The road ahead

The Indian power sector is today at a crucial juncture of development. The country's economy is growing fast and with that the aspiration of people for improved energy services in terms of availability, accessibility and quality. The prevailing scenario (Box 1 and Figure1) presents some serious concerns in this context

Power Generation
In generation capacity additions, we may again end up with huge shortfalls during XI Plan period also, as was the case in earlier Plans even after bringing down the originally planned target of 78,700 MW to 62 374 MW. This back log when carried over to the XII Plan, which has an initial target of around 138,634 MW (under XI FYP assessment), would further increase the size and complexity of the task ahead. A host of reasons, some of which are beyond the control of those in charge of the power sector have contributed to this slow progress. These relate to availability of fuel (coal and gas), difficulties in land acquisition, delays in obtaining environment and forest clearance, transportation (road, rail and ports) bottlenecks, resettlement and rehabilitation issues, equipment (especially BOP1) availability, dearth of skilled personnel, lack of long term financing, inadequacies in project management, limited private sector response, etc.

Snapshot of Indian Power Sector
Installed Capacity 176 GW
Private Sector Share in Generation 22%
Share of RE capacity 10.42%
Gross Generation 811 (Billion kWh)
PLF (Central Sector) 85%
PLF (State Sector) 71%
Peak Deficit 9.8%
Energy Deficit 8.5%
Per Capita Consumption 733 (kWh)
Villages electrified 91%
Household electrified 56.00%

National Solar Mission
Application Segment Target for Phase I (2010-13) Target for Phase II (2013-17) Target for Phase III (2017-22)
Solar collectors (sq meters) 7 million 15 million 20 million
Off grid solar applications 200 MW 1000 MW 2000 MW
Utility grid power, including rooftop 1000-2000 MW 4000-10000 MW 20000 MW

Source: Mission Document, JNNSM

T&D Infrastructure
The power transmission infrastructure has a crucial role to play in ensuring sustainable development and optimal utilization of a country's energy resources. This calls for substantial growth of transmission systems in the coming years commensurate to growth in generation and demand. The challenges in this regards relate to a host of issues like system planning, ROW issues, transmission pricing, mobilization of finances, equipment availability, etc. These have further accentuated in recent years with the opening up of the electricity market and the consequent changes that are taking place in the industry and regulatory structure as well as in the commercial orientation of the utilities. Consideration the physical size of the program and the massive investments required, there is need to encourage private sector participation in power transmission. Distribution system which includes sub trans-mission and LT Lines (33 kV and below) is the vital link in the supply of electricity to the ultimate consumers. However, sub-transmission and distribution system happens to be the weakest link in the power supply chain in all states of the country.

T&D losses
The proposed target of bringing down the AT&C (aggregate technical and commercial losses) losses from the current level of 40% to 15% by the end of the 11th Plan seems to be impractical. This is specially so given the institutional weakness of the sector as well as the slow progress in loss reduction. Only a few states like Andhra Pradesh, Gujarat, Tamil Nadu and Delhi have been able to reduce AT&C losses appreciably. This calls for strengthening of the governance system in the sector.

Reforms in the sector were initiated in 1991 and EA 2003 has given a comprehensive legal and regulatory framework to move forward. The central and state governments have been making efforts, though not always with the requisite zeal and in a harmonious way. As a result, the progress in realizing the objectives of reforms has fallen short of expectations.

The performance of other sectors such as coal, oil & gas, railways also impact the performance of the power sector. The reforms in these sectors, therefore, merit importance in taking forward the power sector.

Tags: power reforms, power deficit, generation capacity, energy access