India is the world’s third largest power producer, only behind China and the US. And as predicted by the International Energy Agency (IEA), the country’s power demand is predicted to grow by 6.5% between 2022-24. Although statistically, India has a power surplus, it faces issues with the transmission and distribution of the energy produced.
In an attempt to reform the sector, the Electricity Amendment Bill (2022) was introduced in the Lok Sabha on the 8th of August. But due to heavy protests by the opposition, the bill is now re- ferred to the standing committee.
The bill allows open access to the distribution infrastructure to all discoms (distribution companies) in an area. Earlier, discoms were only allowed to use their own distribution network. With the new bill, multiple producers can supply electricity through the same network on payment of certain charges. The bill will increase competition in the sector and allow consumers to choose from multiple suppliers. But the opposition is skeptical about the new bill. They claim that private players will only use the govern- ment distribution network to provide supplies to industrial and commercial centers, marginalizing other consumers.
The criticism is valid. If the private producers take over the profit- able areas, government companies will be left with the obligation to provide universal power. This will worsen the conditions of the government companies, which are already in debt.
Moreover, farmers in Punjab fear that privatization of the sector will kill the subsidies they enjoy. Although the central govern- ment has cleared that the states will not be restricted from provid- ing subsidies, nervousness about the bill prevails.
The Way Out
Compared to India, China and the US consume 4 and 10 times more power per person, respectively. Due to poor transmission infrastructure, Indian consumers pay 3 to 4 times. One can not ignore the $16 billion loss each year due to electricity thefts. Moreover, the sector is heavily dependent on coal supplies. Only 39% of the total power produced comes from renewable sourc- es. Coal supplies are unreliable. All these are serious points India needs to work on.
Energy security is crucial for any country, especially a fast-devel- oping nation like India. Besides being self-sufficient, India has a huge export potential of energy. The world watches India with hope as it rolls out ambitious projects like “One Sun, One World, One Grid.” It will only be the steps the nation takes in the next 20 years that will decide if the country stands by the world’s expec- tations.