Electricity: The Catalyst for Socio-economic Development

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The government is taking several measures to increase the solar power generation, says P Uma Shankar, Secretary, Ministry of Power, Govt of India 

What are the key achievements of the ministry in ensuring power in the rural areas?

The ministry has a programme called the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) for ensuring availability of power in the rural areas. The RGGVY was launched in 2005 after merging all the ongoing schemes. Rural Electrification Corporation (REC) is the nodal agency for implementation of RGGVY, under which 90 percent grant is provided by Government of India and 10 percent as loan by REC to the State Governments. This programme is basically for electrifying villages that are hitherto un-electrified, for intensifying electrification in already electrified villages and for providing free connections to Below Poverty Line (BPL) households. In the seven years since the programme started, we have managed to electrify 105,000 un-electrified villages. According to project reports prepared by various state governments, there were around 110,000 un-electrified villages in the country, out of these 105,000 have been covered, and the remaining will get covered by the end of this year. Electricity can act as a catalyst for socio-economic development, and the government is fully focussed on providing Indians\ everywhere access to power.

Does this mean that entire India will be electrified in the next one or two years?
To a large extent that is going to be the case. The number of un-electrified villages in the country is now very small; it could be in the range of 5000 to 7000. These villages can easily be covered towards the end of this year or next year. The next phase of the RGGVY will concentrate on going beyond the villages. This has also been announced by the Prime Minister that we must provide electricity to all the households in the country. So while almost all the villages in the country have been covered in the electrification programme, there are habitations that have not been fully covered. Around the villages we typically have a few habitations where fewer numbers of families live. The next five years of the electrification programme will focus on covering all these habitations. We will also be providing free connections to the BPL families who are residing in these habitations.

But the electricity bills will be collected from the villagers as per their consumption patterns. Isn’t that the case?
That is true. The BPL connection that I have mentioned will be given free of cost. This means that only the connection is for free, the users are to pay the bills as per their consumption. To ensure financial sustainability of RGGVY, it has also been stipulated that there will be franchises at the village level. The franchises will be responsible for reading the metre, getting the bill made, giving the bill to the consumer and collecting payment from them. The franchisee\ will get remuneration for this work.

The Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) is primarily an electricity distribution organisation. In India, there are huge losses due to pilferage and other things. Can the RGGVY become financially viable?
RGGVY is not an organisation. It is a scheme to increase access to electricity. The scheme has been so designed as to reduce technical and commercial losses. It is a high voltage distribution system (HVDS) under which distribution transformer is brought closer to the consumer. This increases high voltage line length and reduces low voltage line length thereby reducing technical losses. Aerial bunched cables are used which prevents unauthorised withdrawal of electricity from the line. To increase the financial sustainability of the scheme, village-level franchises are mandated under the scheme. RGGVY scheme has thus to be seen in an overall context, not just by itself, in so far as financial viability is concerned.

How many hours of electricity are being supplied to the villages that have been newly electrified?
The supply of electricity is in the domain of the State Distribution Companies. However, the RGGVY programme stipulates that the states should make 6 to 8 hours of electricity available to the electrified villages. The Ministry of Power has got some independent studies done, all of which reached the conclusion that this is being more or less supplied. Three different independent organisations had done the studies in different parts of the country. Connections have also been released free of cost to more than 2 crore BPL families.

What kind of new technologies are we having in these bigger power plants?
We have moved to Super Critical technology power plants. These plants are much more efficient as compared to the plants that had been setup earlier. This means that they will use less coal to generate the same amount of electricity. This efficiency will also ensure that the carbon emissions come down, and so the concerns related to climate change get mitigated to an extent. We have already commissioned about 8000 – 9000 mega- watts of Super Critical Power Plants. In the12th Five Year Plan we have plans to build additional capacity of around 85000 megawatts, out of which 60000 megawatts would be coal based and from this around 35 percent will be Super-Critical. And when we go to the 13th Five Year Plan, the Government of India will only like to encourage power plants using Super Critical technology.

That was basically about the electricity distribution plans for the rural sector. But if we look at power sector in the country as a whole, we find that the demand outstrips supply to a really large extent. What are the Ministry’s plans for bridging the electricity deficit?
The first thing that we need to do is to ensure that there is enough electricity being generated in the country to meet the demands of the consumers. So an exercise is conducted to determine what will be the demand for electricity at the end of every Plan Period. The estimate of the demand is made for two kinds of factors – what will be demand in general, and what will be the peak demand. Keeping these two estimates in mind, the target for increasing the generation capacity in the country is calculated. The overall generation in the country has increased from about 810 billion units (BU) during 2010-11 to 880 BU during the year 2011-12. By the year 1217 the demand is expected to go up to 1400 BU. So it is clear that a huge amount of new generation capacity has to be created to keep up with the demand. The attempt of the government will be to ensure that this much of new generation capacity is commissioned, so that there is no large scale electricity shortage. It is also necessary that the transmission capacity should keep pace with the generation. There has to be a good capacity addition in the areas of laying of power lines, building of sub-stations and other such activities. The government is trying to ensure that such transmission capacities are also created in these five years.

It is the hydro projects in the country that seem to face maximum amount of delays. Why is that so?
There are lots of challenges in the hydro sector that lead to delays. The environmental clearances for hydro projects are difficult to obtain. Then there are the concerns related to people getting displaced. The hydro projects are typically located in remote locations, reaching these locations is difficult. Another problem that is often faced in hydro projects is that before a project is started you do a survey and investigation to find out nature of the geology in the area and thus to understand the kind of tunnelling that needs to be done. Quite often what happens is that the actual site conditions are completely different from what the survey and investigation revealed. This is called “geological surprise.” So when you go to do the work on the site, you find that the actual conditions are quite different. This leads to disputes with the contractor and that also contributes to the delays.
We are forced to make changes in the scope of work and the quantum of work. However, in order to safeguard our environment and make cheaper electricity available to all, we have to continue to develop our capacity in hydro and other non-fossil fuel based systems for electricity generation. The government is taking several measures to increase generation of solar power. Currently the price of solar panels is too high, but we are hopeful that with increase in demand, many manufacturers will set up their solar plant units in the country, and with increased production the price will come down.

But with all these initiatives do you anticipate that we will be able to match the demand? I mean demand for electricity has the habit of outstripping the actual supply.
This is because the demand tends to be extremely elastic in nature. You project the electricity demand on the basis of a person living in a newly electrified village using one or two points for light and fan, but he/she may soon start using more points, for TV etc. So the demand can grow rapidly once access is established. However, the government is taking intensive steps to ensure that there is adequate increase in electricity generation. In the earlier Five Year Plans the additional generation capacity that used to be created was in the order of about 20000 MW, but in the last Five Year Plan the additional capacity that was commissioned was about 55000 MW. This is an increase of more than 2.5 times. By the end of the 12th Plan period we hope to add about 85000 megawatt of generating capacity. This will be a huge increase. A big change that is happening in the power generation setup is that now we are looking at power plants with much bigger generating capacity. Earlier we used to have plants of the size of 250 MW. Now we are generally looking at plants with unit size of 660 MW.

What are the key challenges that you face in developing the power infrastructure in the country? What are the solutions to these challenges?
The delay that happens in the execution of power projects is a cause for concern. A power project is dependent on many different factors that are at times difficult to resolve. You have to get large tracts of land for setting up of the plant. Many clearances from different departments have to be taken. However, the fact that we could commission 55000 megawatts of new capacity in the 11th Five Year Plan shows that we are capable of achieving much bigger targets. Earlier we used to face difficulty due to constraints in supply of equipment. Majority of the equipments needed to be imported from foreign countries. Now in most of the cases they are available domestically. BHEL, one of the largest suppliers of equipment for the power industry, has also ramped up their capacity to meet the demands of the power industry. Till some time ago mega power projects could import equipment from other countries and get duty exemption on that.

Power utilities in the country are making losses as there is ineffective system of distribution, especially in urban areas. What can be done to improve the quality of power distribution in congested urban centres?
In fact, I would say that AT&C losses in distribution have come down in some of our cities. For instance, in Delhi we used to have distribution losses of up to 50 percent. Now it has come down to less than15 percent. The national average is about 27 percent. The distribution related losses are mainly due to inefficient metering, billing, collection, theft and pilferages. This may be eliminated by improving metering efficiency, proper energy accounting and auditing and improved billing and collection efficiency. The Accelerated Power Development & Reform Programme (APDRP) was launched by Government of India in 2001, for the strengthening the distribution network. The Restructured APDRP(R-APDRP) was launched by the Government in July 2008. This programme aims at ensuring that there is proper energy accounting through an IT based system. This will enable utilities to bring down their AT&C losses to 15 percent.

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