Indian Power Sector Prime for Investment: RK Singh
Reflecting on the sector's transformation, Minister Singh noted a shift in private sector investment sentiment.
February 13, 2024. By Abha Rustagi
Minister Singh underscored India's unparalleled economic scale, asserting, "There is no other economy which is as big and large as us. And we need power to grow." He highlighted the remarkable growth trajectory of the power sector, citing a substantial 60 percent increase in electricity generation and consumption since 2014-15, accompanied by a corresponding surge in per capita consumption.
Reflecting on the sector's transformation, Minister Singh noted a shift in private sector investment sentiment. He remarked, "Earlier, the private sector had decided to not invest. But now, nobody wants to sign long-term Power Purchase Agreements since the market is up and more remunerative, thus yielding steady investments into the sector."
The Minister attributed the turnaround to government initiatives aimed at enhancing transparency and efficiency within the system. He highlighted measures such as the implementation of an automatic payment mechanism for power suppliers, which significantly alleviated financial stress within the sector. “Earlier, we had almost about 70 GW of power capacity which was financially stressed. This was because state governments used to announce subsidies but not pay them, the collection and billing efficiencies were low. Outstanding dues of gencos were about INR 1.5 lakh crores. Payments to power suppliers used to be in installments of 6 – 8 months. AT&C losses were about 27 percent. ACS-ARR gap was about one rupee.”
Minister Singh highlighted key accomplishments, including the reduction of Aggregate Technical & Commercial (AT&C) losses and the ACS-ARR gap. He emphasized the improvement in rural and urban power availability, underscoring the government's commitment to insulate the sector from political interference.
Speaking on the performance of power sector Public Sector Undertakings (PSUs), Minister Singh noted a significant increase in share prices and reiterated the sector's potential for further growth and innovation.
Responding to inquiries on the turnaround strategy, Singh commended the talent within the sector and emphasized empowering staff to make decisions. He highlighted the institution of dispute-resolution mechanisms to expedite decision-making processes.
Looking ahead, Singh outlined the government's ambitious plans to expand power capacity, particularly in renewables, with substantial projects already under construction or in various stages of development. India's exceptional growth in renewable energy capacity was emphasized, with Minister Singh projecting a shift towards non-fossil-fuel sources accounting for a significant portion of the country's power capacity by 2030.
Minister Singh concluded by lauding India's power transmission system as a global leader in terms of efficiency and speed, affirming the country's commitment to sustaining its pace of growth and innovation in the power sector. "We are the only country to have brought in General Network Access. We give connectivity so fast and in so simple a manner. No other transmission system in the world can match it,” he added.
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