No power as costly as no power
The political executive must walk the talk on power reforms. Notice that India’s state power utilities, given their moribund finances and mounting losses in distribution thanks to populism and reckless giveaways, seem unwilling or are plain unable to procure fuel for thermal plants. Reportedly, nearly 24,000 MW of power-generation capacity based on natural gas is either underutilised or simply idle. Worse, in the backdrop of rising power demand, reports say that as many as 57 power plants, about a fifth of our total capacity, face severe shortages of coal. Utilities are reluctant to bridge the gap with coal imports. Technical and commercial losses of the distribution utilities, or discoms, now add up to nearly ₹1 lakh crore annually. And, since heightened generation merely means worsening revenue leakage, discoms may well deem it prudent to go slow on fuel access or improving logistics. In the absence of power from the grid, there would be either power generated by diesel sets or stymied output and growth. The diesel has to be transported, in the first place, burning yet more diesel. A dysfunctional power sector places a heavy burden of pollution and lost output on the economy. There is little alternative to incentivising billing efficiency in power distribution and supply with smart, prepaid meters and a series of disclosure requirements to step up transparency in the vexed power sector. In tandem, we need time-of-day tariffs to better allocate resources for the 24 GW gas-based plants providing peaking load. In parallel, we need to fast-forward efforts for setting up as many of the potential identified for 5,000 biofuel plants with an investment requirement of ₹1.75 lakh crore to produce 62 million tonnes of compressed biogas.