BW Communities

Too Much Policy, Too Little Power

BW Online Bureau Nov 08, 2014

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[Power to the people is easily announced at political rallies and government speeches. It is much tougher to deliver. And this shows in India's energy policy that has failed to provide for the needs of growing economy. India has to prepare for depleting fossil fuels, rising demand for energy and environmentally sustainable supply. Instead of rising to the challenge of the green new era, India is still struggling to efficiently generate and distribute all forms of energy to its users. A recent report on New Energy Architecture by the World Economic Forum, has emphasized the need for radical changes in the way energy is managed in India. The report says, "Inability to meet energy demand could be the single biggest constraining factor to India's growth story." It further adds, "India must bring new forms of supply online, deliver it more effectively to consumers (both rural and urban) and do so at market-based prices." Indian policy makers have been unable to deliver on this simple but critical objective. And the reason is not difficult to see. Energy policy in India is decided by five ministries. Ministry of Coal, Power, Petroleum and Natural Gas; New and Renewable Energy; and Atomic Energy. Not only do these ministries don't coordinate with each other, they are often at logger heads. The recent crisis of coal supply to power generators is a great example. Each of the ministers and departments focus on the interest of their own sector. But none looks at the overall energy needs of the country. There is a lot of policy making, but little power generation. There is a gigantic bureaucracy that aims to serve the sector through various central organizations. But each works independent of each other and focuses only a small part of the energy picture. Under the Ministry of Power, the Bureau of Energy Efficiency is a body that coordinates energy conservation measures; the Central Electricity Authority (CEA) acts as an advisory body to the central government on matters of national electricity policy, and specifies technical standards and norms for grid operation and Maintenance among other issues; There is a semblance of independent regulation in the power sector. The Central Electricity Regulatory Commission (CERC) regulates central and interstate level power-related activities, while the State Electricity Regulatory Commissions (SERCs) work on state level licensing, state level electricity tariffs and competitive issues. But the problem is that either the regulator is too close to the government or too weak to be able to take strong decisions on market based tariffs. Despite reformist efforts, state governments continue to protect loss-making distribution companies. Few states have been able to convince the electorate of the benefits of paying for power. Petroleum does not even have a regulator. The only body that seems to be overseeing the work of private and government owned petroleum companies is the Director General of Hydrocarbons. But this body is a division of the ministry. The record on renewable energy is also patchy. Some states like Gujarat and Tamil Nadu have made some progress, but again a lack of comprehensive vision on energy hampers generation of green energy. More than 40 per cent of energy demand is based on coal. More than 80 per cent of power generation depends on coal. Petroleum is fuelling transport while renewable play a minor role. A majority of Indian still use traditional agri waste and firewood for cooking and heating. India needs a comprehensive energy policy, a unified ministry and a common regulator to deliver on the promise of power to all. (Pranjal Sharma is a senior business writer. He can be contacted at pranjalx@gmail.com)