{"id":183665,"date":"2022-05-10T20:39:47","date_gmt":"2022-05-10T15:09:47","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=183665"},"modified":"2022-05-10T20:40:42","modified_gmt":"2022-05-10T15:10:42","slug":"powering-up-after-the-power-crisis-shock","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/powering-up-after-the-power-crisis-shock\/","title":{"rendered":"Powering up after the power crisis shock\u00a0"},"content":{"rendered":"


\n<\/span><\/p>\n

News:<\/span><\/b> India is currently going through a<\/span> power crisis<\/span><\/b>. Consequentially, the government has cancelled <\/span>passenger trains<\/span><\/b> to allow the Indian Railways to transport more coal to power plants.\u00a0 In addition, the directives have been issued to use more imported coal to tide over the supply shortfall.<\/span>\u00a0<\/span><\/p>\n

Structure of India\u2019s power sector<\/span><\/b>\u00a0<\/span><\/h5>\n

Under the <\/span>Electricity Act<\/span><\/b>, the <\/span>Distribution Company (Discom<\/span><\/b>) is responsible to provide <\/span>electricity<\/span><\/b> reliably <\/span>round-the-clock<\/span><\/b> to all consumers to meet full demand. These Discoms work under the oversight of the <\/span>State Electricity Regulatory Commissions.<\/span><\/b>\u00a0<\/span><\/p>\n

The Discom enters into contracts with a number of generating companies in order to ensure adequate supply.\u00a0<\/span>\u00a0<\/span><\/p>\n

How did the crisis take place?<\/span><\/b>\u00a0<\/span><\/h5>\n

Supply Side<\/span><\/b>\u00a0<\/span><\/p>\n

A number of <\/span>coal<\/span><\/b>– and <\/span>gas-based power plants<\/span><\/b> were stranded in nature. They could be called as <\/span>non-performing assets<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n

India has been witnessing slower and lesser <\/span>energy-intensive economic growth<\/span><\/b>. This led to <\/span>lower electricity demand<\/span><\/b> growth than expected.<\/span>\u00a0<\/span><\/p>\n

The Discoms have failed to update the <\/span>demand growth projections<\/span><\/b> and <\/span>scenarios<\/span><\/b> over the <\/span>medium term. <\/span><\/b>Thus, they failed to enter into <\/span>adequate supply arrangements<\/span><\/b> in a robust manner with reserve margins.\u00a0<\/span>\u00a0<\/span><\/p>\n

Probably, the State Regulatory Commissions have failed to scrutinise them transparently.\u00a0<\/span>\u00a0<\/span><\/p>\n

Demand Side<\/span><\/b>\u00a0<\/span><\/h5>\n

The nature of electricity demand is undergoing a <\/span>qualitative transformation<\/span><\/b> with rising <\/span>daily<\/span><\/b> and <\/span>seasonal peak<\/span><\/b>s, and spikes on very hot or cold days. This has been due to higher incomes and the consequent increase in the use of air-conditioners and other electrical appliances.<\/span>\u00a0<\/span><\/p>\n

India has been undergoing <\/span>robust economic recovery<\/span><\/b> after two waves of COVID-19. Further, India faced an unexpected heat wave.<\/span>\u00a0<\/span><\/p>\n

Way Forward<\/span><\/b>\u00a0<\/span><\/h5>\n

The <\/span>consumer<\/span><\/b>, the <\/span>political class<\/span><\/b> and the <\/span>Regulatory Commissions<\/span><\/b> have the <\/span>collective responsibi<\/span><\/b>lity for reliable supply.<\/span>\u00a0<\/span><\/p>\n

Tariff Related<\/span><\/b>\u00a0<\/span><\/p>\n

There should be <\/span>meaningful political discussion<\/span><\/b> on the relative benefits from subsidies. In fact, the subsidies should be <\/span>restricted<\/span><\/b> to a specified level as provided in the Act.\u00a0<\/span>\u00a0<\/span><\/p>\n

The <\/span>Regulatory Commissions<\/span><\/b> should not act from a political point of view. It should determine <\/span>cost-reflective tariffs<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n

Demand Side<\/span><\/b>\u00a0<\/span><\/p>\n

There should be <\/span>peak demand moderation<\/span><\/b> through flattening of the <\/span>demand curve<\/span><\/b>. This can be done through a change in <\/span>consumer behaviour<\/span><\/b> with <\/span>smart meters<\/span><\/b>. In addition, there should be a <\/span>large differential<\/span><\/b> in <\/span>peak<\/span><\/b> and <\/span>off-peak rates<\/span><\/b>. Thus, consumers will resort to using cheap electricity during off-peak hours for geysers and washing machines.\u00a0<\/span>\u00a0<\/span><\/p>\n

Supply Side<\/span><\/b>\u00a0<\/span><\/p>\n

The Coal India needs to create capacities to rapidly ramp up production; and should increase coal production.\u00a0<\/span>\u00a0<\/span><\/p>\n

The Railways should ramp up its capabilities to carry larger quantities of coal when demand surges.\u00a0<\/span>\u00a0<\/span><\/p>\n

There is idle but <\/span>expensive generating capacity available <\/span><\/b>in India. The idle <\/span>gas-based power plants<\/span><\/b> can run on imported LNG, and the<\/span> idle <\/span>thermal plants<\/span><\/b> can run on <\/span>imported coal<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n

The consumers who are willing to pay more could be kept <\/span>free of power cuts<\/span><\/b> with purchase and supply of <\/span>more expensive electricit<\/span><\/b>y generated from imported coal and gas. This would be shown as <\/span>a peak demand surcharge<\/span><\/b> in the bills.<\/span>\u00a0<\/span><\/p>\n

The Regulatory Commissions should allow the Discoms to go in for bids for power storage (also, <\/span>large-scale grid storage<\/span><\/b>). This can help India achieve the goals of creating 500 GW of non-fossil fuel capacity including 450 GW of renewables by 2030.<\/span>\u00a0<\/span><\/p>\n

The Discoms should ensure that they do not delay payment to the power generation companies.\u00a0<\/span>\u00a0<\/span><\/p>\n

It is also time to move towards separate <\/span>peaking power procurement contracts<\/span><\/b> in addition to the present system of <\/span>long-term thermal power contracts<\/span><\/b>.\u00a0<\/span>\u00a0<\/span><\/p>\n

There is a need to look whether <\/span>Coal India<\/span><\/b> or <\/span>the Indian Railways<\/span><\/b> have defaulted or <\/span>power generators<\/span><\/b> have defaulted contractually in supplying power to Discoms. The contractual terms may be <\/span>tightened<\/span><\/b> with <\/span>enforceable financial penalties<\/span><\/b>.<\/span>\u00a0<\/span><\/p>\n

India needs to transition to <\/span>demand-based time of day rates<\/span><\/b> of electricity for generators as well as consumers.\u00a0<\/span>\u00a0<\/span><\/p>\n

Source<\/span><\/b>: The post is based on an article \u201cPowering up after the power crisis shock<\/strong>\u201d published in the \u201cThe Hindu<\/strong>\u201d on 10<\/strong><\/span>th<\/strong> May 2022<\/strong>.<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

News: India is currently going through a power crisis. Consequentially, the government has cancelled passenger trains to allow the Indian Railways to transport more coal to power plants.\u00a0 In addition, the directives have been issued to use more imported coal to tide over the supply shortfall.\u00a0 Structure of India\u2019s power sector\u00a0 Under the Electricity Act,… Continue reading Powering up after the power crisis shock\u00a0<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10498],"class_list":["post-183665","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-the-hindu","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704710252},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/183665","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=183665"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/183665\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=183665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=183665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=183665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}