POWER +VANTAGE – The turnaround story of Indian power sector

  Millions of homes in India are yet to get access to electricity. On top of that, the country also experiences power cuts for couple of hours on a larger scale. In spite of these crucial issues the government has declared India is power surplus. Though it is a good sign, still several questions strike the brain, like if there is power surplus then why do we have power cuts? Anyway, this question will be answered very soon.
For the last couple of years India has faced huge power crisis, after facing several crisis the government realised that it is essential to boost the power sector to develop the economy of the country and today the country is witnessing the changes that are taking place in the power sector. These changes were only possible due to several initiatives taken by the government such as launching UDAY scheme, developing healthy discoms, enhancing renewable energy, developing smart grids etc.
With these rapid developments, the government announced the country’s expected power surplus in 2016-17. This news has created positive sensations in the country with the hope the country by this fiscal year will no more be a power deficit country.
Today the Indian power sector is all set for a quantum leap. On this note, this article will describe the turnaround story of the country’s power sector. Also the experts will share their views and opine on expected power surplus, the reason for such transformation and business prospects.
Power surplus scenarioIn a recent Load Generation and Balance Report 2016-17 produced by Central Electricity Authority (CEA) disclosed that, India is likely to experience peak surplus of 2.6 per cent and power surplus of 1.1 per cent in 2016-17 respectively. 
In the table given below the power surplus is anticipated in western and southern region by 6.9 per cent and 3.3 per cent respectively. Whereas the northern, eastern, and north-eastern are likely to face power deficit of (-)1.8 per cent, (-)10.3 per cent, and (-) 8.3 per cent. On the other hand, the peaking shortages are likely to overcome in northern, southern and north-eastern by (-)1.6 per cent, (-) 10 per cent, and (-) 3.8 per cent.
Comparatively in the CEA’s 2015-16 LGRB report, the all India power supply position indicated that the country was likely to experience a peak shortage of (-) 2.6 per cent and energy shortage of (-) 2.1 per cent. Also, the peak shortages were mainly in the southern and north-eastern regions to the tune of 19.8 per cent and (-) 4 per cent respectively. Whereas, the surplus was anticipated in the order of 2 per cent and 3.3 per cent in eastern and western regions.
India Inc’s opinionThe entire nation is witnessing the changes in the power sector. India’s expected power surplus 2016-17 is talk of the town. Every player in the industry has its own views and opinions about the surplus. Some are in favour of it whereas some aren’t. Though there are variations in opinion the question for the entire industry will remain same, on how this power surplus is going to aid the ‘Power for All’ goal. 
Optimism all around Experts in favour of power surplus anticipate that the country may not fall short of power and may light many homes successfully. Experts also share their views and opinions on how the government should approach the power surplus to make it a reality. On this note, expert Joy Saxena, Executive Director – Finance, Vikram Solar suggests that the government needs to support the major pillars for overall growth in the country. He said, “We believe Indian government needs to identify and uphold- availability, affordability, reliability and security of electricity supply as the key pillars for overall growth in the country. Each of these pillars serve a specific function and ignoring one will not complete the picture India wants to paint. Checking and improving financial health of distribution companies by offering subsidies and tax exemptions is required to help these entities purchase more power. As they start to purchase more power, there will be an urge among the power generators to produce more energy, both of which are required if India is to become and stay a power surplus.”
“There is no doubt that availability of fuel has improved  and so has generation capacity. The energy efficiency efforts are also having impact.  However there are some constraints on intra regional transmission capacities and discoms ability to pay for power. This means that power is not being purchased even though it is available and there is demand. We should also not forget that 50 million households, many in rural India still do not have access to electricity,” says Babu Babel, Jt. Managing Director, Secure Meters Ltd.
Power surplus is commendable milestone in India’s history of power sector, believes Rajiv Kumar, Director – Marketing, Electrical Sector – India, Eaton Power Quality Private Ltd. He says, “This is a significant and commendable milestone for India. Having a strong power infrastructure is critical to India’s ambitious growth plans and ensuring a better quality of life for her citizens.”
Different opinionsThe country still faces power shortage then on what basis it is considered that India is expected to have power surplus in this fiscal year questions few experts.  Having a different opinion on power surplus Neelav Samrat De, Asst. General Manager-Marketing, Andritz India Pvt. Ltd points out, ”Technically, India is power surplus today. The essence lies in the fact that the manufacturing industry has not growth at par with demand and the main reason why the demand and supply gap has reduced. There are many states which do not have enough power supplies for its agricultural requirements and are having to purchase power from the exchanges at higher tariffs. “If India was a power surplus now, why is the need to purchase excess power? Secondly, there are numerous power plants, which are completely built but are lying idle due to lack of coal linkages. The situation is dismal as otherwise portrayed in the market. So either we say we are and will be power surplus in 2016-17 or the government puts an impetus on the growth of the manufacturing sector. We have opted to use the former.”
India is shifting its fore from industry and becoming a services driven economy. While we are witnessing a slump in sectors like infrastructure, manufacturing, IT and others, there is a sharp growth in the services sector. “Power demand will obviously decrease with this changing scenario in the economy and hence we can say that we are ‘technically’ power surplus. With no growth in industry, the demand factor will always remain less than the supply,” he adds.
In his opinion, Jyotindra Patel, Chairman, JDS Group of companies says that the centre should not look too much into the projections made by CEA as the surplus situation is on account of lower demand, primarily from debt-ridden state electricity boards and the industry is in the midst of a slowdown.
“The surplus capacity is fairly modest, and will get quickly absorbed when economic growth and industrial activity pick up pace. Further, I do not think we have sufficient reserves to meet exigencies such as adverse weather conditions or plant failure. I think it is important to test the surplus under more stringent conditions of growth and reliability,” he remarks.

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