Friday, November 18, 2011

The state of the Power sector in India

The power sector in India is in distress. It now faces a variety of challenges, many of which are not its doing and most of them difficult to address. I have listed out some issues which are pressing and can be said to be very important.

  • High ATC Losses (Including Technical and commercial losses, MBC efficiency issues) 
  • Tariffs not meeting costs 
  •  Difficulty in Budgeting of Subsidies and release of funds from state governments 
  • Need for Better targeting of subsidies 
  • Need to keep costs low (By encouraging competitive bidding for fuel, power) 
  • Input based franchises: Bundling for self-sufficiency, open access to force issues 
  •  Efficiency in agricultural power usage: DSM measures, water balance issues 
  •  Growth in generation not matching consumption: Lack of economic price signal 
  • Need for Consumer grievance redressal fora to be independent
It is not my case that these are the only issues or that the order that i have placed them in is based on weights. The list only mentions the issues that need to be addressed for any sustainable long term solution to arrive. None of the issues mentioned are simple and all of them are multidimensional. Most of them have difficult socio-political issues intertwined with them and do not offer themselves to easy solutions. In fact all possible solutions involve a degree of sacrifice on the part of some important stakeholders, none of whom are pushovers.

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