US, India Launch Power Reform Initiatives

New Delhi. 21 November 2004.

The United States and India have taken several initiatives in the area of electricity power reforms. These included the launch of  a $30-million, five-year initiative to expand bilateral cooperation on electric power distribution reform in India. The project will be undertaken by the government of India and the US Agency for International Development (USAID) through the Distribution Reform, Upgrades and Management (DRUM) project. In his keynote address at the launch ceremony U.S. Ambassador David C. Mulford said: "We are partnering with the Government of India to demonstrate that commercially viable power utilities are key to meeting consumer needs and expanding supply." This project furthers the cooperative relationship that continues to evolve between the two democracies, he added.

Ministry of Power Secretary R.V. Shahi inaugurated the event, which included a signing ceremony between the US Department of Agriculture's Rural Utilities Service (RUS) and the Indian Rural Electrification Corporation (REC). As one element of the DRUM "beat," these American and Indian counterparts will examine the US experience in rural electrification and then tailor it to India's context. Demonstrating commercially viable and accountable distribution utilities is the focus of the work. USAID and its partners will improve power grid infrastructure, increase use of clean technologies, and support training for 25,000 utility personnel - from linemen to senior managers - on commercial, technical, safety and management aspects of electricity distribution. RUS was created in 1936 by American President Franklin D. Roosevelt to achieve "last mile" electrical connections across rural America. The new government-to-government partnership between RUS and India's REC will glean approaches from that US success story to light the way for millions of Indians.

DRUM will establish pilot electricity distribution projects in selected  areas to test out approaches; design alternative financing schemes to fund upgrades and expansion; train utility staff at all levels in engineering techniques and customer service to cut current losses in the system; and link water conservation with higher quality power services for agricultural and residential customers.

In another initiative, the U.S. Trade and Development Agency (USTDA) announced the award of a $414,000 grant to North Delhi Power Limited (NDPL) to partially fund technical assistance for the NDPL Distribution Automation project in India. Mr. John E. Peters, Counselor for Commercial Affairs at the US  Embassy in New Delhi, signed an agreement conferring the grant on behalf of the US government. Mr. Anil Kumar Sardana, Chief Executive Officer, signed on behalf of NDPL. After its recent privatisation, NDPL has developed plans to improve its power quality and reliability by adopting a distribution automation system and network reliability augmentation programme. The programme is designed to optimise the operations of NDPL's distribution systems, reduce power loss from overloaded lines, improve reliability, and reduce theft. Under the programme, NDPL plans to implement a variety of distribution automation systems, including supervisory control and data acquisition; geographical information; and distribution,  outage and trouble call management.

The USTDA-funded technical assistance will establish the requirements, detailed  functional specifications and budget necessary to implement the programme.  If implemented, the project could serve as a model for similar projects as India seeks to improve the delivery of sufficient and reliable electricity  to domestic and industrial users. NDPL selected KEMA, Inc., a US firm with  extensive experience working with distribution utilities in the United States  and overseas, to provide the technical assistance.

Apart from this, on 27 September, 2004, the USTDA also awarded a $70,000 grant to Bhoruka Power Corporation, Ltd. to partially fund a feasibility study on a biodiesel technology project in India.

Currently, the majority of commercial vehicles in India run on petroleum diesel fuel, a significant source of air pollution in India. Bhoruka Power is interested in producing biodiesel fue. Biodiesel is a non-toxic, biodegradable alternative to petroleum diesel that substantially reduces the quantity and toxicity of diesel engine exhaust. Biodiesel can also be used as a fuel source in power generation. Biodiesel Industries, Inc., a small US company based in Santa Barbara, California, has developed a technology for producing biodiesel using small modular plants called modular production units (MPUs). Bhoruka Power has expressed interest in this technology and has identified a rural village near Bangalore, India as a suitable location for a pilot biodiesel production facility and rural electrification project.

The USTDA grant will fund a study analysing the technical, economic and financial feasibility of utilising Biodiesel Industry's MPUs for this pilot project. The study will also examine plans to replicate the pilot project in other rural villages and to produce biodiesel as an alternative transportation  fuel in India.