The National Democratic Alliance (NDA) government's ambitious plan to
provide 24x7 power to households by 2019 was announced well before the
Union government could even prepare a detailed blueprint or tot up an
estimate of the costs involved.
More than six months after the
NDA government
announced it would electrify entire India by 2019, plans for only three
geographies are ready - Delhi, Rajasthan and Andhra Pradesh.
The scale of the challenge the government has set itself to achieve in
four years is nothing short of astonishing. It will have to provide an
electricity connection
to roughly 80 million households that are still not connected to the
grid (2011 Census). Then it will have to ensure the connections actually
buzz with uninterrupted power that reaches 246.7 million households.The
government can take some solace from the fact that substantial
connections provided between 2011-14 will lower the targets to be met in
four years.
| LIGHTING UP THE NATION |
INVESTMENT ANNOUNCEMENTS
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Rs 1.27 LAKH-CRORE
to be invested by Coal India to raise output to
1 billion tonnes by 2019-20
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Rs 10 LAKH-CRORE
push for renewable energy
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Rs 1 LAKH-CRORE
for transmission and distribution systems
PROMISE OF 24X7 POWER BY 2019
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Plans for only three geographies have been drawn up — Andhra Pradesh, Rajasthan and Delhi
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Nine states’ plans expected to be ready in three months, remaining by December
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To put this in perspective, between 2001 and 2011, an additional 61.6
million households got access to electricity. The government will have
to more than double the rate of electrification to cover the remaining
by 2019.
This is not just a logistical challenge. It has large fiscal
implications. Andhra Pradesh, for example, has to provide connections to
only 1.6 million additional households in four years - it is already 92
per cent electrified. It requires an investment of Rs 54,332 crore to
connect these households and provide 24x7 power to all. By contrast,
Rajasthan, which has to provide connection to an additional 3 million
households, requires approximately Rs 78,500 crore. Costs for just these
two states add up to Rs 1.33 lakh crore. But Rajasthan envisages adding
more renewable power than the state will need (9,615 Mw) at an
additional cost of Rs 67,000 crore.
The government's promise is to provide reliable supply to all consumers,
except agriculture, which according to the two states' plans, will get
6.5 to nine hours of power a day by 2019.
Then there are states such as Uttar Pradesh and Bihar. The connections
previous governments added in the entire country in five years will have
to be added in just these two states in four years. Put together, 36
million houses in these two states were without power, according to the
2011 Census.
To map out reaching the national target, sources in the
power ministry say,
CRISIL, Mecon and Deloitte have been hired as consultants to draft the
remaining 26 states' plans. In three months, these consultants will
finalise three states' plans each. The officials insist that the
remaining states will be ready by December, leaving the government with
about three-and-a-half years to fulfil the promise before the general
elections in 2019. The total investment required by all states, along
with the additional central funding and private investment needs, would
give an indication of the cumulative costs of achieving the 24x7 target.
That will take at least another six months to be put together.
The power ministry did not reply to a detailed questionnaire from
Business Standard, which included queries on the total cost calculations
and estimations, if any, done so far to achieve the 24x7 electricity
supply target.
Over the past few months, the government had announced some estimates of
how much the grand scheme would cost and what it would entail.
Coal India (CIL) would have to increase its production to one billion
tonnes annually from 494 million tonnes in 2014-15 - requiring a 15 per
cent annual rate of growth. Last year, CIL ramped up production by about
6.9 per cent, though in the previous five years the average annual
growth has been only 3.5 per cent. CIL would need to more than double
the growth it achieved last year to achieve the target set by the
government. For this, Coal Minister
Piyush Goyal had estimated investments of Rs 1.27 lakh crore.
Goyal has also suggested that an investment of Rs 10 lakh crore would be
required in the renewable energy sector to ramp up solar power from to
100 GW by 2022 and wind to 60 GW - at a growth rate that no country has
achieved so far. At the beginning of 2014, India had installed 2,631.93
Mw of solar power projects and 21,136.40 Mw of wind power.
To upgrade the transmission and distribution systems, he has said Rs 1 lakh crore is needed over four years. In contrast, the
Central Electricity Authority had
prepared a 20-year plan to ensure a country-wide transmission network
as the backbone of the 24x7 power supply system. This, the authority
assessed, would cost Rs 2.6 lakh crore. Goyal and the government have
assured funds should not be a problem.
Considering the power sector is one of the most indebted today, the
government has its task cut out. The total debt burden on the power
sector is pegged at Rs 4.70 lakh crore, according to Business Standard's
analysis. Accumulated losses of the distributors - state electricity
boards - are Rs 3 lakh crore, according to the government.
These macro numbers will eventually have to be reconciled with the state-specific plans still being fleshed out.
In a three-part series, Business Standard looks at how the government is
gearing up to meet its promise of power for all. The second part will
look at the two plans that are ready and available publicly - those of
Andhra Pradesh and Rajasthan - and how generation of power will have to
be dramatically ramped up in four years
http://www.business-standard.com/article/economy-policy/govt-scheme-for-24x7-power-still-in-nascent-stage-115061700019_1.html