IEEE Technology and Society Magazine - June 2021 - 28

Commentary
These criticisms may be valid and need to be considered
while extending sharing economy principles
to the electricity sector. Mont et al. [46] opine that
research on the sharing economy in the developing
world has been inadequate and there is a need for
developing an understanding of the applicability of
sharing economy models on different domains and
required management structures.
Electric Power Sector in India
The electricity sector supply chain in India can
be divided into four parts: 1) generation; 2) transmission;
3) distribution; and 4) supply. The electricity
generated by the power plants is transmitted through
high voltage lines over long distances and then distributed
using low voltage lines. The per capita electricity
consumption is low in India. For instance, it
was 1010 kWh in 2014 when compared to 15544 kWh
of Canada and 3030 kwH of the world average [23].
It is estimated [57] that 50 million rural homes and
240 million do not have access to electricity. Only
1167 out of 650 000 villages have 100% household
connectivity [23]. The power distribution is also
inefficient. A study [51] showed that out of 168 locations,
52% experienced outages for more than 15 h.
The Indian power distribution sector suffers due to
lower investment, cross-subsidized tariffs, thefts, outdated
meters, and low collection efficiency [33].
The electricity sector in India can be divided
broadly into four stages [31] introductory stage (before
1956), nationalization stage (1956-1991), liberalization
stage (1991-2003), and growth stage (2003 onward).
Soon after independence, the Electricity Supply Act
of 1948 was passed, which brought all new power
generation, transmission, and distribution (T&D) facilities
under the state's preview [14]. By 1991, the State
Electricity Boards (SEBs) controlled over 70% of power
generation and all distribution. Even though there is
a tremendous increase in generation capacity; power
sector appears to be unviable in India. There are multiple
reasons-the introduction of agricultural subsidies
in the 1960s and 1970s, interference of government in
the day-to-day operations, unmetered connections,
and other reasons. This triggered the power sector
reforms in 1991, which provided incentives for independent
power producers. The Electricity Act 2003
attempted to bring inefficiency into the sector. The Act
clearly defines the role of a power generator, transmitter,
distributor, and trader. It mandates the establishment
of Central Electricity Authority, Central Electricity
28
Regulatory Commission, and State Regulatory Commissions
to assist the Indian electricity sector.
The Act allowed any company to establish,
operate, and maintain a generating station without
obtaining any license on complying with the technical
standards relating to connectivity with the grid.
The Act also allowed the private entrants to transmit,
distribute, and trade electricity after obtaining
a license. The private investment in the transmission
sector started in 2006, enabled by the competitive
bidding route. Although power generation and transmission
have seen private participation, the power
distribution is mostly state-owned and continues to
lose large sums of money. However, there is open
access to the T&D system where anyone having surplus
power can sell directly to the bulk consumers
after paying the applicable T&D charges. With the
advent of electricity exchanges in India in June 2008,
there is a trading of electricity [2]. Although open
access enabled large consumers to have access to
the T&D network to obtain electricity from the suppliers
directly, the success of open access for small
consumers has been minimal [57]. There is a need
for intermediaries to enable the participation of
small producers and consumers. To quote Ahmad
and Alam (2019) [2]:
" The individual participation of consumers at
the system level would not be possible for two main
reasons: 1) their individual capacity is below the
required minimum to participate in power system
markets and 2) the number of market participants
would be large and thus the volume of individual
transactions would be difficult to manage. In order
to facilitate the interactions between consumers
and the power grid, aggregating agent would be
required " (p.165).
Recent research [64] indicates that despite power
distribution reforms, the electricity boards and distribution
companies are under financial stress. Seven
reasons are being highlighted: T&D losses, subsidized
power supply to the agricultural sector, political interference,
waving off outstanding dues by/of electricity
boards, unplanned distribution infrastructure, and poor
management practices at the distribution companies.
Given this, whether sharing economy models
offer an alternative path to the electricity sector? The
sharing economy model for electricity sector might
result in better electricity supply at a lower cost,
improved reliability, and lower aggregate technical
and commercial (AT&C) losses. The role played by
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