M1L2: Current state of Power sector in India

In the last lecture we saw, that access to energy is important and equally important is the fact that access to a higher grade of energy is available. Equally important is the fact that in order to improve labor productivity, this access is available at minimal and affordable cost. If you look closely to the recently launched government schemes like Rural electrification policy or Ujala yojana, you will notice that all of them aim to achieve the same objective. And let’s not forget the fact, that India’ per capita energy consumption is already rising which implies that the standard of living of Indians is also increasing quickly.

We now jump to the current scenario. TODAY, India is a country with a population of 130 crores. Out of it ~60% is youth in the age group of 18 to 40, which means a hyperpotential exists to make a giant leap towards progress if the talents of these youth kingdom is harnessed effectively. In a nutshell, give them an infrastructure so that to breed their knowledge & creativity into entrepreneurship, so that we can make our economy $10 Trillion by year 2030.

Now the next question is where does electricity fit into it. As we discussed earlier, an uninterrupted power generation is an intrinsic essentiality for the overall development of any nation. In quantitative terms, the per capita consumption of electric energy is regarded as an indicative parameter of the socio-economic growth rate of a nation. Therefore, to boost the GDP, we need to make sure that electricity is available to each and every corner of the nation. How does this electricity reach us?

Power producer / Power utility provider

Powerhouse => Transmission lines

Layer 2 : Discoms / Aggregators

Transformer => Substation transformer => Distribution lines

Layer 3 : Customers

Houses and apartments

workplaces and commercial offices

factories and industries

agriculture and farming

Now, when we look closely to this supply chain, we find that there any many places where market failure can occur. This can be on the supply side where the power plant is unable to produce electricity because it doesn’t get coal or it can also be because of some problems in the distribution channel that is managed by distribution companies (Discoms) who take electricity but do not supply them to the end customer.

Now there are many reasons why this market failure can occur in the electricity sector. Let us break this in individual segments.

Power producer

The electricity producer may run his powerhouse on coal or oil or gas or bioethanol. Or he can also generate electricity by making a solar farm or a wind farm. In India, we find that most of the electricity generated comes from Coal based powerhouses.  Most of these powerhouses complain that they are unable to produce electricity since the supply of coal is very erratic and unstable. This can be attributed to the fact that the supply chain of coal was earlier overly dominated by coal India limited, a government PSU. So, first things first, if the government wants to improve the access of electricity, this problem needs to be fixed. Can you name me the policy that the government came out to resolve this issue in the supply chain of coal?

Transmission and Distribution

In India, more than 40% of the electricity is lost during transmission and distribution before it reaches the end consumer. This can be attributed to the fact that the Discoms never upgraded their technology since they were unable to make profits. (Thanks to socialist economy of earlier governments that they were not allowed to raise their product price, despite the fact that the factor prices were continuously increasing). So, the other problem lies here. Can you quote the name of the policy that was brought here by the government to improve the health of the Discoms? You assumed correctly, its UDAY Yojana.

Customers

These customers can be divided into three target market segments based on the agenda of the government

1.    to improve ease of doing business: commercial offices and workplaces

2.    to achieve 100% household electrification: houses and apartments

3.    to improve the share of manufacturing via Make in India: industries and factories

4.    to double farmers income by using extension services like irrigation, insurance, weather forecasting information etc.: agriculture and farming

In the next lecture, we will discuss the types of coal that Indian companies are using. But before this, write an essay on how can India manage to achieve 100% electrification in an era, where every global citizen is rising to the increasing call for action, to address the issues of global warming and climate change?

Secondly, refer to the website of the Ministry of Power and check out the rate of growth of power sector in India. Analyze if this increase in the production of power be able to meet the demand to meet the demand for electricity when e-vehicles and industrial automation (Revolution 4.0) gain further penetration in automobile market and manufacturing sector in India.


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KUSUM (Kisan Urja Suraksha evam Utthaan Mahabhiyan

SRISTI (Sustainable Rooftop Implementation for Solar Transfiguration of India)

SHAKTI – for coal allocation

SAUBHAGYA – App for tracking household electrification

VidyutPravah – The Mobile/Web App provides real time information of current demand met, shortages if any, surplus power available and the prices in Power Exchange.

UJALA (UnnatJyoti by Affordable LED`S for All) – App provides real time updates on the LED distribution happening across the country.

UrjaMitra – monitoring of power availability and sending power cut information through SMS

MERIT–information pertaining to marginal variable cost and source wise purchase of electricity.

UDAY- Allows people to compare DISCOMs on the basis of 26 major performance parameters.

URJA (Urban JyotiAbhiyaan) – It is an informative App for Urban Distribution Sector. It captures Consumer centric parameters from the IT systems created under IPDS.

TARANG (Transmission App for real time monitoring & Growth) – It is an IT Web/mobile based platform to provide status of both inter and intra state Transmission Projects in the country. This platform also shows the prospective interstate as well as intra state Transmission Projects.

DEEP e-bidding (Discovery of Efficient Electricity Price) – The portal will provide a common e-bidding platform with e-reverse auction facility to facilitate nation-wide power procurement through a wider network so as to bring uniformity and transparency in the process of power procurement.

Ash Track - linking fly ash users and power plants for better ash utilisation.