1.
The Indian power sector is one of the most
critical components of an infrastructure that affects the economic growth, and
it’s undergoing a major transformation. What is your take on this?
India’s power sector has grown substantially
and today with an installed capacity of 3.45 GW, the country is well poised to
meet energy demands for the years to come. However, having said that, it would
be noteworthy to mention that the current focus is primarily on solar power.
With a mammoth RE capacity addition target of 175 GW until 2021, does not
unfeasible now. Solar tariff bidding had touched a low of INR 2.4/unit which
was the zenith of things. Things have stabilised to an extent with the
government increasing duty on Chinese photovoltaic cells.
Currently, the power sector does not
contribute significantly to the economy as the sector itself is in shackles.
Thermal plants have not been able to close on coal linkages while IPPs are
still deep in debt. The smaller players and SPVs formed to develop and build projects
have now mostly queued up at the NCLT door.
Hydro power seems to have almost fizzled out.
Areas of hydropower potential still remain untapped with either lack of
clearances or no fresh funds being infused in new and existing projects. 40
stressed hydro assets are yet to see reprieve from their current state of
nothingness. Barring solar and wind power, the rest of the sector is pretty
much looking into uncertainty unless important revival steps are taken.
2.
Do you think demand of electrification in all
regions and sectors will drive India’s growth?
The demand for electrification has always
been on the top of the agenda for India’s growth. The current government’s Deen
Dayal Upadhyaya Gram Jyoti Yojana has
helped in bringing electricity to most of India’s villages.
The scheme has provided feeder separation,
strengthening of sub-transmission and distribution network, metering, village
electrification, and setting up micro-grid and off-grid distribution networks.
With greater thrust expected from India’s
manufacturing sector in the near future, electrification needs will come handy
to tackle industry and specially the small and medium enterprises. However, as
per recent reports, it seems that only 7.3% of India’s rural area is
electrified. No doubt a massive accomplishment, but a closer look at what
constitutes “electrified” reveals how much further India has to go. With high
targets yet to be achieved, the demand for power is still high and it is but
obvious that electrification will drive India’s growth in terms of economy,
jobs and wellbeing.
3.
Almost every year, several initiatives are
announced to breathe new life into Indian electricity sector. Can you mention
one such initiative that has proved beneficial for your sector and has been a
game changer?
India’s hydropower sector has not had the
much needed stimulus for the last 7-10 years now. When privatisation was meted
to the sector in the 2000s, numerous inexperienced IPPs jumped in the fray to
pick up projects. This led to project cost over runs, delays and over 40
stressed projects. However, there have been efforts to revive these projects
through various means including front loading of equity, viability gap funding
and revival through fresh funding. These initiatives however, have not gone
well with the revival steps.
The hydropower industry then promulgated the
idea of suggesting an amended hydro power policy to the Ministry of Power,
which could well play an enhancer to revival steps. Some main key features were
deferment of repayments and free power to states, waiver on local area
development fees, reduction in applicable taxes for land acquisition and
compensation. Additionally, there is a mitigation thought of including all
hydro power projects under renewable energy, which would then attract the same
sops and benefits as solar and wind power. This policy could set the tone for a
calculated revival process, but only when the government passes this amendment
into law.
4.
How do you evaluate the role of hydropower in
sustainable development and India’s economic growth?
Hydropower power is the greenest and cleanest
source of electrical energy. It plays an important role in employment, local
area development, providing free power to local community and in some cases
also share premium with village folklore. Though India’s hydro share is only
14% of the total 3.5 GW of installed capacity, it offers the best return on
equity in the long term. This can be seen from existing plants where power is
sold at 60 paise/unit!
5.
With low tariffs and no new policy schemes
for the hydro sector, how is the hydro sector holding up?
The hydro sector is faring well below its
counter energy sources like solar and wind. We do not see any movement of projects
being undertaken by central government undertakings least to mention the
concerned IPPs. Leaving IWT projects in J&K, there is no movement in
projects in Arunachal Pradesh, Himachal Pradesh and Uttaranchal.
A lack of will, fatigue and funds has almost
stalled the sector.
However, there is a market for after sales
with most hydro plants being over 25 years of age. Hence, projects in the south
of India are mainly undergoing modernisation, renovation and even uprating.
This is the only silver lining on the horizon at the moment.
6.
2022 is approaching and so much is left to be
done. What should be done to quicken the pace of achieving the power ambitions?
India could possibly achieve about 76% of the
target of having 175 GW of renewable power generation capacity by 2022
according to Wood Mackenzie. 100 GW will be added through solar while 75 GW
from wind. In spite of myriad challenges, this could well be managed. However,
there isn’t much expectation from the thermal and hydro sectors within this
period.
7.
What does the future hold for the hydro
sector?
As and when the Hydro Policy is in place, we
could expect to see changes. With RE power capacity addition being added into
the grid, the need for hydro pump storage schemes will play a major role in
grid reliability and stability. We could expect movement in PSPs by mid-2019.
Currently most schemes are in the PFR stage.
We expect the hydro power market to move in
2019.
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