Spotlight
New Delhi, 3 July 2021
‘One Nation, One Grid’
EXPEDITE POWER REFORMS
By Dhurjati Mukherjee
The various lockdowns
in several States due to the Covid-19 pandemic, fortunately did not impact the
manufacturing and services sectors as these were more or less operational,
resulting in sufficient power demand. In particular over the decades the power
sector has undergone a significant transformation in terms of supply, furl mix,
energy demand and market operations. The power industry, in fact, has
always been a key driver for industrial development, infrastructure growth and
social welfare.
India is the third
largest power generating country in the world with total installed capacity
increasing at a remarkable pace of around 8 per cent during the fiscal period
2010 to 2020. The installed capacity is 375.32 GW, transforming from a power
deficit to a surplus power country.
However, reforms in
the power sector are an on-going process but do require to be are taken up expeditiously.
Measures such as ‘One Nation, One Grid’ and creating green infrastructure along
with affordable housing can transform lives. A discussion paper on
‘Re-Designing Real Time Electricity Markets (RTM) in India’ was proposed by the
Central Electricity Regulatory Commission (CERC) way back in 2018, which
invited comments and suggestions. In response 21 stakeholders including power
exchanges, trading licenses, IPPs, state utilities, state LDCs and consultants
submitted their views. There are plans of retiring old and inefficient plants
and addressing low utilisation of gas plant capacity due to paucity of natural
gas.
As is well known,
DISCOMs are beset with huge debt burdens, which may be over Rs 80,000 crore or
even more. The Union Power ministry has thus rightly proposed special credit
scheme for these agencies to pay back debt burden to generators on easy terms.
India has unique
characteristics of variation in demand pattern in the different regions due to
its climatic and socio-cultural diversity. This diversity in the demand pattern
can be utilised effectively with national level organised market given the fact
that electricity is more difficult to store. With national level organised
market, the possibility of resource optimisation across regions to take
advantage of cheap resources would increase significantly, thereby benefitting
the masses.
The announcement of
pursuing ‘One Nation, One Grid’ concept has rightly been welcomed by experts
but when it would facilitate the government’s goal of power for all remains a
big question. However, the reforms initiated in driving structural reforms in
the power sector are expected to propel it towards the path of growth.
India had initially
set a 2017 deadline for thermal power plant to install flue gas de-sulphurisation
units that cut emissions of sulphur dioxide. But that was postponed to varying
deadlines for different regions in 2022. The new order of April from the Union
Environment Ministry stated that plants near populous regions and the capital
will have to comply by 2022, while utilities in less polluting areas have up to
2025 to comply. As is well known, Indian cities have some of the world’s most
polluted air. Thermal power companies, which produce three-fourth of the
country’s electricity, account for some 80 per cent of its industrial emissions
of particulate matter, sulphur and nitrous oxides, which cause lung diseases,
acid rain and smog.
Recall, the Union Government
has launched various schemes for electrification of every household, one of these
being the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) in 2005 for
attaining National Common Minimum Programme (NCMP) goal of providing access to
electricity to all households in five years.
Towards this end, the
rapid growth of solar energy has been made possible with the Jawaharlal Nehru
National Solar Mission (JNNSM), launched to encourage environment-friendly
development while tackling India’s energy security issue. This also mark
India’s contribution to the global initiative to confront problems of climate
change. With the motive of transparency and competition in trading of power in
2008, the Indian Energy Exchange (IEX) and Power Exchange India Limited (PXIL) were
established.
Besides, the increase
in renewable energy has been a significant development in the power sector,
capturing 23.51 per cent in the last financial year. The government’s ambitious
target of installing 175 GW of renewable energy, specially coupled with the
establishment of solar parks and the solar city programme propelled the growth
of clean energy in India. Furthermore, the financial incentives offered by the
government are likely to encourage State-owned operators to invest in clean
energy parks and Ultra Mega Renewable Energy Power Parks (UMREPPs).
Lately, in the 2021 Budget,
the Union government announced support to various clean energy programmes
across various cities and launch ‘Hydrogen Energy Mission’ this year to
generate hydrogen from green power sources. Though India has not
committed to ‘net zero emission plan’, it is still working on a sustainable
development agenda to address climate goals while delivering its commitment to
energy access for all.
Moreover to achieve
target of 15 per cent of natural gas in India’s energy basket by 2030, the
government plans to expand the gas transmission network and increasing the
compressed natural gas (CNG) stations count. Further, there is a strong push
for natural gas sector reforms. There is lot of initiative by the
government to change the energy mix to control emissions as air pollution has
emerged a major problem in most metros.
Slowly but steadily,
there is lower utilisation of coal, which is presently around 50 per cent. On
the other hand, gas-fired generation improved on the back of lower LNG prices
and could find off-takers. In 2021, the Plant Load Factor (PLF) of coal plants
is expected to improve to around 60 per cent with this reaching 70 per cent
within a year or so.
The demand curve of
India’s electricity has been largely met even after significantelectrification
of rural areas. The process of such electrification has been moving on a
sustained manner though more needs to be done to ensure that at least power is
available at least 8 to 10 hours a day in the backward regions of the country.
As is generally
agreed, power sector is key to rapid industrial growth of the country and it
has be ensured that in potential areas there has to be 24x7 supply of
electricity. With more and more automation and mechanisation of operation, the
need for power has been increasing at a steady pace. But it is reassuring that
most State governments are in a position to cater to the increasing demand in
the coming years.
It is also necessary
to attract the private sector for which more reforms are possibly necessary,
specially to ensure that foreign players invest with modern and innovative
technological solutions to bring about more efficiency in the power sector.
There are expectations that there would be a dramatic turnaround in the power
sector, specially in the realm of technology, power trading, investments in
infrastructure and also digital transformation. ---INFA
(Copyright, India
News & Feature Alliance)
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