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Article
Publication date: 30 July 2021

Amit Prakash Jha and Sanjay Kumar Singh

The Indian power sector is dominated by coal. Environmental awareness and advances in techno-economic front have led to a slow but steady shift towards greener alternatives. The…

Abstract

Purpose

The Indian power sector is dominated by coal. Environmental awareness and advances in techno-economic front have led to a slow but steady shift towards greener alternatives. The distributions of both fossil fuel resources and renewable energy potential are not uniform across the states. Paper attempts to answer how the states are performing in the sector and how the renewable energy and conventional resources are affecting the dynamics.

Design/methodology/approach

The authors employ a two-stage data envelopment analysis (DEA) to rank the performance of Indian states in the power sector. Multi-stage analysis opens up the DEA black-box through disaggregating power sector in two logical sub-sectors. The performance is evaluated from the point-of-view of policy formulating and implementing agencies. Further, an econometric analysis using seemingly unrelated regression equations (SURE) is conducted to estimate the determinants of total and industrial per-capita electricity consumption.

Findings

Efficiency scores obtained from the first phase of analysis happens to be a significant explanatory variable for power consumption. The growth in electricity consumption, which is necessary for economic wellbeing, is positively affected by both renewable and non-renewable sources; but conventional sources have a larger impact on per-capita consumption. Yet, the share of renewables in the energy mix has positive elasticity. Hence, the findings are encouraging, because development in storage technologies, falling costs and policy interventions are poised to give further impetus to renewable sources.

Originality/value

The study is one of the very few where entire spectrum of the Indian power sector is evaluated from efficiency perspective. Further, the second phase analysis gives additional relevant insights on the sector.

Details

Benchmarking: An International Journal, vol. 29 no. 4
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 30 July 2020

Pavan Khetrapal

The objective of the present study is to evaluate and analyse the performance of Indian electricity distribution utilities post the implementation of landmark Electricity Act 2003.

Abstract

Purpose

The objective of the present study is to evaluate and analyse the performance of Indian electricity distribution utilities post the implementation of landmark Electricity Act 2003.

Design/methodology/approach

Stochastic frontier analysis (SFA) that incorporates exogenous influences on operational efficiency is adopted in the present study. Specifically, a stochastic frontier production function model with a technical inefficiency effects model (Battese and Coelli, 1995) is chosen as a preferred model. In this model, the function that explains the inefficiency scores is estimated in a single stage with the production technology. This avoids the problem of inconsistency which is possible in the two-stage approach.

Findings

The sample involved 52 Indian electricity distribution utilities for seven-year period from 2006 to 2013. Major findings of SFA show that Indian electricity distribution utilities post the implementation of Electricity Act (2003) had, on average, experienced efficiency improvement during the observed period. The overall mean technical effciency score is estimated as 78.5% which indicates that there exist wide scope for effciency improvement in the sector. Further, the empirical findings also indicate that publicly owned distribution utilities obtain average technical efficiencies of 71.3%, which is lower than privately owned distribution utilities, which achieve average technical efficiencies of 85.7%.

Research limitations/implications

Power supply quality indicators such as SAIFI, SAIDI, CAIFI, etc. and unobserved heterogeneity also influence the efficiency analysis of electricity distribution utilities. Hence, these parameters as explanatory variables can be incorporated in the future work.

Practical implications

The results obtained from this empirical study would likely be helpful for utility managers and policymakers to know how well they are performing, and how a better corporate strategy a particular utility can formulate to improve its operational efficiency and also its position in the marketplace.

Originality/value

This paper is amongst the first significant attempts that implement SFA approach to the panel dataset over a longer period of time – 2006 to 2013, so, as to evaluate and analyse the operational efficiency of Indian electricity distribution utilities in a single framework after the enactment of Electricity Act (2003). Unlike previous studies, this study investigates the degree to which various exogenous (or environmental) factors influence efficiency levels in these utilities.

Details

Journal of Advances in Management Research, vol. 17 no. 5
Type: Research Article
ISSN: 0972-7981

Keywords

Article
Publication date: 30 September 2014

Suchismita Satapathy

– The purpose of this paper is to develop a new model – namely service quality enhancement – in the electricity utility sector of south India and to test this model's fitness.

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Abstract

Purpose

The purpose of this paper is to develop a new model – namely service quality enhancement – in the electricity utility sector of south India and to test this model's fitness.

Design/methodology/approach

Effective customer satisfaction investigation is a very important precondition for a power supply enterprise to win in the market competition. The problems that need to be solved for the power supply enterprise are how to use advanced and practiced methods to evaluate electricity customer satisfaction, and how to use results of the evaluation to improve their service. Planning and operating modern electric power systems involves several interlinked and complex tasks. In this paper, structural equation modeling (SEM) is applied to the electricity utility service model to verify service quality satisfaction. To determine the scope of the electricity industry and its relationship with overall service quality, a questionnaire-based survey was conducted and a standard questionnaire was designed for all customers in different groups of stakeholders (i.e. domestic, industrial, agricultural, public organization). To investigate the respondents’ perceptions regarding the service quality of the electricity utility industry, 200 questionnaires were sent, and from these 169 responses were collected, consisting of 53 responses from the domestic sector, 43 industrial, 30 agricultural, and the remaining 43 from public organization consumers. Then a model was constructed using SEM and tested by Amos 18 to verify the casual relationship between the measured dimensions and the electricity service quality.

Findings

The results indicate that electricity service has a direct relationship with the dimensions of reliability, tangibility, empathy responsiveness, assurance, security and stability.

Originality/value

In this era electricity is the vital need, but due to regular interruptions in the electricity service, customer dissatisfaction is the measured issue. At the current time, the Indian electricity utility sector enjoys a monopolistic business. Therefore, there is hardly any effort to improve the service quality in this sector due to a lack of administrative pressure and reformation measures. Indian electricity consumers face many quality-related problems as far as the distribution of electricity is concerned. In order to assess service quality in electricity distribution, a survey has been conducted in this work to extract quality constructs from a customer's perspective. One of the contributions of this work is that on the basis of results obtained from factor analysis of the survey data, an instrument has been proposed for the first time in the Indian context, consisting of seven dimensions (reliability, tangibility, empathy, responsiveness, assurance, security and stability). This instrument would help to measure the service quality of the Indian electricity utility sectors, and it provides insights for managers and administrators to set a service standard to fill the service gap. SEM is a tool is used for confirmatory and exploratory factor analysis. It is used to test and validate standard instruments. Through confirmatory and exploratory factor analysis using SEM, the proposed service quality model has been tested and validated for practical acceptance in Indian electricity industry.

Details

Benchmarking: An International Journal, vol. 21 no. 6
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 19 November 2018

Pavan Khetrapal

The purpose of this paper is to evaluate the utility-level productivity changes in Indian electricity sector during a period that witnessed structural reforms through several…

Abstract

Purpose

The purpose of this paper is to evaluate the utility-level productivity changes in Indian electricity sector during a period that witnessed structural reforms through several landmark regulatory changes.

Design/methodology/approach

A transformed fixed-effect stochastic frontier panel approach accounting for time-invariant unobserved heterogeneity is employed to evaluate the productivity changes, and the inefficiency level in 98 utilities spanning over the years 2001–2010. A flexible translog production model is modeled and estimated, and decomposition of productivity into components of changes in efficiency, scale technology and price effect is computed.

Findings

The empirical findings obtained from the present study suggest that the utility-level productivity in Indian electricity sector has generally declined during the observed period of 2001–2010 specifically after the implementation of Electricity Act 2003. Also, it is estimated that the state-level un-bundling of the electricity sector is not significantly associated with utility-level efficiency change. Furthermore, efficiency improvements attributable to increased competition are observed only in the case of smaller gas-based generating utilities.

Originality/value

Earlier studies on the productivity evaluation of Indian electricity industry have applied the non-parametric data envelopment analysis approach, which has several limitations. The novelty of the paper lies in the fact that this paper is one of the first attempts that implement transformed fixed-effect stochastic frontier panel approach and thus disentangle unobserved heterogeneity from inefficiency. Furthermore, it is the only paper that analyzes 98 utilities (51 generating utilities, 38 transmission and distribution licensees and 9 vertically integrated utilities) in a single framework during the period 2001–2010.

Details

International Journal of Productivity and Performance Management, vol. 67 no. 9
Type: Research Article
ISSN: 1741-0401

Keywords

Case study
Publication date: 6 December 2023

Sobhesh Kumar Agarwalla and Ajay Pandey

This case describes the growth of ReNew Power during its first decade of operation. Sumant Sinha, a first-generation entrepreneur and former banker, founded the company, which…

Abstract

This case describes the growth of ReNew Power during its first decade of operation. Sumant Sinha, a first-generation entrepreneur and former banker, founded the company, which grew from a modest generator-cum-developer of wind energy-based electricity to one of India's largest companies in the renewable energy sector. With the entry of large, well-funded players such as Tata Power and Adani Green into the Indian renewable sector by the end of 2020, Sinha had to make a strategic decision: should ReNew continue to organically scale up its presence in an increasingly competitive yet expanding Indian renewable energy sector, should it diversify geographically, or should it pursue emerging opportunities for vertical or horizontal integration within the sector? The case provides an opportunity to discuss how alternative business models and competitive scenarios may facilitate or inhibit the growth of a player in the renewable energy sector.

Details

Indian Institute of Management Ahmedabad, vol. no.
Type: Case Study
ISSN: 2633-3260
Published by: Indian Institute of Management Ahmedabad

Keywords

Article
Publication date: 6 May 2020

Deepak Sangroya, Gaurav Kabra, Yatish Joshi and Mohit Yadav

This study examines various aspects of green energy management operations in India and reports the current state, potential avenues and barriers for green energy management.

Abstract

Purpose

This study examines various aspects of green energy management operations in India and reports the current state, potential avenues and barriers for green energy management.

Design/methodology/approach

This study performs an extensive literature review and covers the several aspects of green energy management operations.

Findings

The findings report the current state of various aspects of green energy management operations such as: procurement, manufacturing and distribution and provides the viable business models. It further explains the various facilitators and barriers of green energy management and reports the opportunities and challenges that exist in developing and managing green energy supply chain.

Originality/value

The study is pioneer in providing a comprehensive view of developing and managing green energy operations in India. The study is useful to various organisations on drafting strategies to effectively adopt and manage green energy. The study is also useful in policy formulation for promoting green energy use. This article also set as a base for future researchers working in the area of green energy.

Details

Management of Environmental Quality: An International Journal, vol. 31 no. 5
Type: Research Article
ISSN: 1477-7835

Keywords

Article
Publication date: 13 January 2022

Mrigakshi Das

Management of power distribution companies (discoms) in India has been historically criticized on the ground of inefficient management. Inefficiency in operations triggered…

Abstract

Purpose

Management of power distribution companies (discoms) in India has been historically criticized on the ground of inefficient management. Inefficiency in operations triggered management by private franchisees for promotion of managerial and technical expertise. However, franchise contracts have achieved mixed outcomes despite the business model being a decade old in the Indian power distribution sector. Therefore, this study sheds light on the drivers of discoms (principal) with the franchisees (agent) for the achievement of the common performance goals, highlighting the agency issues at multiple levels across the organizational hierarchies. The study seeks to acknowledge the commonalities and differences between and across varying levels.

Design/methodology/approach

A qualitative embedded single case study was conducted in an Indian state, namely Odisha. The study was built on archival analysis, personal observations and semi-structured interviews with the franchisors and franchisee officials across the organization's hierarchical levels. A conceptual model based on the review of prior literature formed the set of coding and presentation for the study.

Findings

The study provides insights on factors that play a role in effective power distribution management, operational efficiency and improved financial performance through the partnership of the principal and the agent.

Research limitations/implications

The study is predominantly dependent upon interviews. This paved the way for the limitation of human biases. Additionally, deep insights were drawn from a single case study of a discom's decision to hire franchisees. However, this was at the cost of the number of organizations interviewed. The findings of the study could be built across other areas or nations.

Originality/value

There is adequate literature on franchising as a business model. However, literature is lacking in highlighting the commonalities and differences between different contracting parties and their impact on the performance of the contract. Additionally, there is a dearth of literature on franchising in the power distribution sector. Therefore, studying the model from multiple perspectives would contribute to the literature on the power sector and franchising.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 8 September 2021

Mrigakshi Das

The Indian power distribution companies are increasingly recognizing franchising for reviving their high loss-making rural pockets. The motivation for franchising has been a…

Abstract

Purpose

The Indian power distribution companies are increasingly recognizing franchising for reviving their high loss-making rural pockets. The motivation for franchising has been a reduction of the franchisor's resource scarcity by bringing in operational efficiency and improved service quality to end consumers. However, there is a dearth of evidence on the influence of the franchisee's operations in addressing the resource scarcity of franchisors in predominantly rural areas. This study contributes towards filling the research gap.

Design/methodology/approach

A qualitative embedded multiple case study was conducted. The cases comprised two rural franchisees operating towards attaining the common goal. The study was built on archival analysis, personal observations and semi-structured interviews with the franchisors and franchisee officials across the organization's hierarchical levels. A conceptual model based on the review of prior literature formed the initial set of coding for the study. The data were presented based on within-case and across-case analysis.

Findings

The analysis revealed that the contract design impacts the requisite operational efficiency achievement. This variation could be elaborated by factors, such as system adaptation across organizational hierarchy, autonomy and independence, review and feedback systems, monitoring, a professional's attitude, bureaucracy, adaption with the local areas, risk sharing, incentives and compensation structure.

Research limitations/implications

The study findings could be generalized to the extent of similar socio-economic conditions, prevailing governance mechanisms and law and orders. Additionally, since the law does not mandate the regulatory commissions to scrutinize the performance of the franchisees, the study was built on data shared by the franchisees and the discom. Further, this study considered the performance of only two performing franchisees. Matching these actualities with the discoveries of this study remains a continuing project as participation of private players is increasingly being recognized. Therefore, the insights drawn from this study could be used to improve the franchise model and can be scaled up across the nation, regions and sectors.

Originality/value

There is a dearth of literature on franchising in electricity distribution. This study is one of the first studies on studying the franchise system in the electricity distribution sector through the application of a well-accepted management theory.

Details

Journal of Economic and Administrative Sciences, vol. 39 no. 4
Type: Research Article
ISSN: 1026-4116

Keywords

Article
Publication date: 1 April 2019

Anindita Chakrabarti and Ahindra Chakrabarti

The purpose of this paper is to determine the factors affecting the capital structure of companies engaged in the Indian energy sector.

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Abstract

Purpose

The purpose of this paper is to determine the factors affecting the capital structure of companies engaged in the Indian energy sector.

Design/methodology/approach

Capital structure theories and empirical literature have been reviewed to formulate propositions concerning the factors/variables determining the capital structure of Indian energy companies. The examination is done using panel data techniques for the sample 141 companies operating in the Indian energy sector.

Findings

The results show firms’ age, asset turnover ratio, liquidity and firms’ size to be significant determinants of capital structure for the Indian energy companies, while profitability, debt service capacity, sales growth, non-debt tax shield and tangibility ratio to be insignificant determinants. Historically, profitability has shared a significantly negative relationship with debt ratio; however, the relation here is not significant.

Research limitations/implications

The focus of the current study is on Indian energy sector, the results obtained will not be applicable for other sectors.

Originality/value

The current research gives an insight into the determinants of capital structure of the companies engaged in the Indian energy sector, which are mostly overlooked due to the laws, policies and regulations governing the sector as a whole.

Details

International Journal of Energy Sector Management, vol. 13 no. 1
Type: Research Article
ISSN: 1750-6220

Keywords

Case study
Publication date: 26 December 2006

Ajay Pandey and Sebastian Morris

The Indian electricity sector was opened to the private sector under the IPP policy. The NTPC, India's largest and perhaps most efficient generator had to respond to the changing…

Abstract

The Indian electricity sector was opened to the private sector under the IPP policy. The NTPC, India's largest and perhaps most efficient generator had to respond to the changing scenario. It set out to set up the Simhadri project in Andhra Pradesh, going beyond to original mandate. The IPP policy, its perversities, the background of the power sector, the problems there in and the response of NTPC are discussed. Case (B) discusses the issues related to Project Planning and Implementation.

Details

Indian Institute of Management Ahmedabad, vol. no.
Type: Case Study
ISSN: 2633-3260
Published by: Indian Institute of Management Ahmedabad

Keywords

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