Power Sector in India

In Context

• The power sector in India is going through a crisis and Peak shortages in some states have reached double digits.

About Power Sector in India

• Power is among the most critical components of infrastructure, crucial for the economic growth and welfare of nations. 
• The existence and development of adequate power infrastructure is essential for sustained growth of the Indian economy.
• India’s power sector is one of the most diversified in the world.
• Sources of power :
  •  Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste. 
• The Indian power sector is undergoing a significant change that has redefined the industry outlook.
  •  Sustained economic growth continues to drive electricity demand in India.

Issues /Challenges

• Power consumption in the country grew 13.6% year-on-year to 132.98 billion units (BU) in April 2022.
• The low coal stocks at power plants due to several factors such as heightened power demand due to the boom in the economy post-COVID-19, early arrival of summer, rise in the price of gas and imported coal and sharp fall in electricity generation by coastal thermal power plants.

• The fall in coal stock in power stations is because of two main reasons. 
  • Due to a rise in the international price of coal on account of the Ukraine crisis, all plants that were importing coal have either stopped generating completely or are generating at much lower levels. 
  • To make matters worse, generation from gas-based plants has also fallen due to high gas prices in the world market. 
  • Reservoirs, too, are drying up due to intense heat which will adversely affect hydro generation.
  • transportation problems faced by Indian railways.

Steps of the government

• The Government of India has identified the power sector as a key sector of focus to promote sustained industrial growth. Some initiatives by the Government to boost the Indian power sector are as below:
  • The government has asked the power companies to import coal for blending purposes to reduce the pressure on domestic coal.
  • The Indian Railways was forced to cancel 42 passenger trains to make way for faster movement of coal to power generating plants amid widespread power outages reported by many States.
  • The Ministry of Power gave  directions to ensure maximum production of coal at captive mines, rationing of coal to non-power sectors, and a price cap of Rs 12 per unit on electricity traded on exchanges
  • Powerthon-2022 is being launched in line with the aim of Revamped Distribution Sector Scheme (RDSS) introduced by the Ministry of Power, Government of India. 

• Under the Union Budget 2022-23, the government announced the issuance of sovereign green bonds, as well as conferring infrastructure status to energy storage systems, including grid-scale battery systems.
  • In the Union Budget 2022-23, the government allocated Rs. 19,500 crore (US$ 2.57 billion) for a PLI scheme to boost the manufacturing of high-efficiency solar modules.
• Electrification in the country is increasing with support from schemes like Deen Dayal Upadhyay Gram Jyoti Yojana (DDUGJY), Ujwal DISCOM Assurance Yojana (UDAY), and Integrated Power Development Scheme (IPDS).
• India has launched the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) Scheme to provide energy and water security, de-dieselise the farm sector and generate additional income for farmers by producing solar power

Conclusion 

• Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. 
  • In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required.
• Create an enabling ecosystem to ensure power plants work efficiently.
• Revisiting fuel allocation and supporting the priority dispatch of efficient plants could help India reduce coal demand by up to 6 percent of our annual requirement, and set aside more coal for the proverbial rainy day.
• Enable discoms to undertake smart assessment and management of demand.
• Introducing time-of-day pricing and promoting efficient consumption behaviour would help shave peak demand and avoid panic buying in the market.
• Empower electricity regulators to help bring down discom losses. 

The ongoing initiatives like introducing smart metres and network strengthening, empowering regulators would be critical to infuse payment discipline across the supply chain of the electricity sector and to keep cost recovery as a key metric.