Reports

Karnataka’s Energy Sector: Advancing Second Generation Distribution Reforms

The energy sector in Karnataka is under transformation. The rapid growth in the deployment of clean renewables and the rising prevalence of grid-connected distributed generation, are features that point to the future. The disruption in the operations of Electricity Supply Companies (ESCOMS), from the rapid increase in Renewable Energy (RE), advance of Open Access (OA), and the rise in group-captive generation must compel the state to move decisively forward with bold and innovative interventions. The paradigm shift that the state must signal is to treat the market as a Producer-Consumer (Prosumer) and strengthen institutionalised Power trading operations – buying and selling energy – based on market intervention mechanisms. Increased flexibility in generation will be required - both physical (flexible generation, and demand response) and institutional (real-time market operations).

This report is the outcome of a study mandated by the Government of Karnataka with three terms of reference:

• Examine administrative restructuring and consider the idea of establishing a Holding Company
• Asset Monetisation of the assets of Power Utilities
• Suggest measures to improve the financial sustainability of the Electricity Supply Companies.