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2014: When India inched forward on providing power for all

Anilesh S Mahajan     December 29, 2014

It was for the first time in Independent India's 67-year-old history that providing 24X7 electricity access to all the citizens became an election issue.

In a country where a third of the population does not have access to electricity and where the remaining face up to 20 hours of load shedding a day, this was a big promise to make. But many believed in the promise made by Narendra Modi, who had earlier managed to provide electricity to all in Gujarat during his tenure as chief minister.

Riding on these expectations, Modi won the general elections and formed the first majority government in India in 30 years. He made his confidant Piyush Goyal the minister in charge of coal, power and renewable energy.

This was followed by the formation of an advisory group under former power minister Suresh Prabhu to identify the challenges to an integrated approach for power, coal and renewable energy, and come up with solutions.

The miscommunication in these ministries was earlier seen as a major handicap in the power sector. There is now a consensus among corporate houses that the government has diagnosed the problem well.

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This led to reforms in the distribution sector, and an amendment related to that was tabled in parliament on December 19. These amendments will promote competition; the aim is to improve efficiency in operations and quality of power supply.

It gels well with state-specific action plans, initiated earlier in states such as Andhra Pradesh, Delhi and Rajasthan.

The aim is to provide 24X7 electricity access to all the citizens there by October 2016. The victory of Modi's BJP in states like Haryana, Maharashtra and Jharkhand has only increased the momentum, and similar plans are being worked out for other states as well.

The government has also moved on e-auction to allocate coal mines. In September, the Supreme Court cancelled the allocation of 214 coal mines allocated from 1993 to 2008, and termed the whole process illegal. The court nullified 47 producing or soon-to-be-producing mines along with 167 other mines.

Efforts have also been made to make government-owned Coal India (CIL) increase its capacity and output. According to latest data of daily stockpiles at 100 power plants in the country, 65 had stocks not enough for even a week. Power plants are required to maintain 15 days of coal stocks, according to guidelines of the Central Electricity Authority.

During the summers, India for the first time generated 9-12 per cent more electricity with a marginal increase of production by CIL. Indian imports of coal might touch 200 million tonnes (MT) for the first time.

However, a target is set for CIL to double its production by 2019, with CAGR of 18 per cent. This looks tough, as the monopoly coal producer has never crossed 10 per cent growth in last one decade and has an average output of 23 tonnes per man shift, compared with the global average of 110 tonnes.

Goyal hopes that improvement in rail connectivity to critical mines in Jharkhand, Chhattisgarh and Odisha will improve the coal production by 200 MT. Rationalisation of coal linkages and logistic supplies would help in unlocking another 200 MT.

Moreover, he is focusing on improving the technology and machinery to increase production from the existing mines of Coal India. However, he ruled out disintegration of this behemoth.  

On transmission side of the business, 2014 started on a good note, with Power Grid's announcement of commissioning of first 765kV Raichur-Solapur transmission line, which allowed synchronization of the southern grid.

This meant that India was the biggest grid in the world running on the same frequency of current. The second line is still under construction. Once erected, this will allow flow of the current both ways.

The government has decided to set up Power System Operation Corporation (POSOCO) as an independent government company.

In the process, the institutional framework for an independent, secure and reliable power system operation entity at the national level has been put in place as mandated under the Electricity Act 2003.

POSOCO operates the National Load Despatch Centre (NLDC) and Regional Load Despatch Centres (RLDCs). POSOCO is also designated as the nodal agency for the Renewable Energy Certificate (REC) Mechanism, transmission pricing, short-term open access in transmission, Deviation Settlement Mechanism, Power System Development Fund (PSDF), etc.

The Ministry of Power is also working out the Deendayal Upadhyaya Gram Jyoti Yojana, announced in the budget. The scheme envisaged feeder separation, strengthening of sub-transmission & distribution network including metering at all levels for the rural areas. This scheme may help in round the clock power to rural households and adequate power to agricultural consumers.

The year gone by also saw many power plants changing hands. In the last six months, four power plans saw new buyers. Adani bought two plants, one from Lanco and another from Avantha; Tata Power bought one from Ideal group, and JSW purchased two hydro projects from Jaypee Group.

There is more than 55,000 MW capacity on sale. NTPC is expected to soon announce the purchase of roughly 2,000 MW of capacity.

With not many private players interested in setting up greenfield projects, 2015 could see many corporate houses with good balance-sheets buying more power plants.


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