India’s power sector has experienced phenomenal growth. When the country gained independence in 1947, the total power capacity of the country was just 1,362 megawatts (MW). As of April 2012, total power generation crossed 200,000 MW. India has a robust mix of power sources. Coal-based thermal power plants are still the country’s main source of electricity generation. Gas-based thermal power plants and hydropower projects are also major contributors. India has also made significant progress in renewable energy. Nuclear power development in the country is progressing at a slower pace.
Prior to independence, private companies mainly carried out generation and electricity distribution. After independence, new power generation, transmission and distribution projects were developed by state and central government utilities. The government of India formed State Electricity Boards (SEBs) that would develop and operate generation, transmission and distribution projects. However, the Electricity Act of 2003 disallowed SEBs to function as integrated power utilities and made it mandatory to unbundle utilities to handle generation, transmission and distribution functions exclusively.
Even though the country has made huge progress in the power sector, a substantial gap remains between supply and demand. Many of the country’s villages still remain powerless. To combat this, the government has introduced the Rajiv Gandhi Grameen Vidyutikaran Yojana rural electrification scheme. Targets, however, have yet to be met. Delays still plague most of the country’s power projects. In both the 10th Five Year Plan (2002-2007) and the 11th Plan (2007-2012) the government missed its power generation targets. In the 10th plan, it was 50% off the mark. There are numerous causes of power project delays. They include difficulty acquiring land, opposition from locals, environmental clearances and supply of equipment.
The first commercial power generation in the country was launched in 1889 in Calcutta (now Kolkata) by the Calcutta Electricity Supply Corporation. Bombay (now Mumbai) was the second city to receive commercial power. The Electricity Act, 1910, provided a basic framework for the electricity supply in the country by issuing licenses to private sector companies. The first hydroelectric project in the country was the 72 MW Khopoli project by Tata Electric in 1915. The company is now known as Tata Power.
At the time of independence, the private sector dominated power generation, with the public sector accounting for just 35% of India’s power. After independence, The Electricity (Supply) Act, 1948 was introduced. The act established State Electricity Boards to plan and implement power generation, transmission, distribution and trading in their respective states. Because electricity is under both central and state jurisdiction, the act also created The Central Electricity Authority (CEA) to create central generating utilities for developing and operating generation plants at the central level. The main role of the CEA is technical coordination and supervision of the programs in the power sector. It is also entrusted with a number of statutory functions. With the Industrial Policy Resolution of 1956, the government further cemented their power monopoly.
Through SEBs, states played a pivotal role in overall power development. However, from the 5th Five Year Plan (1974-1979) onwards, the central government decided to develop thermal power plants and hydroelectric power plants. For this purpose they established the National Thermal Power Corporation (NTPC) and the National Hydro Power Corporation (NHPC) in 1975 and the North Eastern Electric Power Corporation (NEEPCO) in 1976. In 1988, Tehri Hydro Development Corporation (THDC) and Nathpa Jhakri Power Corporation (NJPC) were also set up. National Power Transmission Corporation (NPTC) was set up in 1989 to set up power transmission network across the country. NPTC was renamed Powergrid Corporation of India Limited in 1992.
In 1991, the government of India liberalized the sector to attract private investment. The Electricity (Supply) Act was amended for private participation in the sector. The government has since announced major policy changes. The amendment was carried out majorly due to the deteriorating financial health of the SEBs. Funding projects through budgetary support was getting difficult and the government decided to restructure the power sector to attract private and foreign investment. It also provided attractive return on investments to attract the private participation. The Amendment Act of 1991 provided for private participation in thermal, hydro, wind and solar power projects. The transmission and distribution of power were still carried by the SEBs.
The Ministry of Power began functioning independently on July 2, 1992. It was earlier known as the Ministry of Energy that comprised of Departments of Power, Coal and Non-Conventional Energy Sources.
After its emancipation, the ministry began enacting major policy changes. To attract private investment in large power projects, the government introduced the Mega Power Policy in 1995. The policy envisaged increasing private investments in power projects of over 1,000-MW capacity that would supply the electricity to more than one state. The main motive of the policy was to ensure power at economical cost. Under this policy, the projects were awarded through competitive bidding. CEA facilitated identification of sites, NTPC assisted in preparation of feasibility reports and power-grid facilitated power transmission. Even with these reforms, there was limited participation from the private sector as the private investors remained uncertain of their returns due to the poor financial health of SEBs.
The Mega Power Policy of 1995 was revised in 1998 to provide new fiscal concessions. Power Trading Corporation was also set up in 1999 to buy power from the developers and sell it to the SEBs. In 1996, several guidelines were formulated for the sector’s progress. Under these guidelines, central and state regulatory commissions were set up to regulate tariffs from the power projects.
To curb the commercial losses in transmission sector, the Electricity Laws (Amendment) Act was passed in 1998. This act enabled private participation in transmission sector as well. Under this act, central and state transmission utilities were set up.
The government introduced The Electricity Act 2003 to replace all earlier laws. This act envisaged creating liberal framework for development of the power sector. It promoted competition and sought to ensure efficiency and transparency in the sector. This act provided for unbundling of the SEBs. It made it mandatory for the states to set up regulatory commissions. It also brought in open access in transmission and distribution. The act was further amended in 2007 to make stringer guidelines for checking commercial losses.
Power sector is one of the growth drivers of the country. The ministry of power is constantly making efforts to improve the efficiency of the power projects and ensuring reliable power at competitive price to the customers.
The Ministry of Power is responsible for the evolving policy in the power sector. It deals with all matters relating to the thermal power, hydropower projects of over 25 MW and transmission system. It also looks into research and development and provides technical assistance in thermal, hydroelectric and transmission network. Further, it deals with all matters relating to the CEA, CERCs and public sector utilities. It looks into rural electrification and issues relating to power supply in the states and Union Territories.
Attached Bodies or Autonomous Bodies
Central Electricity Authority (CEA): The CEA is an attached office of the Ministry of Power. It assists the ministry in all technical and economical matters. It supervises the programs in the sector and ensures technical coordination. Being a statutory body, it is also entrusted with several statutory functions. The CEA prepares the National Electricity Plan once every five years. It also signs off on new hydroelectric power projects. It further collects and records data regarding generation, transmission, distribution, trading and carries out studies regarding the cost, competitiveness and efficiency in the sector. A chairman, who is also ex-officio Secretary to the Government of India, heads the CEA.
National Thermal Power Corporation (NTPC): NTPC was set up in 1975 to accelerate thermal power generation in the country. Over the years, apart from thermal power generation, the company has also ventured into hydropower generation, consultancy, power trading, coal mining and ash utilization. The total installed capacity of the company is 37,514 MW. The company has a target of achieving 128,000 MW of capacity by 2032.
NHPC Limited: Formerly known has National Hydroelectric Power Corporation, NHPC was incorporated in 1975 with an authorized capital of Rs. 200.00 crore ($35.51 million USD). The company was set up with a view to plan, promote and organize development of hydroelectric power projects in the country. NHPC later expanded its objectives and included development of power in all its aspects through conventional and non-conventional sources in India and abroad. The company has authorized share capital of Rs. 15,000.00 crore ($2.66 billion USD), with an investment base of over Rs. 38,718.00 crore ($6.87 billion USD) approximately.
Power Grid Corporation of India Limited (PGCIL): PGCIL was incorporated in 1989 as a central transmission utility. Its main functions are to undertake transmission of electric power through inter-state transmission system; and planning, coordination, supervision, control, efficient operation and maintenance of transmission systems. It also provides consultancy services in the power transmission sector. PGCIL is responsible to restoring power in quickest possible time in event of a natural disaster. At present, it carries about 51% of generated power across the country. The company operates around 92,946 ckt. kilometer transmission lines and reported assets of Rs. 50,352.00 crore ($8.94 billion USD) as of March 31, 2011.
Rural Electrification Corporation (REC): REC was incorporated in 1969 to finance and promote rural electrification projects across the country. The company had a net worth of Rs 12,789.00 crore ($2.27 billion USD) as of March 31, 2011. REC provides financial assistance to SEBs, state government departments and rural electric cooperatives to rural electrification projects. It also provides loan assistance to SEBs or other state power utilities for rural electrification projects.
Power Finance Corporation Limited (PFC): PFC is a financial institution set up in 1986 to finance power sector projects in the country. Its main objective is to provide financial resources and encourage flow of investments across the sector. PFC provides project term loan, equipment lease financing, short-term loan and consultancy services for development of generation, transmission or distribution projects and also for the renovation and modernization of the existing projects. PFC is also the nodal agency for development of Ultra Mega Power Projects in the country. The company’s subsidiary – PFC Consulting Limited – provides technical, advisory and consultancy services.
SJVN Ltd: Formerly known as Satluj Jal Vudyut Nigam Limited, the company was incorporated in 1988 as a joint venture between the government of India and government of Himachal Pradesh. The main objective of the company is to plan, investigate, execute, operate and maintain hydropower projects. The present authorized share of capital of SJVN is Rs 7000.00 crore ($1.24 billion USD). The 1500-MW Nathpa Jhakri hydroelectric project was the first project taken up by the company for execution.
THDC Ltd: THDC was incorporated as a joint venture between government of India and government of Uttar Pradesh. The main objective of the company was to operate and maintain the Tehri Hydro Power Complex and other hydro projects. The corporation has an authorized share capital of Rs. 4000.00 crore ($710.10 million USD).
North Eastern Electric Power Corporation Limited (NEEPCO): NEEPCO was established in 1976 with the objective of planning, designing, constructing, generating, operating and maintaining power plants in the North Eastern region of India. The company has installed capacity of 1130 MW. Out of this, 55% capacity is in the Northeast region. The authorized share capital of NEECPO is Rs. 5000.00 crore ($887.63 million USD) and its net worth was Rs. 4619.00 crore ($819.99 million USD) as of March 21, 2011.
National Power Training Institute (NPTI): NPTI was set up with the objective of conducting long term and short term training programs in the areas of thermal power, hydropower, and transmission and distribution. The institute has been continuing its services for last four decades. NPTI has also ventured into consultancy services in human resource development for the power sector.
Central Power Research Institute (CPRI): CPRI was set up in 1960 as a center for applied research in electrical power engineering assisting the electrical industry in product development and quality assurance. It serves as an independent authority for testing and certification of power equipment.
Bhakra Beas Management Board (BBMB): Bhakra Management Board was constituted in 1966 go take over the administration, maintenance and operation of Bhakra Nangal Project. After completion of the Beas project works, it was also transferred to the Bhakra Management Board in 1966. In 1976, the board was renamed Bhakra Beas Management Board. It regulates the supply of water and power from the Bhakra Nangal and Beas projects.
Damodar Valley Corporation (DVC): DVC is the oldest central power utility in India. In March 1948, Damodar Valley Corporation Act was passed that required the central government and state governments of Bengal and Bihar (the area is now part of the state of Jharkhand) to participate jointly to set up DVC. DVC came into existence in July 1948.
Central Electricity Regulatory Commission (CERC): CERC is a statutory body functioning under the Electricity Act, 2003. CERC was set up in 1998, initially under the Electricity Regulatory Commissions Act 1998. The main functions of CERC is to regulate the tariff of generating companies owned or controlled by the central government, to regulate the tariff of generating companies other than those owned or controlled by the central government if such generating companies have a composite scheme for generation and sale of electricity in more than one state; to regulate the inter-state transmission of electricity; to determine tariff for inter-state transmission of electricity; to issue licenses to persons to function as transmission licensee and electricity trader with respect to their inter-state operations and to specify grid code having regard to grid standards.
PTC India Limited: PTC India Limited, earlier known as Power Trading Corporation, was set up in 1999 as a public-private partnership venture. The objective of the company is intermediation for long-term supply of power from identified domestic independent power producers and cross-border power projects, financial services like providing equity and debt support to projects in the energy value chain through its subsidiary PTC India Financial Services, fuel intermediation or aggregation for cross-border power plants through PTC Energy Ltd. and advisory services.
Bureau of Energy Efficiency (BEE): BEE was set up in 2002 under the provision of Energy Conservation Act, 2001. The bureau develops policies and strategies with the main objective of reducing energy intensity of Indian economy. BEE coordinates with consumers, agencies and other organizations to utilize the existing resources and infrastructure to perform its functions as laid out under the act. It has several regulatory functions such as developing minimum energy performance standards and labeling design for electrical equipment and appliances. It also has some promotional functions with the objective of creating awareness on energy efficiency and conservation.
The Planning Commission has approved an amount of Rs. 66,382.73 crore ($11.78 billion USD) as the plan outlay for the ministry of power for 2011-12. This includes Internal Extra Budgetary Resources of central power sector utilities amounting to Rs. 56740.73 crore ($10.07 billion USD) and Gross Budgetary Support of Rs. 9642.00 crore ($1.71 billion USD).
From the outlay, the majority share is for the NTPC. The total approved planned outlay for NTPC for the year 2011-12 is Rs. 26,400.00 crore ($4.69 billion USD). This outlay expected to result in commissioning of several projects by NTPC and also substantial physical progress of the projects scheduled to be commissioned in the 12th Plan. The plan outlay for NHPC is Rs. 5090.00 crore ($903.60 million USD), DVC is Rs. 5890.59 crore ($1.05 billion USD), NEEPCO is Rs. 1037.27 crore ($184.14 million USD), THDC is Rs. 389.85 crore ($69.21 million USD), SJVN is Rs 1133.13 crore ($201.16 million USD) and Powergrid is Rs. 17,700.00 ($3.14 billion USD) crore for their under-execution and planned projects.
Among the Ministry of Power schemes, Rajiv Gandhi Grameen Vidyutikaran Yoljana (RGGVY) received the maximum outlay of Rs 6000.00 crore ($1.07 billion USD) for 2011-12. The Restructured Accelerated Power Development Reforms Program received another major allocation of Rs. 2034.00 crore ($361.09 million USD).
The Planning Commission had assessed total outlay of Rs. 3,09,231.38 crore ($54.90 billion USD) for the 11th Plan period for the Central sector. This comprised of Rs. 78,779.47 crore ($13.99 billion USD) of Internal and Extra Budgetary Resources that were to be raised by the central utilities themselves and Rs. 30,451.91 crore ($5.41 billion USD) of Gross Budgetary Support that included Rs. 26,500.00 crore ($4.70 billion USD) for the RGGVY.
The Dwindling Supply of Fuel
Fuel availability has been a major cause of concern for the power project developers in the country. With the widening gap in the demand and supply of coal, the future of the thermal power projects in India is becoming uncertain. Further, gas-based power plants are also facing the heat as gas supply to the projects is witnessing a downturn. Many projects are stalled due to lack of gas supply.
Coal shortage to hit 46,000 MW power projects (by Bhuma Shrivastava, Livemint)
Desperate for Gas (by Latha Jishnu, Down to Earth)
Gas-based power projects in AP in for crisis (The Hindu)
Northeast India’s Dam Problem
Northeast states in India can be a huge potential source of hydropower. As most of this is untapped, the central utilities have initiated a developmental plan with several hydropower projects envisaged in the states. However, these projects have faced objections mostly from the pressure groups in the state that include NGOs, environmental groups and also the locals in the area. Insurgents, who often demand bribes, can also stall projects.
Northeast’s Dam Controversies (by Sanchet Barua, The Shillong Times)
Protests in Assam over Arunachal Dam (by Samudra Gupta Kashyap, Indian Express)
Heavy-Handed Crackdown at Kudankulam
Development of the nuclear power plant in the country has been opposed mainly by the locals and NGOs. After the Fukushima incident in Japan, the agitation against these projects has grown further. The situation has been particularly tense in Tamil nadu, where protests over a planned nuclear plant in Kudankulam have taken place as far away as Britain. Many protesters feared there would be a meltdowns similar to either Fukushima or Chernobyl in the Soviet Union in 1986. But the governmenent response seemed disproportionate. The state filed sedition cases against peaceful protesters, prompting a rebuke from Human Rights Watch. “The Tamil Nadu protesters are simply speaking out on an issue of great public concern,” opined Meenakshi Ganguly, HRW’s South Asia director. “Filing police cases against peaceful protesters happens in China, but should never happen in a rights-respecting democracy.”As of late June, the government had cleared the neccesary legal hurdles and planned to have the plant online by August 2012.
End intimidation of peaceful protesters at nuclear site - use of sedition law undermines free expression (Human Rights Watch)
Activists ask State to initiate dialogue with anti-Kudankulam protesters (The Hindu)
Kudankulam no Fukushima, Centre & Atomic Energy Commission tell high court (Times of India)
‘Jail Bharo' Agitation Against Jaitapur N-Plant Planned (by Rahul Wadke, Hindu Business Line)
Should India Power Grow with Coal?
Coal-fired power plants accounts for almost 70% of the power generated in the country and coal is expected to be the mainstay in coming years. However, the supply of coal has not been able to keep the pace with the demands. Though the Ministry of Coal and Ministry of Power have identified several coal blocks in the country to meet this growing demand, the Ministry of Environment and Forests (MoEF) has imposed moratorium imposed by on several coal blocks, which were already allocated to the utilities for firing their projects. The matter is still at the ministry level as the Ministry of Power and Ministry of Coal try to persuade the MoEF to lift the moratorium and allow mining from these blocks.
MoEF expert panel recommends moratorirum on mining, power projects in Konkan (by Ashwin Aghor, Down to Earth)
Pro-Mining Coal
As in America, the most consistently pro-coal voice has been the business community, led by the Associated Chamber of Commerce and Industry of India (ASSOCHAM). Their contention is that blocking coal mining has forced Indian industry into importing coal from places like Indonesia, which negativelty affects foreign currency reserves.
Indian Activists Bring Anti-Coal Campaign to World Bank (by Amanda Wilson, Inter Press Service)
Anti-Mining Coal
Anti-mining forces like the South Asia Center of the Atlantic Council, came to a 2011 meeting between the World Bank and the International Monetary Fund to protest loans the two bodies have made to Indian coal projects. The council is not alone in its opposition. All across India, from Andhra Pradesh all the way to Maharashtra, activists have rose up to demand an immediate halt to coal projects that they say are destroying farming and fishing and polluting the environment.
Down with coal! The grassroots anti-coal movement goes global (by Ted Nace, Grist)
India needs quick measures to increase coal production: ASSOCHAM (Commodity Online)
Improve Distribution of Power
The performance of the power distribution sector has been an area of concern since many years. The commercial performance of the power sector depends largely on the distribution sector; hence, it is important to improve the performance of distribution sector in the country. Many states have initiated steps to improve the commercial performance of their power utilities; however, the progress has been very slow. Unbundling of state utilities, setting up independent regulatory authorities, controlling theft and transmission losses are some of the steps taken by the government at the center and state level. Considering the slow progress, the center is taking measures to give these measures a boost.
India’s transmission and distribution utilities – It's time to transform (by Ritesh Pothan, Renewable Energy Magazine)
The future is black: Power is essential for India’s long-term growth. But electricity is unlikely to flow fast enough (The Economist)
A Smarter Grid for India (by Alex Yu Zheng, Smart Grid News)
Sushilkumar Shinde
Sushilkumar Shinde became the minister of Power on January 30, 2006. He left office for a brief period starting May 22, 2009. He assumed charge as the Minister of Power again on May 28, 2009, and left for good in 2012. Shinde was born in Solapur district of Maharashtra. He studied in Law College Pune, and has also served as in Mumbai Police. In 1974, he contested and won the election from Karmala reserve constituency of Solapur and was inducted as the Minister of State in State Cabinet. Since then, he has won elections from different constituencies on Solapur district of Maharashtra. As state cabinet minister, he has led departments of finance, planning, urban development, industry, youth and sports, social welfare, transport and health. He joined national politics in 1992. He was appointed General Secretary of All India Congress Committee in the year. In January 2003, he was appointed the Chief Minister of Maharashtra after having elected as the leader of Maharashtra Congress Legislature Party. He has also served as the Governor of Andhra Pradesh from November 2004 to January 2006.
P.M. Sayeed (May 2004 to December 18, 2005)
P M Sayeed took over as the Power Minister in May 2004. His term turned out to be brief with his death in Seoul on December 18, 2005 from cardiac arrest. Sayeed studied Law in Mumbai. He was a senior leader of the Indian National Congress and represented Lakshadweep for ten terms in the Lok Sabha. During his political career, he has served as the Union Minister of State, Steel, Coal and Mines from 1979-1980; Union Minister of State, Home Affairs from 1993-1995; Union Minister of State, Information and Broadcasting from 1995-1996; and Deputy Speaker of Lok Sabha from 1998-2004. He was also inducted into Congress Working Committee in January 2000.
Anant Geete (August 26, 2002 to May 2004)
Anant Geete was the Union Minister of Power from August 26, 2002 to May 2004. It was during his term that Electricity Act 2003 was enacted, which aims at major reforms in the power sector of the country. Anant Geete is a member of the Shiv Sena political party. He is a current member of the Lok Sabha representing Raigad constituency of Maharashtra. He has also represented Raigad constituency in four previous terms of Lok Sabha. Before being appointed as the Union Minister of Power, Geete served as Union Minister of State, Ministry of Finance, Banking and Expenditure from July 01, 2002 to August 25, 2002.
- Table of Contents
- Overview
- History
- What it Does
- Where Does the Money Go
- Controversies
- Debate
- Suggested Reforms
- Former Directors
- Comments
- Leave a comment
Ministry of Power
India’s power sector has experienced phenomenal growth. When the country gained independence in 1947, the total power capacity of the country was just 1,362 megawatts (MW). As of April 2012, total power generation crossed 200,000 MW. India has a robust mix of power sources. Coal-based thermal power plants are still the country’s main source of electricity generation. Gas-based thermal power plants and hydropower projects are also major contributors. India has also made significant progress in renewable energy. Nuclear power development in the country is progressing at a slower pace.
Prior to independence, private companies mainly carried out generation and electricity distribution. After independence, new power generation, transmission and distribution projects were developed by state and central government utilities. The government of India formed State Electricity Boards (SEBs) that would develop and operate generation, transmission and distribution projects. However, the Electricity Act of 2003 disallowed SEBs to function as integrated power utilities and made it mandatory to unbundle utilities to handle generation, transmission and distribution functions exclusively.
Even though the country has made huge progress in the power sector, a substantial gap remains between supply and demand. Many of the country’s villages still remain powerless. To combat this, the government has introduced the Rajiv Gandhi Grameen Vidyutikaran Yojana rural electrification scheme. Targets, however, have yet to be met. Delays still plague most of the country’s power projects. In both the 10th Five Year Plan (2002-2007) and the 11th Plan (2007-2012) the government missed its power generation targets. In the 10th plan, it was 50% off the mark. There are numerous causes of power project delays. They include difficulty acquiring land, opposition from locals, environmental clearances and supply of equipment.
The first commercial power generation in the country was launched in 1889 in Calcutta (now Kolkata) by the Calcutta Electricity Supply Corporation. Bombay (now Mumbai) was the second city to receive commercial power. The Electricity Act, 1910, provided a basic framework for the electricity supply in the country by issuing licenses to private sector companies. The first hydroelectric project in the country was the 72 MW Khopoli project by Tata Electric in 1915. The company is now known as Tata Power.
At the time of independence, the private sector dominated power generation, with the public sector accounting for just 35% of India’s power. After independence, The Electricity (Supply) Act, 1948 was introduced. The act established State Electricity Boards to plan and implement power generation, transmission, distribution and trading in their respective states. Because electricity is under both central and state jurisdiction, the act also created The Central Electricity Authority (CEA) to create central generating utilities for developing and operating generation plants at the central level. The main role of the CEA is technical coordination and supervision of the programs in the power sector. It is also entrusted with a number of statutory functions. With the Industrial Policy Resolution of 1956, the government further cemented their power monopoly.
Through SEBs, states played a pivotal role in overall power development. However, from the 5th Five Year Plan (1974-1979) onwards, the central government decided to develop thermal power plants and hydroelectric power plants. For this purpose they established the National Thermal Power Corporation (NTPC) and the National Hydro Power Corporation (NHPC) in 1975 and the North Eastern Electric Power Corporation (NEEPCO) in 1976. In 1988, Tehri Hydro Development Corporation (THDC) and Nathpa Jhakri Power Corporation (NJPC) were also set up. National Power Transmission Corporation (NPTC) was set up in 1989 to set up power transmission network across the country. NPTC was renamed Powergrid Corporation of India Limited in 1992.
In 1991, the government of India liberalized the sector to attract private investment. The Electricity (Supply) Act was amended for private participation in the sector. The government has since announced major policy changes. The amendment was carried out majorly due to the deteriorating financial health of the SEBs. Funding projects through budgetary support was getting difficult and the government decided to restructure the power sector to attract private and foreign investment. It also provided attractive return on investments to attract the private participation. The Amendment Act of 1991 provided for private participation in thermal, hydro, wind and solar power projects. The transmission and distribution of power were still carried by the SEBs.
The Ministry of Power began functioning independently on July 2, 1992. It was earlier known as the Ministry of Energy that comprised of Departments of Power, Coal and Non-Conventional Energy Sources.
After its emancipation, the ministry began enacting major policy changes. To attract private investment in large power projects, the government introduced the Mega Power Policy in 1995. The policy envisaged increasing private investments in power projects of over 1,000-MW capacity that would supply the electricity to more than one state. The main motive of the policy was to ensure power at economical cost. Under this policy, the projects were awarded through competitive bidding. CEA facilitated identification of sites, NTPC assisted in preparation of feasibility reports and power-grid facilitated power transmission. Even with these reforms, there was limited participation from the private sector as the private investors remained uncertain of their returns due to the poor financial health of SEBs.
The Mega Power Policy of 1995 was revised in 1998 to provide new fiscal concessions. Power Trading Corporation was also set up in 1999 to buy power from the developers and sell it to the SEBs. In 1996, several guidelines were formulated for the sector’s progress. Under these guidelines, central and state regulatory commissions were set up to regulate tariffs from the power projects.
To curb the commercial losses in transmission sector, the Electricity Laws (Amendment) Act was passed in 1998. This act enabled private participation in transmission sector as well. Under this act, central and state transmission utilities were set up.
The government introduced The Electricity Act 2003 to replace all earlier laws. This act envisaged creating liberal framework for development of the power sector. It promoted competition and sought to ensure efficiency and transparency in the sector. This act provided for unbundling of the SEBs. It made it mandatory for the states to set up regulatory commissions. It also brought in open access in transmission and distribution. The act was further amended in 2007 to make stringer guidelines for checking commercial losses.
Power sector is one of the growth drivers of the country. The ministry of power is constantly making efforts to improve the efficiency of the power projects and ensuring reliable power at competitive price to the customers.
The Ministry of Power is responsible for the evolving policy in the power sector. It deals with all matters relating to the thermal power, hydropower projects of over 25 MW and transmission system. It also looks into research and development and provides technical assistance in thermal, hydroelectric and transmission network. Further, it deals with all matters relating to the CEA, CERCs and public sector utilities. It looks into rural electrification and issues relating to power supply in the states and Union Territories.
Attached Bodies or Autonomous Bodies
Central Electricity Authority (CEA): The CEA is an attached office of the Ministry of Power. It assists the ministry in all technical and economical matters. It supervises the programs in the sector and ensures technical coordination. Being a statutory body, it is also entrusted with several statutory functions. The CEA prepares the National Electricity Plan once every five years. It also signs off on new hydroelectric power projects. It further collects and records data regarding generation, transmission, distribution, trading and carries out studies regarding the cost, competitiveness and efficiency in the sector. A chairman, who is also ex-officio Secretary to the Government of India, heads the CEA.
National Thermal Power Corporation (NTPC): NTPC was set up in 1975 to accelerate thermal power generation in the country. Over the years, apart from thermal power generation, the company has also ventured into hydropower generation, consultancy, power trading, coal mining and ash utilization. The total installed capacity of the company is 37,514 MW. The company has a target of achieving 128,000 MW of capacity by 2032.
NHPC Limited: Formerly known has National Hydroelectric Power Corporation, NHPC was incorporated in 1975 with an authorized capital of Rs. 200.00 crore ($35.51 million USD). The company was set up with a view to plan, promote and organize development of hydroelectric power projects in the country. NHPC later expanded its objectives and included development of power in all its aspects through conventional and non-conventional sources in India and abroad. The company has authorized share capital of Rs. 15,000.00 crore ($2.66 billion USD), with an investment base of over Rs. 38,718.00 crore ($6.87 billion USD) approximately.
Power Grid Corporation of India Limited (PGCIL): PGCIL was incorporated in 1989 as a central transmission utility. Its main functions are to undertake transmission of electric power through inter-state transmission system; and planning, coordination, supervision, control, efficient operation and maintenance of transmission systems. It also provides consultancy services in the power transmission sector. PGCIL is responsible to restoring power in quickest possible time in event of a natural disaster. At present, it carries about 51% of generated power across the country. The company operates around 92,946 ckt. kilometer transmission lines and reported assets of Rs. 50,352.00 crore ($8.94 billion USD) as of March 31, 2011.
Rural Electrification Corporation (REC): REC was incorporated in 1969 to finance and promote rural electrification projects across the country. The company had a net worth of Rs 12,789.00 crore ($2.27 billion USD) as of March 31, 2011. REC provides financial assistance to SEBs, state government departments and rural electric cooperatives to rural electrification projects. It also provides loan assistance to SEBs or other state power utilities for rural electrification projects.
Power Finance Corporation Limited (PFC): PFC is a financial institution set up in 1986 to finance power sector projects in the country. Its main objective is to provide financial resources and encourage flow of investments across the sector. PFC provides project term loan, equipment lease financing, short-term loan and consultancy services for development of generation, transmission or distribution projects and also for the renovation and modernization of the existing projects. PFC is also the nodal agency for development of Ultra Mega Power Projects in the country. The company’s subsidiary – PFC Consulting Limited – provides technical, advisory and consultancy services.
SJVN Ltd: Formerly known as Satluj Jal Vudyut Nigam Limited, the company was incorporated in 1988 as a joint venture between the government of India and government of Himachal Pradesh. The main objective of the company is to plan, investigate, execute, operate and maintain hydropower projects. The present authorized share of capital of SJVN is Rs 7000.00 crore ($1.24 billion USD). The 1500-MW Nathpa Jhakri hydroelectric project was the first project taken up by the company for execution.
THDC Ltd: THDC was incorporated as a joint venture between government of India and government of Uttar Pradesh. The main objective of the company was to operate and maintain the Tehri Hydro Power Complex and other hydro projects. The corporation has an authorized share capital of Rs. 4000.00 crore ($710.10 million USD).
North Eastern Electric Power Corporation Limited (NEEPCO): NEEPCO was established in 1976 with the objective of planning, designing, constructing, generating, operating and maintaining power plants in the North Eastern region of India. The company has installed capacity of 1130 MW. Out of this, 55% capacity is in the Northeast region. The authorized share capital of NEECPO is Rs. 5000.00 crore ($887.63 million USD) and its net worth was Rs. 4619.00 crore ($819.99 million USD) as of March 21, 2011.
National Power Training Institute (NPTI): NPTI was set up with the objective of conducting long term and short term training programs in the areas of thermal power, hydropower, and transmission and distribution. The institute has been continuing its services for last four decades. NPTI has also ventured into consultancy services in human resource development for the power sector.
Central Power Research Institute (CPRI): CPRI was set up in 1960 as a center for applied research in electrical power engineering assisting the electrical industry in product development and quality assurance. It serves as an independent authority for testing and certification of power equipment.
Bhakra Beas Management Board (BBMB): Bhakra Management Board was constituted in 1966 go take over the administration, maintenance and operation of Bhakra Nangal Project. After completion of the Beas project works, it was also transferred to the Bhakra Management Board in 1966. In 1976, the board was renamed Bhakra Beas Management Board. It regulates the supply of water and power from the Bhakra Nangal and Beas projects.
Damodar Valley Corporation (DVC): DVC is the oldest central power utility in India. In March 1948, Damodar Valley Corporation Act was passed that required the central government and state governments of Bengal and Bihar (the area is now part of the state of Jharkhand) to participate jointly to set up DVC. DVC came into existence in July 1948.
Central Electricity Regulatory Commission (CERC): CERC is a statutory body functioning under the Electricity Act, 2003. CERC was set up in 1998, initially under the Electricity Regulatory Commissions Act 1998. The main functions of CERC is to regulate the tariff of generating companies owned or controlled by the central government, to regulate the tariff of generating companies other than those owned or controlled by the central government if such generating companies have a composite scheme for generation and sale of electricity in more than one state; to regulate the inter-state transmission of electricity; to determine tariff for inter-state transmission of electricity; to issue licenses to persons to function as transmission licensee and electricity trader with respect to their inter-state operations and to specify grid code having regard to grid standards.
PTC India Limited: PTC India Limited, earlier known as Power Trading Corporation, was set up in 1999 as a public-private partnership venture. The objective of the company is intermediation for long-term supply of power from identified domestic independent power producers and cross-border power projects, financial services like providing equity and debt support to projects in the energy value chain through its subsidiary PTC India Financial Services, fuel intermediation or aggregation for cross-border power plants through PTC Energy Ltd. and advisory services.
Bureau of Energy Efficiency (BEE): BEE was set up in 2002 under the provision of Energy Conservation Act, 2001. The bureau develops policies and strategies with the main objective of reducing energy intensity of Indian economy. BEE coordinates with consumers, agencies and other organizations to utilize the existing resources and infrastructure to perform its functions as laid out under the act. It has several regulatory functions such as developing minimum energy performance standards and labeling design for electrical equipment and appliances. It also has some promotional functions with the objective of creating awareness on energy efficiency and conservation.
The Planning Commission has approved an amount of Rs. 66,382.73 crore ($11.78 billion USD) as the plan outlay for the ministry of power for 2011-12. This includes Internal Extra Budgetary Resources of central power sector utilities amounting to Rs. 56740.73 crore ($10.07 billion USD) and Gross Budgetary Support of Rs. 9642.00 crore ($1.71 billion USD).
From the outlay, the majority share is for the NTPC. The total approved planned outlay for NTPC for the year 2011-12 is Rs. 26,400.00 crore ($4.69 billion USD). This outlay expected to result in commissioning of several projects by NTPC and also substantial physical progress of the projects scheduled to be commissioned in the 12th Plan. The plan outlay for NHPC is Rs. 5090.00 crore ($903.60 million USD), DVC is Rs. 5890.59 crore ($1.05 billion USD), NEEPCO is Rs. 1037.27 crore ($184.14 million USD), THDC is Rs. 389.85 crore ($69.21 million USD), SJVN is Rs 1133.13 crore ($201.16 million USD) and Powergrid is Rs. 17,700.00 ($3.14 billion USD) crore for their under-execution and planned projects.
Among the Ministry of Power schemes, Rajiv Gandhi Grameen Vidyutikaran Yoljana (RGGVY) received the maximum outlay of Rs 6000.00 crore ($1.07 billion USD) for 2011-12. The Restructured Accelerated Power Development Reforms Program received another major allocation of Rs. 2034.00 crore ($361.09 million USD).
The Planning Commission had assessed total outlay of Rs. 3,09,231.38 crore ($54.90 billion USD) for the 11th Plan period for the Central sector. This comprised of Rs. 78,779.47 crore ($13.99 billion USD) of Internal and Extra Budgetary Resources that were to be raised by the central utilities themselves and Rs. 30,451.91 crore ($5.41 billion USD) of Gross Budgetary Support that included Rs. 26,500.00 crore ($4.70 billion USD) for the RGGVY.
The Dwindling Supply of Fuel
Fuel availability has been a major cause of concern for the power project developers in the country. With the widening gap in the demand and supply of coal, the future of the thermal power projects in India is becoming uncertain. Further, gas-based power plants are also facing the heat as gas supply to the projects is witnessing a downturn. Many projects are stalled due to lack of gas supply.
Coal shortage to hit 46,000 MW power projects (by Bhuma Shrivastava, Livemint)
Desperate for Gas (by Latha Jishnu, Down to Earth)
Gas-based power projects in AP in for crisis (The Hindu)
Northeast India’s Dam Problem
Northeast states in India can be a huge potential source of hydropower. As most of this is untapped, the central utilities have initiated a developmental plan with several hydropower projects envisaged in the states. However, these projects have faced objections mostly from the pressure groups in the state that include NGOs, environmental groups and also the locals in the area. Insurgents, who often demand bribes, can also stall projects.
Northeast’s Dam Controversies (by Sanchet Barua, The Shillong Times)
Protests in Assam over Arunachal Dam (by Samudra Gupta Kashyap, Indian Express)
Heavy-Handed Crackdown at Kudankulam
Development of the nuclear power plant in the country has been opposed mainly by the locals and NGOs. After the Fukushima incident in Japan, the agitation against these projects has grown further. The situation has been particularly tense in Tamil nadu, where protests over a planned nuclear plant in Kudankulam have taken place as far away as Britain. Many protesters feared there would be a meltdowns similar to either Fukushima or Chernobyl in the Soviet Union in 1986. But the governmenent response seemed disproportionate. The state filed sedition cases against peaceful protesters, prompting a rebuke from Human Rights Watch. “The Tamil Nadu protesters are simply speaking out on an issue of great public concern,” opined Meenakshi Ganguly, HRW’s South Asia director. “Filing police cases against peaceful protesters happens in China, but should never happen in a rights-respecting democracy.”As of late June, the government had cleared the neccesary legal hurdles and planned to have the plant online by August 2012.
End intimidation of peaceful protesters at nuclear site - use of sedition law undermines free expression (Human Rights Watch)
Activists ask State to initiate dialogue with anti-Kudankulam protesters (The Hindu)
Kudankulam no Fukushima, Centre & Atomic Energy Commission tell high court (Times of India)
‘Jail Bharo' Agitation Against Jaitapur N-Plant Planned (by Rahul Wadke, Hindu Business Line)
Should India Power Grow with Coal?
Coal-fired power plants accounts for almost 70% of the power generated in the country and coal is expected to be the mainstay in coming years. However, the supply of coal has not been able to keep the pace with the demands. Though the Ministry of Coal and Ministry of Power have identified several coal blocks in the country to meet this growing demand, the Ministry of Environment and Forests (MoEF) has imposed moratorium imposed by on several coal blocks, which were already allocated to the utilities for firing their projects. The matter is still at the ministry level as the Ministry of Power and Ministry of Coal try to persuade the MoEF to lift the moratorium and allow mining from these blocks.
MoEF expert panel recommends moratorirum on mining, power projects in Konkan (by Ashwin Aghor, Down to Earth)
Pro-Mining Coal
As in America, the most consistently pro-coal voice has been the business community, led by the Associated Chamber of Commerce and Industry of India (ASSOCHAM). Their contention is that blocking coal mining has forced Indian industry into importing coal from places like Indonesia, which negativelty affects foreign currency reserves.
Indian Activists Bring Anti-Coal Campaign to World Bank (by Amanda Wilson, Inter Press Service)
Anti-Mining Coal
Anti-mining forces like the South Asia Center of the Atlantic Council, came to a 2011 meeting between the World Bank and the International Monetary Fund to protest loans the two bodies have made to Indian coal projects. The council is not alone in its opposition. All across India, from Andhra Pradesh all the way to Maharashtra, activists have rose up to demand an immediate halt to coal projects that they say are destroying farming and fishing and polluting the environment.
Down with coal! The grassroots anti-coal movement goes global (by Ted Nace, Grist)
India needs quick measures to increase coal production: ASSOCHAM (Commodity Online)
Improve Distribution of Power
The performance of the power distribution sector has been an area of concern since many years. The commercial performance of the power sector depends largely on the distribution sector; hence, it is important to improve the performance of distribution sector in the country. Many states have initiated steps to improve the commercial performance of their power utilities; however, the progress has been very slow. Unbundling of state utilities, setting up independent regulatory authorities, controlling theft and transmission losses are some of the steps taken by the government at the center and state level. Considering the slow progress, the center is taking measures to give these measures a boost.
India’s transmission and distribution utilities – It's time to transform (by Ritesh Pothan, Renewable Energy Magazine)
The future is black: Power is essential for India’s long-term growth. But electricity is unlikely to flow fast enough (The Economist)
A Smarter Grid for India (by Alex Yu Zheng, Smart Grid News)
Sushilkumar Shinde
Sushilkumar Shinde became the minister of Power on January 30, 2006. He left office for a brief period starting May 22, 2009. He assumed charge as the Minister of Power again on May 28, 2009, and left for good in 2012. Shinde was born in Solapur district of Maharashtra. He studied in Law College Pune, and has also served as in Mumbai Police. In 1974, he contested and won the election from Karmala reserve constituency of Solapur and was inducted as the Minister of State in State Cabinet. Since then, he has won elections from different constituencies on Solapur district of Maharashtra. As state cabinet minister, he has led departments of finance, planning, urban development, industry, youth and sports, social welfare, transport and health. He joined national politics in 1992. He was appointed General Secretary of All India Congress Committee in the year. In January 2003, he was appointed the Chief Minister of Maharashtra after having elected as the leader of Maharashtra Congress Legislature Party. He has also served as the Governor of Andhra Pradesh from November 2004 to January 2006.
P.M. Sayeed (May 2004 to December 18, 2005)
P M Sayeed took over as the Power Minister in May 2004. His term turned out to be brief with his death in Seoul on December 18, 2005 from cardiac arrest. Sayeed studied Law in Mumbai. He was a senior leader of the Indian National Congress and represented Lakshadweep for ten terms in the Lok Sabha. During his political career, he has served as the Union Minister of State, Steel, Coal and Mines from 1979-1980; Union Minister of State, Home Affairs from 1993-1995; Union Minister of State, Information and Broadcasting from 1995-1996; and Deputy Speaker of Lok Sabha from 1998-2004. He was also inducted into Congress Working Committee in January 2000.
Anant Geete (August 26, 2002 to May 2004)
Anant Geete was the Union Minister of Power from August 26, 2002 to May 2004. It was during his term that Electricity Act 2003 was enacted, which aims at major reforms in the power sector of the country. Anant Geete is a member of the Shiv Sena political party. He is a current member of the Lok Sabha representing Raigad constituency of Maharashtra. He has also represented Raigad constituency in four previous terms of Lok Sabha. Before being appointed as the Union Minister of Power, Geete served as Union Minister of State, Ministry of Finance, Banking and Expenditure from July 01, 2002 to August 25, 2002.
Comments