The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has stressed need for building ‘National Distribution Grids’ to minimize transmission and distribution (T & D) losses that have exceeded 35 per cent of India’s total power generation capacity so that poorest of the poor can access power and telecom facilities across India. With the establishment of the proposed grids, T & D losses could be reduced by 15 per cent to begin with, which could be adequate to meet current power needs of the country.
In a statement, ASSOCHAM President, Dr. Swati Piramal said that several power generating plants run by state electricity boards are in state in of neglect and low-capacity utilization. Investments in such power plants are restricted for their modernization, simply because it is felt that the electricity boards will continue to subsidize agriculture and other allied activities and hardly take suitable punitive actions against those that indulge in power theft.
In addition, the nuclear power generation capacity in next 10 years is expected to reach 30,000 mega watts from current level of less than 4,000 mega watt in the wake of Indo-US civil nuclear agreement and the on-rush of private sector operators from abroad.
If India’s power distribution system is not jacked up to suit modern energy requirements, the T & D losses will continue to happen and discourage investors to pump in their money into the power sector, be it thermal or nuclear or any other source for power generation through non-conventional sources including hydel, pointed out the ASSOCHAM paper, ‘Jack Up Distribution to light India’.
It is expected that by 2020, the over-all power generating capacity would have to exceed 3,00,000 mw. More private sector entrepreneurs are emerging to set up thermal and hydro power plants but if they are forced to sell power to only one distribution agent and not directly to competing customers, their capacity to raise funds would be constrained, said the ASSOCHAM chief.
Increase in generation capacity is thus linked irrevocably to implementing a fully operational national grid on the one hand and the competitive sale of power through open access on the grid and the distribution system on the other. The institutional arrangement for power trading like power exchanges are already in position. Market-driven but intelligently regulated institutions built around a fully operational high-quality national power superhighways hold the key to quality power at competitive rates for all.
Electricity holds the centre stage for several other critical areas in inclusive growth withaffordable access for all. How could India achieve 40 per cent rural teledensity if power availability is unreliable in most interior locations? Asks the ASSOCHAM chief.
The ASSOCHAM has warned that all plans for high growth and inclusive and equitable growth will flounder on the inability of the Power sector to deliver. The problems of power sector have driven home a lesson for policy makers that even expansion of production depends upon a market driven distribution and universal access that could force efficiencies to be implemented all along the line and thereby reduce costs for all concerned.
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