A big turnaround in India’s power sector

India’s power sector that was marred by continuous shortages and lack of quality and steady supplies to homes and factories has seen an unprecedented turnaround in the past three years.

Today the country boasts of a situation where surplus power to the tune of 3,000-4,000 mw is available on real time basis at any time of the day to states and distribution companies and at affordable rates on the power exchange.

The ease of getting power at affordable rates comes on the back of focussed reforms unleashed by the Modi government over the past three years in the power sector, Within three years, India’s total power capacity has increased by nearly one third (31% or an addition of 76,577 MW) from 243GW in March 2014 to 320 GW in Mar 2017 and the conventional or coal based power capacity (which is the mainstay of the country’s overall power capacity) has increased by 26% (one fourth) from 214 GW in Mar 2014 to 270 GW in Mar 2017.

Energy shortages in 2014 were 42,428 million units (4.2%), which came down to 7,459 MU in 2017 (0.7%). Similarly, peak energy shortage in 2014 was 6,103 MW (4.5%) which came down to 2,608 MW (1.6%) in 2017.

The power generation growth in the past three years is 6.4% from 2014-2017 (provisional). Generation growth would have increased further but for Energy Efficiency activities like UJALA, which have been the focus of our Government since 2014.

In 2014-16, growth was 6.9% & if we add the generation avoided due to energy efficiency activities it was 9.5% Significantly, India has turned around from a net importer of electricity to net exporter of electricity exporting around 5,798 Million Units to Nepal, Bangladesh and Myanmar in 2017 As generation alone cannot drive the sector, appropriate measures have also been initiated in the power transmission sector that too witnessed an impressive growth over the past three years.

In line with the government’s “One nation, One price and One grid” initiative, the transmission sector witnessed as much as 36% (One third) increase in transmission capacity from 5,30,546 MVA in Mar 14 to 7,22,949 MVA in Mar 17.

Alongside, the transmission lines saw a 26% (One fourth) increase from 2,91,336 circuit kilometres (ckm) in March 14 to 3,66,634 ckm in March 17. Then there has been an 87% increase in Alternate Transfer Capacity to South India from 3,450 MW in March 14 to 6,450 MW in March 17.

The growth in the sector was aided by simultaneous reforms on the rural front under the Modi government’s flagship program to provide electricity across all villages in the country.

Rural Electrification under Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) was a programme announced in 2014 to connect un-electrified villages and transform the lives of rural people.

The number of un-electrified villages in 2014 stood at 18,452. This program, that was given a special focus under the reform programme of the government, achieved a new milestone of more than 13,123 villages of 18,441 electrified as on May 12, 2017.

Prime Minister Narendra Modi had promised the nation from his speech on Red Fort on 15th August 2015, that the remaining 18,452 villages (as of 1 April 2015) would be electrified within a 1000 days.

So while under the target set by the government electrification of all villages will be completed by May 2018, however, the dynamic minister for power, coal, renewable energy and mines Piyush Goyal has preponed this deadline and wants to do it by December 2017, that in itself will set a record of sorts.

The talk of reforms in the power will be incomplete in the absence of a mention of the energy efficiency movement through UJALA (Unnat Jyoti by Affordable LEDs for All).

The energy efficiency drive saw distribution of nearly 23 crore LED bulbs by the Government along with 33 crore by the private companies, a move that resulted in savings of over Rs. 20,000 crore per year in electricity bills of consumers.

Government’s lead agency for this program, the Energy Efficiency Services Ltd (EESL) did not restrict this drive to mere distribution of energy efficient bulbs but also fans, air-conditioners, tube lights (for urban areas) along with energy efficient agricultural pumps for the farmers in rural India.

The largest contributor in India’s power reforms story is the government’s Ujwal DISCOM Assurance Yojana or UDAY scheme for turnaround of state distribution entities, that were considered as the weakest link in the entire chain of power sector reforms.

According UDAY was launched by the government to develop sustainable power distribution companies. Within three years, we have a total of 27 States and UTs who have joined this scheme for financial and operational turnaround.

The scheme has already yielded savings of nearly Rs 12,000 Crores to the state power distribution companies. Almost 85% UDAY Bonds have already been issued (Rs. 2.32 lakh cr out of total Rs. 2.72 lakh cr) leading to less rate of interest for DISCOMs.

Transparency has been the major driving factor behind this government’s major reform initiatives. In the power sector alone, in order to empower customers track the working and performance of the ministry and its companies on real time basis, the power ministry has launched various mobile Apps and websites to ensure transparency and accountability.

These includes the GARV (Rural Electrification) App that provides updates related to the electrification of villages and households in India; the Ujala (LED bulbs) App provides real-time updates on the LED distribution; Vidyut Pravah (Power Availability & Price) App giving real-time information on electricity price & availability; URJA (Urban Jyoti Abhiyaan) APP to help enhance consumer connect by showing DISCOM's performance in cities and gives data of the Integrated Power Development Scheme (IPDS), the TARANG (Transmission System Monitoring) App to monitor the progress of Transmission System in India;Ujwal DISCOM Assurance Yojana (UDAY) that gives the progress of the UDAY yojana which assures the permanent resolution of all past, present and future issues of DISCOMs along with the latest kid on the block or the Urja Mitra APP that enables the citizen to access real time and historic outage information for DISCOMs.

India’s power sector has indeed taken rapid strides during the past three years and the process or reforms continues unabated. The reforms in the sector today are recognised by all across the globe. From ranking 99th at the global level in 2014 in terms of electricity accessibility ranking, India today has come up many notches and is sitting at the 26th spot.

Nothing better to sum this up in minister Piyush Goyal’s own words, “Many problems had set India back for many years but now the mood has changed.”

By Anupama Airy