Volume 1 Issue 3 – The Powerless Country

By GovernanceToday
In Issue 3
March 7, 2016

The Powerless Country

Governance Today - November2014

Volume 1 Issue 3


A couple of months back, PM Narendra Modi launched the “Make in India” campaign which is aimed at establishing India as a global manufacturing hub. While the idea has captured the imagination of industry leaders, there are people who are asking a very legitimate question which is, can we create a viable and competitive manufacturing when we force our industry to create a power back up which adds to their overall cost. But industry is not alone in misery; domestic sector is also not much better off. The images in newspapers, of kids preparing for exams in candle light do not surprise us anymore. Nor do the news of people holding traffic to ransom protesting against load shedding. Our power plants are going without fuel and discoms are losing as much as one fourth of the power because of theft. Surely, not all is well with our power and energy sector. It is not that  government is not seized of the matter or is not trying to improve the situation. Successive governments have rolled out policies and laid out rules to increase investment in the sector. Electricity Act 2003, National Tariff Act 2006, UMPP initiatives and allocation of coal blocks to private players were all smart initiatives, but somehow, they got lost in the labyrinthine corridors of bureaucratic structure or failed simply because of corruption. The mess of coal availability and the gas prices are only a few of the examples. However, not all is bad. The hope exists in some of the initiatives of a few state governments. For example, some states have gone for feeder segregation in rural areas which has resulted in substantial reduction in power losses to discoms. Gujarat has provided a commendable incentive structure for solar power investors. These need to be replicated widely. In renewables, wind energy has taken giant leaps in recent years and holds lions share in total renewables power generation in the country. Solar, in which we started late, has seen capex crashing over last couple of years because of which, it has become commercially viable in certain times and promises to attain grid parity much earlier than 2022. Unfortunately, hydro power has not taken off which is strange because there is enormous potential in this segment. At the end of the day, we need to realize that an efficient power planning would need to ensure that reliable power is made available to all section of customers, namely, residential, commercial and industrial. Because of the technical reasons, non-conventional and renewable sources generate power which are fluctuating, because of which they need to be stored. This makes renewables much useful in residential but not for commercial and industrial. On the other hand, traditional sources, say thermal, generate power in smoothened and non-fluctuating manner which makes them most suitable for bulk users such as Industry. It is estimated that just by basic planning to allocate renewables for domestic purposes and thermal power for industry can improve the power availability and quality of power. It is going to result in major saving for industry as it wouldn’t have to invest in parallel power structure and would boost national GDP as production would not halt. Policy makers need to think on these lines.