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Assignment MCOM
Assignment MCOM
energy
Introduction
The demand for power is increasing rapidly with rising levels of populations & increasing
disposable incomes due to rapid growth in various sectors like agriculture & services. As per
Figure 1 we can observe the demand for electricity is increasing over the period more so in the
last decade. In June 2017, Indian government declared the country power surplus with no paucity
of coal production & power generation. Presently India is still a coal dependent power economy
with nearly more than 70% of its electricity coming from thermal based generation. Fig 2 shows
the generation wised breakup of various energy resources producing power. However, with
increasing Climate change concerns & stress on curbing the emission due to fossil fuel in order to
arrest the issues of Global warming, it has been consistently argued to reduce dependence on
coal by increasing more & more renewable energy resources.
The Power System is still beset with various problems related to power supply & ease of access.
There is difference between maximum peak demand for electricity & actual electricity generated
called peak deficit. It varies from state to state. In 2017-18, energy deficit in the country was 0.7%,
and peak deficit was 2%. Another key issue is poor financial situation of distribution network
which has affected their ability to improve supply network & do the restructuring. The capacity of
coal-based power plants is declining in terms of capacity utilization called plant load factor.
Therefore, it has become all the more essential that we overcome our reliance on a single energy
resource which is quiet perishable in nature involving increasing costs of producing energy which
is inefficient & involves large quantum of carbon dioxide emission which involves more of
environmental catastrophe. Hence there is a need to have an energy mix which has more of
renewable energy resources which are abundantly available in our country & which can efficiently
produce electricity which may help us in garnering the carbon credits & help in sustainable growth
with less environmental damage. This increase has become all the more essential due to global
commitment we have done in Paris climate change conference Cop-21 i.e., Intended nationally
determined contribution to the world (INCDC). All nations have agreed to contain global warming
below 2 degrees centigrade to pre-industrial level. INCDC for India aims to provide 40% of total
power generation with non-fossil fuels by 2030.
The distribution was segregated between supply utilities & network utilities. The 2018 draft
amendments retained the segregation of distribution into the network and supply business. This
would allow for multiple supply licensees in an area of supply, and consumers may choose to buy
electricity from multiple suppliers in an area. This would entail choice for consumers to have a say
in which type of distribution utility he would like to take supply. Also, the mechanism to switch
between different supply entities in lesser costs so that consumer may derive benefits of cheaper
& economic power.
5. Removing cross-subsidies in the sector:
The policy was made that any subsidy to any category of consumer will be provided by the state or
central government through direct benefit transfer (DBT). Further, the cross subsidisation within a
distribution area will not exceed 20%, and will be progressively reduced and eliminated within
three years. The CERC/SERC will have to ensure that the reduction in cross subsidy is not less
than six percent in a year.
6. Regulators & Appellate tribunal strengthened
There is need to strengthen the regulators so that they implement the policy decisions speedily &
their personnel policies must be encouraging with attractive pay structure so that employee morale
may be high & working environment may be smooth. Also, regulators must not be arbitrary in their
approach & penalize a single party must take a whole hearted view of the system. Penalties must
be imposed on case-by-case basis.
7. Incentivizing Renewable generation & adoption through various subsidy:
All the stakeholders must arrive a decision to pass on the benefits of cheaper renewable power to
consumers by allowing them discounts & government must offer subsidies in purchase pf various
equipment’s, installation of solar panels so that more & more people adopt this mode of electricity.
This will create sustainable development & help us achieve targets set for climate change.
8. Improving Quality of supply in rural areas:
More Policy like Rajeev Gandhi Grameen Vidyutikaran Yojana RGGVY must be undertaken to
improve rural electrification so that each household may get access to the electricity & also overall
quality of supply is improved by various voltage stabilization measures so that industrial growth &
medium and small-scale enterprises may get boost in rural setting.
Conclusion
As we were able to vividly visualize what are the stakeholders in power sector, what is right mix of
communication strategy & policy intervention we must employ to achieve right kind of balance of
energy mix so that we may have optimum capacity utilization with respect to renewable energy
resources. Since, we were able to realize the Indian power sector is beset with problems which
have strangled the pace of development, however suitable policy decisions have been to rectify
the different aspects of power deficiencies & stress has been for development of energy resources
which are cleaner & less polluting and will go a long way in achieve Paris Climate Targets.
However, we have become also aware for sustainable developments we must appreciate we
cannot do away with fossil-based energy resources & they will continue to be our main stay of
Energy Generation but we must reduce our reliance on them so as to achieve carbon neutrality.
All stakeholders must hand hold each other to alleviate the issues plaguing the power sector by
communicating clear goals & objectives, making transparent policies to remove bottlenecks in the
implementation & make power more accessible with quality to people. Also, we must incentivize
use of renewable energy so that competition will motivate individuals due to lower costs, & lesser
abetment costs of emission standard maintenance.
References:
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Energy and Mines”, Press Information Bureau, Ministry of Power, June 12, 2017,
http://pib.nic.in/newsite/PrintRelease.aspx?relid=165568.
2. 37th Report: Stressed /Non-performing Assets in Electricity Sector, Standing Committee on
Energy, March 7, 2018, http://164.100.47.193/lsscommittee/Energy/16_Energy_37.pdf.
3. Executive Summary on Power Sector, Central Electricity Authority, Ministry of Power, January
2019, http://www.cea.nic.in/reports/monthly/executivesummary/2019/exe_summary-01.pdf.
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26. Sep 20, 2019 — INSIGHTS. Surplus generation capacity but deficits continue, capacity
utilisation declining. Two years ago, the central government announced ...
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