The next round of power distribution, coal supply and thermal power generation reforms should be high on the agenda of the second tenure of the Modi government.
“We expect a larger impetus in electricity distribution reforms, spread of more last mile connections and adoption of smart metering which will further help utilities in achieving better financial health,” Gautam Seth, Joint Managing Director at HPL Electric and Power, said.
The Ministry of Power had put its faith in the second leg of power distribution company (Discom) reforms under the Ujwal Discom Assurance Yojna (UDAY) 2.0. It is expected that these will plug the gaps that are left from UDAY-1.
In January, outgoing Minister of State (Independent Charge) for Power and New and Renewable Energy RK Singh told BusinessLine , “UDAY-1 looked at the intervention in terms of reducing debt burden. UDAY-2 will look at interventions in terms of technology and enablement to further achieve the same objectives. This will mean aerial bunch cables, smart metering, providing some funds for dedicated police units which will be attached with the distribution companies, to prevent theft.”
The earlier government will be credited for considerably improving the power supply position. In September 2017, the Centre embarked on the target of providing all willing households across the country with electricity connections under the Saubhagya scheme. According to data compiled by the Ministry, there were a total of 21.3 crore households in the country. Of these, Saubhagya connected 2.46 crore homes by January 2019, and an additional 1.43 lakh homes were to be connected by March-end.
Providing all homes with electricity connections adds around 28,000 MW of additional peak demand (maximum power requirement at any point during the day). This will be in addition to the 1,77,022 MW peak demand, assessed by the Central Electricity Authority till October 2018. The newer demand coming online will be met with 3,46,048 MW of existing installed power generation capacity.
The next goal is to provide 24x7 reliable power supply.
More demand will mean the need to generate more power. This may also mean a spurt in supply costs. The Ministry of Power is already looking at options to keep this under check. “The government is keenly looking at further structural changes in power purchase transactions so that the cost of power can be contained at acceptable levels,” a Power Ministry official said.
Earlier, the NDA also struggled with domestic coal supply woes during seasons when wind and hydropower generation dipped and thermal demand zoomed. In addition to augmenting the coal supply chain, the Centre will also want to initiate commercial coal mining and boost domestic production.
“Opening up of commercial coal mining for the private sector is the most ambitious coal sector reform since the nationalisation of this sector in 1973,” a Coal Ministry statement had said. The enabling provision to allow commercial mining was approved in January 2016.
But fending of Coal India employee unions that oppose the move to commercial coal mining may be a handful for the new government.