‘People are ready to pay for 24x7 power. It should be affordable, accessible and available'

Idea Exchange

Minister of State for Power (Independent charge) Jyotiraditya Scindia speaks about the challenges in the power sector and the need for a "more transparent system of tariff fixation". This session was moderated by Senior Assistant Editor D K Singh

D K Singh: Describe some of the challenges we face in the power sector and the initiatives you have taken.

The power sector has four segments in the value chain: generation, transmission, distribution and last-mile connectivity. You have to get the entire value chain to become viable. On the generation side, there are two issues: the first is capacity generation, the second is coal supply. The power sector gets 377 million tonnes of coal per annum from Coal India and with that capacity, we are facing a shortage of more than 15-20 per cent. If we want power plants to operate at high plant load factor (PLF), there is no option but to look at imported coal. That is why the Cabinet has approved the concept of price pooling. Another issue is that of fuel supply agreements (FSAs). We need to sign FSAs for 60 giga watt (GW) of capacity out of which we have already signed close to 21 GW of capacity. As for transmission, we have a capacity of 28 GW, making our network the third largest in the world. We plan to increase the capacity to 65 GW, which will make us the largest transmission grid in the world. For me, the key issue in transmission is the issue of grid security, especially after what happened last year (the northern grid failure). There's a great deal of volatility created if you have underdrawn or overdrawn on the grid. The key issue is to iron out that volatility curve, which can be done by reducing the frequency band. Then there is the issue of distribution where the prime thrust has to be to make the discoms viable. That can be done through reducing aggregate technical and commercial (AT&C) losses and increasing electricity tariffs in line with the rise in costs. The AT&C losses should be reduced to 15 per cent—some states have actually done that. This is where the financial restructuring package (FRP) comes in where efforts have been made to make utilities viable by shifting their burden onto the books of state governments. On the last-mile connectivity, we have the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) and the Accelerated Power Development and Reforms Programme (APDRP). We are also looking at reducing energy consumption. We are looking at 12 GW of energy conservation in the next four-five years. For all this to happen, the sector needs a collaborative approach involving the Centre, state and private sector.

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