The cur­rent plan ap­proved by the Union cab­i­net has a bet­ter chance of suc­ceed­ing than the two pre­vi­ous ones as it also aims to en­force fi­nan­cial dis­ci­pline on the states.

Power Watch India - - COVER STORY -

With in­ter­est costs com­pris­ing 10-20% of the cost of power in states, all dis­com turn­around plans ex­pect banks to re­duce their prof­its from the loans dis­bursed. The re­duc­tion of rates on the re­main­ing loans will hit the in­ter­est in­come for power fo­cused lenders es­pe­cially pub­lic sec­tor banks as stated above. It could cost them about eight per cent re­duc­tion in their profit for next year. Com­plete re­work of coal link­ages to re­duce the mine-topower-plant dis­tance in or­der to re­duce trans­port costs will also help re­duce the cost of elec­tric­ity. Al­low­ing large pro­duc­ers like NTPC to move coal to ther­mally ef­fi­cient plants would be of help in this di­rec­tion for all states pur­chas­ing power from NTPC. The coal qual­ity from Coal In­dia and the dif­fer­ence be­tween sup­ply qual­ity and billing was al­ways ques­tioned by all coal pur­chasers, in­clud­ing NTPC.

Now there is a pro­posal to get coal qual­ity ver­i­fied from an in­de­pen­dent party. This would force Coal In­dia to sup­ply the grades they are charg­ing for, which might re­duce the cost of elec­tric­ity. As Open Ac­cess in dis­tri­bu­tion picks up it would help in im­prov­ing ef­fi­ciency and re­duc­ing ATC losses. Power pro­duc­ers can ben­e­fit from im­proved de­mand and cash-flows, while T&D play­ers will gain from higher de­mand, pro­vided the states un­der­take mea­sures in their true spirit.

The suc­cess of the dis­coms’ pack­age UDAY is also crit­i­cal for In­dia’s am­bi­tious clean en­ergy pro­gramme to com­bat cli­mate change, re­vival of stranded ther­mal projects, the health of banks that have lent Rs 4 lakh crore to dis­coms and Prime Min­is­ter’s vi­sion to sup­ply af­ford­able 24x7 power to all. Un­der the present Ujwal Bharat Yo­jna the govern­ment of In­dia has in­te­grated the ap­proach of the three Min­istries of Power, Coal and New and Re­new­able en­ergy, to come to­gether in re­al­is­ing the vi­sion of 24x7 power to all.

The vi­sion of 24x7 power con­sti­tutes of en­ergy se­cu­rity, cli­mate change, en­ergy ef­fi­ciency, smart cities and dig­i­tal In­dia un­der a sin­gle um­brella. In the long run, re­struc­tur­ing creates fis­cal room for dis­coms to start buy­ing power from the mar­ket as well as float bids for long term PPAs, which will be pos­i­tive for power gen­er­at­ing com­pa­nies. Hope this UDAY scheme leads to a real sun­rise in dis­com op­er­a­tions and en­ables them to come out with im­prove­ments to meet the govern­ment’s dream of un­in­ter­rupted power for all.

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