The article puts forward four-point agenda the power sector expects from new Govt
May 16th 2014 became a milestone in the democratic history of India. After 30 years of coalition ruling, the country has elected its new government with a clear mandate. Now expectations are exceptionally high from the new government with regards to reforms and governance.
According to Vineet Mittal, Vice Chairman, Welspun Renewables Energy Pvt. Ltd., “Stable government with clear majority will boost confidence of the industry – both at home and for the global and foreign investors. This will help India regain its status in the world affairs and win back its rightful position.”We agree with Mr Mittal’s take on stable government; however each sector has different setbacks and needs. With the new government coming in expectations are high that it will act speedily to put each sector back on track.
Power sector is the driving force of any country and helps the country to develop economically. Unfortunately, for the last few years, power sector in India has been dealing with number of issues. From lack of funding, delays in clearances to scarcity of fuel, issues kept mounting without any suitable solutions. Here, experts from power sector put forward agendas they want the new govt to fulfil. Policy pushElectricity Act 2003 was formed to reduce the losses in power sector as well as lessen the subsidy burden for government. However, due to faulty implementation of policies, the sector further deteriorated with collapsing funding from banks. Hence, it is crucial that India creates a policy environment, which is supportive of bringing in long-term, firm and strategic investment to the country. New government should review power sector reforms and make necessary amendments wherever needed.
Anil Sardana, Managing Director, Tata Power opines, “To address several challenges that continue to affect the value chain of power generation, transmission and distribution; the need of the hour is to develop a comprehensive national energy security policy which takes into account requirements of all states and UTs.”
The umbrella policy can provide a framework to resolve issues related to pending fuel supply agreements for long-term fuel linkages both in India and overseas. “The Indian government would do well to enter into partnerships with fuel rich countries to meet its long-term energy needs. This will act as an effective hedge against fluctuating global fuel prices. In parallel, regulatory reforms need to be undertaken to make the domestic coal industry more competitive,” Mr Sardana observed.
Pritpal Singh Bami, President, India Energy Forum says, “There should be integrated approach by central and state governments for faster approval, clearances, speedy land acquisitions and also R&R policies. Coal Regulatory Authority Bill is already lying in the parliament, it should be cleared. These are some of the issues new govt should take up. The mandate is that power should be supplied to section of society providing quality and universal service obligation.” Mr Bami is also the former Chairman of NTPC.
Anil Chaudhry, Country President and Managing Director, Schneider Electric India says, “We look forward to policies that will bolster infrastructure development in India, acting as an engine of growth, creating thousands of new jobs and pushing up GDP growth, while lowering poverty levels and bringing alive our collective dream of inclusive growth.”
Availability of fuelFuels contribute majorly in India’s energy sector. Scarcity of fuel had an adverse impact on power sector. Coal shortage within India has more than doubled over the last 5 years. Coal India, which contributes more than 80 per cent of India’s domestic coal production, has been unable to meet the required demand making the situation worse.
Few initiatives had been taken to improve the fuel supply situation, however much more needs to be done to reverse the current deficit scenario. “Proper planning for generation of fuel should be given priority. Restructuring of Coal India should be done. Major recommendation is there should be an energy ministry in charge of power, coal and renewable energy,” Mr Bami suggests.
Prakash Kumar Chandraker, Managing Director and Vice President – Energy Business, Schneider Electric India says, “There is an urgent need to take measures for resolving issues related to fuel availability and cost as well as efficient operation of plants to boost the supply side of power sector. To bring back confidence in the sector it is important to have sustained commitment on competitive bidding revival.”
Power distributionA big challenge that Indian power sector is facing is transmission and distribution (T&D) losses. Distribution is a key segment in country’s electricity supply chain; however it is repeatedly proving to be the weakest link in the power value chain. T&D losses in India are among the highest in the world.
The Accelerated Power Development and Reforms Programme (APDRP) was launched in March 2003 with the main objective to reduce T&D losses. However its under-achievement in reducing the losses made it necessary for the government to reintroduce the programme in the 12th Plan period. Financial restructuring, technology development and larger investment required to bring down the losses and also improve the quality of power supply.
“Distribution continues to be the weakest with one of the highest aggregate technical and commercial losses (AT&C). Financial restructuring is only a short term solution and there is need for implementation of open access and competition along with enforcement of the obligation to service,” Mr Sardana anticipates.
Commenting on the issue Mr Bami says, “Unless distribution companies are able to recover the cost, the whole financial structure will not improve. It is getting difficult for them to get funds from banks which will again pose as a problem for new projects. So funding should be made the top priority.”
However Mr Chandraker feels technology should be given priority. He says, “Technology should be the top priority in the T&D segments to satiate the pressing needs of reliable and quality power. Similarly utmost care is to be taken in improving the utilities’ liquidity position and project financing in the segment. Better control and monitoring by the use of new technologies is required to reduce high losses in the networks thereby also boosting availability of power to masses.”
Focus on REIn the recent years, the concept of renewable energy has been cropping up. Narendra Modi is well-acquainted with the concept of renewable energy well. As the Chief Minister of Gujarat, Mr Modi pioneered India’s first incentives for large-scale solar power in 2009. He is said to have plans to use solar power to enable every home to run at least one light bulb by 2019.
Commenting on the expectation of renewable energy players, Manoj Kumar Upadhyay, CEO, ACME Solar says, “We expect the government will have policy-push in order to grow developers and customers interest in the solar energy. We believe that the new government will give the much-needed impetus to green energy and enable increase in implementation of solar power projects in JNNSM PH-II.”
Mr Sardana says, “Benefits can also be derived by strengthening the Renewable Energy Certificate mechanism, which in turn help to meet purchase obligations. It would also help to incentivise off-grid or distributed renewable energy generation.”
Sharing their commitments to the Indian power sector, Mr Chaudhry says “Schneider Electric India is committed to all efforts to transform India into a self-sufficient, energy-surplus nation. We hope to partner with the country in developing smart cities as well as boosting the renewable energy segment, in particular.”
With Modi’s rise to power, Indian power sector expects sunny days ahead.
——————————————–Pritpal Singh Bami, President, India Energy Forum”There should be integrated approach by central and state governments for faster approval, clearances, speedy land acquisitions and also R&R policies.——————————————–
Anil Sardana, Managing Director, Tata Power”The Indian government would do well to enter into partnerships with fuel rich countries to meet its long-term energy needs.——————————————–
Prakash Kumar Chandraker, MD and VP – Energy Business, Schneider Electric India”To bring back confidence in the sector it is important to have sustained commitment on competitive bidding revival
The article puts forward four-point agenda the power sector expects from new Govt