Year End Review of Ministry of Power (up to November 2023)

Average Availability of power has increased to 20.6 hours in rural areas and to 23.8 hours in urban areas

AT&C losses in power sector down to 15.41% (provisional) in FY 22-23, due to reforms under RDSS

  1. Transforming Power Sector:

  1. Government has transformed power sector from power-deficient to power-sufficient by adding 1,94,394 MW of generation capacity in the past 9 years. The present installed capacity of power generation is around 4,26,132 MW. Out of total generation capacity of 9,943 MW added in the current year 2023-24, 1,674 MW is from fossil fuel sources and 8,269 is from non-fossil fuel sources. During the year, 7,569 MW of Renewable Capacity (Incl. Large Hydro) consisting of 5,531 MW of Solar, 1,931 MW of Wind, 34 MW of Biomass, 42 MW of Small Hydro and 30 MW of Large Hydro Generation Capacity has been added.

  2. Every village and household has been electrified. The availability of power in rural areas has increased from 12 hours in 2015 to 20.6 hours and in the urban areas it has increased up to 23.8 hours.

  • III. During the current year 2023-24, peak demand has increased by 12.7% to 2,43,271 MW during the current year 2023-24 from 2,15,888 MW during same period previous year and all India peak Shortage has reduced to 1.4% (3,340 MW) with respect to 4.0% (8,657 MW) during the same period previous year.

  • IV. Energy requirement has increased by 8.6% to 11,02,887 MU during the current year 2023-24 from 10,15,908 MU during same period previous year. Energy availability has also increased by 8.9% to 10,99,907 MU during the year from 10,10,203 MU during same period previous year. Total Electricity generation including from Renewable Sources during 2023-24 is about 1176.130 BU as against 1092.520 BU during the same period last year showing a growth of 7.7%. During the current year 2023-24, energy shortage at all India level has reduced to 0.3% (2,980 MU) with respect to 0.6% (5,705 MU) during the same period previous year.

  1. Development of Stalled Hydro Electric Projects in Arunachal Pradesh:

  1. For the development of stalled Hydro Power Projects in Arunachal Pradesh, 29 projects of cumulative capacity 32,415 MW were indicated to the Hydro CPSEs (NHPC Ltd, NEEPCO Ltd, SJVN Ltd and THDC Ltd) under Ministry of Power, for taking over as per the basin-wise indication conveyed by the Ministry in December, 2021. NHPC Ltd, NEEPCO Ltd and SJVN Ltd signed Memorandum of Agreement (MoA) with the Government of Arunachal Pradesh on 12th August, 2023, for development of 12 stalled Hydro Electric Projects (capacity 11,523 MW) in the State.

  2. Signing of these MoAs and allotment of these projects to Hydro CPSUs would prove to be a significant step towards harnessing the immense hydro-electric potential of Arunachal Pradesh. Development of these projects will contribute towards achieving the declared Nationally Determined Contribution (NDC) target of reaching 500 GW non-fossil energy capacity by 2030. These projects are also expected to create huge employment opportunities in the region and boost the local economy as well as foster skill development and technical expertise in the region.

  1. SAMARTH Mission:

  • I. Modified Revised Biomass Policy has been issued on 16.06.2023 indicating price benchmarking of biomass pellets and procurement process of pellets. Addendum to the Revised Policy issued on 03.05.2023 for inclusion of Bamboo and its by-products for manufacturing Biomass pellets.

  1. Total Biomass usage in the year 2023 has crossed 2.08 LMT (lakh metric tonnes). Cumulative biomass usage till the year 2023 has crossed 3 LMT. In the year 2023, orders for 31.50 LMT Biomass pellets have been placed. Tendering of ~ 38 LMT of Biomass pellets is under different stages.

  2. Revised Model Contract for Biomass procurement has been issued. Price Benchmarking of Biomass Pellets in NCR, WR & NR for co-firing in Thermal Power Plants has been notified.

  3. Bankable project report for pellet-briquette manufacturing has been issued in association with SBI. Exclusive loan schemes for Biomass pellet manufacturing have been launched by SBI and other Govt. Banks.

  4. Provisioning of necessary administrative approvals for Biomass Pellet Plant Installation through National Single Window System (NSWS) has been enabled through launch of NSWS Mission Website as an informative & interactive platform for all stakeholders, with further provision for pellet manufacturers to display the status of readily available pellets along with price. Procurement Provision on GeM portal for Biomass pellets has been made. Raw Biomass has been added as a commodity on e-NAM portal of Ministry of Agriculture and Farmers’ Welfare.

  1. Addition in Transmission Capacity:

  1. During 2023, 14,390 ckm of transmission lines, 61,591 MVA of transformation capacity and 4,290 MW Inter-regional Transfer Capacity has been added.

  2. In the last 9 years, with the addition of 1,87,849 ckm (64.48% increase), the transmission network of 4,79,185 ckm has evolved as the largest national synchronous grid in the world. The total inter-regional capacity to transfer power from one region to another is enhanced to 1,16,540 MW (224.17% increase) from 35,950 MW in last 9 years. Total transformation capacity (220 kV & above) is 12,13,313 MVA (128.69% increase) with addition of 6,79,327 MVA in last 9 years.

  1. Transmission Plan for integration of over 500 GW of non-fossil fuel capacity by 2030

  1. India has huge ambitions in energy transition and plans to have 500 GW of non-fossil based electricity installed capacity by 2030. Ministry of Power had constituted a high level committee under Chairperson, Central Electricity Authority with representatives from Solar Energy Corporation of India, Central Transmission Utility of India Ltd, Power Grid Corporation of India Ltd, Grid-India, National Institute of Solar Energy, and National Institute of Wind Energy for planning the transmission system required for having 500 GW of non-fossil fuel based installed capacity by 2030. The Committee prepared a detailed Plan titled “Transmission System for Integration of over 500 GW RE Capacity by 2030".

  2. The Plan has identified major upcoming non-fossil-based generation centres in the country, which include potential RE Zones in Rajasthan, Gujarat, Andhra Pradesh, Karnataka, Telangana, Maharashtra, RE park in Ladakh etc. and based on these potential generation centres, transmission systems have been planned. The transmission plan also includes transmission system required for evacuation of 10 GW off-shore wind located in Gujarat and Tamil Nadu. The Plan provides broad transmission system requirement for having about 537 GW of Renewable Energy capacity by the year 2030.

  • III. The RE Capacity commissioned till 30.11.2023 is179.6 GW. Further, for integration of 64.1 GW Wind and Solar Capacity, Inter State Transmission System (ISTS) network is under construction and for 63.8 GW Wind and Solar Capacity, ISTS network is under bidding. Around 26.1 GW additional RE capacity is likely to be integrated to intra-state network under Green Energy Corridor (GEC- I&II) scheme of MNRE. The balance planned transmission system would be progressively taken up for implementation.

  1. Revamped Distribution Sector Scheme (RDSS):

  1. The Government of India launched the Revamped Distribution Sector Scheme (RDSS) to help DISCOMs improve their operational efficiencies and financial sustainability by providing result-linked financial assistance to DISCOMs to strengthen supply infrastructure based on meeting pre-qualifying criteria and achieving basic minimum benchmarks. RDSS has an outlay of ~ Rs. 3.04 lakh Cr. over 5 years i.e., FY 2021-22 to FY 2025-26. The outlay includes an estimated Government Budgetary Support (GBS) of ~ Rs. 0.98 lakh Cr. The main objectives of RDSS are:

  1. Reduction of AT&C losses to pan-India levels of 12-15% by FY 2024-25.

  2. Reduction of ACS-ARR gap to zero by FY 2024-25.

  3. Improvement in the quality, reliability, and affordability of power supply to consumers through a financially sustainable and operationally efficient distribution sector.

  1. Prepaid Smart metering is the critical intervention envisaged under RDSS with an estimated outlay of ~Rs. 1,50,000 Cr with GBS of ~Rs. 23,000 Cr and 250 Million prepaid smart meters are targeted to be installed during the Scheme period. Along with the prepaid Smart metering for consumers, system metering at feeder and DT level with communicating feature along with associated Advanced Metering Infrastructure (AMI) would be implemented under TOTEX mode (Total expenditure includes both capital and operational expenditure) thereby allowing the Discoms for measurement of energy flows at all levels as well as energy accounting without any human interference. So far, action plan and DPR of 30 States / UTs have been approved. 19,79,21,237 prepaid Smart meters, 52,18,603 DT meters and 1,88,491 Feeder meters have been sanctioned with a total sanctioned cost of Rs. 1,30,474.10 Cr.

  2. Capital investment is also budgeted for loss reduction works, system strengthening works to cater to load growth and modernization to have smart distribution system under RDSS. Loss Reduction works majorly include replacement of bare conductor with AB cable, HVDS systems, feeder bifurcation, etc. while system strengthening works include creation of new substations, feeders, upgradation of transformation capacity, cables, etc. Modernization works include SCADA, DMS, IT/OT, ERP, GIS enabled applications, ADMS etc. to make distributions systems smarter. So far, Loss Reduction works of ~ Rs. 1.21 lakh Cr. have been sanctioned and also Rs. 5,806.48 Cr has been released as GBS towards loss reduction works under RDSS as per scheme guidelines.

  3. As a result of reform measures taken under the scheme, AT&C losses have come down to 15.41% (provisional) in FY 22-23. The direct impact of this will be on reducing the ACS-ARR gap which will ultimately benefit end consumers for getting quality supply.

  1. National Smart Grid Mission:

  1. National Smart Grid Mission (NSGM) is designated to lead the assessments for Smart Distribution cities, under the guidance of Ministry of Power, with the technical assistance of USAID’s South Asia Regional Energy Partnership (SAREP). NSGM and SAREP team have made the visits to above five DISCOMs and have held kickoff meetings to initiate the assessment through collection of key data metrics.

  2. Ongoing two Smart Grid / Smart metering projects, sanctioned under National Smart Grid Mission (NSGM) for Rs. 116.01 Crores with Rs.34.803 Cr. Govt. Budgetary Support (GBS), are nearing completion. Till November 2023, 1,69,330 smart meters were deployed under these projects and Rs. 31.32 Cr. have been released to the implementing utilities towards progressive milestone achievements.

  3. A R&D project for “Standardized way of sharing Energy data with End Consumer Applications” with support from IIT-Hyderabad, taken up under NSGM, is in advanced stages. In order to formalize and conduct regular training and capacity building programs (put on hold due to COVID-19 pandemic), a fresh MoU has been signed between NPMU and SGKC on 07.06.2023. Under MoU, three Smart Grid / Smart Distribution training programs were conducted at SGKC in the year 2023, wherein 83 engineering professionals from different Indian DISCOMs were trained. So far, around 450 Engineering professionals / DISCOM officials have been given training on smart grid applications under NSGM.

  1. Unnat Jyoti by Affordable LEDs for ALL (UJALA)

  1. The Prime Minister, on 5th January 2015 launched Unnat Jyoti by Affordable LED for All (UJALA) programme. Under UJALA scheme, LED bulbs, LED Tube lights and Energy efficient fans are being sold to the domestic consumers for replacement of conventional and inefficient variants.

  2. Till date, over 36.86 crore LED bulbs, 72.18 lakh LED Tube lights and 23.59 lakh Energy efficient fans (including over 55,000 BLDC fans) have been distributed by EESL across India. This has resulted in estimated energy savings of 48.39 billion kWh per year with avoided peak demand of 9,788 MW, GHG emission reduction of 39.30 million ton CO2 per year and estimated annual monetary savings of Rs. 19,332 crore in consumer electricity bills. The above programme has been successful in creating the market for above appliances by bring down their price significantly and making them affordable for consumers.

  1. Street Lighting National Programme (SLNP)

  1. The Prime Minister, on 5th January, 2015 launched Street Lighting National Programme (SLNP) to replace conventional street lights with smart and energy efficient LED street lights across India.

  2. Till date, EESL has installed over 1.30 crore LED Street Lights in ULBs and Gram Panchayats across India. This has resulted in estimated energy savings of 8.75 billion kWh per year with avoided peak demand of 1,459 MW, GHG emission reduction of 6.03 million ton CO2 per year and estimated annual monetary savings of Rs. 6,128 crore in electricity bills of municipalities.

  1. Subsidy Accounting and Framework for Financial Sustainability in Power Sector:

  1. With the amendment in the Electricity Rules, 2005 notified on 26.07.2023, the Government has put in place additional measures to improve financial health of Discoms with streamlining the process of accounting, reporting, billing and payment of subsidy by States to the Distribution Companies. The Rules mandate that a quarterly report shall be submitted by the distribution licensee within thirty days from end date of the respective quarter and the State Commission shall examine the report, and issue it within thirty days of submission of the quarterly report. The report will inter-alia cover the findings regarding raising of demands for subsidy based on accounts of the energy consumed by the subsidized categories; and the subsidy payable to these categories as announced by State Government and the actual payment of subsidy in accordance with section 65 of the Act.

  2. Provision has been made that if subsidy accounting and the raising of bills for subsidy is not found in accordance with the Act or Rules or Regulations issued thereunder, the State Commission shall take appropriate action against those responsible for non-compliance as per provisions of the Act.

  • III. Under the framework for sustainability, in order to define a definite and reasonable goal for reduction of Aggregate Technical and Commercial (AT&C) loss, it is prescribed that the AT&C loss reduction trajectory would be approved by the State Commissions for tariff determination in accordance with the trajectory agreed by the respective State Governments and approved by the Central Government under any national scheme or programme, or otherwise. The trajectory for both collection and billing efficiency, for distribution licensee have to be determined by the State Commission, accordingly.

  1. Rights of Electricity Consumers:

  1. With the objective of beginning an era of empowering Power Consumers, laying down rights of the consumers and a system of enforcement of these rights, while facilitating ease of doing business in power sector, the Ministry of Power promulgated the Electricity (Right of Consumers) Rules 2020 with the conviction that the power systems exist to serve the consumers and the consumers have rights to get the reliable services and quality electricity. These Rules lay down the time limits and standards for the various services to be provided by the Distribution Companies across the country or otherwise they will have to pay compensation to their consumers. These Rules specify the obligations of the licensee and sets the practices that must be adopted by the licensee to provide efficient, cost-effective, reliable and consumer-friendly services to the consumers.

  2. The Government of India has made amendments to the Electricity (Rights of Consumers) Rules, 2020 on 14.06.2023, bringing an important change to facilitate more and more consumption of power from renewable sources by the introduction of Time of Day (ToD) Tariff, where electricity prices vary based on the time of day, so as to give price signal to change the consumption behavior of consumers while incentivizing use of more electricity during solar hours.

  • III. The ToD mechanism aims to encourage consumers to manage their load and reduce electricity bills, as well as facilitate better integration of renewable energy sources by incentivizing shifting of demand to high renewable energy generation periods. Most State Electricity Regulatory Commissions have already implemented ToD tariffs for large commercial and industrial consumers.

  • IV. Government has also simplified the rules for smart metering for ease of doing business as well as ease of living. To avoid inconvenience / harassment of the consumers, the existing penalties for increase in consumer’s demand beyond the maximum sanctioned load / demand have been reduced. As per the amendment in metering provision, post installation of a smart meter, no penal charges will be imposed on a consumer based on maximum demand recorded by the smart meter for the period before installation date. Load revision procedure has also been rationalized in a way that maximum demand shall be revised upwards only if sanctioned load has been exceeded at least three times in a financial year. Moreover, smart meters shall be read remotely at least once in a day and the data shall be shared with Consumers in order to enable them to take informed decision about consumption of electricity.

  1. Amendments in Electricity (Promoting Renewable Energy through Green Energy open Access) Rules, 2022:

  1. For unshackling the Renewable Energy Sector, i.e. to remove barriers in availability and utilization of RE and to address the issues that have hindered the growth of open access for a long time, Green Open Access Rules, 2022 have been notified on 6th June, 2022. The Rules reduces the Open Access limit from 1 MW to 100 kW, which pave the way for small consumers also to purchase RE and there is no limit for Captive Consumers.

  2. Amendments to these Rules have also been notified on 27.01.2023 and 23.05.2023 for effective implementation. In the recent amendment made in Green Open Access Rules, the following provisions have been made:

  1. Revamped “Entity” Definition: Previously, an “entity” was any consumer with a contracted demand or sanctioned load of 100 kW or more, except for captive consumers who had no load limit. Now, the definition expands to include those with 100 kW or more, achieved through either single or multiple connections in the same electricity division of a distribution licensee.

  2. Unlimited Access to Green Energy: A Proviso has been updated to grant all entities, whether through a single connection or multiple connections totaling 100 kW or more within the same electricity division, the eligibility to access Green Energy Open Access. Captive consumers, in particular, now enjoy unrestricted access to this green energy resource.

  3. Extended Surcharge Exemption: Rule 9 now extends surcharge exemption for electricity generated from offshore wind projects. The new deadline for commissioning such projects is December 2032, offering an extended window of opportunity compared to the previous deadline of December 2025.

  1. Statutory Mechanism for timely payment to Generating Companies:

  1. Electricity (Late Payment Surcharge and Related Matters) Rules, 2022 give relief to the DISCOMs, as well as electricity consumers and at the same time Generating companies also getting the benefit from assured monthly payments, which will help the whole power sector to become financially viable. It will create a win-win situation to both Discoms and Gencos.

  2. Provision has been made for one-time scheme for liquidation of arrears, enabling DISCOMs to pay total outstanding dues including Late Payment Surcharge (LPS) as on the date of notification, in up to 48 monthly instalments. No LPS on past outstanding dues will be applicable in case of timely payment of these instalments. It will bring discipline in timely payment of dues.

  3. All current dues are being paid since August 2022 within a timeframe of 75 days maximum.

  4. Total legacy dues amounting to Rs. 88,278 crores have been paid by 13 States/ UTs against total outstanding of Rs. 1,39,947 Cr. as on 03.06.2022. Balance legacy dues as on 13.12.2023 is Rs. 51,668 crores; out of these 13 States opted for loans from PFC / REC (total loan sanctioned is Rs 1,13,737 Cr). Further, 20 States/ UTs reported to have no outstanding dues as on 03.06.20.

Source: PIB