Sikkim Becomes 22nd State to Join UDAY

Sikkim would derive an Overall Net Benefit of approximately Rs. 207 crores through UDAY by way of cheaper funds, reduction in AT&C and transmission losses, interventions in energy efficiency, etc. during the period of turnaround.

The Government of India and the State of Sikkim has signed a Memorandum of Understanding (MOU) under the Scheme Ujwal DISCOM Assurance Yojana (UDAY) for operational improvement of the State’s Power Distribution Department. With the signing of MoU, the total number of States covered under UDAY has reached twenty-two. Sikkim would derive an Overall Net Benefit of approximately Rs. 207 crores through UDAY by way of cheaper funds, reduction in AT&C and transmission losses, interventions in energy efficiency, etc. during the period of turnaround.

The MoU paves way for improving operational efficiency of the Power Distribution department of the State. AT&C losses and transmission losses would be brought down through compulsory distribution transformer metering, consumer indexing & GIS mapping of losses, upgrade/change transformers, meters etc., smart metering of high-end consumers, feeder audit etc., besides eliminating the gap between cost of supply of power and realisation. The reduction in AT&C losses and transmission losses to 15% and 3.50% respectively is likely to bring additional revenue of around Rs. 179 crores.

Demand Side interventions in UDAY such as usage of energy-efficient LED bulbs, agricultural pumps, fans & air-conditioners and efficient industrial equipment through PAT (Perform, Achieve, and Trade) would help in reducing peak load, flatten load curve and thus help in reducing energy consumption in the State of Sikkim. The gain is expected to be around Rs.25 crores.

While efforts will be made by the Power Distribution Department of the State to improve their operational efficiency, and thereby reduce the cost of supply of power, the Central government would also provide incentives to the State Government for improving Power infrastructure in the State and for further lowering the cost of power. The Central schemes such as DDUGJY, IPDS, Power Sector Development Fund (PSDF) or such other schemes of Ministry of Power and Ministry of New & Renewable Energy are already providing funds for improving Power Infrastructure in the State and additional/priority funding would be considered under these schemes, if the State/DISCOMs meet the operational milestones outlined in the scheme. Further, with improved efficiency, the State Power department would be in a better position to borrow funds at cheaper rates for Power infrastructure development/improvement in the State.

The ultimate benefit of signing the MOU would go to the people of Sikkim. Reduced levels of transmission and AT&C losses would mean lesser cost per unit of electricity to consumers. Further, financially and operationally healthy State Power Distribution department would be in a position to supply more power.

In January this year Government signed a MoU with Tamil Nadu and the State DISCOM TANGEDCO under the UDAY for operational and financial turnaround of the DISCOM. Tamil Nadu becomes 21st State to join UDAY.