The government is looking to overhaul the power sector. The advisory panel led by Suresh Prabhu has come up with some recommendations to adress issues that plague CIL , poor T&D infrastructure, how to ensure 24 x 7 power supply etc. Read further to find out what has been recommended.
• No need for restructuring Coal India Limited ( CIL ). Need for improvements in CIL and its subsidiaries including Central Mine Planning and Design Institute Limited (CMPDI). Turn CMPDI into an independent identity.
• Phase out old and inefficient thermal power plants that burn excessive fuel.
• Recommended opening up of the coal sector and up-gradation of Coal India Limited (CIL) and its subsidiaries. This will increase domestic production of the dry fuel.
• It also mentioned the issues of coal block auction Process, coal linkage rationalization and swapping of coal linkages for optimum utilization.
• Power projects that are complete and do not have fuel linkage should get coal linkages. Coal linkage means that a coal consumer is assured of the supply of coal.The Linkages of coal demand is primarily done with the objective of planning of coal supplies, keeping in view indigenous coal resources as well as the need to supply fuel of appropriate quality to the consumers and at the same time making the most economic use of the available capacity for production and of coal.
• Develop railway infrastructure from coal mines to main railway system, including through a joint venture company on infrastructure by CIL.
• Reforms recommended in the distribution sector of coal with targeted actions, including PPP in distribution of coal.
• It called for separation of Carriage and Content in the Distribution license. Carriage refers to the distribution aspect and content to power itself. Amendments to Electricity Act propose the separation of carriage and content businesses. Building infrastructure for power supply and the supply of power will be two different business entities.
• It also called for restricting the authority of the State Governments to issue directive to prevent Open Access. However this recommendation has drawn criticism. Electricity Act is built on the foundation of open access and accordingly the Act gives a statutory right to generating companies to choose their buyers. Also, open access allows large users of power to buy cheaper power from the open market. The idea is that the customers should be able to choose among a large number of competing power companies, instead of being forced to buy electricity from their existing electric utility monopoly. It helps large consumers particularly the sick textile, cement and steel industrial units by ensuring regular supply of electricity at competitive rates and boost business.
• For the upcoming e-auction, the committee has issued a word of caution on reserve bid prices, against cartelisation in tenders.
• Need for strengthening penalties to improve quality of service and grid discipline, establish regional regulators in consultation with states and a mechanism to review the performance of regulatory commissions through a forum of regulators.
• Renewable Energy – what should be the reform here according to the panel ?
- Incentivise renewable energy generation and have green energy corridors.
- Coal-based generating Companies be obligated to set up renewable power generation.
- Priority in purchase of renewable power by distribution utilities.
- Improve functioning of IREDA.
• Power supply for 24 hours should be a norm and not a scheme. How to ensure that ? The panel recommends the following : –
- Transmission infrastructure should stay ahead of generation, so that the incidence of transmission bottlenecks is eliminated.
- Private participation in T&D should be enhanced, identify new transmission projects and bid out soon.
- Make transmission plan for 20-25 years.
- Distribution sector needs institutional changes, PPPs and increased private investment. It holds the key to 24 x 7 power supply.
- Appropriate financing, capital restructuring of state utilities as they right now suffer huge losses.
- State-level transmission and sub-transmission infrastructure should be strengthened in a time bound manner as it will pave the way for national transmission system.
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