India has made significant strides over the last few years in the power sector, in terms of capacity addition and deficit reduction. India is now amongst the top four power markets in the world with an installed capacity of 329 GW (as of April 2017). Going forward, the vision for Indian Power Sector is even more ambitious and looks to support the government initiatives in providing 24X7 Power for All; balanced energy mix with 175 GW of renewable energy capacity targeted by 2022; financially viable and self-sustaining DISCOMs, along with significantly reduced AT&C losses.
Even as Coal, Oil, and Natural Gas are the three primary commercial energy sources, India’s primary energy mix has been changing over a period of time. There is lesser dependence on coal power plants and more emphasis on cleaner and greener sources of energy. A sizeable portion of India’s energy requirements, about 40 per cent, especially in the rural household sector, are met by non-commercial energy sources. Access to affordable and reliable electricity is critical to India’s growth.
Coal is expected to continue to be the mainstay of the country’s energy mix. However with the government’s support India's solar sector has been fast growing and receiving increased international investments. The government has announced no more coal plants after 2022 and predicts that renewables will generate 57 per cent of its power by 2027. Integrating and increasing the share of Renewables in India’s energy mix will only complement India’s energy security and commitments to the Paris Agreement at the Conference of Parties (CoP) 21.
The Government of India has introduced and refurbished a series of schemes and policies in order to strengthen the Power Sector. Indian Industry has been strongly supporting and further adding to the successful implementation of these different schemes. The Ujwal DISCOM Assurance Yojana (UDAY) scheme has brought back the focus on improving the financial health of the electricity distribution companies of India (DISCOMs). There have been dedicated efforts by CII in raising awareness on energy efficiency and power saving. Industry has been deeply involved in the successful implementation of Deendayal Upadhyaya Gram Jyoti Yojana UJALA, an acronym for Unnat Jyoti by Affordable LEDs for All, executed by Energy Efficiency Services Limited (EESL) which has resulted in energy savings of more than 2.66 crore kWh every day and reduction of over 21,550 tonnes of CO2 per day which is estimated to have a cost savings of Rs 10.64 crore per day. Over the past few years, India has been working towards ensuring universal access to affordable electricity by 2030 with a commitment to 100 per cent rural electrification pushed by UDAY scheme and Grameen Vidyutkaran.
CII’s Role in the Power Sector
In order to promote sustainable growth and robust development of India’s Power sector, CII has constituted a National Committee on Power with around 45-50 CXOs representing the entire sector value chain. With continuous advocacy with the government and focussed interactions, CII is helping create a platform for the Indian industry, the government and different stakeholders to come together and shape India’s growth story in the power sector.
The CII National Committee on Power looks to focus on some core issues like the Enhancement of Demand and Distribution Reforms; (re)engaging with Stranded Assets and initiate Regulatory Reforms. In order to support the government in addressing these issues, the committee will firstly look at how demand can be increased which would include addressing issues such as low plant load factors, distribution reforms to lower AT&C losses, tariff revisions, time of the day metering etc.
Secondly, to support the government on developing a mechanism to resolve the stressed power assets, the Committee proposes to explore mechanisms of initiating the takeover of sick and stranded facilities. Finally, to facilitate adequate resolution on issues around tariff compensation, long-term power purchase agreements and clear regulatory guidelines, the Committee proposes to look at regulatory reforms necessary for effectiveness, consistency and accountability. The committee in the course of the year, aims to engage with issues that need to balance consumer and developer interests such as national grid development, open access, technical minimum, utilisation of thermal assets, fuel pricing in tariffs, merit order dispatch, integration of renewables, tariff revisions and implementation of Kelkar Committee recommendations.
In addition, the government of India has been pushing for improving quality of coal in India which has further reduced the coal consumption for the same amount of energy produced. Today, thermal power plants are using 8% less coal and this has brought the power costs down by 20% in the last three years. Using clean technologies is not only benefitting domestic consumers and industries but will prove to be a significant contribution in reducing emission from energy intensive industries such as coal companies, power utilities, oil & gas companies, chemical and fertilizer producers, steel and cement plants. CII has been promoting the use of innovation, check on regulations and industrial standards, to accommodate clean coal industry in building new business models for a low carbon and sustainable future.
Regular committee interactions and dialogues has enabled CII to be at the forefront of providing platforms to different stakeholders in the power sector to come together and deliberate on the road ahead. The industry has been able to communicate several matters of concern through representations and the government always ready to lend a listening ear and working collectively in seeking solutions.
India has made significant strides over the last few years in the power sector, in terms of capacity addition and deficit reduction. India is now amongst the top four power markets in the world with an installed capacity of 329 GW (as of April 2017). Going forward, the vision for Indian Power Sector is even more ambitious and looks to support the government initiatives in providing 24X7 Power for All; balanced energy mix with 175 GW of renewable energy capacity targeted by 2022; financially viable and self-sustaining DISCOMs, ...