Power sector trips on planning front

Power, like any other infrastructure sector, requires attentive planning and forecasting to ensure adequate availability for all genuine demands. Given that power infrastructure takes time to build and that power cannot be stored, perspective planning and forecasting assumes an important role.

A shortfall in supply due to inadequate power infrastructure requires some lead time, as investments in power sector are capital- and time-intensive. Timely planning and development of transmission and distribution (T&D) lines to deliver power to the load centres is equally important.

Power sector capacity development is usually based on, apart from techno-economic feasibility, the projected demand. In addition, adequate T&D infrastructure is planned to evacuate power from the power plants to the load centres. India has been continuously enhancing the reach and capacity of the national grid, now the fifth largest in the world, having a capacity of transmitting about 40,000 MW across the length and breadth of India and one that has been a cynosure of all eyes till recently.

AFTER GRID FAILURE

Two successive failures of the national grid on July 29 and 31 plunged more than half a billion people in darkness. The Government, after a swift restoration of the grid, has evolved a 12-point resolution to prevent such occurrences. It has also set up a technical committee to look at the reasons for the twin failures. The outcome of the review will be an important element in maintaining grid discipline to hedge against future disasters.

The resolution at the meeting taken by the Union Power Minister with the chief ministers of states, in the aftermath of the grid failures, points to overdrawal of power as the immediate cause. One of the resolutions, therefore, requires States to prepare plans over the long-term, medium-term and short-term horizons for the procurement of power, network and demand management in accordance with the Indian Electricity Grid Code (IEGC). Simply put, the new grid discipline that the meeting resolved to put into effect seeks to end overdrawals by States, to ensure that the grid capacity is not breached.

DEMAND ESTIMATES

This brings to the fore the question of whether the installed power infrastructure is adequate to meet demand. While the shortfall in capacity addition and the recent fuel shortages are the usual reasons put forth, a more germane issue is how robust is perspective demand forecasting.

Investments in power infrastructure are capital- and time-intensive; therefore, inaccurate forecasting of demand would inevitably lead to a widening demand-supply gap. The growing demand-supply mismatch and ensuing power outages have compelled utilities to overdraw more from the grid than their allocated share — a situation that cannot change in a hurry.

It would be useful to accurately assess demand, and thereby prepare an appropriate response by integrated planning of generation, transmission and distribution resources.

PROJECTIONS GO AWRY

The Central Electricity Authority (CEA) brings out Electric Power Surveys (EPS) periodically that forecasts power demand, and is used by all stakeholders and investors for setting up power plants, and T&D infrastructure. About 17 EPS have been released by CEA till date and the 18th one is (perhaps) at its final stages (as it is yet to be made public).

The Government announced, in early 2002, the avowed goal of ‘‘Power-for All’’ by 2012, which is based on the demand assessment by the 17th EPS for 2012.

The key ingredients in this plan were to have, by 2012, a generation capacity of 200000 MW, per capita consumption of 1000 KWh per annum, along with a robust T&D infrastructure.

If one looks at the statistics put out by CEA for 2011-12, all three parameters seem to have been achieved. The installed generation capacity in India is a little over 200000 MW, the per capita consumption of electricity is 850 KWh per annum in 2011-12, which is projected to increase to 940 KWh this year, and there is a national grid to cater to inter-regional transfers of 40,000 MW.

However, we are still a fair distance away from the universal access goal of 2002. In fact, over the years, the gap between peak power demand and supply has remained stagnant between 11-13 per cent. Therefore, the demand projections in 2002, in hindsight, should have given a much higher target, enabling the Government to plan accordingly.

It is a worrying sign that a discussion paper on the 18th EPS (put together in mid-2011) uploaded on the CEA Web site seems to continue the trend of conservative forecasting. As is evident from the table cited from the paper, there is a scaling down of demand projections from the 17th EPS. If this forms the basis of perspective planning, the desired outcome will remain as distant as it is today.

If these demand projections had been correct, India would have plugged the demand-supply gap, avoided the public outrage over persistent power cuts, and prevented the grid failures.

NEW METHOD

The methodology followed for forecasting demand needs to be revisited. The methodology adds the energy equivalent of power outages and power lost due to distribution losses to the actual demand. This data is then fed to an econometric model to project demand. It also, perhaps, takes into consideration the historic elasticity of economic growth with electricity.

The model needs to be revitalised to include issues that impact the energy demand and do not necessarily get reflected in the exercise.

For instance, growth projections of energy-using consumer goods such as ACs, washing machines, refrigerators, lighting applications, and the growth of inverter and generator market are important variables that do not get fully reflected. In both these sectors, India is among the fastest growing markets in Asia.

It is not that judicious power planning and forecasting alone would solve power sector problems.

However, it could stimulate timely investments, keeping pace with the growing demands of a vibrant economy.

(The author is Programme Officer, OzonAction Programme, United Nations Environment Programme, Bangkok. The views are personal.)

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