Monday, July 21, 2014: In a bid to provide electricity to more homes in India, the government has recently announced its plans to invest in the solar power and grid. But the experts from the industry opine that the amount of investment will not be enough to address the needs of 1.2 billion population of the country.
As many as 480 million people in the country still do not have any access to a reliable electricity source. The industry experts term the government plan as directionally correct but rather small and unspecific. The sagging sector needs more funds and widespread action plan to be strengthened.
The government has plans to spend Rs 15 billion on solar power access in the country. A part of the amount will also be spent on improving the power delivery. However, two-third of the amount will be utilised on various solar power projects.
Kameswara Rao, head of energy, utilities and mining in India for PricewaterhouseCoopers LLP, opines that the funding needed to split rural electricity supply from the domestic sector is far larger than budgeted.
Adding to it, Indian economist and columnist S L Rao told IBTimes UK, “Free power to agriculture has no caps, nor metering. Where they exist, agricultural feeders are not maintained properly and transformer blowouts are common. Billing and collections are inefficient. In Delhi alone, over Rs 250,000 million of funds that belong to the private distribution companies are held up, causing cash and profit problems.”
Rao is of the belief that ‘root and branch reform’ is needed in India. He also emphasised on the fact that currently, most of the distribution companies are state-owned and headed by bureaucrats with brief tenures. The Discoms run more like government departments, rather than commercial enterprises. Lax discipline and collusive theft of power is commonly seen in these state-owned enterprises, said Rao.
Noting the shortfall of coal and gas for power plants, a Fitch analyst wrote, “The entire ecosystem of the power sector – from generation to distribution – needs to be strengthened.”
