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Editorial | June 2017

Three years and three cheers!

Three years is not a long time to judge a government's performance, but it is long enough to set a trend in power sector reforms in the country. Narendra Modi's government at the Centre, which completed three-year tenure in the last week of May 2017, has some achievements to boast of in the sector that touches everybody's life. Unlike the previous governments, the current government has set a new trend in adopting time-bound targets under various power sector related schemes. That too most of the schemes are aiming to accomplish the final target of the scheme. For example, village electrification scheme is targeting connectivity to all the villages by May 2018, and the plan is to achieve 'Power for All' by 2022.

UDAY is also an admirable scheme aimed at improving the financial and operational parameters of power distribution companies (discoms). The important component of the scheme is bringing in accountability of the states by shifting three-fourths of the discom debt burden on to them. Over the last full year after UDAY AT&C losses have fallen from over 23 per cent to 21.3 per cent in April 2017.

Though the rapidly falling prices of solar gear, particularly PV panels and batteries, across the world is said to have helped bring down solar power prices to a great extent, the reverse bidding process, which induces competition among the prospective bidders for solar projects, has expedited the process of price discovery/correction over the last couple of years. In a repeat, this bidding process has brought down wind prices by 20 per cent from the previous level highlighting its strength.

Simplification of coal linkages to power plants across the country in such a way that it curtails undue wastage in transportation has resulted in savings for power companies. The new policy, called SHAKTI, allowing fresh auction of CIL's coal linkages is a step in the right direction, addressing the coal requirement of some new power plants. Raising domestic production of coal, imports were curtailed.

It is not that these schemes were not in existence before Modi government assumed office. For example, 'Power for All' scheme, when it was announced during the 11th plan (2007-12), the target was set at 2017, but not enough was done to achieve the same. EESL is in existence since 2009, but it made rapid strides only from 2015, when UJALA (LED bulb) scheme was launched.

However, it is a long way before we can see the best side of the power sector. Frequent power outages and issues about quality of power supply remain irritants for users. Planning for development of generation, transmission and distribution infrastructure are still done in silos. Already the country is suffering from lack of sufficient transmission lines to transfer power from surplus locations to needy geographies. The distribution companies are yet to think of ensuring 24x7 power supply.

Still development of intelligent grid infrastructure is a far cry. According to a regulator the project is moving at a snail's pace. Without building smart grids ensuring quality of power will only remain a mirage. That means the efforts should continue for long without break to take Indian power sector closer to global standards.

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