An economy that runs without power

For most, nay, all Indians who have a power connection from the local electricity board in their homes, summer is synomymous with one thing, power cuts. Power cuts come in various shapes and sizes and at various timings. They can come in the morning, when you are waiting to go to school and there is no power to iron your shirt, or it can come at night, so that half your time, you are swinging your handheld fan over yourself and your sleeping family, and the other half of the time, you sleep while your family does the fanning. Yes, for middle class families all across the country, that is what summers mean. Its the heat during the day and the mosquitos and humidity during the night.

This was our life in the 80's and in the 90's, and now that India seems to be on the growth trajectory and everyone's starting to take notice, unfortunately things still stand the same way for millions of us eletricity deficient citizens.

True, a lot of new "ultra-mega" power projects have been announced, a lot of new private companies say they are building a project here, a project there, thermal, hydel, nuclear, wind, you name it, and India says its building it, and yet, things dont seem to be getting any better.

Govt now plans 7 ultra mega power projects

Buoyed by the overwhelming response by the private developers for the Sasan and Mundra ultra mega power projects and forced by the shortage situations, the government is expanding plans for the 4000 MW plus ultra-mega power projects. From an initial five to seven on last count. Now, Andhra Pradesh will be home to the seventh ultra mega power project.

Like the other power projects, a shell company formed by the Power Finance Corporation will help get the projects off ground. However due to its late start, this project would be handed over to the successful bidder for developing only by mid-‘07.

These projects are being set up in Sasan (Madhya Pradesh), Akaltara (Chattisgarh), Mundra (Gujarat), Ratnagiri (Andhra Pradesh) and Tadri-Karwar (Karnataka). The seven projects will account for a capacity addition of 28,000MW and would mean an investment of Rs 1,05,000 crore. The government is hoping that competitive bidding will result in a tariff of Rs 1.60 to Rs 1.80.
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But thats not the point. India loses billions of rupees on free power, something which the myopic state politicians feel is essential to keep their vote banks humoured, while those who live in the cities and those who are leading the industrial come back have to either do without it or spend their own money to build captive power plants. More importantly, India loses crores worth of electricity on transmission and distribution, and all cities have incompetent electicity boards and power thieves who thrive in such a situation. So if only we could cut all the loose threads and improve on what we have, we can still improve the existing situation to a large extent.

Much like the rest of the investment-starved infrastructure sectors, the power sector is in need of some major moolah, and more importantly, some major reforms. And the good thing about India, you know, is that there's always hope. Despite all the wrongs, yet we find something we can look forward to, and there are stories which keep coming up that say that maybe things are probably going to get better. India is doing well in the wind generated power production, we are 5th highest producer of wind generated electricity in the world, and that could help solve at least some of the problems.

Wind power capacity up 45% in 2005-06

Installed wind power capacity grew by 45 per cent during 2005-06 over the previous year, the same level of growth that was recorded in 2004-05, show preliminary figures provided by wind turbine manufacturers.

It is estimated that the total installed wind power capacity in the country will be 5,200 MW at the end of March 2006, against 3,595 MW at the end of the previous financial year - an addition of 1,605 MW.

As in the past, Tamil Nadu has contributed to a bulk of this capacity addition accounting for nearly 870 MW during last financial year.

Industry sources point out that there were local problems in Karnataka, with villagers blocking roads and interrupting work. This seems to have been sorted out to a large extent now.
The distribution companies in Karnataka have also started signing power purchase agreements now with investors in wind power, which is a positive development, according to the sources.

As far as other States were concerned, the sources said wind power policy was due for a review in Maharashtra later this year and, hence, there was a rush for installations now.
Rajasthan, which is a small market for wind power, wheeling and transmission are the problem areas. There is potential for installing wind turbines in the desert region, where there is not much demand for power.

Those investing in wind power are being asked to pay Rs 17 lakh a MW for improving the grid and also construct sub-stations and connect them to the nearest high voltage evacuation point.
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Despite being the national capital, Delhi faces an acute power shortage every year. With all the news about the hydel projects in Uttaranchal and the new power plants coming up in the surrounding states, things still look bleak in Delhi, and this makes one wonder, if things are so bad in the national capital, what must it be like for the rest of the country? The answer is that yes, things are much worse in the rest of the country. I can say for certainty that for any electricity department in any state capital, the most important job is to ensure that the VIP areas and the homes of the politicians are provided for, while the rest of the city can go to hell. Such is the case in Delhi, which has been reeling under heavy power cuts since April, prompting the Supreme Court to set in. And these are the cities we talk of. Our rural areas have absolutely no electricity at all to talk of.

We talk about racing with China, heres a sobering thought for those Champions of bullshit sitting pretty in their air conditioned offices in Delhi, China adds around 28,000 MW of electricity a year, while we can barely add 4,500 MW. They have managed to expand their network so that 97% of their households have access to electricity, while in the great Democracy of India, its less than 50%. Coming to the transmission and distribution losses, its less than 10% in China, while its more than 30% in India. With these stats, I can't imagine how we can manage to grow at even 8%, because it all feels so hollow.

Power crisis: SC steps in; seeks explanation from Delhi, Centre

As the capital reels under severe power crisis, the Supreme Court today asked the Centre and Delhi Government to explain the steps being taken by them to enhance power generation and supply to meet the increased demand during the peak summer.

The Bench, which is monitoring the power crisis here since 1999, wondered if the situation in the capital continued to be power-starved, "how will we organise the Commonwealth Games in the year 2010 here?"

The Court observed when it started monitoring the power crisis, Delhi did not have adequate power because it was exporting power. Thereafter, it was said that non-availability of power was due to electricity-theft and distribution losses.

However, despite the distribution system having been handed over to private companies, the situation has not improved, the Bench observed. On behalf of the power distribution companies, senior counsel Aryam Sundaram submitted that his clients could not be blamed for the crisis as they were supplying what was being made available to them by Delhi Transco.

Amicus Curiae Ranjit Kumar said the capital was facing a shortfall of 500-600 megawatts of power and that was why most parts of the city faced power-cuts for hours everyday.
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And with all this incompetence and ridiculousness you would think the government is at least serious to bring about a change, no man, it aint! Most of the power plants that are being expanded and built are running behind schedule, and the Central Electricity Authority has been cutting their expansion targets again and again. So says Assocham.

No respite from power crisis: Assocham study

Acute shortage of electricity across the country is unlikely to be bridged soon, with as many as 47 power plants running much behind schedule to expand capacity, says an industry chamber ASSOCHAM.

As many as 10 power plants in the north, 16 in the west, eight in the south, 11 in the east and two in the north-east regions, scheduled for expanding capacity in the 10th plan period (2002-07), are behind their target date of completion, the Assocham study said.

"As a result of the slow work progress, the Central Electricity Authority (CEA) has reduced the capacity expansion plan from the targeted 41,110 MW to 32,778.5 MW. Only 14,301.4 MW of this has been commissioned so far," said ASSOCHAM President Anil K Agarwal.

"In the current fiscal only about 10,000 MW of capacity addition could be expected and the remaining will have to be shifted for commissioning in the 11th plan period."
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Let me end this post with an opinion piece which provides for both the hopeful and the pessimistic. Reforms are going on, but they seem to have lost direction. While things are happening, they are backed by short-sighted policies and lack of concrete (read those that might hurt vote banks) actions.

A K Bhattacharya: The missing emphasis

Somewhere along the way, power sector reforms in India seem to have lost direction. This may sound a little odd at a time when power reforms in general have made a lot of difference to the efficiency of the distribution network, the regulatory system and to the economic health of power generators and distributors. The truth is that in spite of all these changes, the power sector is in a bit of a mess. And there are clear signs that this mess is going to get messier in the years to come.

Today, all the states in the country have signed memoranda of understanding with the Centre for bringing about power distribution reforms. As many as 24 states have set up state electricity regulatory commissions and 19 of them have already issued tariff orders. Barring a few state electricity boards, all of them are cash surplus, after their accumulated dues were securitised in 2002-03. National Thermal Power Corporation (NTPC), the country’s largest power generator, has reported no payment overdues from the state electricity boards for the last three years.

Thirteen states have corporatised their power utilities or unbundled the various wings of generation, transmission and distribution. Orissa and Delhi have privatised power distribution, although whether they achieved the desired results is still being debated.

Four states have recorded 100 per cent consumer metering and nine states have achieved 90 per cent consumer metering. Transmission and distribution losses have come down below 15 per cent in 158 towns and below 20 per cent in 38 towns.

The good news, however, ends here.

The problem starts with the overall availability of power that has either declined or remained the same as five years ago. The number of pockets suffering from shortages has increased (north Indian states are an example these days) and seasonal supply shortfalls have worsened. The country’s total electricity shortage at the start of the Tenth Plan was 7.5 per cent. Last year, it was over 7.7 per cent.

The reason for this sorry state is that the government’s programme for power capacity addition has gone completely haywire. Take the Tenth Plan as an example. The Plan target was to add 41,110 Mw in five years ending March 2007. The Tenth Plan mid-term appraisal showed that a capacity addition of only 36,956 Mw was feasible, down by 10 per cent. The government has now further scaled down the target to 34,000 Mw.

But a look at the ground reality reveals that achieving even this target will be difficult. Till January this year, the total new capacity commissioned in the Tenth Plan was 13,800 Mw. The government now hopes that in the remaining 14 months, it would commission 20,250 Mw more capacity! This is a near impossibility.

It is not just the central or state sector power utilities that failed to meet the targets of adding capacity in the last few years; the private sector’s plans have also gone awry. Against the 172 Mw of capacity to be added in 2004-05, it ended up creating only 70 Mw. Similarly in 2005-06, it added only 660 Mw till January 2006 against the annual target of 1,382 Mw.

The power ministry is still busy focusing on giving approvals to mega power projects and ultra mega power projects with a capacity of 4,000 Mw each. The problem is not in planning the projects. The ministry should now direct its energies to resolving all the issues that are coming in the way of timely execution of power projects in the country.