August , 2019
Power infra improving, but debt is a problem
15:20 pm

Kuntala Sarkar

Absence of electricity has been an inherent feature of rural India. It has led to low infrastructure and poor communication services in rural India. However, according to government reports, the situation has improved in the last few years. Electricity production in India reached its highest level of 117047 GWh in May, 2019.

According to Government of India, power Ministry of Power, one lakh Mega Watt (MW) generation capacity has been added for expansion of the transmission grid by more than one lakh circuit kilometre (CKM) till date in 2019.

Government-owned power companies like National Thermal Power Corporation, Damodar Valley Corporation, National Hydroelectric Power Corporation and Nuclear Power Corporation of India are contributing heavily in this expansion. The government is also looking to promote the usage of electric vehicles and the success of this move depends on a seamless power generation and distribution process.

Additionally, the government is looking to promote the usage of LED bulbs to cut down electricity consumption. The 2019 Budget referring to the UJALA Yojana proposed, “A programme of mass scaling up of LED bulbs for widespread distribution at the household level was taken up resulting in massive replacement of incandescent bulbs and CFLs. Approximately, 35 crore LED bulbs have been distributed under UJALA Yojana leading to cost saving of Rs. 18,341 crore annually.”

Growth in renewables

Ministry of New Renewable Energy has set a target of installing 11802 MWp of renewable energy capacity in FY 2019. The Indian government has planned to reach a target of installing 175 GW of renewable energy capacity by 2022. It includes 100 GW from solar power, 60 GW from wind energy, 10 GW from biomass and 5 GW from small hydro-power projects. Of this target, 40 GW is set for grid-connected solar photovoltaic (PV) rooftops. With an additional 4846 MW hydel capacity installed during 2014-2019, the project is heading north. But the progress has been slow. India’s installed hydel capacity at the end of 2018 was around 45,400 MW with an annual growth of just 1%. The Ministry of New and Renewable energy in June, 2018 has set the targets of off-shore wind power capacity installation at 5 GW 2022 and 30 GW by 2030. The ministry started India’s First 1.0 GW off-shore wind project off the coast of Gujarat in August, 2018.

One Nation, One Grid

Pace of power grid construction has increased substantially in the last few years. From independence to 2014, the average addition to the national power grid was around 4385 kilometres per year. For the last five years, it has scaled up to 24414.2 km per year. The country is also experiencing 14% increase in inter-regional power transfer capacity for the 2018-2019 fiscal. The coverage of transmission lines were around 69450 CKM during 2010-2014 and have increased to 122071 CKM during 2014-2019.

State-owned electric utilities companies like Power Grid Corporation of India (PGCIL) installed 9,072 CKM transmission assets of Extra High Voltage (EHV) transmission lines in 2018. The company is also witnessing extraordinary growth over the last few fiscals and achieved a turnover of Rs. 30,766 crore during the 2017-18 fiscal.

Status of Rural Electrification

‘Pradhan Mantri Sahaj Bijli Har Ghar Yojana’ known as the ‘Saubhagya’ scheme was launched on September 25, 2017 as a project that aimed to provide electricity to all households. The government intended to invest $2.15 billion to electrify 212 million households under this scheme.

The household electrification process reached its highest level during the last quarter of 2018 and can be attributed to the successful implementation of the Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY) which was earlier known as Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY).

According to the Indian power department, it has sanctioned 921 projects under DDUGJY. These projects are aimed to electrify 1,21,225 un-electrified villages and also implement complete electrification of 5,92,979 partially electrified villages. The department also plans to provide free electricity connections to 397.45 lakh BPL rural households. In the last four years, projects under this scheme have been implemented in 1,10,146 un-electrified villages. Additionally, intense electrification of 3,20,185 partially electrified villages have been completed. 220.63 lakh no-cost electricity connections have also been given to BPL households.

The Indian government claims that till December 2018, 99% households received this facility. This can be seen as an enormous achievement by the government. However, this statistics can be challenged. In maximum cases, even if electricity is available, the monetary conditions of the villagers prevent them from availing electricity.

Curbing power theft

As per the Central Electricity Authority, over 27% of the power produced in India is either lost because of dissipation from wires or due to theft. DISCOMs lose around Rs. 10-15 billion per year because of power theft. Under the UDAY 2.0 metering and billing system, the government proposed to install smart meters for curbing power theft or leakages. However, the online portal of the Indian power department informs that only 4% of smart metering for the above 500 kWh category and 4% of smart metering for the above 200 kWh category have been implemented till date.

Debt of power suppliers

India has mined enormous amounts of coal to run power plants. Distribution companies (DISCOMs) connected millions of homes to power grids. But the companies are burdened with a record debt rate. According to data from rating agency Crisil published in May 2019, this debt is expected to reach $37 billion by 2020. State governments are unwilling to increase power-costing and that is leading to losses for the DISCOMs and with the economy in doldrums, industrial demand for power is also limited. The government needs to take effective steps to address this problem.

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