US investments and co-operation in Indian power Sector

Great potential for US investments and co-operation in Indian power Sector: Jyotiraditya Scindia

Shri Jyotiraditya M Scindia, Minister of State (Independent Charge), Ministry of Power, Government of India visited Washington on July 2, 2013 with the objective of further enhancing India –US partnership in the Power sector. Delivering a talk on “Indian Energy Security in the context of the Power Sector”. Shri Scindia emphasized that there is great potential for US investments and co-operation in the Indian power sector. The Minister addressed the issues of growth of the Indian power sector particularly relating to challenges in the context of generation, transmission, distribution and access to electricity. He explained about the initiatives taken by him in the recent months to address these challenges and how these impact the framework of India US co-operation in power sector in general and renewable energy as well as energy efficiency matters as well as the overarching strategy for low carbon growth and clean energy adopted by India. Mr Scindia emphasized that power sector is especially significant in the Indian context, since apart from meeting India’s energy requirement, it also drives capital investment and resultant growth. He emphasized that the policy of the government in the power sector was structured around the 3A strategy: Availability, Accessibility and Affordability. In this context he stated that India has performed admirably in terms of capacity addition in generation, having added about 50 GW over the period 2007-2012, and expected to add another 118 GW over the next five years, of which renewable capacity would be 30 GW. He informed that strong steps have been taken in the past 7 months to improve fuel availability – coal and natural gas – to the power sector. The addition of 200GW of total transmission capacity including 66GW in inter-regional capacity and the crucial integration of the Southern grid with the rest of the country by January 2014, will make it the largest integrated transmission network globally. This will ensure secure operation of the grid. Another key sector touched by him concerned the goal of reducing the Aggregate Technical and Commercial (AT&C) losses which had come down significantly owing to federal support through the Restructured Accelerated Power Development and Reform Project (APDRP) and ensuring access to the people in the villages through the flag ship program – Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY). He spoke at length about the $25bn Financial Re-structuring Plan (FRP) launched recently by the Government of India, aimed at improving the viability of the State power utilities and shifting the onus of funding of power subsidies to the books of the State Governments. He also emphasized various measures concerning energy efficiency and stated that in the past 5 years there had been a savings equivalent of 11,000 MW of avoided capacity and this achievement was set to be surpassed with the target of 12GW for the next 5 years. He referred to other potential areas of India US co-operation relating to transmission technologies, development of large scale hydro power, supercritical technology development for efficient energy production, smart grids and energy efficiency improvement programmes. The Minister also spoke of the institutional mechanisms set up by him in the Ministry concerning then Ministry Advisory Group comprising private and public sector experts; Bankers’ group, Inter-Ministerial groups with Coal and Environment. Inorder to ensure time bound follow up of the decisions taken in these Groups, a Dashboard Mechanism had been set up at his level. Several important decisions have been taken such as to assist in finalising the Standard Bidding Documents for competitive procurement of power, issues of financing, coal, gas, environment clearance of hydro projects given untapped hydro potential. Regular interactions with the Forum of Regulators and the Central and State regulatory agencies is also undertaken to ensure timely regulatory intervention to address various matters such as tariff, grid security and power procurement. The participants and the moderator raised issues of sustainability of reforms, the timeframe in which the uncovered portion of the country would be given electricity connectivity, the receptivity of State Governments to the FRP, the competing challenges of power availability and clean energy, the future of renewable in the Indian context and the political economy issues in the context of the on-going reforms. The talk was organised by the Brookings institution and was moderated by Michael Greenstone, Director of the Hamilton Project and Senior Fellow in Economic Studies at the Brookings Institution. Attended by a wide cross-section of persons, representing Government, academia, industry and press & media, it enabled an exchange views on a wide range of subjects impacting the power sector in India and the leading role to be played by India in the global context.