Frequent power failures during peak demand underscore the need for major restructuring in the sector
Photo by Banddeep Singh
The sudden surge in electricity demand at the beginning of summer in the second half of April exposed the vulnerability of the country’s electricity sector. On 27 April, peak demand exceeded 207.1 GW and supply was short by at least 10 GW. Power plants were gasping for fuel, distribution companies (discoms) were struggling to arrange cash and many of them did not have robust distribution networks to meet the surge in demand. Over eight hours of load shedding was observed daily in major parts of the country.
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In July 2021, when RK Singh was made a cabinet minister, many saw it as a reward for the work done in providing electricity to every household in the country. But Singh has had limited success in terms of work. In the past three years, the power ministry has made slow progress in pushing amendments to the Electricity Act, the draft Atal Distribution System Improvement Scheme (Aditya) scheme—called UDAY 2.0—has not seen the light of day, and new The tariff policy is still in consultation mode. In fact, the upgraded version of Aditya Yojana was launched as Revised Distribution Area Scheme (RDSS) in the last week of April with an outlay of Rs 3.03 lakh crore. It aims to cut line losses, build infrastructure for discoms and install smart meters. Discoms still owe Rs 1.9 lakh crore.
Even though they are under state control, the minister plans to use a “carrot and stick” approach to discipline the discoms. Schemes and their money disbursement will play an important role here. However, Singh managed to bring in rules to ensure the rights of consumers to time-bound services, and levy surcharges on discoms if they make late payments to production companies. However, there is still a way to go for the implementation of these rules.
Actually, performance is the big problem. The new Tariff Policy (NTP) and amendments to the Electricity Act are considered to be a massive reform- it will not only bring discipline to the discoms but will also clean up a lot of glitches in the system. While the amendments require Singh to take the legislative route, NTP regulators can be done with executive orders.
Meanwhile, Singh has been drawing a lot of criticism for the mess of power shortage and his instructions to states instead of relying on supplies from Coal India Ltd for coal imports (from October).
