The Renaissance of India’s Power sector under the Modi government

In a recent interview, Minister of state for Power R K Singh said that the achievements of 48 months of the current government compared to 48 years of achievements of other governments as an “eye-opener”.

At a press conference on the completion of 4 years of the current government, he said that the present government has added 24,000 MW power generation capacity per year compared to 4800 MW of earlier governments. He also said that the government intended to provide power supply for 4 crore families by December 2019 under Saubhagya Scheme.

When one looks at the performance of the current government compared with the performance of previous governments, one realises that the current government has invested a lot of resources in transforming the sector.

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Generation:

  • The installed capacity of power generation by the end of 2012 under the UPA regime was around 202,979 MW. By the end of March 2018, the power generation rose to 344,002 MW with an outstanding growth of more than 10% every year.
  • The per capita consumption rose to 1122 kWh in 2018 from 883 kWh in 2012.
  • Clean Energy production generation was about 63,493 GW in 2014, where the generation has almost doubled to 114,315 GW (out of which Hydro Projects produce 45,293 MW) which in 2018 thanks to the push given by the current Modi led government.
  • The share of thermal energy in the mix is still very high at 222,906 GW, almost 66 percent of the electricity produced, while the clean energy is about 33 percent of the remaining produced.

 Thermal:

India’s thermal sector contributes about two-thirds of the power generation. The Coal-based power plants produce about 88 percent of the thermal power produced, while the remaining comes from Gas and Diesel based plants. The total thermal power generation has increased from 131,603 MW in 2012 to 222,906 MW in the last 6 years with an average growth of 10 percent per year.

Renewable Energy:

India is one the largest producers of power from the renewable energy with almost 69 GW of energy, excluding large Hydropower generation. The Large Hydropower sector accounts for another 45G W of energy, both combining to form about 33 percent of India’s power generated. The government has set an ambitious target of producing 175 GW of energy from renewable sources – nearly 100 GW through solar power, 60 GW of wind power, 10 GW of biomass power and 5 GW of small hydropower by 2022.

  • Wind Energy: Wind power generation capacity in India has significantly increased in recent years. As of 31 March 2018 the total installed wind power capacity was 34,040 MW, the fourth largest installed wind power capacity in the world. The production in the UPA regime was around 28,214 MW and rose to 52,666 MW in 2018 under NDA regime. The government has set a target of production of 60 GW of energy from Wind alone. Tamil Nadu alone produces about 8197 MW of energy followed by Gujarat and Maharastra. The present government has also invited bids for development of offshore wind power to give a boost to the renewable sector.
  • Solar Energy: Solar power generation projects are seemed to be the pet project for the present government. Prime Minister Narendra Modi has invested a lot in making a global solar producing nation. The government is moving in a clear path to not only just produce power from solar energy, but also to be a global leader in developing technology to harness power using solar. The country’s solar installed capacity reached 20 GW in February 2018. The present government has expanded country’s solar-generation capacity 8 times from 2.63 GW in 2014 under UPA to over 22 GW as on 31 January 2018. The government has achieved this target much earlier than previously scheduled to be done in 2022. The solar power sector has consistently seen a growth of 80% growth every year since 2015.
    The government has revamped National Solar Mission and has set a target of 100 GW of energy from solar energy alone, out of which 40GW is to be produced from rooftop solar plants. In December 2014, the Government of India introduced a scheme to establish at least 25 solar parks and Ultra Mega Solar Power Projects to add over 20 GW of installed solar power capacity.
    Narendra Modi led government wants India to be a leading power in global renewable energy today. It has entered into global alliances like International solar alliance with an objective of being a global giant when comes to Solar power. India is also working with France to co-develop projects related to solar energy.
  • Hydro Power: India is the 7th largest producer of hydroelectric power in the world. India’s Hydropower is comprised of both large and small hydropower projects. India’s installed utility-scale hydroelectric capacity was 44,594 MW or 13.5% of its total utility power generation capacity. While the former produces about 38,247MW, the latter produces only 5056 MW of energy. There is not much of a change in terms of production from the days UPA regime to the current NDA government as there was a production of 44,162 MW during 2014.
  • Nuclear: Nuclear power production is complex and has a long gestation period. As of March 2018; India has 22 nuclear reactors in operation in 7 nuclear power plants, having a total installed capacity of 6,780 MW and another 6 more are under construction. India has a plan to reach a nuclear power capacity of 63 GW in 2032.
    The present government has been credited for resolving the disputes between India-US Nuclear pact and for also entering into an agreement with Japan, who are considered to be hardliners when it comes to nuclear non-proliferation.
  • Other Sources: The production of power from other sources like Biomass, Waste to power generation, Geothermal and Tidal have seen little growth in terms of other sectors. The cumulative production from these sources is about 9000 MW of which 8700 MW is produced by biomass sources. In addition to that, the government has created enabling policies and have de-regulated most of these sectors for private participation.

Transmission and Distribution:

One of the achievements of the present government is revamping the power transmission and distribution (T&D) sectors. The T&D sector is mainly in the hands of state sectors, while the transmission is mainly done by Power Grid Corporation of India, a PSU under the Ministry of Power.

The present government has launched a scheme called Ujwal Discom Assurance Yojana, where state governments will take over the debt of these discoms and even discoms can issue bonds to finance their debts. This will ease up the debt-ridden companies to correct the course and bring efficiency in the distribution sector. The scheme has resulted in both the financial outcome and operational efficiency of reduction in AT&C losses have improved at an aggregate level. This is estimated to have freed up Rs 22,000 crore capital of the banking sector.

Rural Electrification:

  • It can be said that one of the biggest achievement of the present government is in the field of rural electrification. The government had set the target of electrification of all the un-electrified villages and has been achieved this year.
  • Deen Dayal Upadhyay Gram Jyoti Yojana aims to provide 24×7 uninterrupted electricity supply to each rural household across the country by 2022. It aims to strengthen sub-transmission and distribution network to prevent power losses. It focuses on feeder separation for rural households and agricultural purpose.
  • The schemes like ‘Power for All’ intend to provide 24 hours electricity throughout the country by 2022. The other scheme Saubhaya where, the government will provide free electricity to all households identified under Socio-Economic and Caste Census (SECC) data 2011, while others will be charged 500 Rs.
  • In addition to these schemes, the government has taken key initiatives to shift to cleaner energy platforms. The government of India, through the Energy Efficiency Services Limited (EESL) under the Ministry of Power, will retrofit 10 lakh conventional street lights with LED lights under Street Lighting National Project (SLNP).
  • Unnat Jyoti by Affordable LEDs for All (UJALA) was launched by Prime Minister of India Narendra Modi on 1 May 2015, replacing the “Bachat Lamp Yojana”. The main objective of the scheme is to promote efficient lighting, enhance awareness on using efficient equipment which reduces electricity bills and helps preserve the environment.
  • The Ministry of Power along with the Ministry of Textiles has launched Sustainable and Accelerated Adoption of efficient Textile technologies (SATHI) to help small Industries. The Powerloom sector in India is predominantly an unorganized sector and has a large number of micro and small units which produce 57 percent of the total cloth in the country.

The present government, which had inherited dis-functioning electricity sector under UPA regime and has transformed it as a capacity surplus sector. The Modi led government should be credited for making India a power surplus country today. It also invested a lot of time and money on bringing a revolution in clean energy in the country. Along with this, it has eased the regulatory framework for more private sector involvement. The strong power sector is a sine qua non for any country’s economic growth. The government needs to do more, but one can be assured of positive changes in the future if the data holds up and the present government continue this work with the same intensity.

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