The recent power outage should be taken as an alarming situation by the policy makers and power sector reforms need to move with a faster pace. By Pradeep PandeyIndia, already reeling under severe power deficit, has experienced one of the world’s worst blackouts in July, with 670 million people directly impacted. The repercussions from two days of power outages were widely reported. It became a matter of discussion across the globe that how one of the fastest growing economies with world’s one fifth population could not give a serious thought on a basic necessity even after two decades of economic liberalisation! This incident illustrates a much serious systemic failure. There is a serious need of improved energy governance in the country if it has to regain its double digit growth.It was not like citizens of India have never faced such situations, rather they have acclimatised themselves with the circumstances as a major portion of the population either do not have access to uninterrupted power supply or still awaiting for transmission line to reach their vicinity. Nevertheless, it could be expected that with this incident, policy makers would expedite the much awaited policy reforms and its timely implementation that may save the country from future power crisis.Even though the committee on recent power grid collapse has submitted its report to the power ministry, citing various causes led to the black out, there are vital issues still need to be rectified. A committee headed by A S Bakshi, chairman of the Central Electricity Authority (CEA), has pointed out that instability in the northern grid combined with other issues such as 20 transmission lines undergoing a planned shutdown during the monsoon season led to the blackout. While, the Central Electricity Regulatory Commission (CERC) is figuring out how to maintain grid discipline and control various transmission nodes, in order to avert such situations in the future.“We had asked power grid and POSOCO to provide a detailed report on inter-state transmission system and we have received the report. Meanwhile, we are studying to identify radial feeders that can be opened up later on,” said Pramod Deo, chairman of CERC. The regulatory authority has issued show cause notices to managers of state load dispatch centres. “We are also exploring options that how the inter-state and inter-regional transmission systems can be controlled in stipulated time if such situation occurs. I believe that grid code discipline must be maintained,” Mr Deo added.Meanwhile, Bakshi committee has also recommended for implementation of smart grids and Special Protection Schemes (SPSs) for the long-term solutions. The SPSs help averting grid failure situations which disconnects the circuit automatically during critical situations.Moreover, the country’s energy governance needs much more improvement as the power sector problems spanning from the power generation to its distribution has been deep-seated. The former power minister, Suresh Prabhu has pointed out that the power sector is suffering from lack of initiatives, “no policy or wrong policy”. Power sector has been a serious victim of policy paralysis as many power projects are stranded due to lack of fuel supply or they don’t have systems in place for power evacuations, while state electricity boards are bleeding due to lack of funds. In addition to this, there are various other issues such as land acquisition, environment clearances, affordable fuel supply and poor infrastructure growth in the country resulting delay in proposed power projects.PROJECT DELAYSCurrently, India has installed power capacity of 205,339 MW but poor supply systems, inadequate maintenance, shut downs, lack of fuel supply or other problems can strip this down. The country is facing a power deficit of 12-15 per cent during the peak hours.Reportedly, about 30,000 MW of power capacities are stranded or delayed due to lack of fuel, despite serious participation by public and private companies. Efforts to accelerate the pace of capacity addition have been thwarted by issues such as land acquisition and necessary clearances for power projects, including regulatory delays and environmental concerns.A case in point, Anil Ambani owned Reliance Power’s 4,000 MW Krishnapattanam Ultra Mega Power Project has been stalled due to lack of coal supply. Its another gas based project at Samalkot in Andhra Pradesh is still waiting for gas supply. Fuel has become acute problem for the sector, especially when it comes to coal. In India thermal plants constitute 66 per cent of the total installed capacity, mainly fired by coal. Volatility in coal prices, recent regulatory reforms in international coal destinations and strangulated domestic supply has hit hard the thermal power producers. Even though India has one of the world’s largest coal reserves, about 270 billion tonnes, power producers have to face unwarranted delay in getting fuel linkages. And, if they take refuse of overseas supplies their projects near to be unviable.According to sector analysts, post regulatory reforms in a country like Indonesia, imported coal based projects in India could be only viable if the policy makers bring in sustainable price mechanism. “Either we go for differential pricing to consumer or if we cannot do it we must go for pool pricing,” said Ashok Khurana, director general, Association of Power Producers.According to him, to operate a power plant on imported coal has become difficult as the cost of generation goes up and if the producer is not able to pass the additional cost to the consumer the plant may get unviable.Now, power players in the country would have to just hope and wait for policy makers to expedite policy reforms in the country.
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