Interview with Lalit Jalan, CEO Reliance Energy



What is the structure of Reliance Energy and Reliance Infrastructure?

Reliance Infrastructure Ltd is not only India’s largest private sector enterprise in power utility but also the largest private sector player in many other infrastructure sectors of India. In the power sector the company is involved in generation, transmission, distribution and trading of electricity and constructing power plants as EPC partners. In the infrastructure space the company is focused on roads, urban infrastructure and real estate.

What is your personal background?

I joined Reliance Industries Limited as Chief Executive Officer, Polypropylene Business in 1995 as the youngest CEO at Reliance. I was the Executive Director of Reliance Infrastructure prior to my appointment to the position of full-time director of the company on April 25, 2007. I am the chairman of BSES Rajdhani Power Limited and BSES Yamuna Power Limited. I also sit on the boards of Reliance Power Transmission Limited and Reliance Digital World Limited. I am responsible for the entire distribution, transmission, trading and shared services of the company. I did my MBA in Finance from the prestigious Wharton School, University of Pennsylvania and MS in Computer Science from Moore School, University of Pennsylvania. I did my BTech from the Indian Institute of Technology, Kanpur.

What role does Reliance Energy play today and what is your vision?

Reliance Energy used to be BSES and was acquired in 2003 by Reliance, starting with Mumbai customers as well as a power plant for the Maharashtra region. It has been a long journey. Today Reliance Energy distributes more than 28 billion units of electricity to cover 25 million consumers across different parts of the country, including Mumbai and Delhi. Reliance Energy-owned Power Plants generate 941 MW of electricity, from power stations located in Maharashtra, Andhra Pradesh, Kerala, Karnataka and Goa. Reliance Energy is also executing the first 100% private sector power transmission project for a western grid with an investment worth US$0.5 billion. Reliance Energy is also a leading EPC player with an order book of about US$2 billion worth of contracts in the power sector.

I want the consulting to SEBs to grow at a higher pace and also see Reliance as the largest transport company around, whilst remaining within the top three trading companies in India and number one player in executing EPC projects.

What are the major challenges?

The challenges are specific depending on the vertical. From my point of view, within generation the major obstacle is and will be land clearance and ongoing supply of fuel. In terms of distribution, the biggest challenge is that 90% of all Indian utilities are still state-owned, which makes them less flexible in terms of competitiveness and technology upgrades.

My vision is to move more utilities to the private sector in order to achieve realistic targets as well as work more closely with government and planning bodies. Within the transmission vertical, privatisation is equally applicable and an increased number of privatised companies would allow them to be more competitive in the future and ensure supply security for an evergrowing Indian economy.

What metering projects are under way?

Metering has been transformed from ground zero (using static meters) to state of the art meters today. Reliance undertook a lot of research into global case studies, whilst keeping in mind unique Indian challenges (such as tampering and revenue protection). They solved the major problems by designing their own meter according to Reliance’s specifications and are satisfied with the product, which I would describe as a ‘future-proof’ state of the art AMR meter.

Within Delhi, Reliance has implemented optical meter reading, AMR for all high-end customers. We are using our own solution for meter reading as well as our own Reliance specific software as third-party software product cost is too high. Load information is online 24/7. These solutions are currently implemented for Reliance companies, but we plan to market them to SEBs within India and in the medium-term to utilities worldwide.

Another project worth mentioning is how we connect a smart meter to a ‘smart substation’, which not only provides online information of various power-related parameters of a distribution transformer, but also includes data such as humidity level, oil level, etc of DTR. This exercise is currently undergoing a pilot study.

In terms of finding solutions for the grid, all technologies are automated facilitating ABT (availability-based tariff); and SEBs have started using Reliance specifications for vendor requirements. Our SCADA site is world-class with fully automated Mumbai-based control centres.

What CRM and R&D projects are under way?

Reliance doesn’t see their energy customer as an ‘electricity customer’ but rather as a customer that requires and gets world-class customer service, including a 24/7 multilingual bill in a language of their choice and other personalised billing services.

They are proud of their excellent recovery team, using very good software products. In terms of non-payment, Reliance can disconnect and ultimately remove customer meters. Regarding theft, Reliance uses energy accounting to help discover theft at any time. They also work with task teams, cooperating closely with the police to enforce this policy. Tampering led to several power-theft arrests with US$2.042 collections from energy theft alone . We employ 15 enforcement teams and while one does not expect the major hotel chains or big paper mills as well as high-income groups to steal electricity, this does occur to a great extent.

In terms of R&D, we have our own laboratory. This is accredited by the government of India, with a metering team in Mumbai and Delhi, a team of business analysts to catch tampering and an R&D department that is working on new design requirements due to the customer getting smarter and smarter.

What is your vision for the future?

To be one of the two largest power producers, the largest distribution company and the largest private electricity trader and EPC in India, whilst also playing an active role in the privatisation process.