November 16, 2012

Proper electricity supply

The power minister mustn’t get daunted by the enormity of the task

Soon after taking over as the new Power Minister, Jyotiraditya Scindia told the media that his priority was “to ensure proper electricity supply in the country”. The Minister can take credit for articulating a simple, yet inspiring Vision Statement for the power sector. All the different agencies that make up the sector must display this statement prominently on their walls and align themselves to this goal.

Let us examine what it takes to realise such a vision. Let’s also interpret that vision to mean “reliable, round-the-clock, good quality power supply for all citizens of the country throughout the year”. This is not as ambitious as it sounds. This is something people of developed nations take for granted.

Reliable water supply in any city is dependent on adequate storage capacity, extensive pipe network, pumping stations and the hardware at the point of use; Similarly, reliable electric supply too is a function of adequate generation, extensive cross-country transmission network, local distribution systems and finally the electrical devices and wiring at the point of use. An additional dimension in the case of electricity is that it cannot be stored. So, the generation must match the demand in real time, even when the demand keeps changing by the hour and with the season.

The 12th Plan provides for an addition of 78000 MW in 5 years or an average of 15600 MW per year, but if we really aspire to step up our per capita consumption from 778 units/year to a global average of 2700 units/year, we need to target an addition of 50000 MW of installed capacity every year. And this has to be in the form of baseload plants that are capable of round-the-year operations, not seasonal power. Considering that we have never added more than 15000 MW in any given year, this is indeed a tall order. The capital outlay for increase in generation capacity alone will be Rs 250000 crores year after year. These plants have to be spread over all the states to avoid clustering in one corner and adding to the transmission burden. Fuel supplies for additional capacity have to be tied up and will require investments in port facilities and logistics. Environmental clearances should be expedited and not held up for political reasons.

Private sector investments in renewable energy projects keep increasing but ironically, grid-connected wind and solar power plants reduce the reliability of the grid due to their seasonality or availability only during specific hours. The grid needs to balance the need to promote the use of renewable energy and the need to ensure reliability of supplies. So, investments in flexible, quick-start/stop power plants will be necessary to act as a foil for infirm renewable energy and to counter the unpredictability.

Reliability cannot be achieved without redundancy in the system. Grids in developed nations have a spinning reserve of 10 percent at any point of time to provide for one of the running plants going out of action for whatever reason. They also have 15-20 percent back-up capacity either in the form of stand-by plants or through an arrangement with a neighbouring grid network. This is a luxury we cannot think of when we haven’t met even 80 percent of required capacity.

Just as narrow or choked pipelines can disrupt water supplies even when adequate storage is available, a choked transmission corridor can be a major bottleneck, when evacuating power from generation stations. The blackouts in the north this year resulted from overloading of a transmission line between Bhopal and Agra. If reliability has to be ensured, a robust and well-sized transmission network is absolutely essential. Therefore, the strengthening of transmission system requires as much attention as addition of generating capacity, if the stated objective is for electricity to reach each village in every nook and corner of the country.

During the 12th Plan period, a total of about 1,09,000 circuit kilometers (ckm) of transmission lines, 2,70,000 MVA of AC transformation capacity and 13,000 MW of HVDC systems are estimated to be added. The total requirement of funds for development of transmission system is estimated to be around Rs 1,80,000 crores.

Similarly, the distribution system planned for the 12th Plan includes setting up of new lines (13, 05,000 ckm), installation of new substations (88,000 MVA), augmentation of substation. The total fund requirement is Rs 3,06,235 crores for distribution-related projects. Considering that these new lines will need to reach out to remote villages, execution of these projects will not be easy. Our track record has been miserable, which explains why much of rural India lives in darkness.

The proposed investments in the 12th Plan period on generation, transmission and distribution may be our highest so far in any plan period, but would still fall far short of the required capacity addition to meet the Minister’s aspiration of “proper supply for all”.

Reliability comes at a cost. All the investment in extra capacity, with built-in redundancies and stand-by support will need to be recovered from the consumers. It will require political will to increase the power tariff to a reasonable level every year. This is not as difficult as it sounds. So far, consumers were asked to accept a higher price without promise of reliability. They resisted. If reliability is demonstrated, the consumer can be convinced to pay a higher price. “Reliable power” and “unreliable power” will be perceived as two different products by discerning consumers and can be priced differently

So, Power Minister, I hope that you will not be daunted by the enormity of the task. I also hope that you will not limit yourself to the objective of meeting the 12th Plan targets. You will have to aim higher, if your vision has to come true. You won’t want to end up ensuring proper supply for ‘x’ percent of the citizens, ‘y’ percent of the time, with ‘x’ and ‘y’ ranging from 50-75 percent.

Photo: Ingy the Wingy

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