Dinesh Kamath's Editorial 'Government should focus on Power Sector' that was published in Newsband

Government should focus on Power Sector

There have been entry of many new private players in the power sector.. This has resulted in an increase in installed capacity under Central, State and private sectors. The surge in installed capacity has led to a short-term decrease in power market prices. But there are still a number of issues that need government focus.

Open market capacities are facing oversupply due to excess power capacity, forcing generators to supply power at near-variable costs which are just enough to keep the plant running. As prices fall below variable cost, plants shut down, causing stranded assets and creating NPAs in the banking system. Thus, it is crucial for India to focus on maximising capacity utilisation, lowering power generation costs and addressing existing excess capacities.

Shortage of water and fuel are other issues. The Government needs to address them. Smaller and inefficient units must also be taken out. The Government should also work towards creating a level playing field for discoms and generators by creating equitable clauses in the model PPA. Subsidy should be reduced and finally withdrawn for all consumers of electricity. Then only, they will use energy-efficient equipments and will not waste energy on lavish illumination, decoration etc.

Any system or any equipment will work properly, only if the operating personnel are sincere and competent. So, Discoms and generating Companies should be manned by sincere competent personnel from bottom to top.

What the world is going in for is use of compressed air. Air is available in abundance. nuclear and other thermal plants need boiler grade water for steam and also for cooling. Compressed air based power generation does not need steam grade water but less amount. While all other systems have life period needing replacement at huge costs, compressed air systems do not call for huge initial investment, huge renewal costs need for huge real estate, cooling towers etc., In short, with nearly 75% efficiency, it poses as a most fitting candidate as alternative considering recurring expenditure and the plant operating ratio will be certainly much lower than other systems.

First of all, the discom should function as commercial centre, having its own balance sheets, HRD, finance etc, uninterfered by the government. The ruling politicians care only for their vote banks, providing free power to huts and agricultural purposes. Even for government offices, the power bill is paid only after the budget. Well, let the agriculturist get his freebies but he must pay the bill and get it duly reimbursed by the government. There should be revised staff standards and recruitment through PSC. The power supplied by transformers in industrial areas must be measured at transformer level and compared with the consumed power billed to detect power thefts.