Power costs could deter push for generation capacity

By Editor


Buying power of consumers and grid connectivity could pose hurdles in India’s rush for energy expansion.

The Economic Times reports that the country may be headed for surplus energy generation; but it will not be a surplus after demand is met.

The report says more than 300 million people in the country are either not connected to the power transmission grid, or don’t have the financial means to buy electricity at rates likely to come into being with greater grid connectivity and generation.

The government is targeting 800 gigawatts of power generation capacity by 2030, which is nearly thrice the current figure. In terms of coal production and procurement, that would mean an increase to 1.5 billion tons annually by 2020.

Distribution companies across the country have been struggling to buy power and frequently report losses. They are unlikely to be able to buy new power generated, which could be of higher tariffs owing to the increase in prices of coal.

According to Central Electricity Authority the capacity utilization of thermal power plants fell to 59 percent in June and coal was piling up.

Also, while the country added about 40,000 megawatts of power generation capacity, demand has increased by only about 10,000 megawatts, the report says.

The cost of supplying power to remote localities would come to Rs 10 per unit which people in such areas are unlikely to be able to afford given the economic conditions.

Currently utilities receive between Rs 4 and Rs 6 for a unit of electricity. In certain cities it is even higher.

Further increase to Rs 10 per unit makes power supply unsustainable for utilities unless they are supported by the government.

The existing circumstances call for a pragmatic approach that could dovetail economic growth with sustainable energy generation and consumption.

Many countries are adopting microgrids based on renewable energy generators to meet the power needs of the back of beyond populations. They should be more suitable and economically viable for such communities.

Ajith Kumar S

[email protected]

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