POWER +VANTAGE – The turnaround story of Indian power sector

  Millions of homes in India are yet to get access to electricity. On top of that, the country also experiences power cuts for couple of hours on a larger scale. In spite of these crucial issues the government has declared India is power surplus. Though it is a good sign, still several questions strike the brain, like if there is power surplus then why do we have power cuts? Anyway, this question will be answered very soon.
For the last couple of years India has faced huge power crisis, after facing several crisis the government realised that it is essential to boost the power sector to develop the economy of the country and today the country is witnessing the changes that are taking place in the power sector. These changes were only possible due to several initiatives taken by the government such as launching UDAY scheme, developing healthy discoms, enhancing renewable energy, developing smart grids etc.
With these rapid developments, the government announced the country’s expected power surplus in 2016-17. This news has created positive sensations in the country with the hope the country by this fiscal year will no more be a power deficit country.
Today the Indian power sector is all set for a quantum leap. On this note, this article will describe the turnaround story of the country’s power sector. Also the experts will share their views and opine on expected power surplus, the reason for such transformation and business prospects.
Power surplus scenarioIn a recent Load Generation and Balance Report 2016-17 produced by Central Electricity Authority (CEA) disclosed that, India is likely to experience peak surplus of 2.6 per cent and power surplus of 1.1 per cent in 2016-17 respectively. 
In the table given below the power surplus is anticipated in western and southern region by 6.9 per cent and 3.3 per cent respectively. Whereas the northern, eastern, and north-eastern are likely to face power deficit of (-)1.8 per cent, (-)10.3 per cent, and (-) 8.3 per cent. On the other hand, the peaking shortages are likely to overcome in northern, southern and north-eastern by (-)1.6 per cent, (-) 10 per cent, and (-) 3.8 per cent.
Comparatively in the CEA’s 2015-16 LGRB report, the all India power supply position indicated that the country was likely to experience a peak shortage of (-) 2.6 per cent and energy shortage of (-) 2.1 per cent. Also, the peak shortages were mainly in the southern and north-eastern regions to the tune of 19.8 per cent and (-) 4 per cent respectively. Whereas, the surplus was anticipated in the order of 2 per cent and 3.3 per cent in eastern and western regions.
India Inc’s opinionThe entire nation is witnessing the changes in the power sector. India’s expected power surplus 2016-17 is talk of the town. Every player in the industry has its own views and opinions about the surplus. Some are in favour of it whereas some aren’t. Though there are variations in opinion the question for the entire industry will remain same, on how this power surplus is going to aid the ‘Power for All’ goal. 
Optimism all around Experts in favour of power surplus anticipate that the country may not fall short of power and may light many homes successfully. Experts also share their views and opinions on how the government should approach the power surplus to make it a reality. On this note, expert Joy Saxena, Executive Director – Finance, Vikram Solar suggests that the government needs to support the major pillars for overall growth in the country. He said, “We believe Indian government needs to identify and uphold- availability, affordability, reliability and security of electricity supply as the key pillars for overall growth in the country. Each of these pillars serve a specific function and ignoring one will not complete the picture India wants to paint. Checking and improving financial health of distribution companies by offering subsidies and tax exemptions is required to help these entities purchase more power. As they start to purchase more power, there will be an urge among the power generators to produce more energy, both of which are required if India is to become and stay a power surplus.”
“There is no doubt that availability of fuel has improved  and so has generation capacity. The energy efficiency efforts are also having impact.  However there are some constraints on intra regional transmission capacities and discoms ability to pay for power. This means that power is not being purchased even though it is available and there is demand. We should also not forget that 50 million households, many in rural India still do not have access to electricity,” says Babu Babel, Jt. Managing Director, Secure Meters Ltd.
Power surplus is commendable milestone in India’s history of power sector, believes Rajiv Kumar, Director – Marketing, Electrical Sector – India, Eaton Power Quality Private Ltd. He says, “This is a significant and commendable milestone for India. Having a strong power infrastructure is critical to India’s ambitious growth plans and ensuring a better quality of life for her citizens.”
Different opinionsThe country still faces power shortage then on what basis it is considered that India is expected to have power surplus in this fiscal year questions few experts.  Having a different opinion on power surplus Neelav Samrat De, Asst. General Manager-Marketing, Andritz India Pvt. Ltd points out, ”Technically, India is power surplus today. The essence lies in the fact that the manufacturing industry has not growth at par with demand and the main reason why the demand and supply gap has reduced. There are many states which do not have enough power supplies for its agricultural requirements and are having to purchase power from the exchanges at higher tariffs. “If India was a power surplus now, why is the need to purchase excess power? Secondly, there are numerous power plants, which are completely built but are lying idle due to lack of coal linkages. The situation is dismal as otherwise portrayed in the market. So either we say we are and will be power surplus in 2016-17 or the government puts an impetus on the growth of the manufacturing sector. We have opted to use the former.”
India is shifting its fore from industry and becoming a services driven economy. While we are witnessing a slump in sectors like infrastructure, manufacturing, IT and others, there is a sharp growth in the services sector. “Power demand will obviously decrease with this changing scenario in the economy and hence we can say that we are ‘technically’ power surplus. With no growth in industry, the demand factor will always remain less than the supply,” he adds.
In his opinion, Jyotindra Patel, Chairman, JDS Group of companies says that the centre should not look too much into the projections made by CEA as the surplus situation is on account of lower demand, primarily from debt-ridden state electricity boards and the industry is in the midst of a slowdown.
“The surplus capacity is fairly modest, and will get quickly absorbed when economic growth and industrial activity pick up pace. Further, I do not think we have sufficient reserves to meet exigencies such as adverse weather conditions or plant failure. I think it is important to test the surplus under more stringent conditions of growth and reliability,” he remarks.
On the other hand, Reji Kumar Pillai, President, India Smart Grid Forum believes that it is waste to show off the power surplus as most part of the country (especially rural) still faces darkness. He comments, “Depends on whose lens you are looking at it. In a country where half the population lives in darkness and the per capita consumption of electricity is well below one-third of world average, we are bragging about surplus in power is preposterous.”
Shah Nawaz Ahmad, Senior Advisor, India, Middle East and South East Asia, World Nuclear Association appreciates the efforts made by the government to enhance the power sector but he says, “I really cannot join this debate when a large proportion of our country-men remain without electricity.  A surplus can be declared for a product if people can’t afford it. [For when my production cannot be bought; I will have a surplus; always]. Electricity is an essential need. There is enough evidence to show that the growth of a society without electricity remains stunted. For India to become amongst the real greats, we need to have all our people in the electricity loop.”
Who is the game changer?Government has taken many initiatives such as introducing UDAY scheme, improving financial health of distribution companies, developing renewable sector or improving coal production in the country etc. Each sector is crucial and has its role to play but still one need to be stand out to prove itself as a game changer for this (power surplus) transformation.
Sharing his views in terms of who will be the game changer for this transformation Anil Sardana, CEO & MD, Tata Power says, “Surplus power can be attributed to the improved coal supply situation as well as the rapid expansion in renewable energy capacity building. In May 2014, as many as two-thirds of coal based power plants were having critical coal stocks, meaning less than 7 days of coal stock. Recovering from such a dire situation, the power plants have ample coal availability now. While the demand for electricity has remained constant, the government’s aggressive capacity push adequate coal supply to thermal plants has resulted in surplus power generation. That said, poor financial health of state discoms and transmission and distribution constraints are still resulting in power cuts across the country, he informs.”
“The rapid growth and proliferation of renewable energy is another primary reason for this transformation.” The government has laid out plans to add 175GW of renewable energy by 2022. Taking the cue, private sector is investing significantly into building green energy capacity,” he adds.
Governments has strived hard to improve and clear issue related to the power sector to develop the power scenario in the country believes Anil Kadam, Senior Manager, Energy Business, Schneider Electric. He states, “There has been a clear strategy from the government to address structural issues facing the power sector, be it fuel supply relating to coal and natural gas, removing transmission bottlenecks as well as improving financial capability of discoms through debt management. All of these have improved the power sector scenario in India. Similarly, there has been a strong push to spruce up power generation through renewable sources like solar and wind, which is going to be a game changer for power generation.”
According to Shrirang Karandikar, CEO, India Power Corporation Ltd the increase in the power is due to various policies adopted by the government. He comments, “This increased availability of power has been definitely achieved due to various policies adopted by India government and more specifically by Ministry of Power, Renewables & Mines. The current leadership of Minister of Power Piyush Goyal with the guidance of Prime Minister Narendra Modi has ensured coal availability, increased thrust to renewable energy, providing connectivity of transmission lines and improvement due to UDAY and Deen Dayal Upadhyaya Gram Jyoti Yojana Scheme together.
When it comes to game changer Hartek Singh, Chairman and Managing Director, Hartek Power Pvt Ltd says, “It’s hard to pinpoint any one game changer. A combination of factors is behind this transformation. Any change in the entire ecosystem which makes the grid sustainable can be a game change.”
Expanding horizonTata Power is in the process of implementing nearly 400MW of renewable power projects at various locations. In order to aggregate its clean and renewable energy portfolio, Tata Power has initiated the process of carving out its 500MW clean energy assets from its books into TPREL. TPREL is seeking to grow its renewable portfolio in India and in select international markets through organic and inorganic opportunities. 
Havells with an innovative range of conventional switch gears, HT and LT cables, capacitors and circuit breakers have been a significant supplier of quality products to the transmission and distribution sector. “Havells’s energy saving lighting components like LED’s and CFL’s are amongst the first choice of consumers and has delivered immense savings in terms of power consumption,” claims Sunil Sikka, President, Havells India. 
Havells offers a wide range of products catering to both consumer and industrial requirements. “As the country embarks on an ambitious power capacity addition plan, we will see an increase in demand for inputs on the transmission and distribution side as well. With a range of HT and LT power cables, fire survival cables, solar cables, switches, circuit breakers, and conventional switchgears, Havells is well positioned to cater to rising demands,” he states.
CG with its vast experience and complete portfolio of products and solutions across the voltage class is well positioned to serve the industry needs. From partnering in the transition to 765kV, to creating a complete portfolio of UHV products, to the integration of renewable energy in the national grid, CG has been an integral part of the growth story of the Indian power sector. CG has displayed its excellence in manufacturing and supplying high quality equipment that continue to make itself a partner of choice. “We are fully associated with the development of solar parks by supplying energy efficient and cost effective transformers (both power and distribution) and switchgears to most of the developers in the country. In addition, we are supplying substation equipment, which will be part of the national grid, and help transmit power from one region to the other.  At the same time, our technology team is relentlessly working on the development of new materials and optimising designs to develop energy efficient transformers,” briefs Anindya Basu, Vice President, Transformers (India), CG on the company’s contribution. 
The Game Is OnIndia will achieve one of the most balanced energy mix in the decades to come. Today, the government is on a drive to electrify the entire country. On being very optimistic about power surplus, the industry is looking forward for business opportunities out of power surplus. Commenting on business opportunities Sam P. Cherian, Chairman, Elmeasure India Pvt Ltd says, “Businesses will come to India only in a power surplus situation. The ambitious power addition plans will throw up bigger opportunities for us as new plants require automation, metering, energy management solutions etc. A turnaround in the power sector will prompt discoms to invest in smart meters and other enabling infrastructure. This situation augurs well for our growth and we are very excited about the opportunities that lie ahead with the smart cities project as well”
On the other hand, Hindustan National Power Corporation Ltd is committed to support the government’s drive to electrify every village in the country and touch every citizen’s life.  Its vision is to create a generation capacity of 10,000MW over the next few years with an investment of $12 billion, which will add to the government’s massive electrification drive.
“With the core business of electrical construction materials, Anchor’s journey of more than 53 years has been an exciting one. The advent of Panasonic further strengthened the manufacturing capabilities. The current ambitious power addition plans will definitely churn new opportunities for business in commercial segment apart from residential as the government initiatives will propel a holistic industry growth,” briefs Rajesh Nandwani, VP and Business Unit Head-Switchgear, Anchor Electricals.