Even though government data shows low power deficit and a surplus situation in the country, a large population is still without electricity and power cuts are part of daily life, says a report. According to clean energy consultant Mercom Capital Group’s latest report, the power deficit numbers in India do not paint the full picture. “….large populations in India are still without electricity and power cuts are still part of daily life in urban areas and more so in rural areas,” the report ‘India Solar Quarterly Market Update’ said.
“The reduction in the power deficit we are seeing is largely due to a combination of a drop in power demand in the commercial and industrial sector, and the financial health of discoms,” it added. Falling demand has led to record low prices on the power exchanges, it said. According to Central Electricity Authority (CEA), plant load factors have fallen by 20-30 per cent due to the drop in power usage from commercial and industrial customers, a major source of revenue for discoms. These customers also usually end up subsidising residential and rural customers for whom discoms refuse to increase tariffs in line with costs, leading to massive losses year after year.
Discoms, which continue to have financial struggles, are purchasing cheaper power from the exchanges, which is resulting in curtailment issues for solar power. Some discoms are simply resorting to power cuts as they cannot afford to even purchase power at low rates on the exchanges. Some states have surplus power but still do not supply power round the clock for fear of losses due to low tariffs from residential and agricultural customers.