India aims for 1000 GW energy capacity by 2032

Presently, employee cost in tariff to the consumer is approx 55 paisa per kWh for discom and approximately 40 paise per kWh for generation and transmission.

India’s aim for 1000 GW power generation capacity by 2032 poses challenges. Stakeholders must enhance efficiency for a sustainable energy paradigm, as detailed by Rajiv Goyal in the article.

What strategies can the power sector employ to address the challenges of increasing capacity, reducing labour costs, and enhancing workforce skills 

India is actively investing in its power sector to expand its generation, renewables, storage, transmission, and distribution capabilities, with a target of reaching 1000 GW capacity by 2032. However, challenges like electricity recovery, optimising the energy mix, and maintaining reliability persist. Currently, labour costs are about 55 paise per kWh for distribution companies and 40 paise per kWh for generation and transmission.

Narayan Murthy, Infosys co-founder, has suggested a 70-hour workweek to enhance productivity, sparking debate. While the recommendation is disputable, there’s a consensus on the importance of closing the skills gap through dedicated work hours. Workforce knowledge and skills significantly impact productivity, and organisations need the required technical and soft skills to maintain competitiveness. To tackle these challenges, power industry firms are turning to consultants who provide trained workforce with industry expertise. These consultants can incorporate best practices from various sectors, navigate regulatory frameworks, and offer project-based or ongoing services.

How can the sector achieve workforce optimization through consultant leverage and outsourcing?

Engaging consultants can cut consumer employee costs to 50 paise per kWh by 2032, down from 95 paise per kWh (adjusted to 33 paise today with 5% inflation). Power companies should distinguish between “Capex-based” and “Opex-based” roles. Capex projects have limited durations, where consultants like Wapcos, RECPDCL, Medhaj, and smaller firms provide trained resources for timely, budgeted project completion.

Opex tasks (e.g., repair, customer service, metering, billing) are outsourced, with HR consultants managing all organisational needs. Cloud-based RMS solutions offer cost-effective IT and professional billing expertise for Discoms. Demand forecasting and power scheduling are entrusted to experts like PTC, Mercados, and 50 Hertz using AI-based modelling, saving costs in power procurement.

Regulatory filings and ARR petitions are specialised tasks, and consultant companies have developed expertise in data compilation, ARR modelling, and timely submissions. It’s vital to reevaluate the practice of retaining employees without incentivizing skill development. The future success of the power sector relies on a mix of dedicated employees and skilled consultants working together for efficiency.

With the 2032 deadline looming, how can energy auditors spearhead resource optimisation?

Energy Audit is taken seriously neither by power industry companies like generation, transmission and discoms nor by consumers. LED was one of the programs by the central government which could save huge energy. Brushless DC fans can save another 3000-4000 MW of electricity. Recently, R. K Singh, Power and Renewable Energy Minister, has asked EESL to distribute 100 million such fans in the country, in line with the LED scheme. 

Smart meters are a serious intervention which can provide insight into energy usage. Companies may deploy AI-based tools to use smart meter data to identify the potential of energy saving. The ‘Train the Trainer’ approach is required to enhance the pool of energy auditors. BEE may reduce the threshold for industry experts to train as energy auditors. Energy Conservation requires capex to replace inefficient equipment, which may be allowed to avail rebate from income tax.

Energy Conservation Act, 2001 is promulgated by the parliament, which will give rise to avail services of energy auditors. ICE vehicles are converting to battery-based EVs, and energy auditors must guide on improving battery efficiencies. The consultants, with the help of energy auditors, can monetise energy savings, and this market is expected to mature by 2028-29.

Innovatively, how can power utilities tap into their vast workforce for sustainable scalability?

Trilemma, the energy transition, affordability of energy and security of energy exists today and requires an integrated approach to solve it. While central power industry PSUs including CIL and Indian Railways, which are generally in generation and transmission, are expanding their terrain and increasing profitability and productivity of employees, state utilities are only responding to ecosystem partners viz ministry of power, the government, regulator and consumers and lack proactiveness which is primarily due to shortage of funds and political interventions in the state. It is impossible to train or upskill everyone, and thousands of state utilities in the country are either looking for VRS by state government or are liable to be retired under rules to make the organisation lean and flexible. Any function where the existing employee cannot add value with more years must be outsourced to agencies, consultants and IT tools. Utilities can allow the distribution network, at least HT, on an opex basis to improve on T&D losses and reduce O&M expenses.

How can power consultants, energy auditors, and utility engineers collaborate effectively to drive technological advancements?

The pressure on utility engineers to perform due to several regulatory provisions and failure is increasing competition from open-access consumers, and subsidy bills are increasing. The amendment of the Electricity Act 2003 has been pending for more than five years now. The role of utility engineers needs to be redefined in line with the competition in power distribution in future. The utility management has to deploy consultants as extended stakeholders for the improvement of business processes, supervision and monitoring, and adopting changes as per regulatory provisions. Energy auditors need to work in collaboration with industry to promote funding energy conservation projects. Utility engineers need to be trained on aspects of new realities of businesses and make ready for competition. Integration with distributed generation, battery storage, flexible tariffs, demand response by consumers, etc., are new systems for which utility engineers need to be trained by consultants.

Amid ambitious goals, what performance metrics can power utilities set to advance toward an energy renaissance?

The monopolistic functioning of power utilities has worked well in reaching the remotest consumers with support from the central government and state government fund deployment. Free electricity is a new political slogan after huge subsidy bills over the decades. Only when utilities are allowed to work on commercial principles can real growth be achieved.

Against national per capita consumption of approx. 1400 units, Telangana stands at approx. 2400 units and Uttar Pradesh at 550-600 units, and this difference can be seen in terms of per capita incomes also in the two mentioned states. Each state must come up with a road map to allow competition in power distribution; instead of tariff subsidy or cross-subsidy, states must allow implementation of DBT for electricity bill payment, electricity network development for domestic & agriculture consumers from the state budget, promotion of distributed energy generation by providing 100 percent banking provisions, allocation of PPAs & transmission capacities among state discoms on commercial & social principles. Salaries to employees are allowed on 70:30 principles, where 70 percent be fixed, and 30 percent is variable. CEA, New Delhi needs to study and declare a policy to limit O&M norms for employee, R&M and A&G cost per unit. Today, Domestic & agriculture consume approx. 580 BU/annum compared to 560 BU/annum (FY 2022-23), and to achieve a 7 trillion dollar economy by 2030, policies and efforts need to make industry consumption at least 1.5X of domestic & agriculture consumption.

Spokesperson– Rajiv Goyal, President- Vivani Consulting Pvt. Ltd.