- India’s power sector is highly diversified, with an installed capacity of over 450 GW comprising coal (59%), renewables (24%), hydro (12%), and nuclear (2%). It is central to meeting rising electricity demand, supporting economic growth, and achieving Net Zero 2070 targets.
India’s Power Sector: Facts
- India is the third-largest producer and consumer of electricity globally.
- Installed Capacity: As of March 31, 2024, India’s installed power capacity was 442.0 GW.
- Renewable Energy: Reached 168.4 GW (40.9% of total capacity).
Systemic Issues in India’s Power Sector
- High Cost of Fuel due to delays in environmental clearances, land acquisition, and lack of investment in coal extraction technology.
- Reliance on Imported Coal despite abundant reserves. E.g. In 2023, India imported around 60 million tonnes of coal, leading to additional costs of about $2 billion.
- Non-Renewable Dependency: Around 80% of power generation is based on thermal power plants.
- Aged Power Plants: Many plants are outdated and inefficient, increasing operational costs.
- Financial Health of DISCOMS: Poor financial conditions discourage private sector investment. E.g. DISCOMS in Andhra Pradesh reported accumulated losses exceeding Rs 20,000 crore in 2022.
- Lack of Competitiveness: High industrial tariffs and cross-subsidy regimes affect competitiveness.
Government Policies & Initiatives
- Green Energy Corridor: Projects to enhance renewable power evacuation with over 8,651 km of transmission lines and 19,558 MVA substations constructed.
- Rooftop Solar National Portal: Streamlined process for residential consumers to apply for solar.
- Smart Meters: Over 51.62 lakh meters were deployed under the National Smart Grid Mission.
- PLI Scheme: Rs. 19,500 crores allocated for high-efficiency solar PV modules.
- Competitive Bidding: Competitive bidding in power generation, especially renewable energy, aims to bring transparency and lower costs.
- Saubhagya Scheme: 2.82 crore households have been electrified under this scheme as of March 2021.
- KUSUM Scheme: Promoting solar pumps and selling surplus power to local DISCOMS.
- LED Distribution: More than 36.86 crore LED bulbs and other energy-efficient devices have been distributed, saving 48,411 million kWh annually.
Way Forward
- Separate Bidding: Conduct separate tenders for solar and coal power to avoid complexity and ensure that developers specialise in either renewable or conventional energy.
- Encourage Smaller Developers: Create tenders with lower entry barriers to include smaller players, ensuring a broader range of bidders and more competition, which leads to better price discovery.
- Annual Calendar: It can give developers time to plan their investments and bids.
- Cross-Subsidy Rationalization: Gradual reduction of cross-subsidies to ensure more equitable tariff structures, reducing the financial burden on industries while still protecting vulnerable sections.
- Improved Metering: Implement 100% net metering, smart meters, and agricultural power metering to improve revenue collection, reduce losses, and ensure accurate billing. E.g. smart meters In Delhi.
- Promote Hybrid Power: Encourage tenders that combine renewable sources like solar and wind with battery storage, enabling a more stable and reliable power supply.
- Enhance Grid Infrastructure: To facilitate smoother power flow from remote locations and enhance energy security. E.g. Upgrading transmission networks in solar-rich regions like Gujarat.
Government initiatives like the Green Energy Corridor, Smart Grid Mission, and competitive bidding aim to modernize India’s power sector. Strengthening infrastructure, DISCOM efficiency, and policy frameworks is key for reliable and sustainable electricity toward Net Zero 2070.
Reference: Indian Express
PMF IAS Pathfinder for Mains – Question 312
Q. India has emerged as a power-surplus nation, yet power shortages and outages persist. Critically analyze the causes and outline measures for a sustainable transition towards net-zero 2070. (250 Words) (15 Marks)
Approach
- Introduction: Write a brief introduction about the power sector in India and mention data.
- Body: Write causes for this paradox, issues faced by India’s power sector and measures for a sustainable transition towards net-zero 2070.
- Conclusion: Write a futuristic and balanced conclusion by mentioning the future course of action.
