The only challenge before power sector now is viability: RK Singh

• Singh dismissed rumours that the Centre may be looking to take away the power of states to appoint members/chairpersons of SERCs

• The increase in penalty to up to Re 1/KWh for failure to meet RPOs would lead to huge rise in demand, said the minister

New Delhi: While asserting that India is a power surplus nation, Power Minister RK Singh has said that the only challenge that the country is yet to mount on the way to ensure 24×7 electricity for all is the viability of the power sector through a change in tariff policy and amendments in the Electricity Act. "India is a power surplus nation. We are well connected (in terms of power transmission). Over one lakh MW electricity can be transmitted from one region to another region in the country. We have met all challenges in the sector but the only challenge left here is making it viable," said the minister at BNEF summit.

Viability of power sector: No proposal to take away states' powers

Dismissing rumours that the Centre may be looking to take away the power of states to appoint members/chairpersons of SERCs (State Electricity Regulatory Commissions), Singh said that no such proposal is in the pipeline and that these appointments will continue to be made by state governments. 

Pointing to another rumour that has been doing the rounds, Singh said, "It has been argued that if states are not able to pay the subsidies on time, the electricity supply to the consumers may get disconnected. This is baseless." He dismissed another misconception about the Centre taking over the states' ability to set tariff for retail supply of electricity to consumers as "baseless." Singh said, "Presently, the tariff is determined by SERCs and no change has been proposed in the present arrangement."

'Raising penalty on RPOs will create demand for Renewable Energy'

Commenting on RPOs (Renewable Purchase Obligations) and the accompanying penalty for non-compliance, Singh said that the increase in penalty to up to Re 1/KWh of the shortfall would lead to huge rise in demand. "The current set of penalties are very small… so we are increasing RPO penalties to an extent that the demand is going to be exponentially huge because all those discoms and states which have not achieved their RPOs will have to achieve that in a hurry or pay heavy penalties," Singh said.

The minister said that penalties will initially be 50 paise/KWh and after a year, it will be increased by Re 1/KWh of the shortfall. "Ultimately, there will not be any auctions at all. The discoms would themselves be looking for renewable energy capacities and then the government would invite them to set up capacities, thus the demand would boom and whatever has been installed till now would be doubled," the minister said.

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