Electricity Sector in India – Power for All?
Published by : Industrial Automation
The Government of India has identified power sector as a key sector of focus so as to promote sustained industrial growth.
The power sector in India is undergoing a significant change after years of relative neglect and inadequate capacity addition. Sustained economic growth continues to drive electricity demand in India. The Government of India’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country. According to a World Bank report, electricity demand in India will almost triple between 2018 and 2040, in a little over two decades. The report – In the Dark: How Much Do Power Sector Distortions Cost South Asia – published by the World Bank, also states that more than 250 million people in South Asia live without access to electricity, which is a quarter of the global population living off the grid. A large percentage of these people are in India, despite government efforts specifically directed at electrifying all villages. At a time when government claims 100% electrification of villages, what explains this dichotomy? The devil is in the details. The government deems a village “electrified” if power cables from the grid reach a transformer in each village and 10% of its households, as well as public places such as schools and health centres, are connected. That still leaves most of the place unelectrified,
While the country has always been power deficient, in the last decade, total installed power generation capacity in India increased from 154.7 GW in 2007 to 345.5 GW in 2018, making it the world’s third-largest producer of electricity (India is also the world’s fourth largest consumer of electricity), falling behind only China and the United States. But that tells only part of the story. While the installed capacity is almost double that of estimated peak demand of 170 GW, the fact is due to a host of factors, the foremost being the inability of distribution companies to buy power, there is still overall electricity deficit in the country, however small the percentage. Availability is one thing, reliability another. The reliability of electricity in India is still low compared with the international standard. The 2018 Global Competitiveness Report ranks India 80th among 137 economies in the reliability of its electricity supply.
What contributes to this contradictory situation of surplus power generation, low reliability and the large number of people still living without proper electricity is the fact that there are still parts of the country where the power distribution network is either non-existent or inadequate, especially in the north east. Take Arunachal Pradesh, for example. The present per capita power consumption of this state is 233 kWh against national average of 1075 kWh. Recently Prime Minister Narendra Modi laid the foundation stone for 7 Extra High Voltage (EHV) Sub-stations and 24 Low Tension (LT) Sub-stations in Itanagar, the state capital. This project is a major step towards meeting the national objectives of affordable 24x7 power to all, especially in the remote locations.
Inadequate distribution infrastructure is also causing transmission congestion that prevents power trading across states, particularly in the northern and southern regions of the country. As a result a significant amount of electricity is lost due to congestion in the electric network. That apart, India loses about a quarter of electricity in the network due to both technical and commercial reasons – well above the 10 per cent international norm.
The power mix
As of January 2019, the total power generation capacity of the country is 349.28 GW of which the state sector contributes 24.2%, the central sector 29.7% with private sector contributing 46.1%. What is more important is the power mix of this total generation where thermal energy accounts for 63.9% (overwhelmingly coal but also lignite, gas and oil, in that order). Large hydroelectricity projects contribute 13% which is actually renewable energy, but is not clubbed with renewable energy sources (RES). Nuclear energy is a small share at 1.9%. The silver lining is the growing share of RES contributing 21.2% which includes small hydro projects, biomass gasifiers, biomass power, urban and industrial waste power, solar and wind
It is against this background the Government of India’s roadmap to achieve 175 GW capacity in renewable energy by 2022, which includes 100 GW of solar power and 60 GW of wind power assumes significance. Renewable energy in India comes under the purview of the Ministry of New and Renewable Energy (MNRE). India was the first country in the world to set up a ministry of non-conventional energy resources, in the early 1980s. Solar Energy Corporation of India is responsible for the development of solar energy industry in India. The earlier target of installing 20 GW of solar power by 2022 was achieved four years ahead of schedule in January 2018, through both solar parks as well as roof-top solar panels.
A blueprint draft published by Central Electricity Authority projects that 57% of the total electricity capacity will be from renewable sources by 2027. In the 2027 forecasts, India aims to have a renewable energy installed capacity of 275 GW, in addition to 72 GW of hydro- energy, 15 GW of nuclear energy and nearly 100 GW from “other zero emission” sources.
The road ahead
The Government of India has identified power sector as a key sector of focus so as to promote sustained industrial growth. This is also confirmed by the World Bank report’s prediction of electricity demand tripling between 2018 and 2040 as the whole country is electrified in the true sense of the term and growing needs of industry and the smart city infrastructure. The ambitious plan of the government for ‘One Nation – One Grid – One Market’ envisages combining all the regional and sub-regional power grids for the optimal utilisation of scarce natural resources. It will helps transfer power from resource centric regions to load centric regions. Use of technology is another positive as the Aggregate Technical & Commercial (AT&C) losses are reduced – the idea is to bring them down to 15 per cent by in FY2019.