India’s Power Sector Calls For A Multi-Pronged Strategy
While electricity generation is on track in India, the challenge lies in making it accessible to all. In a country of 1.3 billion people, more than 200 million people live without electricity, especially in rural areas
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Uninterrupted power supply is one of the prerequisites for any advanced economy. In the last 70 years, since independence, Indian coal-mining, renewable-energy, power-generation and electricity-distribution sectors have undergone a radical transformation. Once marred by continuous shortages and lack of quality and steady supply, the power sector has seen an unprecedented turnaround.
However, it’s still far behind its peers. Today, an average Indian consumes a dismal 1,000-odd KWh of energy annually, while the Chinese consume four times of that, and the Americans about 16 times. Going forward, with increasing economic activity and income levels, power consumption is bound to rise. Are we prepared to match the growing number?
India, not only has to be ready to cater to the increased power demands from industries but it also has to provide ‘Power to all’, while limiting its carbon emissions. About two-thirds of the power supply in India comes from coal.
India’s reliance on coal will persist even in 2047, the year when India turns 100, with an estimated 42-50 per cent share in the energy mix. At the same time, the penetration of renewables is definitely going to increase with its share rising to 11-14 per cent in 2047 from 3.7 per cent in 2012, according to NITI Aayog.
The most exciting part of renewables is that the technology is still in the early stages of evolution, which means further advancements and growth in industry volumes will continue to make clean power cheaper. The dramatic fall in tariffs, the rising awareness towards renewables, improved storage technology, and stricter regulatory framework among other factors will change the energy landscape dramatically in the years to come. As a result, a different kind of infrastructure — distributed and decentralised — could be witnessed .
“We are potentially looking at solar power costing Rs 2/ KWh by 2020, while the cost of integrated solar-storage systems with 100 per cent power back up is expected to fall below the critical threshold of Rs 5/KWh by 2020,” according to consultancy firm Bridge to India. The energy mix of the country will undergo a transformation with the prevalence of renewable technologies, storage solutions, smart grids and enlightened consumer becoming the order of the day.
While electricity generation is on track in India, the challenge lies in making it accessible to all. In a country of 1.3 billion people, more than 200 million people live without electricity, especially in rural areas.
Tim Buckley, director of Energy Finance Studies, says in his papers that all the above targets would require ‘efficiency’ to keep up — efficiency of coal production; grid-efficiency; operating efficiency to drive the Discoms from their current unsustainable, operating-loss position; energy efficiency to lower the ratio between electricity demand and economic growth; carbon efficiency to lower the electricity sector’s emissions intensity through better emissions standards and a greater reliance on low carbon alternatives such as wind, solar and hydro electricity; and finally, financial-market efficiency to drive down the cost of capital and increase access to capital.
India’s power sector calls for a multi-pronged strategy — a mix of conventional and renewable sources of energy, and within renewable, a mix of centralised and decentralised solutions, along with a focus on energy efficiency to reduce energy demand and enhance domestic supply.
‘Power to all’ can become a reality way before 2047, however, 100 per cent accessibility of smart, clean and efficient power will be possible only when all the above conditions are met in the most corruption-free manner.