Power Sector in India: Challenges and Opportunities

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Significant advances have been made in the power sector during the last five years, but there continues to be a huge mismatch between demand supply. Our per capital consumption of electricity is 778 KWH. However, this is fairly low when we compare it to the world average of 2600KWH. According to the government’s own estimates, approximately 80.9 million households are still to electrify. In the rural areas, 42 percent of rural masses continue to use kerosene based lighting, which is highly inefficient and a major factor in environmental pollution.

“Sunil Kumar & Nayana Singh, Elets News Network (ENN)”

Power for All

The government of India has launched an ambitious mission of “Power for all by 2012.” This dream of power for every Indian can only come true if we can take our installed generation capacity to at least 2,00,000 MW by the end of this year, from the present level of 1,14,000 MW. A huge expansion in the power generation sector, must also lead to corresponding expansion of the transmission networks. Resources are distributed unevenly in the country, and power needs to be carried over great distances to areas where load centres exist.
The bulk transmission has increased from 3708 ckm in 1950 to more than 265,000 ckm today. The Ministry of Power has divided the country into five regions for transmission systems, namely Northern Region, North Eastern Region, Eastern Region, Southern Region and Western Region. Even though the predominant technology for electricity transmission and distribution has been Alternating Current (AC) technology, High Voltage Direct Current (HVDC) technology has also been used for interconnection of all regional grids across the country and for bulk transmission of power over long distances.

Managing Distribution

Some improvements have been made in curbing T&D related losses, but this still remains high as compared to the global benchmarks. The T&D losses reached the level of 32.86 percent in the year 2000-01. The government of India has tried to address the issues in this segment by undertaking a range of reforms. Many of the State Electricity Boards have been unbundled into separate Generation, Transmission and Distribution units. Privatisation of power distribution has also been initiated, either through outright privatisation or the franchisee route.
The technical losses of power can be primarily due to lack of better systems or unplanned extensions of the distribution lines, overloading of the system elements like transformers and conductors, and lack of adequate reactive power support. Low metering efficiency, theft and pilferages are primarily to be blamed for losses of commercial nature. Hence government has initiated a range of measures to improve metering efficiency, and have in place proper energy accounting and auditing and improved billing and collection solutions.

Power sector reforms

With the idea of improving the scope of ICT in power sector, the Ministry of Power, Government of India, has launched the Restructured Accelerated Power Development and Reforms Programme (R-APDRP) in the Eleventh Five year Plan. The APDRP programme was restructured in July 2008, as a central sector scheme for XI plan. The scheme comprises of two parts- Part-A & Part-B. The Part-A of the scheme is dedicated to establishment of IT enabled system for achieving reliable & verifiable baseline data system in all towns with population greater than 30,000 as per 2001 census (10,000 for Special Category Status).
The task of managing and enhancing the scope of the Sub Transmission & Distribution system falls under the Part B of the R-APDRP scheme. The focus for Part-B is on AT&C loss reduction on sustainable basis. Loans ranging from 25 percent to 50 percent of the project cost are being provided under the scheme. Ministry of Power has earmarked sanctioning of funds up to `40,000 Crores under R-APDRP Part-B. Out of this amount up to `20,000 Crore will be converted to grant depending on extent to which utilities reduce AT&C losses in project areas.

Renewable energy

Under the leadership of Dr Farooq Abdullah, the Ministry of New and Renewable Energy has taken many major initiatives to promote renewable energy. Renewable power projects using wind energy, biomass energy, hydro power and hybrid systems are being established in the country to meet the energy requirements of isolated communities and areas which are not likely to be electrified in near future. The government is providing subsidy of up to 30-50 percent to companies engaged in solar power generation.
The Ministry is also subsidising the installation of solar lanterns, home lights and small capacity PV plants through NABARD, Regional Rural Banks and other Commercial Banks. During 2011-12, the Ministry sanctioned a project for installation of standalone SPV power plants aggregating to 8740 kWp capacity in 4115 schools and 9 examination centers. During the current financial year, the Ministry has sanctioned a project for installation of 560 SPV water pumping systems in six districts of Bihar.

Twelfth Five Year Plan

The Approach Paper to the Twelfth Five Year Plan says that “the increase in energy requirement depends on the elasticity of energy demand with respect to GDP, which has been falling over time and is currently around 0.80. Allowing for some further decline in the elasticity, a GDP growth rate of 9.0 percent per year over the Twelfth Plan will require energy supply to grow at around 6.5 percent per year. The ability to meet this energy demand depends on our ability to expand domestic production in critical energy sub sectors, notably petroleum, gas and coal, and meeting the balance requirement through imports.”
During the period of the Twelfth Five Year Plan (2012-17), there is a plan for having a 100 GW power capacity addition. There is an IEA (International Energy Agency) report that concludes that India needs around 800GW-1200GW by 2050 as compared to present 199GW capacity.
The only environmentally friendly way by which India can meet its energy needs is by increasing the efficiency of the entire power generation, transmission, distribution and also the consumption space. The Approach Paper to the Twelfth Five Year Plan proposes that efficiency can be brought action on two fronts: rationalising energy prices to incentivise energy efficiency and taking non-price initiatives to push the economy towards greater energy efficiency.

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