On account of the lower growth of electricity
generation (less than 3%) during the year 2008-09, power shortages across the
country, both in terms of peaking deficit and average energy gap, have
increased. The gaps would have been even higher if the present slowdown in
economy was not there. In view of reduced growth rates in manufacturing and in
service sector, which is leading to a GDP growth of less than 7% during the year
2008-09, demand on power was obviously lower. If the economic activities were to
remain at the same level as they were during 2006-07 and 2007-08, obviously the
electricity shortages would have been significantly higher. 2009-10 is likely to
continue to face the difficulties of global slowdown. And, therefore, the power
shortage may remain more or less at the same level i.e. about 15% of peaking
shortages. However, when the economy comes to the right pitch of activities,
hopefully during the year 2010-11, it is likely that shortages could be even
higher, notwithstanding the capacity additions that are in the pipeline.
Wartsila organised a half day
discussion on the subject of Decentralised Distributed Generation as a means to
support mitigate the shortages. I made the following observations as a part of
the Keynote Address:
People often ask
"When will the situation of power shortage be over?" My reply consistently has
been that in the foreseeable future it is unlikely that we will have a situation
of no - power - shortage. There is a well considered rationale behind this
argument. Unlike most other commodities, in the case of power the very
availability of it creates more demand. In any case, India is on a much lower
side of per capita consumption of electricity, as compared to many other
countries. Even if we do not compare with advanced countries of the West on
account of various reasons including vast differences in climatic conditions, we
are far behind even China which has reached a per capita electricity consumption
level of about 2000 Kwhr as compared to about 650 Kwhr (less than 1/3rd)
in case of India.
the relevant factors and variables, while preparing the Integrated Energy Policy
(IEP), we developed the projections for installed capacities to be created
during the period 2007-32. The total installed capacity has to be increased
almost 6 times to 800 GW as compared to 130 GW as in the beginning of 2007.
With all the best
intentions and renewed preparations, taking due care of lessons learned in the
past, it is unlikely that in coming five to ten years we shall succeed in
achieving targeted capacity addition programmes. We have been performing in
successive Five Year Plans between 45 to 55% of the targets. We might improve
to 70%. Yet, we will end up with huge gaps because the scale of targeted
programmes itself is on the increase.
therefore, agree on the conclusion that we will definitely be confronted with
(a) growing demands, and (b) usual shortfalls in capacity additions. These two
put together may put pressure on supply side management. Shortages,
particularly during peak hours are likely to increase.
All steps are
being taken and some more steps might be initiated, for smoothening the load
curve. In spite of these, it may not be reasonable to expect that our load
curve during 24 hour period would be a flat one. Some results have been
achieved in the last few years on account of steps like separation of
Agricultural and Domestic Feeders. But, we have a long way to go in putting in
place various energy efficiency measures, so that we have a more comfortable
situation on managing particularly peak hour demands.
impact of the shortages in supply of electricity could very well be appreciated
by the fact that during the current summer season, which has just started, the
price of power during peak hours, on short term day - ahead purchases, is
reported to have gone beyond Rs. 10 per Kwhr. There are State utilities which,
to manage the crisis, prefer paying Unscheduled Interchange (UI) rates of Rs. 8
per Kwhr or higher rather than not drawing the additional power from the grid.
captive power capacity development under the Electricity Act 2003, as further
reinforced by the Rules made under the Act, was aimed at mitigating part of the
shortage problem. Industry has responded to these liberal policy initiatives.
However, the pace of capacity development has not been as expected. I believed,
when we liberalised various provisions, that atleast 12,000 to 15,000 MW
capacities could come up through captive routes during the Eleventh Plan
itself. No doubt, a large number of projects are under construction, but the
aggregate would be significantly less than the above projection.
of the provision of the Electricity Act, which has fully delicenced power
generation capacity development, it was expected that a good number of power
plants may come up under the Merchant Plant Group. Here again, it was expected
that about 15,000 MW of such capacities could come up. There are a number of
projects which have been initiated. But, for a number of reasons, including
uncertainty about land, transmission, in some cases about fuel and also in some
cases due to financing issues, the process is slow.
As a result of all
these, we may continue to have a gap in the peaking, of the order of 15% to 20%
in various states. The consequence of such shortfalls is experienced throughout
the country. In spite of several steps and continuing supports provided to
Delhi, we have several areas which suffer load sheddings of varying durations.
Situations in other Metros and Cities are even worse. A large number of other
towns suffer load sheddings of 5 to 6 hours and rural areas 12 to 20 hours.
It is in this
context that Decentralised Distributed Generation (DDG) systems can be
considered to be a workable alternative to mitigate these problems. We may
examine these for three different situations (a) peaking support in towns and
cities, (b) group captive power plants for industrial estates, and (c) local
distribution network connected decentralised generation in rural areas:
All the stakeholders need to
appreciate the necessasity and the rationale of DDG for each of the three
situations - in cities to provide peaking support, in industrial areas to match
the shortfalls and in rural areas to provide the main source of power supply.
We need to have complete acceptance by the regulatory institutions in the larger
interest of not only coping with the increasing shortages but also for creating
satisfaction among customers with reliable power supply. Customers should
recognise that uninterrupted power may cost somewhat higher like in Pune model.
We need to have entrepreneurs who should capture the opportunities and create
generation facilities with a win-win situation. Governments of the States may
formulate Schemes which could facilitate development of these facilities.