Surya NamaskarAugust 18, 20200The Sun is here to stay, let’s make the best hay
Inspite of this, there is a lot of paranoia within the Discoms around solar. Discoms tout the “daytime only” operation and the “unpredictability” of solar projects as their reasons for resisting solar in any form, be it open access or onsite solar. Threat to their monopoly, inertia or fear of the unknown maybe the real reasons but let’s leave it at that.
In the benefit of the sector that gives us our daily bread, let’s explore solutions that can be a win-win for solar and Discoms. The first stage is acceptance. Let’s accept that solar is here to stay. Next stage is to assess how can Discoms use it to their benefit, like a batsmen who pulls a bouncer for a six, and for those who stopped watching cricket after Gladstone Small’s visit to India, check out “David vs Goliath” by Malcolm Gladwell. By the way, who is Gladstone Small? I don’t think you missed much. Now the pull shot.
Discoms are asset owners and service providers. They own wires and supply electricity, latter being a margin business (difference between buying and selling price). Distributed solar can help them improve their profitability and in ways that directly adds to their bottom line. Discoms have a captive market, the millions of customers that they have been servicing for decades. These millions of customers have millions of roofs. What if the Discom ties up with rooftop RESCOs. RESCO installs the rooftop solar plant. The Discom bills the customer for all power consumed by the customer; the electricity generated from the rooftop solar is not net-metered but gross-metered, i.e, customer will now have two meters, existing for import and new for export.
- Customer continues to interact only with the Discom.
- Discom guarantees the payment to Resco and charges a fees for lead sourcing (sales) and payment guarantee.
- Customer gets a roof rent which is setoff in its monthly bill.
Can we have multiple suppliers for electricity? And what will these multiple suppliers compete on? Telecom has shown that multiple suppliers can co-exist and “price” is not the only selection criteria for a customer; number portability did not result in the mass exodus as dreaded but “call drops” did. Similarly, Discoms need to improve their service to retain their customers. The monopolistic market has to change and it will change. Uber, Netflix, Telecom, the customer wants a choice. We will leave the discussion about “service” to another day. For the time being, we will focus on how rooftop solar can help Discoms improve their service. Reactive power consumption, voltage drops are couple of issues faced by the customer when we talk of service levels. Solar inverters have in built capabilities to be controlled remotely. They can be ramped down and also tweaked to inject reactive power into the grid, all in real time and remotely. This can reduce the need for new capacitor banks and voltage regulators or postpone the need to upgrade circuits and transformers.
Lastly comes the grouse about solar supplying electricity during the day and Discoms having peak requirements during evening (6 – 10 pm) and morning hours (6-10 am). Solar is supportive of the morning peak but can do nothing about the evening peak, but Discoms can surely do. Agricultural loads on dedicated feeders can be moved to the daylight hours, a la off peak hour calling rates in telecom. This will take care of the daily load curve. Next comes the grouse of seasonal load curve, for which you have inter-state banking and sale on power exchange, and now the real time market. Realisations in both the power exchange and the RTM are lower than the bid prices of Discom solar but that’s what a trader is all about, and a Discom is but a trader since it buys and sells electricity.
Banks do it all the time, in what is called an asset liability mismatch, wherein the money that they borrow has a different tenor than the money that they lend. This is because the cost of capital is different for both the buckets. Discoms can buy long term and then sell short term. Of course they will have to make more on certain parts, certain months etc.
The three suggestions, viz. using its incumbent position to sell rooftop solar, use of solar inverters to stabilise the grid and shifting of load to peak solar hours, are not difficult to implement. The IOT and software capabilities available in India can easily facilitate these. So, times are changing and the answer my friend is blowing in the wind …errr….shining in the sun.
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