Within three years of coming to power, the Narendra Modi government has demonstrated a sterling performance in the power sector
There was neither shortage of coal nor of other resources, but the country was struggling for power supply for a long time.
The situation however, has vastly improved during past three years since National Democratic Alliance led by Prime Minister Narendra Modi came to power.
Today the country boasts of a situation where surplus power to the tune of 3000-4000 mw is available on real time basis at any time of the day to states and distribution companies and at affordable rates on the power exchange.
Not only that the country which was facing power shortage for past 70 years, has now actually become exporter of power. According to Central Electricity Authority, for the first time in history India exported power around 5,798 Million Units units power to Myanmar, Nepal and Bangla Desh during 2016-17, up to February 2017 only.
It also imported around 5,585 Million Units units power from Bhutan. That makes India a net exporter of 213 million units of electricity.
The ease of getting power at affordable rates comes on the back of focussed reforms unleashed by the Modi government over the past three years in the power sector.
Swift thrust in government policies has seen a sudden spurt in production of both conventional and non-conventional energy. India has been putting lot of emphasis on production of solar and wind energy. It has also emerged not only as a big market in this sector but also a global player as far as solar energy production is concerned.
Modi government had fixed a 2022 deadline for provide uninterrupted power to every household. But the speed of ongoing work in power sector indicates that the government is likely to meet the target much before the deadline.
The power generation growth in the past three years is 6.4% from 2014-2017. Generation growth would have increased further but for Energy Efficiency activities like UJALA, which have been the focus of the Modi Government since 2014.
As generation alone could not drive the sector, appropriate measures were initiated in the power transmission sector which witnessed an impressive growth over the past three years.
In line with the government’s “One nation, One price and One grid” initiative, the transmission sector witnessed as much as 36% (One third) increase in transmission. Alongside, the transmission lines saw a 26% increase from 2.91 lakh circuit kilometres to 3.66 ckm.
Each Village to be lighted
The growth in the sector was aided by simultaneous reforms on the rural front under the Modi government’s flagship program to provide electricity across all villages in the country.
Rural Electrification under Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) was a program announced in 2014 to connect un-electrified villages and transform the lives of rural people. The number of un-electrified villages in 2014 stood at 18,452. This program, that was given a special focus under the reform programme of the government, achieved a new milestone of more than 13,123 villages electrified so far.
Prime Minister Narendra Modi had promised the nation from his Independence Day speech in 2015, that the 18,452 villages would be electrified within a 1000 days. So while the target set by the Prime Minister for electrification of all villages was May 2018, the Union Minister for Power, Coal, Renewable Energy and Mines Piyush Goyal has preponed this deadline to December 2017. This in itself will set a record of sorts.
The talk of reforms in the power will be incomplete in the absence of a mention of the energy efficiency movement through UJALA (Unnat Jyoti by Affordable LEDs for All).
Rs 20,000 crore per annum saved
The energy efficiency drive saw distribution of nearly 23 crore LED bulbs by the Government along with 33 crore by the private companies, a move that resulted in savings of over Rs. 20,000 crore per year in electricity bills of consumers.
Government’s lead agency for this program, the Energy Efficiency Services Ltd (EESL) did not restrict this drive to mere distribution of energy efficient bulbs but also fans, air-conditioners, tube lights for urban areas along with energy efficient agricultural pumps for the farmers in rural India.
The largest contributor in India’s power reforms story is the government’s Ujwal DISCOM Assurance Yojana or UDAY scheme for turnaround of state distribution entities that were considered as the weakest link in the entire chain of power sector reforms.
According UDAY was launched by the government to develop sustainable power distribution companies. Within three years, a total of 27 States and Union Territories joined this scheme for financial and operational turnaround.
The scheme has already yielded savings of nearly Rs 12,000 crore to the state power distribution companies. Almost 85% UDAY Bonds worth Rs. 2.32 lakh crore, have already been issued leading to less rate of interest for DISCOMs.
Reforms through transparency
Transparency has been the major driving factor behind this government’s major reform initiatives. In the power sector alone, in order to empower customers track the working and performance of the ministry and its companies on real time basis, the power ministry has launched various mobile Apps and websites to ensure transparency and accountability.
These includes the GARV (Rural Electrification) App that provides updates related to the electrification of villages and households in India; the Ujala (LED bulbs) App provides real-time updates on the LED distribution; Vidyut Pravah (Power Availability & Price) App giving real-time information on electricity price & availability; URJA (Urban Jyoti Abhiyaan) APP to help enhance consumer connect by showing DISCOM’s performance in cities and gives data of the Integrated Power Development Scheme (IPDS), the TARANG (Transmission System Monitoring) App to monitor the progress of Transmission System in India;Ujwal DISCOM Assurance Yojana (UDAY) that gives the progress of the UDAY yojana which assures the permanent resolution of all past, present and future issues of DISCOMs along with the latest kid on the block or the Urja Mitra APP that enables the citizen to access real time and historic outage information for DISCOMs.
India’s power sector has indeed taken rapid strides over the past three years and the reforms continues unabated. The reforms are recognised by all across the globe. From ranking 99th at the global level in 2014 in terms of electricity accessibility ranking, India today has come up many notches and is sitting at the 26th spot.Nothing better to sum this up in minister Piyush Goyal’s own words, “Many problems had set India back for many years but now the mood has changed.”
Minister of State (IC) for Power, Coal, Mines and New & Renewable Energy, Piyush Goyal, has said that International Solar Alliance ( ISA) can act as a medium to spread lessons on energy security which can help achieve universal energy access target set up in SDGs before 2030. He was speaking at the launch of “Scaling Solar MiniGrids” by France and India on the sidelines of 52nd Annual Meeting of the African Development Bank (AfDB) in Ahmedabad.
Recently Expressions of Interest have been received from Indian companies to install 664,000 solar pumps, 56 MW of minigrids and train 5,400 mechanics in African countries who have signed and ratified the ISA Framework Agreement. Government of India is extending a US $ 10 billion line of credit for undertaking developmental work in African countries. On the request of ISA, Government of India has agreed to earmark 15-20% of this line of credit for undertaking solar related projects. H.E. Mrs. Ségolène Royal, Minister for Environment, Energy and Marine Affairs of France, in charge of International Relations on climate change, was the main architect and motivator to launch this programme during such a short period. Delegation from the French Embassy was present too on this occasion.
The International Solar Alliance is an initiative jointly launched by the Honourable Prime Minister of India and Honourable President of France on 30th November 2015 at Paris, in the presence of the Secretary General of the UN, on the side lines of COP21. The main objective of ISA is to undertake joint efforts required to reduce the cost of finance and the cost of technology, mobilize more than US $ 1000 billion of investments needed by 2030 for massive deployment of solar energy, and pave the way for future technologies adapted to the needs of 121 countries lying fully or partially between the Tropics. So far 31 countries have signed the Framework Agreement of the ISA, which is the first international and intergovernmental organization to be headquartered in India.
Solar prices hit a record low twice this month. On May 10, India finalised a new auction at the Bhadla solar park in Rajasthan with the award of a power tariff at a record low Rs 2.62/kWh, at least 12 per cent below the previous record low Rewa solar tariff awarded only just three months ago in Madhya Pradesh. This new record only lasted two days with the latest 500MW solar auction coming in at Rs 2.44/kWh, down yet another seven per cent. This tender was also for projects at the Bhadla Phase IV solar park.
“The ongoing Indian electricity transformation, which can be increasingly spearheaded by NTPC, will have global ramifications not least for the thermal coal sector which faces a technology driven structural decline,” says Tim Buckley, Director of Energy Finance Studies Australasia with the IEEFA.
Energy Minister Piyush Goyal’s plan to cease thermal coal imports by the end of this decade is being led by NTPC which has already stopped them this past fiscal year. “Coal exporters that are looking to India to prop up volumes as China continues to reduce coal consumption are going to be disappointed,” he said.
The report, also authored by energy finance analyst Simon Nicholas, says overseas investors are now seeking more opportunities in Indian renewable projects.
Goyal called for deeper Indo-African cooperation, saying Indian renewable energy sector offers lessons such as lower and innovative financing models, risk reduction, setting up large scale solar projects through energy parks. “India has achieved grid parity in solar tariffs”, he added.
Shri Piyush Goyal also said that Scaling Solar MiniGrids shall work in tandem with ISA’s over all objectives and already existing two programmes, namely Scaling Solar Applications for Agricultural Use and Affordable Finance at Scale launched on 22nd April, 2016. The main activities under the programme shall include-design and deploy small grids, adopt common standards, aggregate demand, help establish global credit enhancement and de-risking mechanisms, call for expression of interest, assess demand and costs requirement for mini grid projects, identify/develop attractive payment models for consumers, and persuade member countries with overseas assistance budgets to earmark a portion of their soft loan for the Third Programme.
The objective of the event is to cater to the energy needs of ISA Member states in identified areas with unreliable or no grid(s), and in island member states having abundant potential to tap solar energy. Such participating member countries can take advantage of the available solutions to promote universal energy access and reduce electricity costs and tariffs through introduction and promotion of mini, micro, and nano grids with smart features for harnessing solar power, in a time bound manner.
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