Power sector Current Affairs - 2019

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State Power Ministers Conference

A two – day state power ministers conference starting on October 11, 2019, is to be held in the banks of Narmada river at Kevadia, Gujarat. The conference will be inaugurated by Union Minister of State for Power RK Singh.

The conference is to be held near the Statue of Unity, the tallest structure in the world. The congregation of the state energy departments is to be held on the banks of River Narmada. This is to signify that Narmada was the first river to have a canal top solar power plant in India.

Highlights of the conference

  • Schemes to promote clean energy is to be the prime focus of the conference.
  • Discussions related to emerging technologies in renewable and sustainable energy sector
  • Implementation of Prime Minister Kusum Scheme. The major components of the scheme are as follows
    • Provide solar run irrigation pumps to the farmers
    • Solarization of 10 lakh existing grid connected pumps.
  • Renewable energy development in the border areas. Recently GoI has also proposed construction of wind and solar projects in the Indo – Pakistan border.
  • Ease of doing business in solar and wind energy space
  • Issues related to regulatory matters, land and infrastructure
  • Discussions about projects for Ultra Mega Renewable Energy parks
  • The scheme of roof top solar projects will also be discussed. This is a scheme which certainly needs the support of the states.

The conference is being hosted by the Gujarat Government. In the event, there will be presentation on the achievement in the power and energy sector by the government in the past 10 years. There will also be detailed briefing about how Gujarat provides 24 – hour electricity through Jyoti Gram Scheme

Jyoti Gram yojana

It was an initiative of the Gujarat Government to ensure 24 – hour power supply to rural areas to farmers in scattered farm houses.

Instructions by the Center

The Union Ministry will make the following request to the states

  • PPAs should not be re – negotiated. The provisions under PPAs has to be enforced in letter and spirit. The payment to the generators, especially solar and wind, by the DISCOMS should be made on FIFO (First In First Out) basis
  • The Center will also instruct to expedite supply reforms, renewable capacity addition and improve energy efficiency standards.

The PPA issue

Recently many states reviewed or cancelled PPA with the renewable projects. The State’s decision to review renewable PPAs created controversies. The power generators moved to the High Court. The HC asked them to raise their grievances before the AP Electricity Regulatory Commission.

Efficiency gap in India’s power sector costs 4% of GDP: World Bank Report

The World Bank recently released a report titled ‘In the Dark: How Much Do Power Sector Distortions Cost South Asia’. As per the report, Efficiency gap in India’s power sector costs the Indian economy 4% every year, which equivalents to $86 billion in 2016FY.

Key Points of the Report:

  • The rural household’s income in India can be increased by $9.4 billion and business losses worth USD 22.7 billion can be eliminated with 24 hours access to power supply.
  • There was a shortage of 14% in India in meeting coal demand in 2016FY.
  • The average output per labour shift at Coal India’s underground mines was less than one ton in 2016FY, which is very less in contrast to 25 tonnes in the United States. Also, out of total 1o underground mines only one underground coal mine in India is mechanised.
  • As per the World Bank Report, Electricity subsidies provided by the government and inefficient power generation, transmission, and distribution of the power play a major role in power shortages.
  • In 2016, around 20% of electricity generated was lost during transmission and distribution. This rate is the highest loss rate in the world.
  • Industrial electricity tariffs become less affordable and competitive due to power subsidies from to households and farmers.
  • India provides subsidies on electricity for agriculture which has made India the world’s largest user of groundwater. The consumption of groundwater has increased by 700% from 1950 to 2014.

Recommendations in the report:

  • The report recommends reforms in the electricity sector to restore market pricing and improve efficiency. This will complement traditional investments to increase power supply and expand access to reliable electricity.
  • Reliable access to electricity will have a positive impact on Gender Equality by increasing women’s employment and girls’ study time. It will lead to lower use of kerosene lamps which would improve health and the environment.
  • Coal allocation and delivery need to be more efficient and competition in coal and electricity supply needs to be encouraged. Energy prices should be rationalised to reflect the actual cost of supply.
  • Incentives should be given for the promotion of more efficient power generation and delivery.
  • Social assistance should be provided to help people deal with higher energy prices.

India has made great progress in expanding access to power in recent years. However, many people still lack access to electricity and power shortages harm the economy and consumer well-being. India was at the 80th spot among 137 economies in the reliability of electricity supply as per the 2018 Global Competitiveness Report.