Mooting an idea: Right to Electricity Act in India

lectricity is the cleanest fuel at the user-end and is considered the prime mover of the economy of a country and the lifeblood of its people. Today, it is difficult to think of a world without electricity as almost every machinery and appliance that we use are run on electricity—either from the electric grid directly or from the stored electricity in a battery.

Electrification of India started on the right note with the commissioning of the first hydroelectric plant of 130 kilowatt (KW) in Darjeeling in November 1897, almost a year before electricity came in London. By 1900, India had an installed capacity of over 1 megawatt (MW), which was pretty impressive in those days. But when the British left India in 1947, it had grown only to 1,362MW and the electric network was limited to a few industrial cities such as Mumbai (then Bombay), Kolkata (then Calcutta), Ahmedabad and Surat, and to a few capital cities of rich maharajas.

Independent India has made very impressive strides in building a nationwide electricity system, but miserably failed in providing reliable electricity supply to its citizens. To build a power system of 300,000MW and an electric network that spans the entire country, connecting over half-a-million villages, is impressive by any measure, but instead of the end results of providing access and availability of reliable electricity to all, it has been a futile exercise as one-third of the households in the country are yet to be connected to the grid (according to census report of 2011) and large parts of the country experience power outages almost every day for several hours.

The government of India has planned and implemented several focused programmes for electrification of the country in the past few decades but even now, we have over 250 million people who do not have access to electricity. Hundreds of thousands of villages have been electrified spending billions of dollars, but the majority of those villages do not get electricity even for one hour a day. Electricity supply companies (mostly owned by respective state governments) are in serious financial crisis and they have no money to buy electricity from power generation companies and supply to their customers. The average tariff in majority of the states during the past decade has been lower than the average power purchase cost. This skewed tariff policy administered by state governments are based on the misconception that if tariffs are increased, the poor cannot afford electricity, and would lead to electoral defeats. However, the reality is that common people are more than willing to pay the true cost of electricity as in the absence of grid power, all other standby arrangements (diesel generator sets, inverters and kerosene lamps, among others) are several times more expensive. And more often, the poor pays a much higher percentage of their income for their daily energy needs.

The dream of ‘Electricity for All’ has been slipping away like a mirage for a long time despite several government programmes. The National Democratic Alliance government, under former Prime Minister Atal Bihari Vajpayee in 2002, launched a programme ‘Power for All by 2007’ and introduced a new scheme for rural electrification and another scheme for modernising the power distribution systems in 56 select urban circles, which was called Accelerated Power Development and Reforms Programme (APDRP). The United Progressive Alliance (UPA) government in 2004 rechristened the rural electrification programme as Rajiv Gandhi Grameen Vidyutkaran Yojana (RGGVY) and set the new goal of ‘Power for All by 2010’, which later got changed to ‘Power for All by 2012’. APDRP, which was part of the 10th Five-Year Plan, was extended as ‘Restructured APDRP’ (R-APDRP) covering 1,411 towns in the 11th Five-Year Plan and was allocated about Rs.52,000 crore while RGGVY was pursued vigorously with Rs.36,000 crore allocation. In the later years of the UPA regime, there was no firm target date for ‘Power for All’.

Prime Minister Narendra Modi, in 2014, set the new target of ‘24×7 Power for All’ by 2019. RGGVY has been re-launched as Deen Dayal Upadhyaya Gram Jyoti Yojana and R-APDRP has been extended to 5,000 towns under the name of Integrated Power Development Scheme.

Another programme for powering the north-eastern states has also been launched with assistance from the World Bank. The combined capital outlay for these programmes is over Rs.1 trillion. After two years into these programmes, the target date for ‘24×7 Power for All’ now stands shifted to 2022. Why are we not able to meet the goal of providing electricity to all citizens when the Prime Minister and the entire central and state governments are committed to achieve it?

This calls for a relook at the actual challenges in executing the work on the ground. Building or extending the electric grid to villages is easier than supplying power 24×7 to all citizens. The common complaint is that the newly electrified villages do not get power for even one hour in a day and as a result, households not connected to the grid are not motivated to invest in wiring their houses and getting connected when their neighbours, who are already connected to the grid, still live with kerosene lamps every day.

It is time to realise that more and more investment in the grid and generation capacity expansion is not going to result in 24×7 power for all. New business models need to emerge wherein those who are willing to pay the true cost of electricity are able to buy it from the grid, which in any case, will be cheaper than self-generation through diesel generator sets and inverters. This can be facilitated when consumers are empowered with the right to electricity. For over a century, we ran the electricity system as a public service (not as a business); so it is rational to make it a public right to get electricity, provided one is willing to pay for it. This summer, an average of 3,000MW surplus generation capacity is online every day but people all over the country experience long hours of power cuts. This is over and above the 35,000MW-plus plants that are permanently stranded owing to a variety of issues.

On the one hand, power plants are idling as there are no buyers at Rs.4-5 per unit whereas customers have to resort to power from diesel generator sets at prices above Rs.15 per unit. This dichotomy can be resolved only through a ‘Right to Electricity Act’ that will drastically change the landscape of electricity business in the country. More on this in another column.

 

Article Contribution by:

Mr. Reji Kumar Pillai, President of India Smart Grid Forum, a public-private-partnership initiative of the government of India.

 

Source : http://www.vccircle.com/infracircle/mooting-idea-right-electricity-act/

SMART GRID Bulletin November 2017


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