Reforms in the power sector

Reforms in the power sector

The government has formulated various schemes for reforms in power sector in the country. This was stated by Shri Piyush Goyal, Minister of state for Power, Coal & New and Renewable Energy (Independent Charge) in a written reply to a question in the Rajya Sabha on Tuesday, Dec 2, 2014.

The Schemes launched for betterment and reforms in power sector are as follows :

1. Restructured Accelerated Power Development Programme (R-APDRP)

Re-structured APDRP was approved as Central Sector Scheme on 31.07. 2008 with total outlay of Rs. 51,577 crores for IT enablement & strengthening of distributions sector. The focus of the programme is urban areas towns and cities with population of  more than 30,000 (10,000 for special category states).

Projects under the scheme are taken up in two parts. Part-A is for establishing IT enabled system for energy accounting / auditing and SCADA for big cities (population: 4 lacs and Annual Energy Input: 350MU) whereas Part-B is for regular distribution up-gradation & strengthening projects. Initially funds for projects under both the parts would be provided through loan. The entire amount of loan for Part-A projects would be converted into grant on the completion of the project and up-to 50% (90% for special category States) loan of Part-B projects would be converted into grant on achieving the 15% AT&C loss in the project area on a sustainable basis. The completion period for both Part-A and Part-B projects are five years from the sanction date.

Projects worth Rs 39,252 crores covering 1412 towns have been sanctioned under the programme and are at various level of implementation.  

2. National Electricity Fund (NEF)

The Government of India launched the National Electricity Fund (Interest Subsidy Scheme) in July 2012 to provide Interest Subsidy on loans raised by both Public & Private Distribution Companies (Discoms), for capital works sanctioned by financial institutions to improve the infrastructure in Distribution Sector during the FY 2012-13 & 2013-14. The National Electricity Fund would provide interest subsidy aggregating Rs 8,466 crores spread over 14 years of loan disbursement amounting to Rs 25,000  crores for Distribution Schemes sanctioned during the 2 years viz., 2012-13 & 2013-14.  The pre-conditions for eligibility are linked to reform measures taken by the States and the amount of interest subsidy is linked to the progress achieved in reforms link parameters.

3. Financial Restructuring Plan (FRP)

The scheme for Financial Restructuring of State owned Discoms was notified by Ministry of Power vide OM dated 05-10-2012 after CCEA approval to enable the turnaround of the State Discoms and ensure their long term viability. The scheme contains measures to be taken by the State Discoms and State Government for achieving financial turnaround by restructuring their debt with support through a Transitional Finance Mechanism by Central Government.

The Central Government  provides incentive by way of grant equal to the value of the additional energy saved by way of accelerated AT&C loss reduction beyond the loss trajectory specified under RAPDRP and capital reimbursement support of 25 per cent of principal repayment by the State Government on the liability taken over by the State Government under the scheme. Bonds amounting to Rs 56,908 crores have been issued by the Discoms and STL amounting to Rs 51,204 Crores have been rescheduled by lenders in the participating states.

4. Ultra Mega Power Projects (UMPPs)

The Ministry of Power launched an initiative in 2005-06 to facilitate the development of Ultra Mega Power Projects (UMPPs) each having a capacity of 4,000 MW and above, at both the coal pitheads and coastal locations. These projects are awarded to developers selected through international competitive bidding process by following the Guidelines notified by Ministry of Power, GoI under section 63 of the Electricity Act, 2003. Four UMPPs (Sasan, Mundra, Krishnapatnam and Tilaiya) have been awarded so far to developers.

The entire investment in the projects is to be made by the developers and no funds of Government are involved in the development of these projects.

5. Independent Transmission Projects (ITPs)

The Ministry of Power has initiated a scheme for development of Independent Transmission Projects (ITPs) through private sector participation for evacuation of power from the Generating Stations, Transmission of power from pooling stations to other grid stations up to load centers and system strengthening in India under tariff based competitive bidding route under Section-63 of the Electricity Act, 2003. For the development of ITPs, PFC Consulting Limited (PFCCL) and REC Transmission Projects Company Ltd (RECTPL) have been appointed as Bid Process Coordinator by Ministry of Power, Govt. of India.

The entire investment in the projects is to be made by the developers and no funds of Government are involved in the development of these projects.

6. Integrated Power Development Scheme (IPDS)

The Government has approved the Scheme of Integrated Power Development Scheme" (IPDS) with the objectives of:

1. Strengthening of sub-transmission and distribution network in the urban areas;

2. Metering of distribution transformers /feeders / consumers in the urban areas; 

3. IT enablement of distribution sector and strengthening of distribution network as per CCEA approval dated 21.06.2013 for completion of targets laid down under Restructured Accelerated Power Development and Reforms Programme (RAPDRP) for 12th and 13th Plans by carrying forward the approved outlay for RAPDRP to IPDS.

The scheme will help in reduction in AT&C losses, establishment of IT enabled energy accounting / auditing system, improvement in billed energy based on metered consumption and improvement in collection efficiency.

The estimated cost of the present scheme with the components of strengthening of sub-transmission and distribution networks, including metering of consumers in the urban areas is Rs 32,612 crore which includes the requirement of budgetary support from Government of India of Rs 25,354 crore over the entire implementation period.

The component of IT enablement of distribution sector and strengthening of distribution network approved by CCEA in June, 2013 in the form of RAPDRP for 12th and 13th Plans is subsumed in this scheme and CCEA-approved scheme outlay of Rs 44,011 crore including a budgetary support of Rs 22,727 crore is be carried over to the new scheme of IPDS.

7. Deendayal Upadhyaya Gram Jyoti Yojana(DDUGJY)

The government has approved the Scheme of Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) with components (i) to separate agriculture and non agriculture feeders facilitating judicious roistering of supply to agricultural and non-agricultural consumers in rural areas and (ii) strengthening and augmentation of sub transmission and distribution infrastructure in rural areas, including metering of distribution transformers/feeders/consumers.

The estimated cost of the scheme for above two components is Rs 43,033 crore which includes the requirement of budgetary support of Rs 33,453 crore from Government of India over the entire implementation period.  In addition to this, the ongoing scheme of RGGVY in 12th and 13th Plans is subsumed in DDUGJY as a distinct component for rural electrification, for which Government has already approved to carry forward the balance amount of Rs 29,574 crore.

Source: Press Information Bureau

Smart Grid Bulletin May 2018

View all SMART GRID Bulletins click here

22 June 2018