Government is racing to add electricity capacity to meet growing demand: Union Minister for Power and New & Renewable Energy R. K. Singh


The Union Minister for Power and New & Renewable Energy Shri R. K. Singh has said that the power sector of India is the place to be in and invest, given the fast growth of the Indian economy and of the power sector now and in the years to come. “There is no other economy which is as big and large as us. And we need power to grow. The electricity generation and consumption has gone up by 60% as compared to 2014-15. The per capita consumption has gone up by almost that much. Compared to last year, we have grown by 8%. Hence, this is a sector which will reward you. The demand will continue to keep growing and our challenge is to ensure that supply keeps pace with the demand.” The Minister said this recently at an event..

Speaking about the transformation in the power sector, the Power Minister told the business community that earlier, the private sector had decided to not invest. “But now, nobody wants to sign long-term Power Purchase Agreements since the market is up and more remunerative, thus yielding steady investments into the sector.”If power sector had not grown as much, our economy would not have been able to grow as we do now, added the Minister.

Shri Singh explained that the government made the system transparent, with automatic payment mechanism for power suppliers. “Earlier, we had almost about 70 GW of power capacity which was financially stressed. This was because state governments used to announce subsidies but not pay them, the collection and billing efficiencies were low.Outstanding dues of gencos were about Rs. 1.5 lakh crores. Payments to power suppliers used to be in installments of 6 – 8 months. AT&C losses were about 27%. ACS-ARR gap was about one rupee.”

The Power and New & Renewable Energy Minister said that the government has turned around the sector and that it will continue to grow. “We brought down AT&C losses to around 15% and ACS-ARR gap has come down to 15 paise last year. Legacy dues of gencos have come down to Rs. 42,000 crores, and this too will be wiped out in around 7 – 8 months, while current dues are paid in full. Average daily availability of power in rural areas has gone up from 12.5 hours in 2015 to around 22.5 hours today. In urban areas, it is now around 23.8 hours.”

Shri Singh explained that he has tried to insulate the system from politics and to check the use of electricity as a political tool such as through announcing freebies. “My message is that somebody has to pay for power and we have put in place Rules which enforce this, so that subsidy is accounted, that if the subsidy money is not given in advance, then subsidy will not be passed on. We made everything conditional; if you do not pay for power, you do not get power.”

Speaking about the performance of power sector PSUs, the Minister said that their share priceshave gone up by 2.5 – 3 times in recent years and that they will keep growing, since the power sector is where the demand is growing to grow and where we are doing new things and evolving.

Replying to a question on how the turnaround has been brought about, the Minister said that our staff is talented – the PSUs recruit some of the best people in the industry, pay them very well, provide them very good working conditions and give them the confidence to take decisions. “I have encouraged officers to take decisions, telling them that if you make a mistake, I don’t mind. It is only people who decide who make mistakes. And I assume that my officers have made bona fide decisions, unless a  mala fide intention is proved.I have tried to give confidence to my officers to go ahead and decide.”

The Minister said that the institution of dispute resolution mechanisms has been another reform measure. “We sidetracked the normal arbitration mechanism which takes 6 – 7 years and put in place a dispute resolution mechanism. This was a major hurdle in hydro projects where we have geological surprises, leading to disputes. As a result, decision-making has become faster.”

Shri Singh said that with peak electricity demand having gone up from 136 GW In 2014 to more than 240 GW today, the government is racing to add additional power capacity. “We have 27 GW of thermal power capacity under construction, about 12 GW which has been bid out and another 19 GW is under various stages of clearances. By 2030, about 90 GW thermal power capacity would have been added. In renewables, 103 GW is under construction, 71 GW under bid and the total capacity is around 180 GW. In hydro, we have about 18 GW under construction and 15 GW under survey and investigation.” The government is pushing renewables as fast as possible since gestation period for solar energy is about 18 months, less than other sources of energy, said the Minister.

The Minister said that the growth of renewable energy capacity addition in India is one of the fastest in the world. “Non-fossil-fuel capacity is already 44% of total power capacity. We have already achieved our NDC commitments and now, we are expecting to exceed our commitment of having 50% of total capacity from non-fossil-fuel sources by 2030; we will have 65% coming from non-fossil-fuel sources by then.”

The Minister explained that the government started with vanilla solar, vanilla wind, then moving on to wind-solar hybrid, wind-solar hybrid with energy storage, and now offshore wind and round-the-clock renewable energy with green hydrogen as storage. The government is setting up capacities for manufacture of grid scale storage and Pumped Storage Power Projects capacity too is being augmented, said the Minister.

The Minister pointed out that India’s power transmission system is way ahead in terms of rules, procedures, connectivity and speed than any other transmission system in the world. “We are the only country to have brought in General Network Access. We give connectivity so fast and in so simple a manner. No other transmission system in the world can match it.” No other country can match the pace at which India has added transmission capacity, the Minister added.