In an interview with ET Now, power secretary Ajay Kumar Bhalla says in order to bring down T&C losses, state governments have been advised to put up meters everywhere. If the billing efficiency goes up, tariff increase could be avoided.
Congratulations! All the Indian villages have access to electricity now. How has the journey been so far and what are the internal targets for the last 1,000 days? How did the team achieve all those targets?
These were the villages which towards the end were the most difficult ones. We had set up targets to complete this as early as December 2017 but we could not do it especially for three states which was J&K, Arunachal Pradesh, and left wing extremist areas of Chhattisgarh.
Then the efforts of Air force to drop some materials in J&K, use of helicopters to drop materials near Myanmar border in Arunachal Pradesh and some innovative methods to push in solar standalone solutions in Chhattisgarh really helped us. It is the team effort of all the state governments which has made us achieve this target well in time.
I am very happy that all the power departments of the state government and the discoms put in really good efforts.
That is one part of the story. The villages, talukas and kasbahs have been electrified. But what about availability of electricity? The more important step is to provide uninterrupted supply of power?
There has been a comprehensive effort to supply power. On generation side, you are aware that we have surplus power available. The inter-state transmission capacities definitely have gone up.
In some states, the intra-state transmission capacities are an issue and of course the most difficult ones, the last mile discoms connectivity to the villages, the carrying capacity of the transformers and the conductors definitely is an issue.
The Deen Dayal Upadhyaya Gram Jyoti Yojana is mainly meant for strengthening this infrastructure separation of rural feeders, providing meters, metering of transformers and the electrification of villages, which is basically intensive electrification of villages as in earlier years, the village was electrified with one line and a few poles.
Those villages are covered as electrified villages. We are doing intensive electrification and so a lot of money is getting spent on this programme. About Rs 9,000 crore in the last year and about Rs 25,000 crore in the last four years have been sanctioned and release to the state government for implementing this.
We intend to take electricity connection to each and every household 24×7.
Give us an indicative breakup of the state- wise incremental addition. Which state has seen the maximum incremental addition in terms of being reached at this juncture?
In terms of intensive electrification, I do not have the numbers of each state right now, but in terms of households, some of the bigger states like UP and Bihar are the ones where the challenge lies and where the large number of households are unelectrified as of date. Like in Assam, Bihar, UP, Jharkhand, there are some of the bigger states where we need to work harder to make the electricity reach each and every household.
How do you see the road ahead for power prices? Data suggest that power prices have gone up. There is talk about coal shortage leading to an uptick in prices. What is the government doing to ensure that there is enough supply at affordable prices?
Coal movement is being monitored on a very regular basis. Coal production has increased over the last years and in the last financial year, we could supply coal to most of the power stations.
We could manage more rakes from the railways. On an average, in March, we touched about 278 rakes from Coal India mines which is the highest number and of course in April, we are targeting 288 rakes on an average.
The frequency fluctuations are almost nil in the exchange. Power prices are the same across the country. I do not see that supply side issue is any more problem. As far as tariff is concerned, a gradual increase in tariff is expected so that discoms cost is met.
The only thing we need to focus on is the losses which these discoms are incurring. In order to bring down T&C losses, we have suggested that state governments should put meters everywhere. Once the meters are there, the billing efficiency goes up and once the efficiencies go up, then tariff increase may not be a solution.
The current administration has invested a lot in creating solar and wind capacity, but given the way how wind power and solar prices have come down, do you think those options may not scale up because the profitability is now a miss?
No, not in that sense. Yes, on one front, you can say that discoms have not entered into many long-term PPAs for the coal-based power or some of the gas-based power that is lying unutilised, some of the plants’ capacity is not getting scheduled.
But the need for renewables is also there and we are integrating it well with the hydro. As of now, about 70000 megawatts of renewable energy is available and it is beating the requirement in a very balanced manner along with hydro power where the requirement in India peaks late in the evening as sun is not available. The coal plants are getting scheduled and a peak of 161 gigawatt about 126 gigawatts are coming from coal-based generation.
The remaining comes from nuclear and gas.
We have a very ambitious plan of adding 175 gigawatt renewable energy by March 2022 and accordingly, we have sufficient coal and hydro capacity to integrate in the grid. It matches our demand and I do not see any reason because with surplus power available, the prices will fall beyond the economic level. Prices may come down to a certain extent within the affordability range, but I do not see prices falling below the economic level.
If there are supply side issues for coal based/thermal power projects what is the solution?
In the long term, the solution should be that a coal-based power plant should be located at the pithead. Instead of moving coal, we should move power. It is much easier, cheaper and cleaner way of transportation and sufficient transmission capacities have been created.
We have provided for the flexible utilisation of coal. The policy was brought in 2016. In this year, the coal can be used in Punjab and Haryana can use give their coal to a pithead plant in Chhattisgarh and buy power, provided it is economically cheaper.
What kind of demand growth are you pencilling in for the future?
In the current year, 4% to 5% growth has been there and from December onwards, the growth has been higher and in January, month on month it was 8%, in March it was 10%. We are definitely projecting a 6% growth rate at this moment.
Where do you think the power capacity would be by end of FY19?
In March this year, our capacity is at 345 gigawatts, of which about 70 gigawatts is renewable. By 2022, we will have 525 gigawatts capacity with 175 GW in renewables.