Saison is actively involved and trying to maximize its contribution in the renewable industry as much as possible by supplying excellent quality and price competitive components & products and hope to become a major contributor in the industry. Mr. Puneet Shukla, CEO, Saison Components & Solutions shares his views on India’s power industry and key issues in this sector.
What is your outlook on India’s power demands.
There are three major pillars of power sector these are Generation, Transmission, and Distribution. As far as generation is concerned it is mainly divided into three sectors these are Central Sector, State Sector, and Private Sector.
In 2012, several state-level corporations which accounted for about 41.10% of overall generation, such as Jharkhand State Electricity Board (JSEB), Maharashtra State Electricity Board (MSEB), Kerala State Electricity Board (KSEB), in Gujarat (MGVCL, PGVCL, DGVCL, UGVCL four distribution Companies and one controlling body GUVNL, and one generation company GSEC), are also involved in the generation and intra-state distribution of electricity came down to 24.7% which is 81,167 MW in 2017.
On the other hand, the private sector enterprises which constituted around 29.11% that is 61409 MW in 2012 came up to 43.6% which is 143590MW.
The above comparison proves that the private sector companies are contributing more on the generation than the state level corporations.
On comparing the peak demands of power with the Peak met in the country we see a big difference in last 5-6 years.
In the year 2009-10, the peak met was 104009MW against the peak demand of 119166MW which shows a deficit of over 15MW.
However, down the years we have been successful in lessening the gap by more than 10% as in 2016-17, the peak met was 156934MW against the peak demand of 159542MW.
So, power demands are increasing but we the country has been successful in filling the gap by developing alternate sources of power generation like wind solar and hydro.
Saison has been contributing in power segment by supplying high quality components.
What are the key challenges in Power and Energy sector in India?
We would like to list a few major challenges in Power & energy sector in India, which are as follows:
- The first and foremost is the fuel security concerns, Thermal capacity addition is plagued by the growing fuel availability concerns faced by the Industry. While a significant gas based capacity of more than 20,000 MW is idle due to non-availability of gas. Coal supplies by CIL is restricted to around 65% of actual coal requirement by coal based thermal plants, leading to increased dependence on imported coal with the cascading result of high power generation costs.
- Financial Health of State Discoms: Years of populist tariff schemes, mounting AT&C losses and operational inefficiencies have adversely affected the financial health of State Discoms which are currently plagued with humongous out-standing debts.
- Under-procurement of Power by States: Increasing power generation costs due to limited fuel availability, poor financial health of State Discoms, high AT&C losses have contributed in suppressed demand projections by State Discoms.
- Inimical Financing Environment: Over the last 4-5 years, the leading rates have increased significantly from the time of project appraisal resulting in project cost overrun and hence higher end tariffs.
- Policy Paralysis: The micro level policies governing the fuel cost pass-through, mega power policy; competitive bidding guidelines are not in consonance with the macro framework like The Electricity Act 2003 and the National Electricity Policy.
What are the steps to tackle these issues?
To tackle the issues mentioned above, below are the solutions:
- Fuel Reforms: Various aspects like ramping up coal production by both public and private sector in a time-bound manner, increased participation of private sector in coal production and easing of regulatory framework, clearances and approvals for allocation and development of coal blocks & gas infrastructure need to be addressed while formulating such reforms.
- Arriving at an optimal fuel mix: There is a dire need to develop both conventional and non-conventional forms of energy, wherein, three key factors must be kept in view for developing an energy mix: (i) the pattern of energy demand seen in the country (ii) the availability of fuels, and (iii)fuel production and import costs. It would be effective to adopt coal thermal as a fundamental component of the fuel mix for the next 20-30 years, with solar occupying 5-8 % of the total mix.
- Balanced Regulatory Interventions: Regulators need to be sensitized to the challenges faced by the sector and policy framework needs to be crafted and enforced to ensure a win-win situation for all the stakeholders. They must pro-actively intervene to resolve the immediate issues ailing the power sector.
- Increased Financing Facilities for Energy Sector: A robust and sustainable credit enhancement mechanism for funding in Energy Sector needs to be put in place through increased participation by global funding agencies like The World Bank, ADB etc. in the entire value chain.
- Public private partnership model: There is a strong need to push for wider-scale implementation of public private partnership models. The private sector has been playing a key role in generating power; a more supportive environment will help in bridging the energy deficit of the country.
This is the foundation of a functioning energy market and the sustainable, green growth economy that India should pursue.
What are your recommendations as user?
Our recommendation is that every building, home or office should have a roof top solar so that energy taken from the grid can be minimized and in fact should be transferred to the grid. People should adopt solar and wind as much as possible and minimize the intake of grid power. The government is in full support of this and giving subsidies for solar installations.
Is renewable energy is harder in India? What do you think?
We don’t think it is harder in India, rather it is growing very rapidly and we see a good future of renewable energy in India.
The renewables (wind & solar) have posted a CAGR of 15% compared to 12.5 % for coal power plants between fiscal years 2013 & 2016.
Moreover, the PM’s government has targeted 175GW till 2022 and has mandated the rapid electrification of more than 18000 villages so it has to be increased in the coming years.
At the end of fiscal year 2016, India had a total of 42.6GW of installed clean energy capacity which amounts to 14% of the country’s overall generation capacity.
Saison is actively involved and trying to maximize its contribution in the renewable industry as much as possible by supplying excellent quality and price competitive components & products and hope to become a major contributor in the industry.