Why in news?
The Ministry of Power announced that projects worth ₹2.83 lakh crore have been sanctioned under the Revamped Distribution Sector Scheme (RDSS). The government also reported significant progress in rolling out prepaid smart meters and other distribution reforms.
Background
Launched in July 2021, RDSS aims to make India’s power distribution companies financially sustainable and operationally efficient. The scheme targets reduction of Aggregate Technical and Commercial (AT&C) losses to 12–15 percent and elimination of the gap between the Average Cost of Supply (ACS) and the Average Revenue Realised (ARR) by 2024‑25.
Key components
- Prepaid smart metering: Installation of smart meters for consumers, distribution transformers and feeders helps detect theft, improve billing efficiency and provide consumers with real‑time consumption data.
- Infrastructure upgrades: Replacement of old bare conductors with low‑tension aerial bunched cables, conversion to high‑voltage distribution systems and augmentation of distribution transformers reduce losses and improve reliability.
- Performance‑linked funding: Financial assistance is released in tranches based on utilities meeting agreed milestones, encouraging accountability and reform.
- IT and automation: Strengthening of supervisory control and data acquisition (SCADA), distribution management systems and energy accounting ensures accurate measurement and planning.
Importance
- Financial health: Distribution companies are the weakest link in India’s power sector. RDSS seeks to reduce debt and improve cash flows through better collection efficiency and cost recovery.
- Consumer benefits: Smart meters allow prepaid billing and demand‑side management, empowering consumers to monitor and control consumption.
- Grid stability: Accurate data on demand and losses enables better planning and integration of renewable energy.
Source: The Hindu