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Indian power sector scenario
Government of India has claimed that the country is expected to become power surplus as the all-India 'power deficit' has been easing. The deficit was 8.7 per cent in 2012-13, which has come down to 2.1 per cent in 2015-16.

While this is good news, but it is not totally correct. While calculating power demand of the country, only people who are connected to the grid and have access to electricity at present are taken into consideration. The real demand that encompasses all citizens would be known only when India achieves universal energy access.

Claim of power surplus data show the extent to which power supply falls short of the demand by those connected to the grid. 'Connected' is the word to watch. It is these limited hours of supply that are taken into account while calculating the power requirement of agricultural customers and rural areas to arrive at the overall deficit or surplus. The deficit is only capturing the unmet demand of the people connected to the grid.

However, people who are yet to be connected and those with poor supply quality are not being taken into account. In an absolute sense, by which the availability of 24x7 power supply to all can be guaranteed is a distant dream.

With nearly six crore rural households, comprising a third of rural households, not having an electricity connection, the reported numbers under-estimate the country's real demand for electricity. Similarly, many urban households, too, have no electricity connection. Also, the supply of electricity to farmers which is subsidised or free is limited to 4 to 8 hours every day.

India's per capita energy consumption of 1070 units is almost one-third the global average of 3026 units, and trails far behind the mean figure for the developed world. It is lowest amongst BRICS countries. Although per capita energy consumption has more than doubled over the past 15 years, almost 240 million people do not have access to affordable energy supply today.

It is even worse for the rural UP, Bihar, MP and Jharkhand. As many as 87 per cent of rural households in Bihar, 71 per cent in UP, 45 per cent in MP and 63 per cent in Jharkhand have no electricity connection. Houses in urban areas also have no electricity connection. The urban households without electricity are 19% in UP, 33% in Bihar, 12% in Jharkhand and 7% in MP. In the last two years, Bihar which has the lowest per capita power availability, witnessed the highest growth rate of around 25 per cent.

On the contrary there are, however, some States such as Gujarat and Maharashtra where the access to power is surplus or almost universal. Some states like Punjab, Haryana, Gujarat, Maharashtra, have signed more than required power purchase agreements with private power generators due to which state run thermal power plants are forced to back down while states like UP and Bihar are facing load shedding. Majority states are still power deficit states. Discoms are not in such financial position to embrace more financial liabilities in its efforts to ensure interrupted power supply.

It is a fact that the State Discoms of the country as a whole are in poor financial health with accumulated debt and losses of the previous years. The Government has introduced the UDAY Scheme by which the State Governments would own the responsibility to improve financial condition of the State Discoms and to start with taking over of the outstanding debts of the Discoms in a phased and time bound manner. By operational and financial turnaround of Discoms, government expects to facilitate reliable, adequate and sufficient power supply to consumers, among other things. Even with this step, it would take several years for achieving financial turn-around of the state power sector and no one can assure of actual turnaround of Discoms. The earlier two financial restructuring programme of government has failed to achieve desired results.

Under these circumstances, the step to further amend the electricity act 2003 for introducing the concept of supply licensee so as to separate out carriage and content would lead to exodus of high paying and profitable consumers to the private licensees.

Electricity Act 2003 was enacted for restoring the financial health of power sector but this Act has failed to achieve its objective resulting in more than 8 lakh crore losses & debt on state power distribution companies (Discoms).

Without analyzing the causes and circumstances of failure to achieve its objective, the government wants to conduct another experiment by way of introducing more amendments in the act.

A particular feature of the proposed amendments is to introduce an Intermediary Company to which all the power purchase agreements (PPAs) would be assigned. These PPAs would include central sector companies, state generating companies and stations as well as private sector generating stations in the state. The role and working of the Intermediary Company under the proposed scheme would be extremely difficult to execute under the Indian conditions.

Most of the states are having the problem of stranded capacity of power stations in the state including central sector and private sector. The situation is wide spread wherein private sector plants are operated in preference while central sector plants are not fully scheduled and also state thermal stations are being kept shut down.

The state run thermal plants are seeing lowest plant load factor and idle coal stocks and remain on forced outage due to no demand for power. However, advertisements claim that government has electrified one village every day. Marketing does not work in governance.

Another major hurdle in power sector reforms is that after new government took over, power sector appointments are seeing major blocks. Most of the regulatory posts are vacant and chairman of all regulatory commissions are retired bureaucrats. Even in state utilities technocrats have been sidelined and are not part of decision making management.

Chinese entry into supervisory control and data acquisition (SCADA) systems being added to smarten up city grids raises security fears. SCADA is a computer-based industrial automation control system that maintains balance between demand and supply in the grid.

The Chinese equipment will be increasing the vulnerability of power sector if exposed to suspect individuals, companies and nations which may use such access to their advantage. There is ample scope of planting computer bugs in the system at a later stage.

Government of India should recognize and accept that the conditions prevailing in the power sector are not at all favorable for introducing far reaching changes in distribution.

The following major issues which includes turnaround of financial health and restoring financial viability, curbing/minimizing of thefts of electricity etc., development of energy accounting, metering and IT systems should be examined in detail before processing the amendments in electricity bill.

(Author is Spokesperson of All India Power Engineers Federation)

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of In case you have a opposing view, please click here to share the same in the comments section.
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