Getting the power sector to emerge from its financial morass is an exercise that requires all hands. On the one hand rests the tough job of plugging leaks, while, on the other, raising tariffs in line with costs. And during this inordinately long transition period to recovery, the government needs to keep investments up to meet the burgeoning energy needs of consumers.
But what happens when the pace of the first two events is tardy? Reliance on private investments to add new capacities also falters. This, however, is not visible. First, there’s the gestation period of three-four years for setting up a new plant. Then, there’s hope that the tariffs will indeed be raised. Finally, financial institutions, which drive investments, accounting for 7 of every 10 rupees in the generation business, have not curtailed lending. All this gives the appearance that generation capacity is on an auto pilot, while in reality it is not.
So, the safest act in the power sector today is to undertake demand management and efficiency measures—tighten belts and exercise. However, resorting to power cuts leaves governments unpopular. In states bearing large farm load, the answer lies in creating separate feeders, a practice successfully adopted in Gujarat. However, a separate feeder connecting farmer homes is an expensive proposition. The costs are daunting and that explains the slow pace of progress.
Energy efficiency, meanwhile, is a low hanging fruit. With 20% of electricity consumed by light bulbs, any reduction in power consumption without affecting the glow holds a lot of promise for cash-starved distribution utilities. Bachat Lamp Yojana, a Union government initiative, promotes replacement of incandescent bulbs with energy-efficient compact fluorescent lamps. Recently, the government sought funds from the International Clean Technology Fund to provide concessional funding for replacement of fans with more efficient ones by utilities.
However, the utilities’ desire to inject efficiency does not reach beyond bulbs and fans. They are reluctant to drive load reduction in large machines. For any drop in consumption by the industrial segment would directly affect their ability to cross-subsidize other consumer segments such as farm and domestic users. If energy efficiency efforts are to be meaningful, that needs to change.
How can India achieve greater energy efficiency? Tell us at email@example.com