August 10, 2022
Good morning. In today’s either/view, we discuss whether the new Electricity Amendment Bill will help resolve the power crisis in India. We also look at the geothermal project in Ladakh, among other news.
📰 FEATURE STORY
Power Crisis – Can The Electricity Amendment Bill Help?
It seems India is always in a perpetual state of a power crisis. No matter what the Centre or states do, there’s a power shortage. As a result, people and industries suffer. Not to mention the power cuts during the harsh summer months. It’s also a conundrum for India – more coal is needed to keep up with the demand while also trying to transition to renewable energy.
With that in mind, the government wants to clean the sector up. Here enters the Electricity (Amendment) Bill, 2022. It was tabled in Parliament amid strong opposition. Part of the government’s efforts is to allow private players in the power distribution landscape. They want to make it pro-consumer by reforming the power sector. However, the Bill has come under criticism from unions, employees, and distribution companies (discoms).
The power sector has three elements – generation, transmission, and distribution. In India, power generation is mainly through coal, natural gas, hydro, and some renewable sources. Transmission is primarily done through central and state companies, though it remains a government-controlled activity. Distribution is the network for the retail supply of power to consumers. It’s done by discoms.
The power sector in India is something of a mess. It’s not the most organised or profitable sector of the economy. The next several decades will see India undergoing rapid urbanisation and industrialisation. With that comes an increasing power demand. So how has the power sector done in terms of production? It’s a mixed bag.
In June 2017, the Ministry of Power said India had become a power surplus country. So, there wasn’t a shortage of power or coal. Since then, things haven’t gone so well. The power demand has increased significantly. In fact, Power Minister RK Singh said India’s power demand in 2022 increased by a record 40,000-45,000 MW per day. On June 9, India’s power demand touched a record 2.1 lakh MW with more than 4,700 million units consumed.
Back in May, independent research group CREA said India might face a power crisis in July-August due to lower pre-monsoon coal stock at thermal plants. At the time, coal stocks stood at 13.5 million tonnes at pithead power stations and 20.7 cumulatively at all power plants across the country.
On the financial side of things, discoms are in poor financial health. If discoms struggle financially, it affects their ability to buy power and improve their supply network. Their debt to the banks was addressed to some extent by the Ujwal DISCOM Assurance Yojana (UDAY). However, there’s still the debt owed to power plants. According to Moody’s, their weak financial health is a challenge for the renewable sector as it has led to delays in Power Purchase Agreements (PPAs).
Ahead of this year’s budget, the power sector wanted a push for renewables and better distribution infrastructure. India has set a target of 500 GW of renewable energy by 2030. Given India’s climate goals and balancing that with ever-increasing power demand, can the Electricity Amendment Bill help?
VIEW: Game changer for the sector
There’s no disputing that the power sector needs reforms. The Bill, in essence, will facilitate non-discriminatory open access to the distribution network. It’ll allow private companies to supply electricity once they get a license. What this will result in is the distribution network being used by all licensees to enable competition, thereby increasing efficiency.
The Bill doesn’t reduce the power of the states to regulate the power sector. The government has cited Mumbai as an example. Here, multiple power licensees operate in the same area of supply. The government has indicated that multiple discoms can exist in the same area. What the Bill does is only simplify the process to foster competition.
Another positive aspect of the Bill that the government has touted is the Renewable Purchase Obligations (RPOs). India aims to achieve 50% of its installed power capacity from renewables by 2030. The government believes the RPOs will augment India’s power demand. It’ll also help India be on track to achieve its green targets as per the Paris and Glasgow Agreements.
COUNTERVIEW: It’s anti-consumer
One of the initial criticisms of the Bill is that it was formulated and introduced without much consultation from stakeholders. Opposition parties came out against the Bill, saying it would benefit only a few discoms that are owned by large companies. Among those were Delhi Chief Minister Arvind Kejriwal and his Punjab counterpart Bhagwant Mann. Kejriwal said the Bill would only exaggerate the power crisis and not solve it.
Apart from the political parties, employees and engineers led by the All India Power Engineers Federation (AIPEF) have come out strongly against the Bill. They see it as a blatant way of privatising the power sector. AIPEF Chairman Shailendra Dubey said the government’s rhetoric about the Bill allowing people to choose from multiple providers was misleading. He wrote a letter to Prime Minister Narendra Modi demanding it to be referred to a Parliamentary Committee. It worked, as that’s what happened.
Labour unions and the Sanyukt Kisan Morcha, the umbrella organisation at the centre of the farmer protests, said the Bill wouldn’t help farmers. They’re of the view that free power for farmers and those below the poverty line will eventually go away. For government discoms, the Bill will cause massive losses leading to a monopoly of a few private players in the sector.
What’s your opinion on this?
(Only subscribers can participate in polls)
a) The Electricity Amendment Bill, 2022 will help the power sector.
b) The Electricity Amendment Bill, 2022 will hurt the power sector.
🕵️ BEYOND ECHO CHAMBERS
For the Right:
During The Quit India Movement, The Hindu Mahasabha Played The British Game
For the Left:
Discipline, Dignity, Dedication: The Venkaiah Naidu Garu I Know
🇮🇳 STATE OF THE STATES
Geothermal project (Ladakh) – The Iceland GeoSurvey (ÍSOR) announced an agreement with ONGC for a geothermal project and power plant in the Puga valley in Ladakh. It’ll be ONGC’s first venture in this sector and will help it further its plans and ambitions in the geothermal space. The conditions are demanding as it’s 4,400 metres above sea level. The first phase will involve two 1,000-metre narrow exploratory wells used for small-scale power generation.
Why it matters: This isn’t the first geothermal project ISOR has in India. Together with SIH Píulagnar, they worked on a heating project in Chumathang a few years ago. India has great potential to tap geothermal energy for about 40% of its power needs. The Puga valley is one of the prime areas in India. Since Ladakh lies in the confluence of two continental plates, there’s scope to tap the geothermal energy there.
Revenue village status (Karnataka) – The state government has decided to provide the Thandas of the Lambani tribe the status of a Revenue village. This tribe resides mainly in the hamlets of Kurubas. Thandas are smaller human clusters with a population of a few hundred. 3,526 Thandas belonging to the Lambani tribe will now be eligible for government schemes and initiatives. For Thandas on private land, a separate notification will be issued.
Why it matters: The Lambanis are mostly a nomadic community of 1.1 million concentrated in the northern part of the state. In 2017, the state government criticised the Goa government for trying to evict the Kannada-speaking people of the tribe from the beaches. In Karnataka, they’ve lived mostly in poverty as they have not been able to reap much of the benefits from the government’s schemes.
Embracing live tutoring (Bihar) – Since Filo, a live tutoring platform, partnered with the Bihar government, it has gotten a good response from students. It was launched two months ago in Patna. Since then, more than 21,000 students have enrolled and clocked in more than five lakh minutes of learning across 1.2 lakh sessions. The app has seen maximum traction in Patna, Gaya, and Aurangabad, among others. The demand for maths and sciences is the highest with 51% and 39%, respectively.
Why it matters: The state partnered with Filo to help students enhance their learning potential and give them a brighter future. The government wants to put Bihar back on the education map through high-quality school education powered by technology. For many students, post-classroom one-on-one tutoring can make a lot of difference in their performance.
Banned from filing RTI queries (Gujarat) – Over the past year and a half, 10 people in the state have been barred for life from filing RTI queries. The ban was imposed by the Gujarat Information Commission (GIC). Among the reasons cited were the people concerned who were using the RTI Act to harass government officials and were filing multiple queries. It imposed a ₹5,000 fine on the applicants. In all the cases, officials were instructed not to provide the information.
Why it matters: Many people have criticised the RTI Act for being misused by government officials and how it hasn’t brought about much transparency in governance. A study by the Centre for Equity Studies for the year 2018-19 showed that less than 45% received the information they had sought. An analysis of the 10 people in this instance showed the GIC relied on a few paragraphs from a handful of court orders.
Need for a strong regional party (Nagaland) – The Rising People’s Party (RPP) said the state needs a strong regional party to put the interest of its people front and centre. The RPP quoted a senior journalist who said after the 2023 elections, the NDPP might merge with the BJP if the alliance manages to come to power. The party feels that if this is correct, then chief minister Neiphiu Rio and the 41 NDPP MLAs are pawns for the BJP.
Why it matters: The state is entering a period of political uncertainty as the Naga People’s Front (NPF) is crippled and the Nationalist Democratic Progressive Party (NDPP) could soon be extinct. The RPP feels the possibility of the merger is a danger to the state. They’ve appealed to the rank and file of the NDPP to leave the party as soon as possible.
🔢 KEY NUMBER
7.5 lakh – The number of flags the Karnataka Postal Circle is expected to sell before August 12, in the run-up to Independence Day. The flags are being sold at post offices.