Analyzing performance of Distribution System in Nepal and investigating possibility of reorganization of distribution centers

Abstract

This paper aims to analyze the performance of Distribution System in Nepal by investigating the operational efficiencies of the distribution centers (DCs) owned by Nepal Electricity Authority (NEA). NEA is the owner and operator of Integrated Nepal Power Systems (INPS) which, covers over 95% of the total electrified area of the country. Data Envelopment Analysis (DEA) technique is used for the purpose. Weight restriction DEA model is formulated, to carry out analysis, incorporating a wide range of inputs and outputs capturing the essence of electricity distribution process. Decision maker’s preferences regarding operation of the DCs have been considered while carrying out the analysis. A case study is provided for FY 2004/05 to assess the operational efficiency of the DCs owned by NEA and performance report for the same is prepared. Sensitivity analysis is carried out in order to check the robustness of the results as well as to identify the improvement directions for DCs. Based on the results of the sensitivity analysis; strengths and weaknesses of individual DCs are identified. The results are ultimately used to rank the DCs based on their average overall efficiency scores. The paper, also investigates a possibility of re-organization of existing DCs inside NEA’s distribution framework on the basis of geographical convenience. DEA based analysis is carried out in order to assess the suitability of such re-organization. Recommendations are made based on results of the analysis.