22/11/2019 - Infrastructure | Mainstorming

IAS Parliament 5 years

KEY POINTS

· Central Electricity Authority (CEA) data revealed that the plant load factor (PLF) of thermal units in the April-September 2019 period (at 57.67 per cent) was the lowest in a decade

· Under these circumstances, the country should have been in a state of crisis This fiscal, peak demand for electricity has been more or less met. The deficit was just 0.7 per cent.

· This has been possible because India has finally overcome the capacity constraint that dogged power generation since Independence.

· In fact, the total generation capacity today at 3,64,960 MW is good enough to meet any surge in demand for the next few years even if economic growth picks up pace.

· Most thermal power plants operated at a PLF of 90 per cent or more to meet the tight demand-supply situation often at the cost of preventive maintenance which resulted in them breaking down causing disruption in power supply.

Flexible generation

· The need of the hour thus is flexible generation capacity, something India lacks in its overall energy mix. Gas-based power plants offer this flexibility and so do pumped storage hydro power plants.

· Unlike thermal or nuclear power plants they don’t have to be run continuously and can be operated on demand. Economic cycles and consequent demand volatility apart, flexibility in generation has become all the more important in this era of renewable energy.

· It is high time planners impart significant flexibility to the grid to leverage clean energy effectively and optimally use the thermal assets.

Tariff rationalisation

· Today if the sector is under stress it is because demand from well paying consumer category such as industrial users has dropped, especially in the States such as Maharashtra, Tamil Nadu and Gujarat, while non-paying or low paying domestic consumers have risen.

· Consumers — industrial, commercial or retail — should pay the right price for electricity and if any government wants to offer free or cheaper power to a section of the population it should use direct benefit transfer (like LPG) to subsidise them.

· Cross-subsidisation of free or cheap power by charging the industry more will not work any more. It will leave manufacturing uncompetitive and hurt India’s ‘Ease of Doing Business’ ranking.

Independent regulator

· To make all this possible and protect the interest of all stakeholders an independent regulator is essential

· India is in a relative better situation, and has overcome the capacity problem and is today in a position to meet every unit of demand.