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Power: A poverty of political will

Power: A poverty of political will

Power: A poverty of political will
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By Latha Venkatesh  May 2, 2018 8:57:43 AM IST (Updated)

The achievement of connecting the last Indian unelectrified village to the grid comes at a particularly painful time for the power industry.

Connecting the last Indian unelectrified village to the grid is certainly a happy achievement. But it can’t be ignored that the achievement comes at a particularly painful time for the power industry.

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Let us survey some facts:
  1. Even as the country celebrates reaching the grid to the last Indian village, 17% or 3.13 crore households in the country have not been reached. (Government counts power availability to 10% of a village as electrifying of a village; hence the discrepancy of 100% villages electrified but only 83% of households)
  2. The bigger tragedy is there is surplus power with power companies and consumers with money but the two can’t be bridged because of the pathetic state of the finances of power distribution companies (Discoms) which prevents them from buying more power.
  3. Since 2013, discoms have signed power purchase agreements (PPAs) for only 7168 megawatts of power, even as 53,664 megawatts of power capacity has been added by private power generating companies.
  4. Without PPAs, banks can’t extend further loans to power companies and hence 19,000 megawatts of power projects are stressed and likely to go to the insolvency courts by September.
  5. Of these 19,000 megawatts of stressed power, 12,000 megawatts are stressed also because they do not have a stable source of coal because the public sector behemoth Coal India is able to increase its output by no more than 4.8% a year.
  6. Another 10,500 megawatts of gas-based power projects will also land in the insolvency courts in four months because the expected gas supply did not materialise
  7. Even more strange 11,700 megawatts of projects are stressed because various surcharges (such as coal terminal surcharge, busy season surcharge, clean energy cess) are levied on them which these power companies cannot pass onto consumers since the regulator hasn’t given permission. These power companies have also not been allowed by the regulator to pass on increases in transportation costs, because of flawed calculation formulas.
  8. Even as the nation celebrates reaching the grid to Leisang, a remote village in Manipur, 45% of Uttar Pradesh households, 26% of Bihar’s households, 36% of Odisha’s homes and 52% of Jharkhand’s homes do not have access to power. Much of these are in the Indo Gangetic plains where the excuse of tough terrain can’t hold
  9. Power outage figures for the month of March are as follows: 45 hours in Jharkhand, 18.4 hours in Haryana (one of the richest states) and 16 hours in Chhattisgarh. These are homes which have connectivity and are willing to pay; the states are rich in coal and enjoy proximity to power plants and yet there are power outages because loss making discoms can’t buy power for their citizens
  10. And finally the discoms are poor because of power theft. Here are the latest figures: 36% of power was stolen in Uttar Pradesh in March, 22.7% in Maharashtra, 31.9% in Madhya Pradesh and 25.4% in Rajasthan. Not surprising, the discoms are unable to buy power even for those who are willing to pay.
  11. That India took 71 years after independence to reach a basic necessity like power to every village is shameful, not celebratory.
    What is worse, even now 17% of households can't access power because of purely political failures: poor administration, poor law and order and reckless political promises.
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