An overview on initiatives that will set new rules in the Indian power sector
With the Indian government taking steps towards providing 24×7 power across the country by 2019, the power sector in India is undergoing a transformation on multiple fronts. From energy efficiency activities like UJALA (Unnat Jyoti by Affordable LEDs for All) to rural electrification under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) to Ujwal DISCOM Assurance Yojana (UDAY) and digital empowerment, the stage is set for a massive rebound. Here we discuss on some of the landmark reforms being initiated by the government and their cascading impacts on the industry.
Electric Vehicles (EV)
India introduced National Electric Mobility Mission Plan with the aim to reduce pollution and also to boost the domestic manufacturing capacity. Today EVs have become talk of the town. Even the government is planning to take a major shift to EVs by 2030.
In addition, Electrical Vehicle market is slowly gaining a momentum in India. It is believed that Electrical Vehicles are going to create opportunities for many industries including manufacturers, battery sector, charging infrastructure, recharging booths, electricity etc. All the industries are geared up to seize the opportunity.
With the foreseen opportunities in this space it is believed that EVs are soon to be the game changers.
Sharing views on how EVs will be game changer Shreegopal Kabra, President, IEEMA says, “The government’s focus on EVs will definitely be a game changer in the coming years, which will transform the way we consume energy.”
Agreeing upon Kabra’s views H K Mishra, Acting, Director, ERDA (Electrical Research and Development Association) also says, “The government’s determination on deployment of 100 per cent EVs by 2030 will also be a game changer in the total electrical sector in future.”
Ujwal Discom Assurance Yojana (UDAY)
UDAY is one of the significant initiatives taken by the government to stabilise the power sector. It is a structure that helps discoms to improve its financial conditions as well as operational performance. Since implementation of UDAY, many discoms got on track and it is believed to be having huge potential to change the game of the power sector.
Commenting on how UDAY can be a game changer Rajiv Menon, Managing Director, Black & Veatch India says, “A significant factor in Moody’s upgraded outlook was optimism about the ability of UDAY to improve the financial stability and operational performance of state discoms. Getting to grips with distribution challenges is central to ensuring the power sector can meet consumers’ needs. To this end UDAY is among the initiatives with greatest potential to bring change.”
He adds, “UDAY is a very welcome initiative. The drive for renewable is bearing fruits, June saw a record level of power, 10.2 billion units (BUs), generated from renewable sources; 26 per cent more than the same period last year. Allowing the swapping of coal supplies among central and state-owned power plants has helped optimise transportation costs and related losses with increased generation.”
Rajeev Khushu, Director Corporate Affairs, Texas Instruments India, informs, “Three years back, one of the major challenges that the government faced was the looming debt of inefficient discoms, who were struggling with payment defaults and ever rising ATC losses. “
Sahaj Bijli Har Ghar Yojana (SAUBHAGYA)
Despite vigorous efforts through village electrification programmes like DDUGJYs the government realised that there are still areas where electricity access problems are unresolved. To solve this issue the government has recently launched SAUBHAGYA, Rs 16,320 crore initiatives to provide electricity connections to 40 million homes in rural and urban areas by December 2018. This scheme ensures that every household receives electricity.
Briefing on the performance of the initiatives Amit Jain, Managing Director, CMI Ltd says, “We have been witnessing significant changes in the power sector. and latest launch of SAUBHAGYA scheme to ensure electrification of all willing households in the country in rural as well as urban areas latest by December 2018.”
One single initiative cannot be a game changer alone, however SAUBHAGYA could be the game changer believes Alok Verma, AVP-Policy and Regulatory of Amplus Energy Solutions Pvt Ltd. He states, “SAUBHAGYA scheme will bring monumental changes in the industry. SAUBHAGYA will create a larger value (not the cost) to distributed sources of energy (including solar). It will be major game changer and results can be seen in few years down the lines.”
Informing about the initiative that will change the game in 2017 Subhash Sethi, Chairman, SPML Infra Ltd says, “Although the current rate of electrification is much higher than earlier, the rate of electrification needs to be multiplied by about six times of the current rate to meet the stringent timeline of December 2018 set for the SAUBHAGYA scheme. This scheme will certainly be a game changer for the current year and next year.”
Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)
To enhance rural electrification and for modernisation of transmission and distribution (T&D) network, DDUGJY was launched. The scheme is projected as ‘power sector reforms for rural India’ that promises round-the-clock electricity supply to rural India. While sharing about initiatives that will change the game in 2017 Sahaj J Patel, Managing Director, JDS Group of Companies says, “Schemes like DDUGJY and Integrated Power Development Scheme (IPDS) have the potential to change the game.”
These schemes have a planned investment of Rs 1,14,000 crore to strengthen power supply and availability over FY17-22E. This investment is bound to trigger about Rs 15,000 crore demands for power and distribution transformers (11-66 kV) over FY17-18E. “My prediction is for the overall transformer industry demand to grow at 10-11 per cent compound annual growth rate (CAGR) range over FY17-18E versus negative growth reported during FY11-15,” he states.
He adds, “Power transformer manufactures (product range above 33kV to 756kv) will be benefited due to limited number of players in the segment, strong demand from transcoms, sustained PGCIL spending and distribution transformer manufacturers, (product range below 11kV) will be beneficiary due to central sponsored schemes that is DDUGJY and IPDS.”
Unnat Jeevan by Affordable LEDs and Appliances (UJALA)
UJALA was launched in 2015 with an aim to reduce the power consumption rate and to check the carbon emission rate. Since LEDs are more efficient, and durable and long lasting the government urged to use more LEDs. Within one year of its launch the country could reduce huge amount of electricity bills which gave an opportunity to UJALA to be a game changer.
Explaining why UJALA can be a game changer Fahad Khateeb, Director, IndiLites says, “The UJALA scheme has been successful. It has helped create awareness about power saving LED lights and helped their penetration especially in rural India. The only glitch that they need to work on now is to ensure there is no shortage of products in the market. Due to policies of some major players, the manufacture of LED products in India has not been at the volume that should have been. The MSME industries that can be the major support system in this case feels left high and dry because their full potential isn’t used. As a result the supply and demand ratio is forever increasing. A little support to MSMEs and ease of operation can change this scenario and the Indian industry can, in fact become a major exporter of these products competing directly with China.”
Sameer Gupta, Chairman & Managing Director, Jakson Group, informs, “Under the UJALA scheme, more than 25 crore LED bulbs have been successfully distributed across the country which have resulted in large scale power saving. All these figures prove that all these schemes have delivered their intended results.”
Surya Mitra and ARUN
Surya Mitra App enhance the employment of trained youths in solar PV technologies and to improve the business of solar entrepreneurs because of quality servicing, maintenance and repairing professionals are now available to customers at the click of a button on their mobiles. On the other hand, Atal solar Rooftop User Navigator (ARUN) is a guideline for the solar rooftop systems, related policies etc. This (ARUN) app also calculates the cost of installation of rooftop systems.
While sharing about how Surya Mitra App can be a game changer Kunwer Sachdev, Managing Director, Su-Kam says, “Leveraging technology effectively through the launching of apps like Surya Mitra and Atal solar Rooftop User Navigator (ARUN) will be game-changer for the sector. These user-friendly apps will go a long way in bringing transparency and accountability in the sector besides ensuring hassle-free access to power to consumers.”
Goods and Service Tax (GST)
On 1 July, a one indirect tax regime GST started with the concept of “one nation, one market and, one tax” by dismantling inter-state barriers to trade in goods and services that revolutionised the way India pay taxes. GST has created its impact and has benefitted the economy.
Briefing on GST as a game changer Sanjib Mitra, Country Head Sales and Marketing-Transformers and Solar Solutions, Electrotherm (India) Ltd. “Business activities are on high speed track, the GST is helping total integration of the industry, in fact GST is the biggest game changer in terms of overall consolidation of industrial and business activities. The taxation has become more simple and traceable and thus helping industries to obtain right forecast of business. It seems, by 2019 it will bring the complete result of overall industrial growth in a countrywide platform and will further help industries to grow for more sales and service activities to perform smoothly.”
‘Power for All’
The government has planned a roadmap to achieve ‘Power for All’ and is also working on it by introducing various initiatives like DDUGJY, UJALA etc. With ‘Power for All’ initiatives millions of homes are accessing uninterrupted and affordable electricity. On the other hand, the government is introducing new technologies to enhance the power quality and also boosting renewable energy to produce more power. With efforts today India is not ‘Power deficit but Power surplus’ country.
“The particular initiative that will change the game in 2017 or now we can say in 2018 is ‘24×7 Power for All,” states Rajesh K Mediratta, Director (BD), Indian Energy Exchange (IEX). He adds, “Such initiative will also increase PLF of generation capacity and mitigate stranding of generating assets. UDAY will ensure better revenues for discoms.”
‘Make in India’ and Foreign invest
‘Make in India’ can be believed as a game changer as it was launched to encourage domestic manufacturing in India. The major objective of this initiative was to focus on job creation and for skill enhancement. The initiative also aims at high standard and quality of the product along with minimal impact on the environment.
Briefing about the initiatives that will be a game changer Sanjay Jadhav, CEO, Powergen Business, Sterling and Wilson says, “Government initiatives like ‘Make in India’, and a renewed invitation to global manufacturers to invest and develop products in India for the global market has led to many global players set up shop here.”