Blueprint for Power Sector Development
To mitigate the shortages, the Government of India
(GoI) has set a goal - Mission 2012: Power for All. A comprehensive
Blueprint for Power Sector development has been prepared encompassing
an integrated strategy for the sector development with following
- Sufficient power to achieve GDP growth rate of 8%
- Reliable of power
- Quality power
- Optimum power cost
- Commercial viability of power industry
- Power for all
Meeting the target of providing access to all households
by 2012 by adding 100,000 MW capacity and integration of regional
grids into the national grids with 30,000 MW of inter- regional
transfer capacity by the year 2012 is a daunting task. The task
would require massive addition to Generation capacity, Transmission
system & Distribution network.
Accordingly, the programmes of the GoI revolve around
- Access to electricity to be available for all households in the
next 5 years.
- Availability of power on demand to be fully met by 2012.
- Energy shortage and peaking shortage to be overcome by providing
adequate spinning reserves.
- Reliability and quality of power to be supplied in efficient manner.
- Electricity Sector to achieve financial turnaround and commercial
- Consumers’ interests to be accorded top priority
For complete ‘Blueprint for Power Sector Development’,
refer to the report - 'Overview
of Power Sector in India 2005- revised edition'
Strategies to achieve 'Power for All':
- Power Generation Strategy with focus on an
integrated approach including low cost generation, optimization
of capacity utilization, controlling the input cost, optimisation
of fuel mix, technology upgradation, capacity addition through nuclear
and non-conventional energy sources, high priority for development
of hydro power, a comprehensive project monitoring and control system
- Transmission Strategy with focus on development of National Grid
including Interstate connections, Technology upgradation & optimization
of transmission cost.
- Distribution strategy to achieve Distribution Reforms with focus
on System upgradation, loss reduction, theft control, consumer service
orientation, quality power supply commercialization, Decentralized
distributed generation and supply for rural areas.
- Regulation Strategy aimed at protecting Consumer interests and
making the sector commercially viable.
- Financing Strategy to generate resources for required growth of
the power sector.
Conservation Strategy to optimise the utilization of electricity
with focus on Demand Side management, Load management and Technology
upgradation to provide energy efficient equipment / gadgets.
- Communication Strategy for political consensus with media support
to enhance the general public awareness.
Power Sector Reforms
The power sector continues to be one of the greatest
constraints to maintaining growth and further reducing poverty in
India. 45% of the households remain unconnected to the public power
system, and those who are connected, often receive infrequent and
unreliable service, making power supply a brake on private sector
development and economic growth.
The State Electricity Boards (SEBs) have been incurring
losses and were unable even to make payments to the CPSUs like NTPC,
PGCIL etc for purchase of power. The accumulation of outstanding
to the CPSUs grew over Rs 40,000 crore, seriously hampering their
capacity addition programme. The reform of the power sector is crucial,
as financial losses amount to 1.5% of the GDP. To turn around the
financial health of the power sector, the GoI has taken up reforms
in the power sector for gradual elimination of losses. The reform
process in power sector in India was initiated in 1991 and Indian
Power sector is witnessing major structural changes.
Performance/ Policy Initiatives / Decision Taken
during the year 2003-04
- Electricity Act 2003 has been enacted in July 2003.
- Accelerated Electrification Programme for One Lakh villages and
One Crore rural households launched. The scheme outlay of Rs 6,000
cr. comprises grant component of Rs 2,400 cr.
- 50,000 MW Hydro Initiative launched
- Improvement in Power Supply Position- Since the beginning of the
IXth Plan (1996-97), the peak shortfall has reduced from 18% to
about 11%. Supply shortfall has also reduced from 11.5% to 7.1%.
- Generation Performance
- Generation during 2003-04 over the previous year improved from
531 BU to 558 BU Overall PLF of generating stations improved from
72.2% to 72.7% while in central sector it improved from 77.1% to
Capacity Addition Target & Achievement
Uninterrupted and reliable supply of electricity for
24 hours a day needs to become a reality for the whole country including
rural areas. In order to fully meet both energy and peak demand
by 2012, enough generating capacity has to be created with some
spare generating capacity so that the system is also reliable. The
sector is to be made financially healthy so that the state government
finances are not burdened by the losses of this sector and should
be able to attract funds from the capital markets without government
support. The consumer is paramount and he should be served well
with good quality electricity at reasonable rates.
To ensure grid security and quality & reliability
of power supply reasonable spinning reserve at national level has
to be created in addition to enhancing the overall availability
of installed capacity to 85%.
Capacity of about 100,000 MW is planned to be set
up during the 10th and 11th plans, ie between 2002 and 2012. This
implies doubling the installed capacity and, incidentally, works
out to adding about 430 MW every fortnight! Capacity addition plan
for addition of 41,110 MW finalized for the Xth Plan period- the
Central, State and Private sector’s share is expected to be
51%, 16%, and 25% respectively. About 7% is expected to come from
renewable sources and 2% from the Tala project in Bhutan. [Capacity
Addition Program, Mission 2012, MoP].
The Hydro Power initiative has also been launched
by the Prime Minister in 2003, under which a capacity of 50,000
MW is to be added in the same period- 2002 to 2012. Outlay for power
sector for the Xth Plan period has been enhanced to Rs 1,43,399
cr, an increase of approximately 214% over the IXth Plan outlay
of Rs 45,591 crores. Advance action plan initiated for capacity
identified for addition in the XIth Plan. In the last two Plan periods,
barely half of the capacity addition planned was achieved. The optimistic
expectations from the IPPs have not been fulfilled and in retrospect
it appears that the approach of inviting investments on the basis
of government guarantees was perhaps not the best way.
For detailed & updated information on the Indian
Power Sector, refer to the report - 'Overview
of Power Sector in India'