GS-3, Uncategorized

Government launches new Energy Conservation Building Code

The code was developed by the Ministry of Power and Bureau of Energy Efficiency (BEE), with technical support from United States Agency for International Development (USAID) under the U.S.-India bilateral Partnership to Advance Clean Energy–Deployment Technical Assistance (PACE-DTA) program.

Features of the code:

  • The code prescribes energy performance standards for new commercial buildings to be constructed across India.
  • It sets parameters for builders, designers and architects to integrate renewable energy sources in building design with the inclusion of passive design strategies
  • The code aims to optimize energy savings with the comfort levels for occupants, and prefers life-cycle cost effectiveness to achieve energy neutrality in commercial buildings
  • Buildings need to demonstrate minimum energy savings of 25% to be considered as ECBC compliant
  • Additional improvements in energy efficiency would lead to higher grades like ECBC Plus (for savings of 35%) or Super ECBC (for savings of 50%)
  • Adoption of ECBC 2017 for new commercial buildings throughout India will lead to estimated reduction of 50% in energy use by 2030
  • This will be equivalent to expenditure savings of 35,000 crores and 250 million ton of CO2 reduction

The Existing Energy Conservation Building Code:

  • The code provided incentives for adopting conservation measures
  • Under the provisions of the earlier code, states such as Haryana offered up to 25 per cent additional Floor Area Ratio, while Pune Municipal Corporation offers up to 50 per cent discount on premium amount of building permission charges

Providing subsidies under the new program:

  • According to the Minister of state for power coal and new & renewable energy, the success of the program should not be based on incentives and subsidies provided by the government
  • Rather doing away with subsidies and government involvement has made the roll-out faster and more efficient
  • Thus, the initiative should be self-sufficient and made viable based on its size and scale
GS-2, Uncategorized

New steps to enhance transparency in Power Sector

In a bid to enhance transparency in power transmission sector of the country, the government has launched the‘TARANG’ Mobile App, ‘e-Trans’ & ‘DEEP’ e-bidding web portals. These are developed by Rural Electrification Corporation Transmission Projects Company Limited (RECTPCL), a subsidiary of REC Ltd.

  • These measures are aimed at enhancing ease, accountability & transparency and would boost confidence of investors in power transmission sector. Better price discovery shall ultimately benefit the power consumers in India.

Details:

TARANG: It is a powerful monitoring tool that tracks upcoming transmission projects and monitor the progress of Inter-State & Intra-State transmission systems in the country, being developed through Regulated tariff mechanism as well as Tariff Based Competitive Bidding(TBCB) route. TARANG shall also include status of stalled/delayed transmission systems in country which would enable the stakeholders viz. Ministry of Power, State Governments, all private sector transmission developers and PSUs like Power Grid Corporation of India Ltd., for expeditious completion of such projects. Green Energy Corridors, an important component of our renewable energy mission, would also be monitored through TARANG.

e-Trans’: It is a web platform for e-bidding and e-reverse auction for Tariff Based Competitive Bidding (TBCB) in transmission projects. Till date transmission sector providers have been participating in transmission bids through manual mode. With e-Trans, the interface will be electronic.

DEEP (Discovery of Efficient Electricity Price) e-Biddingportal: It is for medium term (1-5 years) purchase of power. The Portal will provide a common e-bidding platform with e-reverse auction facility to facilitate nation-wide power procurement through a wider network so as to bring uniformity and transparency in the process of power procurement.

Editorials, GS-3, Uncategorized

Power cuts in a time of surplus

India has, for the first time in history, declared that it will not have a power deficit this year. The country will have a surplus of 3.1% during peak hours and 1.1% during non-peak hours during 2016-17, latest data from the Central Electricity Authority shows.

  • This is the first time that the country has declared a year of no shortage though many regions have had power surplus for shorter periods. In 2015-16, the peak hour deficit stood at -3.2% while non-peak hour deficit was at -2.1%. The deficit was as high as 13% about a decade ago.

Regional variations:

  • Data shows that states in southern India will have surplus power to the tune of 3.3% after being power starved for almost a decade.
  • Western India will have surplus electricity at 6.9%.
  • Eastern region will have the maximum shortage of 10.3% and northeastern region at 8.3%.
  • The northern states will have a deficit of 1.8% during the year.

Reasons behind surplus power:

  • Highest ever conventional power capacity of 46,453 MW has been added during the last two years.
  • About 11,000 MW of gas plants have been revived and coal shortages to power plants are removed.
  • The government has launched revival scheme for distribution companies and many states have joined it.

What’s the issue now?

India now generates more power than it needs and has surplus power. And yet, the practical experience of Indians is that scheduled and unscheduled power cuts are the norm in cities, and the situation in most rural areas is worse. India lags far behind other countries in per capita consumption of power.

What’s causing this?

  • While capacity addition has peaked, industrial and commercial offtake remains low. Growth in industrial and commercial consumption—the highest-paying segment under the telescopic tariff structure followed—was only around 4.57%. Only the domestic consumer segment, which puts additional cost burden on the distribution utilities given lower tariffs, saw decent demand growth of 8.9%.
  • Cost of supply has increased, as have aggregate technical and commercial (AT&C) losses. Domestic consumers do not have the capacity to absorb all the incremental power produced, or pay higher cost. Distribution companies, or discoms, typically incur higher cost on supplies to this segment and earn lower revenues.
  • The state of the state-owned power distribution companies, or discoms, which are responsible for buying electricity from the generation companies and selling them to consumers, is also responsible for this. The discoms suffer massive transmission and distribution (T&D) losses. Almost 25% of the power is lost, and never gets billed for — double the global average of about 12%.
  • Worse, the remaining 75% is sold at prices that are much lower than the discoms’ procurement costs. In every state, the tariff is set by a group of largely political appointees, who avoid increasing rates because of the associated political costs. Political unwillingness is at the heart of the T&D losses as well.

What’s the solution?

To help these discoms, government announced a new scheme — UDAY, or Ujwal Discom Assurance Yojna- in November 2015. Under UDAY, participating state governments would take over 75% of discom debt over two years — 50% in 2015-16 and 25% in 2016-17. The idea is to make the state governments formally responsible for the losses of state-owned discoms.

This is expected to have two effects. One, it will relieve debt-ridden discoms, who can push power distribution in right earnest instead of being a roadblock to economic growth. Two, the more overt acceptance of debts on their books will push states to align tariffs to costs, and make it possible for discoms to run on a sustainable basis.
uday-scheme

Challenges before UDAY:

  • Electricity is not a central subject, and states cannot be made to participate in the programme. Also, the Centre is not providing any monetary assistance. The Centre’s carrot, in this case, is actually its stick. As such, willing states will be provided subsidised funding from the central government’s power schemes, as well as priority in the supply of coal.
  • State governments are expected to convert the discom debt into bonds. However, apart from the banks that had lent the money in the first place, finding buyers for such bonds might prove difficult — especially since these would not enjoy SLR status.
  • Besides, there is nothing in the scheme to fix the perverse political incentive that leads to T&D losses and debts in the first place.

Way ahead:

The present surplus may not be adequate when industrial demand starts to pick up, or even to meet exigencies such as unscheduled generator shutdown or extreme weather event. Also, a truer, holistic gauge would be 24×7 reliable power supply to all at an affordable price.

  • To achieve that objective, states will have to show strong resolve to reduce AT&C losses, invest in infrastructure development, ensure efficient commercial operation of discoms, make timely tariff revisions, and reduce the cross-subsidization that’s impacting the competitiveness of the industry and services sectors.
  • The time is also right, perhaps, to provide direct, targeted subsidies to electricity consumers who can’t pay much—if at all. The learnings from the LPG direct subsidy transfer project would be very handy here.
GS-2, International Relations, Uncategorized

Dedication of Kudankulam Plant to the Nation

India Russia relationship has moved a mile ahead with the dedication of the 1st Unit of Kudankulam Nuclear Power Plant. With 1000 Mega Watt, Kudankulam Unit 1 has become the largest single unit of electrical power in India. This also signals the joint commitment of both the nations to develop a partnership ahead for green growth.

The first unit of this plant attained criticality in July 2013. Since then, more than 10,800 million units of power have been generated. It was further integrated with the southern grid and commercial power generation began by the end of December 2014.

Significance:

  1. For a grossly power deficient nation like India, this is a big boost in power generation to meet the demand-supply gap. With 1000 MW power generation, up to some extent Kudankulam Power Plant will be successful in decreasing the power starving of states like Tamil Nadu, Kerala, Karnataka and Andhra Pradesh.
  2. Being a clean source of energy, it will help in reducing the dependence on fossil fuels and further addresses the issue of global warming due to Greenhouse effect.
  3. In a small area high power generation is possible. There is no such requirement like coal loads to be transported to the power stations through wagons in this case. Thus, there is no question of fly ash disposal.

Energy Security:

  1. India depends on other nations for supply of Uranium. There are not much resources of Uranium in the country itself. Taking into account the sanctions implemented on transportation of nuclear elements, India cannot be said to be fully secure in terms of energy.
  2. Design of this plant has been done using Russian technologies. Although there are a lot of inputs from Indian nuclear technologists to make the nuclear reactors work according to India’s conditions but we still need support from other nations.

Public Opposition and their Perception:

The opposition from public has delayed the operation of the plant by ten years already. It appeared that most of the agitators were fishermen concerned with their safety. However, it has been assured by the Indian technologists that Kudankulam nuclear reactors are one of the safest in the world. There have been no nuclear accidents so far in India and this is a very good safety record for the country. There are rumors among local people which can be eliminated when the Atomic Energy Department and Nuclear Power Generating Companies interact with these people to increase awareness among them and remove their fears.

Safety Measures Taken:

  1. KKNPP is well protected from a possible rise in sea level by locating the entire plant site at a higher elevation. The safe grade elevation of KKNPP site has been kept at 7.5 metres above the MSL (mean sea level) and a shore protection bund has been constructed all along the shore to a height of + 8.0 metres to the MSL.
  2. Passive heat removal system to provide cooling automatically.
  3. Double containment.
  4. Core catcher to provide safety in the unlikely event of fuel meltdown.
  5. Passive hydrogen recombiners which do not need any power supply to absorb hydrogen liberated inside the containment.

Thus it can be safely concluded that Kudankulam reactors are built with state of the art technology, with best safety features that will not impact our environment and the public. It will further take Indo-Russia strategic partnership to a new level.

GS-3, Uncategorized

Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY)

Electrifying the rural India in mission mode


deen-dayal-upadhyaya-gram-jyoti-yojna


 

  • Aim: To ensure electrification of all the un-electrified villages by 2017 in mission mode <do you know how many villages are electrified? Answer in comments.>
  • The Scheme draws its inspiration from the similar pioneering scheme implemented by the Government of Gujarat
  • It will enable to initiate much awaited reforms in the rural areas
  • It focuses on feeder separation (rural households & agricultural) and strengthening of sub-transmission & distribution infrastructure including metering at all levels in rural areas <How does feeder separation help? Answer in comments.>
  • The scheme will replace the existing Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY)
  • Scheme has an outlay of Rs 76000 Cr for implementation

Why DDUGJY?

  • The rural agricultural and non-agricultural consumers of the country are generally serviced through the local distribution network which is unreliable
  • Many rural areas of the country face insufficient electricity supply, consequently the distribution utilities are forced to resort to load shedding
  • This affects the power supply to both agricultural and non-agricultural consumers
  • The demand of power in rural areas is increasing day by day due to changing consumer base, improving living standards for which augmentation of rural infrastructure needs to be regularly undertaken
  • To improve the commercial viability of power distribution, there is need for metering of all categories of the consumers

Objectives:

  • To provide electrification to all villages
  • Feeder separation to ensure sufficient power to farmers and regular supply to other consumers
  • Improvement of Sub-transmission and distribution network to improve the quality and reliability of the supply
  • Metering to reduce the losses

Benefits:

  • All villages and households shall be electrified
  • Increase in agriculture yield
  • Business of Small and household enterprises shall grow resulting into new avenues for employment
  • Improvement in Health, Education, Banking (ATM) services
  • Improvement in accessibility to radio, telephone, television, internet and mobile etc
  • Betterment in social security due to availability of electricity
  • Accessibility of electricity to schools, panchayats, hospitals and police stations etc
  • Rural areas shall get increased opportunities for comprehensive development
  • Key enabler in Digital India programme

Progress:

  • Govt has achieved its annual target of electrifying 7000 villages during this (2015-16) fiscal year under DDUGJY (according to recently published data) <can you tell us the definition of an electrified village? Answer in comments>
  • However, these figures have been contested and critcised for being unrealistic
  • An analysis by The Hindu- The govt has electrified 20% of the villages that were without power at the start of this financial year (2015-16)

Follow the story for updates- Policy Wise: India’s Power Sector

GS-3, Indian Economy, Uncategorized

Power Tariff Policy

What is the policy?
Tariff policy for power is governed under the Electricity Act. The policy is the guiding principle for setting power rates, power purchase agreements, sale and purchase of coal and power – both conventional and renewable energy
Why was it revised?
The policy revision was undergoing since 2006 in wake of increasing basket of power generation, corresponding growth of transmission & distribution and lack of regulations to tackle new issues cropping up in the ever dynamic power sector. Power ministry in its first draft said the revision was taken up “to provide affordable power to consumers and ensuring fair returns to generators, transmitters and distributors of power and to facilitate development of markets and market instruments in the power sector.”
 Major Amendments:
1. For optimal utilisation of land and other resources that are used for power projects, the policy allows increasing power production on the same project site to the extent of 100 per cent capacity. (Subject to regulatory approvals)
Impact: hassles of land acquisition, forest and environment clearance reduced without effecting power generation. Impetus to private investment.
2. Sale of surplus power generated which has no takers, in spot market through power exchanges
Impact: As spot market is mostly buyer’s market, cheap power would be available for states/discoms to buy. It would improve the PLFs of generating station which have to reduce the capacity when states don’t buy the contracted power.
3. All transmission projects to be awarded through tariff based competitive bidding. The basket of exceptions reduced to minimal list of security related projects. Even intra-state projects which are above a stipulated cost to follow bid regime.
Impact: The policy has given a clear directive to follow competitive bidding in both central as well as state transmission projects. This will allow greater flow of private capital into the lagging transmission sector.
 4. Hydro power projects to be awarded under cost-plus basis and not reverse bidding. The tenure of power purchase agreement extended by 15 years over and above the existing 35 years
Impact: Hydro power gets a new lease of life. Also, hydro when compared to thermal takes longer time and faces lot regulatory hurdles. Any forecast regarding tariff is difficult, so cost plus is a blessing for private investors in the hydel sector.
5. Solar Renewable Purchase Obligation (RPO) to reach 8 per cent by March, 2022. Also, the policy introduces Renewable Generation Obligation, which allows new coal/lignite based thermal plants to also establish renewable capacity to meet their RPO. Existing plants can set up such capacity subject to approval of procurers.
Impact: This will mandate discoms towards providing clean energy to the consumers and prevent payment default to the power producers. Market experts are however still reading the fine print of how much would 8 per cent solar power purchase entail on generation and demand for solar power.
6. Bundling of renewable power with power from those plants whose PPAs have expired or plants which have completed their useful life, subject to development through competitive bidd
7. No inter-State transmission charges and losses–No inter-State transmission charges and losses to be levied for renewable power (solar/wind) till such period as notified by GoI. Impact: One major worry that renewable energy investors face is procurement. “Leveraging existing power assets to expand capacity in both conventional and unconventional energy to boost generation suggests better utilization of invested capital. The continued preoccupation with renewable energy is heartening. This is in line with the growing expectation that cleaner energy like solar shall increasingly displace conventional sources in energy portfolios of developed and developing countries. The intentions have been reiterated, what remains to be seen is how these are implemented and the various parties involved held accountable to deliver the commitments proposed,”
8. Enhanced role of regulators: Both central and state regulators have been strengthened to take up hard tasks and be the final word in most cases. The state regulator would devise the trajectory for achieving 24*7 power by 2022 and closely monitor it as well. Regulator would also mandate compulsory purchase of power from micro grids set up in remote locations.
Impact: Tariff Policy being just a guiding principle is usually twisted by state regulators. The policy amends the legal position of SERCs to “may” which entails falling in line with most regulations. SERCs being given executive role also strengthen their role further.
 Other important amendments for:
Power Producers:
1. Cost pass through of change in domestic duties, levies, cess and taxes in competitive bid projects
2. Cost pass through for use of imported/E-auction coal in competitive bid projects which the producer had to use in case of shortfall contracted coal supply by Coal India.
3. Recovery of costs owing to variation in prices of fuel / power purchase etc. on monthly / quarterly basis.
Consumers:
1. To benefit from periodic cost variation as there would be no carry forward cost.
2. Upfront payment for several cost variables.
3. Smart meters to simplify billing, demand monitoring, help choose power supplier in future
4. Net metering for roof-top solar. Two way smart meters shall be provided to all consumers for roof top solar