CERC chairperson says UDAY implementation did not yield desired result

The Ujjwal Discom Assurance Yojana (UDAY) scheme in 2015 was brought in to revive ailing state power distribution companies and make it operationally as well financially efficient.

After four years of scheme implementation, estimated all India power supply losses of 20 participating states stands at 21.6 percent for Q1FY20 against the target of 15 percent of AT&C (Aggregate Technical & Commercial) losses by FY19.

PK Pujari, chairperson of CERC (Central Electricity Regulatory Commission) also the one who had initiated the implementation of UDAY scheme said, "Implementation of the scheme did not bring the desired results of making discoms efficient operationally or financially.”

Pujari also highlighted that there's an urgent need to bring in coordinated efforts from all sides to resolve power sector issues.

On the idea of discom privatisation or separation of carriage and content, he added, "Need a lot of political will to bring in the carriage and content separation in the power sector. Discom franchise model could be an easier way to bring in efficiency in the operations and finances of the discoms."

About 90 percent of the Power Purchase Agreements (PPAs) are tied up for the long term, about 2-3 percent are for medium-term and only about 7-8 percent of the PPAs are of short term.

CERC chairperson said, "Long-term PPAs were good for the past, the structure of the power purchase agreements will change drastically in the coming years and there will be the need for more medium to short term PPAs only."

He also added that private sector investment in the greenfield power projects is unlikely and the opportunity remains in the renewable energy sector as 20-25 power projects' are likely to retire in the next five years.