In­dia Set to Have First Power Sur­plus in 8 Yrs

Resource Digest - - CONTENTS -

In­dia fore­casts an elec­tric­ity sur­plus for the first time in at least eight years be­cause of trans­mis­sion im­prove­ments and more gen­er­a­tion. The coun­try may have 1.1 per­cent ex­cess elec­tric­ity sup­plies in the year end­ing March 2017, ac­cord­ing to the power min­istry’s Cen­tral Elec­tric­ity Author­ity. A 2.6 per­cent sur­plus for the pe­riod is fore­cast for peak pe­ri­ods, when daily de­mand is high­est. In­dia’s power deficit shrank to be­low 1 per­cent in May. The nar­row­ing gap masks un­ful­filled de­mand in a coun­try where one in five cit­i­zens don’t have ac­cess to elec­tric­ity and a mar­ket for back-up power thrives be­cause of un­re­li­able sup­plies. Prime Min­is­ter Naren­dra Modi’s plan to light up ev­ery house­hold by 2019 and boost man­u­fac­tur­ing in the coun­try are ex­pected to help lift elec­tric­ity de­mand. Power gen­er­a­tion growth has risen to 9.5 per cent this year so far, as against 5.65 per cent dur­ing the 10-year pe­riod from 2004 to 2014, Power Min­is­ter Piyush Goyal said. The power gen­er­a­tion growth was recorded at 5.65 per cent be­tween 2004 to 2014, 5.02 per cent in 2012-14, 7.03 per cent in 2014-16 and 9.5 per cent in 2016-till date, Goyal tweeted. Goyal also said there was 87 per cent re­duc­tion in en­ergy short­age in just two years to 14 mil­lion units (mu), from 110 mil­lion units ear­lier. Ac­cord­ing to Vidyut Pravah ap­pli­ca­tion to mon­i­tor power de­mand on the ba­sis of data pro­vided by states, the elec­tric­ity deficit came down to 14 mu in July this year from 110 mu in the same month in 2014 and 62 mu in 2015.

Goyal also tweeted that power was avail­able at rates be­low Rs 2 per unit at ex­changes across the coun­try with no network con­ges­tion. “This re­flects coun­try mov­ing to­wards One na­tion, One grid, One price,” he said.

“The over­all sur­plus es­ti­ma­tion, while skewed due to the po­si­tion in Western re­gion, demon­strates the progress In­dia has made in re­solv­ing fuel and power gen­er­a­tion is­sues,” said Sam­bitosh Mo­ha­p­a­tra, a part­ner at PWC In­dia. “As the econ­omy grows, fi­nan­cials of state util­i­ties im­prove and ru­ral elec­tri­fi­ca­tion pro­gresses, the sur­plus will get ab­sorbed.”

Though sup­plies may sur­pass de­mand at a na­tional level sev­eral parts of the coun­try may con­tinue to face short­ages, ac­cord­ing to the Cen­tral Elec­tric­ity Author­ity. Part of the rea­son is that money-los­ing state dis­trib­u­tors cur­tail power pur­chases and re­sort to black­outs. A plan to re­struc­ture their debt and make them prof­itable is un­der­way.

Power de­mand dur­ing the cur­rent fis­cal year is ex­pected to grow 9 per­cent to 1.21 tril­lion kilo­watt hours, while sup­plies are ex­pected to rise al­most 13 per­cent to 1.23 tril­lion kilo­watt hours, ac­cord­ing to the Cen­tral Elec­tric­ity Author­ity. In­dia, home to a sixth of the world’s pop­u­la­tion, ac­counts for about 6 per­cent of global en­ergy use.

Mean­while, terming In­dia as a “promis­ing and de­mand­ing” mar­ket for re­new­able en­ergy, Su­zlon group Chair­man Tulsi Tanti said govern­ment has a tar­get of 175 GW of re­new­able en­ergy by 2022, of which 60 GW is wind power. “In­dian mar­ket will con­tinue to grow by 30 per cent,” he noted, adding that to achieve such a huge tar­get, the in­dus­try needs tech­nol­ogy upgra­da­tion to counter lower tar­iffs and at the same time, grow gen­er­a­tion ca­pac­ity at a com­pet­i­tive cost. Ex­plain­ing the ra­tio­nale, he said: “Now the best sites are ex­hausted and we need to utilise low wind sites. We need to keep in mind the de­clin­ing tar­iff. PPA tar­iffs are go­ing be­low Rs 5. Be­cause of these two chal­lenges, it is im­por­tant for us to in­vest in tech­nol­ogy to make projects vi­able.”

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