The government is currently in the process of framing Rights of Consumers and added that it will give the consumer the choice of switching energy providers, said RK Singh
Losses incurred by state-owned discoms should be the liability of the state government and should be added to the contingent liability, said the minister
New Delhi: Speaking about reforms that could alleviate the financial stress in the power sector, Union Minister for Power RK Singh said on Monday that along with creating an ecosystem for multiple power distribution companies (discoms) to operate in the same area, a coal exchange could lead to better discovery of coal prices for thermal power generation, which would, in turn, bring down the cost of electricity. Addressing an online session on Quest for Sufficiency & Sustainability of Indian Power Sector organised by FICCI, Singh said, “If we have a coal exchange, similar to that of power exchange, where coal can be sold, there will be better price discovery.”
Singh also hinted that the government is currently in the process of framing Rights of Consumers, a proposal for which is with the Ministry of Law, and added that it will give consumers the choice of switching energy providers. “This is the future that we should be aiming for. Not only will people get the best of service, the prices will also become competitive,” he added. “Once we have a system with multiple distribution companies, the consumers will benefit with lesser price of electricity and it will also benefit the generators by way of higher demand,” said Singh.
Burden of reducing discoms’ losses should be on state govts: Singh
While noting that the sustainability factor in the power sector is worrisome, Singh said, “Many of our distribution companies are loss-making. And most of these discoms are state-owned,” he said. “The loss incurred by state-run discoms have consequences. Because they are making losses, discoms are not able to pay for power, which causes stress upstream and dampens investment. Because discoms are making losses, they can’t buy power and resort to load-shedding. They can’t even maintain the system for the same reason. And this has been happening for several decades now. Every 5-7 years, the Central government has to inject money to strengthen the power distribution system. And after a while, it again goes back to square one again,” said the minister.
Singh emphasised that one of the major reasons for losses is inefficiency in billing and collection. “I have written to the Financial Commission that the losses incurred by state-owned discoms should be the liability of the state government and should be added to the contingent liability. Once that starts happening states will wake up to the need to make discoms healthy,” he added.
‘By 2030, 64% of India’s generation capacity will come from non-fossil fuel sources’
Commenting on energy transition, Singh said that the issue is the centrepiece of global discourse and India has emerged as a leader in this sphere. “We have pledged that by 2030, 40 percent of our established delegation capacity will be in Renewable Energy (RE). We are on a steady trajectory and by 2030, we will have 64 percent of our capacity coming from non-fossil fuels,” said the Power Minister.
Singh added that India is, in fact, the only major economy that is on track with the trajectory required for limiting temperature rise to two degrees. He further stated that India has the fastest-growing RE capacity in the world. The volume of power in the past four years has surpassed everywhere else. We grew our solar capacity by 14 times that has also resulted in India emerging as the most attractive nation for RE for investors.
“We have designed our systems in such a way that it is transparent, and we have set up a transparent Dispute Resolution Mechanism. We are very clear in our mind that the sanctity of contract is most important,” he added.
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