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24/7 Electricity – 24 Hours Power A Dream For India
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Sixty seven years after independence more than 30% Indians still live without reliable access to grid electricity. And, the majority of those who do have a grid access suffer on average 5-6 hours of power disruption.
India the world’s third largest producer and consumer of power continues to remain incapable of supplying 24/7 power to its citizen. Even though 98% of the villages have at least power line but only 80% have access to power. There are still 28 cr. people who are without electricity.
But there is a hope with India now sitting on 31% higher power generation capability. The country is half way there to realise its dream of 24/7 power. The other half remains a giant- both politically and financially enfeebling. It involves fixing an enormously inefficient and bankrupt power distribution system that has accumulated losses in excess of Rs. 3.19 lakh crore. Its roots cause lies in the inability of state government to summon up courage and raise power tariffs as power generation and distribution cost continues to rise.
This has led 21 of India’s 29 power distribution companies ailing, preventing modernisation of equipment and network. This becomes a major reason for AT&C[Aggregate Transmission & commercial] losses, creating a vicious cycle that they are now struggling to get out of.
The very high fraction of losses has plagued the financial health of state electricity boards in a distressed state. The high loss affects revenue, inefficient or no revision in tariffs is another reason that has affected performance.
The banking sector and most lenders have become very cautious in extending loans to power sector. This all has left distribution companies bleeding profusely.
A report presented by Sanjay Agarwal, power secretary of Uttar Pradesh, showed that losses in PM Modi’s lok sabha constituency, Varanasi had increased from 43.18% to 50.13%, while in Azamgarh a new pocket borough of Mulayam Singh Yadav, it had risen from 56.84% to 63.78%, both districts are getting 24/7 electricity because of their VIP status.
This is where the problem lies. 24/7 supplies is assured only because of political considerations not because of efficiencies. This is reality in most jurisdiction of the loss making distribution companies. If they continue to do this, loses are bound to increase.
However, Power Minister Piyush Goyal, is pushing rural electrification by pushing the clearances. PM Modi has launched Ujwal Discom Assurance Yojna [UDAY] for power sector reform. UDAY isn’t a simple central govt. driven bailout programme which just gives cash to discoms and states without accountability. There’s a specific roadmap for restructuring. Under UDAY, participating states will take over their public discom debt over two years with the debt benchmarked to September 2015.
Indian power sector has a very complex chain which involves fuel linkages, power generation, power transmission, power distribution, trading, financing and end consumption. Different parts are owned by different central and state govt.
UDAY ensures that discom reforms are not just distribution centric but positively impact on various input and output to the distribution function. UDAY compels the discom to improve operational efficiency. The biggest issue to address under this space is the AT&C losses.
The UDAY package will need the states to bring their AT&C losses to 10% or 15% by 2018-2019. This is huge ask, but if the states achieves this, they will get additional benefits of better infrastructure and technology via centrally sponsored schemes. The central govt. will be monitoring the progress on this parameter regularly.
The action on this account by state will be the single best driver towards “Power on Tap”. Nothing is impossible to achieve, not even fulfilling the dream of having 24/7 power.
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