Highlight the role of public private partnership (PPP) and input-based distribution franchisee models in the power sector to handle the problem of distribution losses.

Input-based distribution franchise model is the incorporation of inputs and pre-determination of estimated scenario in preparing power purchase agreements (PPA).

Benefits of PPP in power sector:

• Combines efficiency of private sector with infrastructure of public sector.
• Involves proper determination of peak demand and cost analysis leading to informed pricing and better operational performance.
• Helps in reducing populism and rationalize use of electricity.
• Distribution losses will be minimized through proper assessment of demand-supply scenario.
• Use of data analytics and artificial intelligence by private sector to improve profits will lead to lower transmission costs.

Input-based distribution franchisee model and its benefits in distribution:

• Helps optimize supply-demand scenario.
• Peak demand & variation is analysed leading to estimation beforehand.
• Reduces cost through rationalizing infrastructure for distribution.
• Helps in meeting public demand and provide customer satisfaction by efficiently allocating distribution of voltages.

Although there have been efforts in PPP and other arenas (ex. Mumbai, Gujarat), the problems remains due to operational bottlenecks. There is a need of overhauling the transmission infrastructure and integration of various sources of energy to reach the optimum level of benefits with customer satisfaction.

Topics: GS-III: Indian Economy Issues Relating to Planning • GS-III: Infrastructure Energy Sector