Torrent Power has witnessed significantly lower losses in its distribution franchisee areas during H1 (April to September) of FY23.
According to an an investor presentation filed on stock exchanges, Torrent Power has seen reduction in losses in each of its three franchisee areas – Bhiwandi (Maharashtra), Agra (Uttar Pradesh) and Shil-Mumbra-Kalwa (Maharashtra) – during the first half (H1: April to September) of FY23.
Spread over an area of 65 sqkm, SMK had a peak power demand of 132 MVA in FY22. Torrent Power holds the distribution franchisee licence for this area for a 20-year period ending February 29, 2040. The licence was won under a competitive bidding mechanism.
In FY17, AT&C losses in the SMK area were estimated at 47 per cent, and these are project to reduce to 12 per cent by around 2035. Torrent Power has outlined capital expenditure of Rs.300 crore in the SMK area over the 20-year licence period, with Rs.150 crore to be invested in the first five years.
In fact, the overall franchised distribution business made a positive impact on Torrent Power’s total consolidated income (TCI). In Q2 of FY23, the distribution business contributed Rs.128 crore more than it did in Q2 of FY22, to the total income of Torrent Power during the period.
Reduction in T&D losses was derived from “continuous and sustained focus on loss reduction activities”, the presentation said.
Electricity demand in the franchised area also showed an uptick during Q2 of FY23. In the said period, Bhiwandi showed the highest year-on-year growth in electricity purchase, at 12.1 per cent, followed by Agra with 4.5 per cent and SMK with 3.8 per cent. [It may be noted that the investor presentation has not given electricity purchase in franchised areas for the April-September (H1) period.]
Also read: Torrent Power Expects To Start Operations In Dholera This Year
Licensed distribution
Apart from the distribution franchisee business, Torrent Power is also a distribution licensee in four areas in Gujarat – Ahmedabad, Surat, Dahej and Dholera SIR – and in the Union territory of Dadra & Nagar Haveli and Daman & Diu (DNHDD).
Prospects
Torrent Power sees opportunities for private sector in the power distribution area considering the endemic inefficiencies of the public power distribution sector. It also feels that successful privatization of utilities (discoms) in UTs will spur even states to follow the path.
Featured photograph (source: finpedia.co) shows a substation in Torrent Power’s Bhiwandi distribution area in Maharashtra.