Introduction
- Power is one of the most critical components of infrastructure crucial for the economic growth and welfare of nations. The existence and development of adequate infrastructure is essential for sustained growth of the Indian economy.
- India’s power sector is one of the most diversified in the world. Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste. Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required.
- In May 2018, India ranked 4th in the Asia Pacific region out of 25 nations on an index that measures their overall power.
Market Size
- Indian power sector is undergoing a significant change that has redefined the industry outlook. Sustained economic growth continues to drive electricity demand in India. The Government of India’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country. At the same time, the competitive intensity is increasing at both the market and supply sides (fuel, logistics, finances, and manpower).
- Total installed capacity of power stations in India stood at 346.62 Gigawatt (GW) as of November 2018.
Investment Scenario
- Between April 2000 and June 2018, the industry attracted US$ 14.18 billion in Foreign Direct Investment (FDI), accounting for 3.64 per cent of total FDI inflows in India.
- Some major investments and developments in the Indian power sector are as follows:
- In November 2018, Renascent Power Ventures Pte Ltd acquired 75.01 per cent stake in Prayagraj Power Generation Company Limited (PPGCL) for US$ 854.94 million.
- In August 2018, Kohlberg Kravis Roberts & Co (KKR) acquired Ramky Enviro Engineers Limited for worth US$ 530 million.
- In April 2018 ReNew Power made the largest M&A deal by acquiring Ostro Energy for US$ 1,668.21 million.
Government Initiatives
- The Government of India has identified power sector as a key sector of focus so as to promote sustained industrial growth. Some initiatives by the Government of India to boost the Indian power sector:
- As of September 2018, a draft amendment to Electricity Act, 2003 has been introduced. It discusses separation of content & carriage, direct benefit transfer of subsidy, 24*7 Power supply is an obligation, penalisation on violation of PPA, setting up Smart Meter and Prepaid Meters along with regulations related to the same.
- Ujwal Discoms Assurance Yojana (UDAY) was launched by the Government of India to encourage operational and financial turnaround of State-owned Power Distribution Companies (DISCOMS), with an aim to reduce Aggregate Technical & Commercial (AT&C) losses to 15 per cent by FY19.
- As of August 2018, the Ministry of New and Renewable Energy set solar power tariff caps at Rs 2.50 (US$ 0.04) and Rs 2.68 (US$ 0.04) unit for developers using domestic and imported solar cells and modules, respectively.
- The Government of India approved National Policy on Biofuels – 2018, the expected benefits of this policy are health benefits, cleaner environment, employment generation, reduced import dependency, boost to infrastructural investment in rural areas and additional income to farmers.
COAL SECTOR
- The reality of India’s energy sector is that around three-quarters of our power comes from coal powered plants and this scenario will not change significantly over the coming decades. Thus, it is important that India increases its domestic coal production to provide energy security and reduce its dependence on imports. The following steps needs to be undertaken to boost coal production and distribution –
- At the institutional level, an independent organisation should be created to develop and maintain the repository of all coal related geological information in the country. The proposal to set up a Coal Regulator for fostering competition in the coal sector apart from advising Central Government on the formulation of the principles and methodologies for determination of price of raw coal and washed coal should be implemented.
- Using market mechanisms to open the coal-mining sector for commercial mining. (Discussed later).
- Critical role of railways in coal distribution should be leveraged. In 2014, 50 million tons of coal could not be distributed in a timely fashion due to rail limitation. For instance, there is a need to complete the three critical Railway lines namely Tori-Shivpur, Jharsuguda-Barpalli and Mand-Raigarh to significantly augment coal evacuation.
- The government should employ more Coal-Handing and Preparation Plants (CHPP) that wash coal before shipping. This process removes ash and debris, thereby increasing the energy content per tonne by 10-20%. Also, steps need to be taken to adopt clean-coal technologies including coal gasification.
- Finally, to boost production, the on-going auction process and transfer of mining lease and other related activities of captive mines to the new successful bidders should be expedited. The production from captive blocks has been targeted at 400 MT by 2020; the yearly targets should
- be devised and, where required, coalmines should be re-allocated to achieve the above target.
OIL AND GAS IN INDIA Oil & Gas scenario in India:
- India has 0.5% of the oil and gas resources of the world and 15% of the world’s population. This makes India heavily dependent on the import of the crude oil and natural gas.
- India the third-largest oil consuming nation in the world: India’s oil consumption grew 8.3 per cent yearon-year to 212.7 million tonnes in 2016, as against the global growth of 1.5 per cent.
- India is the fourth-largest Liquefied Natural Gas (LNG) importer after Japan, South Korea and China, and accounts for 5.8 per cent of the total global trade.
- Government aims to increase the share of gas in the country’s energy mix to 15 per cent by 2020 from about 6.5 per cent now to curb pollution and carbon emissions.
- Draft National Energy Policy target to reduce oil imports by 10% from (2014-15 levels) by 2022
- According to the Minister of State for Petroleum and Natural Gas, India’s oil demand is expected to grow at a compound annual growth rate (CAGR) of 3.6 per cent to 458 Million Tonnes of Oil Equivalent (MTOE) by 2040, while demand for energy will more than double by 2040 as economy will grow to more than five times its current size.
EXPLORATION OF COAL BED METHANE (CBM)
- The Cabinet Committee on Economic Affairs chaired by the Prime Minister gave its approval for issuing a notification amending Oil Fields (Regulation and Development) Act, 1948 (ORD Act, 1948)
- Government had earlier issued a notification in 2015 granting rights to CIL and its subsidiaries for exploration and exploitation of CBM from all coal bearing areas for which they possess mining lease for coal. However, permission was required for Mining Lease (ML) for CBM by Ministry of Petroleum and Natural gas.
- Now with new amendment, requirement of permission has been done away with for CIL and its subsidiaries.
RENEWABLE ENERGY
- India is looking at using renewable energy to meet multiple objectives: energy security, energy efficiency, decarbonization, and sustainability, among others. India’s fossil fuel requirements, which comprise nearly 90% of primary energy supply, are increasingly being met by imports. India is also committed to meeting its commitments stated in the Paris Agreement. Renewable energy is an element in achieving these objectives. The following actions are recommended for expanding the installation, generation and distribution of Renewable energy-
- At the institutional level, all 8 Renewable Energy Management Centres (REMCs) should be operationalized to activate grid planning between Central Power System Operation Corporation Limited (POSOCO) and / State Load Despatch Centre (SLDCs) to ensure smooth dispatch of renewable electricity.
- There is a need to develop storage solutions within next three years to help bring down prices through demand aggregation of both household and grid scale batteries.
- The central/state agencies should provide infrastructural, transmission and purchase support to developers to help achieve the renewable target of the country. Moreover, a friendly eco-system for integration of renewable electricity should be created by changing/improving the regulatory practices and better coordination, through state specific renewable action plans.
- A robust market for renewable power should be created through effective implementation of Renewable Purchase Obligations (RPOs) especially in the light of uniform targets having been announced. The renewable rich states may be encouraged to sell power to renewable poor states
Government initiatives
- Some initiatives by the Government of India to boost the Indian renewable energy sector are as follows:
- A new Hydropower policy for 2018-28 has been drafted for the growth of hydro projects in the country.
- The Government of India has announced plans to implement a US$ 238 million National Mission on advanced ultra-supercritical technologies for cleaner coal utilisation.
- The Ministry of New and Renewable Energy (MNRE) has decided to provide custom and excise duty benefits to the solar rooftop sector, which in turn will lower the cost of setting up as well as generate power, thus boosting growth.
- The Indian Railways is taking increased efforts through sustained energy efficient measures and maximum use of clean fuel to cut down emission level by 33 per cent by 2030.
Achievements in the sector
- Solar capacity has increased by eight times between FY14-18. India added record 11,788 MW of renewable energy capacity in 2017-18.
- A total of 47 solar parks with generation capacity of 26,694 MW have been approved in India up to November 2018, out of capacity of 4,195 MW has been commissioned.
- Inter-state distribution of wind power was started in August 2018.
- Power generation from renewable energy sources (excluding large hydro) in India reached record 101.84 billion units in FY18 and has reached 81.15 billion units between Apr-Oct 2018.
Road Ahead
- The Government of India is committed to increased use of clean energy sources and is already undertaking various large-scale sustainable power projects and promoting green energy heavily. In addition, renewable energy has the potential to create many employment opportunities at all levels, especially in rural areas. The Ministry of New and Renewable Energy (MNRE) has set an ambitious target to set up renewable energy capacities to the tune of 175 GW by 2022 of which about 100 GW is planned for solar, 60 for wind and other for hydro, bio among other. As of June 2018, Government of India is aiming to achieve 225 GW of renewable energy capacity by 2022, much ahead of its target of 175 GW as per the Paris Agreement. India’s renewable energy sector is expected to attract investments of up to US$ 80 billion in the next four years.
- It is expected that by the year 2040, around 49 per cent of the total electricity will be generated by the renewable energy, as more efficient batteries will be used to store electricity which will further cut the solar energy cost by 66 per cent as compared to the current cost.* Use of renewables in place of coal will save India Rs 54,000 crore (US$ 8.43 billion) annually5.
- PPSC Mains Tests and Notes Program
- PPSC Prelims Exam 2024- Test Series and Notes Program
- PPSC Prelims and Mains Tests Series and Notes Program
- PPSC Detailed Complete Prelims Notes