long-term viability of the distribution sector while reducing the ACS-ARR gap and AT&C losses, levels of outstanding subsidy payÂable by the state government, and outstanding government department dues. Going forward, implementation of the RDSS will be enhanced significantly through prepaid smart metering, enforÂceÂment of prequalification conditions and implementation of the results-linÂked framework.