Dear next prime minister,
Even as a significant contributor to India’s economic development, the country’s power sector is crippled with many challenges, owing to dated approaches and technologies. The 20th century was an era of centralised power generation when power stations were more expensive and less reliable than the grid, sharing of costly generating capacity and handling of diverse loads was only possible via a transmission grid but now is the time to change course and tackle the modern day problems crippling the sector by using modern day technologies.
Major challenges that are affecting conventional power generation technologies in India are:
Fuel availability – 70% of our generated power comes from fossil powered technologies. Ministry of coal has projected a coal deficit of 238 Metric Ton by 2017 to will be fulfilled by imports. This will be the major driver of inflation in electricity prices in future.
Ineffective transmission system – According to a report by central electricity authority, India looses approximately 23.8% of its produced energy in its transmission network where as continual power deficiency in the country in 10%. More over with transmission network is gradually becoming saturated and is insufficient to evacuate any more power unless a significant investment is made to upgrade the system
Environmental pollution – India is now the third highest polluting country in the world, based on CO2 emissions and 54% of the pollution in the country is due to electricity and heat production
Land acquisition – Consolidation of large parcels of land in suitable areas near water/ coal fuel source is tough and new Land Acquisition Act makes land acquisition more expensive and prolonged
This makes it imperative for India to start exploring the distributed generation model that has proved to be a roaring success in countries like USA and Germany. The advantages of distribution generation are manifold.
A distributed generation source can employ a range of technological options from renewable to non-renewable sources and help us diversify from the unclean and expensive fossil fuels. It can operate either in a connected grid or an off-grid mode. The engineering benefits of distributed generation include lower grid losses, better fault management and reactive support, thus ensuring increased power quality. Renewable energy based distributed generation has minimal environmental impact and improves the bottomline by controlling electric supply and costs.
Flexibility of having small modular installtions means no large consolidated land parcels are required. Due to a policy stasis on the matter, distributed generation remains an underutilised mechanism, while subsidised prices of fossil fuels is leading to artificially created low electricity rates in the country. This is reflected in the dismal financial condition of many state discoms in India. An important way to addressing this situation is by enforcing inter-connection standards, net metering and switching to smart grids. Grouping of smaller projects to reduce execution and financing costs and low cost debt would increase the attractiveness of the market for investors.
For distributed generation to achieve its true potential in making India an energy secure nation, it is critical to address the sector’s needs at the technical, financial, regulatory and policy levels.
(Author is a graduate of Indian Institute of Technology- Delhi, currently working on his venture, Aeon Solaris, aimed at increasing the adoption of distributed generation models in India)
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