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| Power
Sector in India - Challenges & Policy Options
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 Round Table Discussion
on "Power Sector in India - Challenges
& Policy Options" by Mr. Puneet K. Goel - Director,
Ministry of Power, Government of India in Espire, A 41, MCIE, Mathura
Road, New Delhi - 44.
26th JULY 08
HIGHLIGHTS
Kilowatt, Mega watt and Per second
energy produced
- It is actually per second energy
produced. What is per second energy produced? If you go to your
physics, joule per second is the wattage. Suppose we consume one
kilowatt of electricity for an hour, it is called kilowatt-hour.
We get in our bills what we call units at home; it is actually
kilowatt-hour, and the units are the same. In the power sector,
when we say, we are often using two terms. If you read the Times
of India or the Economic Times, sometimes they will mention peak
shortage and sometimes energy shortage. These are two different
problems. When they say peak shortage, it is actually megawatt
shortage or kilowatt shortage. When energy shortage is mentioned,
then it is actually kilowatt-hour shortage.
What Base load, peak load and Major
Components
Talking about generation and distribution, there is another very
important link between both. What is the difference between transmission
and distribution? Transmission is at higher voltage. Why don't
we transmit at lower voltage? Reverse current is v/r; when voltage
is high, current will be low. Then why don't we use high voltage
at our residences? We cannot, so there is a paradox. To reduce
losses, we have to go for higher voltage, whereas for the safety
of human beings we have to go for lower voltage. This question
is very important because some of the developed countries have
increased their voltages to very high level, to the extent possible
outside their residences. Korea has the world's best power utility.
And its size was half of India's total capacity. It has the world's
minimum losses. They have achieved this by techno-managerial solutions.
Through continuous research, they have gradually reduced their
losses. Their losses are around 3.9%. Technically, it is a near-impossible
feat. Compared to that, our losses are at 30%. Even the US has
about 6% losses. But from our perspective, the good thing is that
30-40 years back, their losses were as high as India's. So there
is some hope for India too.
Captive Generation
 When
you set up a plant for your own use and the definition is that
you should use at least more than 50% of that power. And you should
have equity of at least 26%. It need not be 50%, but the user
should have equity of 26%, so that he has control over the company.
Some people can set up a plant with 74% equity; this model is
very much an upcoming one. In Tamil Nadu's industrial area, people
are setting up plants with 74% equity and are asking the industrial
consumers to hold 26% equity. They can then provide reliable supply.
This was a new concept, which came up in the Electricity Act in
2000.
Open Access
- Actually, either the power grid owns transmission
lines or distribution lines are owned by distribution utilities.
They sometimes may have excess capacity. What is grid? This is
my last question. It is basically a high voltage network. We have
five national grids.
Corporations
- The Ministry of Coal has Coal India Limited with it and then
it has Neyvelli Lignite Corporation. Then there is the Ministry
of Power; many of the organisations are not statutory. One very
important one is Central Electricity Regulatory Commission, which
has come after the Electricity Act, 2003 and NTPC, PTC, Power
Trading Company, Corporation for Power Finances. PTC is actually
private; earlier, the majority of shares were held by government
PSUs, now it is fully private. Then we have NHPC and the Ministry
of Petroleum.
- Korea has 21 nuclear plants. They have 21,000 megawatts capacity
of nuclear energy running at almost full capacity; we have less
than 3,000 and that too running at 30% plant load capacity.
Types of Plant
 There
are two types of plant in terms of their locations. One is a pithead
plant and another is load centre plant. We have one in Badarpur
and another in Dadri, which are basically load centres. They are
more in the context of, this term is more in the context of coal-based
plants or lignite based plants, in the context of hydro, everything
has to be at the site only. And in terms of nuclear, it can be
anywhere because carrying uranium is very risky. These three states,
Jharkhand, Orissa and Chattisgarh, they are often arguing that
government of India should not encourage too many plants in their
states rather they should set up plants outside their states.
 There
are many plants in Jharkhand. Whenever a central company sets
up a plant, there is a formula that it has to leave extra power
to the hosts. So Orissa, Jharkhand and Chattisgarh get about 10%
excess power apart from their normal power. They trade that additional
power to other states, even U.P., which is very much lagging behind
in setting up its own plants. And with that, they are subsidising
their own consumers. Secondly, they also do not supply. Most of
the unelectrified villages are in these districts.
Nuclear Programme
- We have a three-stage nuclear programme. The first stage is
based on uranium. We don't have uranium in plenty in our country,
only sufficient for 3,000 megawatts. In the second stage, we will
have fast breeder reactors. In the third stage, we will have plants
from thorium, of which there is plenty in Kerala. We expect that
by 2050, we should be able to produce about 2.5-lakh megawatts
from this. In this context, nuclear energy is very important.
The first and second stages of nuclear energy are very important.
- Our hydro potential is 1,50, 000 megawatts. 33,000 megawatts
lie in the Indus, 20,000 megawatts in the Ganges, then Brahmaputra,
primarily in Arunachal Pradesh 66, 000 mega watts. But there are
lot of difficulties in hydro. There are many environmentalists
who delay projects for many years. Of course, there are problems
of destruction of forests and rehabilitation. These plants have
a certain life, for instance, Bhakra Nangal, but if we are able
to construct some plants over - on the upstream of Bhakra Nangal
- the life of any large multi-purpose hydro project will increase.
Definitely, the environmentalists have a point to some extent.
But at the same time, what we see is that much snow melts every
year and goes into the sea. Thus every year, we lose a huge amount
of electricity, which could have been used for the prosperity
of the country. Again, hydro plants are very important to meet
our peak load.
Ultra-Mega Power Projects
 About
two years back, the Government of India, i.e. the Ministry of
Power had identified nine sites - nine projects - called ultra-mega
power projects. There is no mystery in the term ultra-mega; it
simply denotes size, which is 4,000 megawatts. Till now, we had
plant size of 1000 mega watts. In this ultra mega also, there
are two categories: one, is which are set up at a coast and another
is which are at pithead locations. So we have one more category
apart from pithead and load centre; the third category is coastal
power plants. The idea was that if they have a power purchase
agreement with the states, their return is guaranteed. Thus, private
investors can come and tie up with Indonesia or South Africa and
it will solve some of the problems. For one 4000-megawatt power
plant, an investment of Rs16,000 crores is required. To get people
to make this large investment, we in the ministry got all the
clearances, acquired land for these power plants, gave them environmental
clearance before bidding. We gave them limited blocks because
these are the places where an investor has to do maximum running
to get a coal block, to get an environmental clearance, water
clearance, to get land. Therefore, the ministry of power, in coordination
with the states identified these nine sites, and gradually, we
have already awarded three projects. This is a very welcome change
in the approach that has materialised in the last two years and
I am sure the results will come in the next three years because
the gestation period is about five years.
Types of Sites
- There are pithead sites and coastal sites. Coastal are based
on the imported coal. The developer has to tie up with coal on
his own. We have so far awarded three projects; one is Sarsung
where the Government of India has given the coal block. That's
a pithead site. Then there are two more sites, one at Mundra and
another at Krishnapatnam in Andhra Pradesh. These are coastal
plants. Sarsung should be able to take care of the needs of the
northern states and Mundra will take care of the needs of the
western states and Krishnapatnam will take care of the needs of
the southern states. And six more plants are in the pipeline.
Sarsung is in Madhya Pradesh. We had created our own companies;
those companies were given water clearance, land and environmental
clearance and when the project was awarded, the entire company
was transferred to the bidder, which is a new concept.
- Some states like Orissa and Jharkhand, which are otherwise power
surplus, do not supply to their own companies. They are selling
at a very high cost to states like Delhi and Maharashtra. Earlier,
the rates were very high and Power Trading Corporation was putting
its own margin on that, regulator has kept that margin.
- The Eleventh Plan says that our construction time is 40 months
and development time is 24 months to set up a power plant. Similar
to the manner they have developed these nine sites, India must
develop at least 140 such sites - maybe on a small scale - if
the supply has to exceed the demand by 2017.
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