What has triggered the current crisis and what can be done to pre-empt it next time? THE WAY OUT...

PROBLEMS

➘ COAL SHORTAGE India gets 60 per cent of its electricity from coal. Average coal stocks fell to nine days in midApril, the lowest in eight years and lower than the government-mandated average of 24 days’ stock. As per the coal directory 2020-21, India was the second largest importer of coal, mainly from Indonesia, Australia, South Africa and the US. We imported 215.3 million tonnes in 2020-21, 248.5 MT in 2019-20 and 235.4 MT in 2018-19.

➘ HIGH AT&C LOSSES Though power minister R.K. Singh informed Parliament that aggregate all-India AT&C losses reduced from 23.7 per cent in FY16 to 21.8 per cent in FY20, our aggregate technical and commercial losses remain among the highest in the world. Technical loss is the energy lost when electricity is carried over wires, aggravated by poor equipment. Commercial losses are caused by theft and pilferage of power. While 18 discoms witnessed a decline in losses, 12 saw a rise. This loss is the percentage of power procured by the discom for which it did not receive any payment.

➘ DIFFERENTIAL TARIFF

Consumers across different categories pay different prices for power. An industrial consumer pays the most, a farmer the least. The tariff varies from over a rupee per unit to nearly Rs 8 per unit. BLEEDING DISCOMS Weighed down by differential tariff, longterm power purchase agreements (PPAs) and unpaid dues, discoms cannot invest in superior networks and paying dues

SOLUTIONS

➘ Rajasthan, Andhra Pradesh, Gujarat, Karnataka and Maharashtra have reduced leakages by separating feeders for agriculture use. Discoms can reduce power procurement costs by encouraging farmers to instal meters on every farm and ensuring benefits go directly to them

➘ Incentivise consumers to meet part of their load via renewable energy. They can monetise their rooftops and sell the excess to discoms. Adequately compensate discoms for expenses to integrate rooftop solar power generation

➘ Discoms must be pushed to bring down cross subsidies to 20 per cent of power purchase cost

➘ Pay dues, especially by government bodies

➘ Find quick resolution to disputes between discoms and plants based on imported coal

➘ Rationalise multiple levies on coal—royalty on basic price (14%), GST (5%) and GST Compensation cess (Rs 400 per tonne). Its transportation, too, is expensive as rail freight charges cross-subsidise passenger transport.