UDAY-II will focus on reducing losses, says power minister R K Singh

The power sector witnessed the maximum number of schemes, web portals and monitoring apps during BJP rule. Some like village electrification achieved their targets in record time, while the jury is still out on other reforms. Coal supply remains contested, while solar power is growing by leaps and bounds. Amid this, R K Singh, minister of state for power and new and renewable energy, discusses with Shreya Jai newer schemes. Edited excerpts:

Only 1 per cent of households are left to be electrified under Saubhagya. After the creation of infrastructure at such a rapid pace, how will you ensure power supply?

We have electrified houses in all states except four whose targets will spill over to January — these are Rajasthan, Assam, Chhattisgarh and Meghalaya. This is still well before the target of March 2019. We have also signed agreements with states that have committed to provide 24x7 supply from April. 

Most discoms are back to making losses. How will the scheme be implemented if they make losses? Is UDAY-II (Ujwal Discom Assurance Yojana) in the works?

As far as losses are concerned, in the past year, the focus was on increasing access. Now, we will focus on loss reduction. What UDAY did was reduce the debt burden. More steps are needed. One is metering and billing. We will mandate discoms to switch to smart prepaid meters. Smart, because we are aiming at ‘time of the day’ tariff. Prepaid, because it improves efficiency. The other is energy theft. We will give assistance for ‘aerial bunched cabling’ to prevent hooking. We have also proposed special police stations for catching energy thieves. This is an UDAY-II, taking forward the work done under UDAY. Both the Centre and the states would finance it. 

How will the Centre push discoms for steady supply?

The upcoming tariff policy provides for penalty in the case of gratuitous load shedding after April. State electricity regulators can extend the deadline for six months or a year and decide the penalty amount. Any loss beyond 15 per cent incurred by the discoms would not be a pass-through on consumer. Through this, discoms would be compelled to cut losses. Power-purchase agreements signed by discoms should have enough power to meet the average annual demand of the area they serve. If they don’t, licences would be revoked. We have reduced the number of tariff slabs too. The policy has been finalised. A Cabinet note has been circulated and before elections, by January, it would be out to be implemented.

DT Metering and feeder segregation are also important components in strengthening networks and reducing losses. Some states lag in it.

As more households were connected under Saubhagya, there was a need for system strengthening at the village level. For that, we have sanctioned ~110 billion under Deen Dayal Upadhyaya Gram Jyoti Yojana. Government schemes have helped reviving the electrical equipment industry. It is growing at 12.5 per cent. The demand is so much that at times they find it difficult to meet it. 

There has been a turnaround in the industrial power demand and consumers are being added. However, coal supply continues to be lower than the demand. 

Compared to last year, the supply of coal has increased 7-8 per cent. But the demand for power is increasing by 11 per cent. So, that (coal supply) worry is there. We are coordinating on a day-to-day basis with the coal ministry. Production needs to be ramped up. Apart from that, imports are allowed for anyone who faces shortfall. In 2013, a circular was issued that said if coal is procured through imports or spot auction, in case of shortfall from Coal India, the cost would be allowed to be a pass-through. It was valid till 2017. Now, we have made it a permanent feature and it will be part of the new tariff policy. So, any thermal power unit can pass through increased cost of coal, after regulatory approval.

Will it not increase the cost of power?

If coal production catches up, there will be no power price increase. Imported coal can be used up to a limit, so any increase will be marginal. The question is availability of coal. If there is sufficient coal, everyone will get it. The gestation period for increasing mine production is 2-3 years. So, we are working with the coal ministry.

Solar power has witnessed historic growth. But wind power has fallen behind even after introduction of bidding. 

We are coming out with more bids. Every 45 days, we will come out with a bid of 2,000 Mw each for solar and wind. 

Renewable is facing issues with regards to financing, free fall in tariffs and increasing cost. How are these being addressed?

People tell me that price of solar cells and modules have come down, but they could not take advantage due to strengthening of dollar. The interest rate globally has also gone up. We are analysing this and would decide a reserve price for tenders, depending on the prevalent market condition. 

Growth of hydro- and gas-based power has been close to nil. How do you plan to revive them?

We are coming out with hydro policy. It is in the final stages. There is a proposal for RLNG (imported gas) auction for gas-based units that we are examining. There were several hydro projects that were stuck due to clearances. The hearings have been expedited. As soon as we shift to ‘time of the day’ tariff, both hydro and gas will become viable as peaking power.  

No new projects can come up on Ganga. Are you eyeing other rivers and areas?

The sites have been identified from before, further investigations are on.

When will the implementation of recommendations of the high level empowered committee for stressed assets commence? 

A group of ministers (GoM) has been constituted of which I am a part along with Suresh Prabhu and Nitin Gadkari. The first meeting is on Wednesday. As soon as the GoM approves all proposals, we will move the Cabinet. It should not take much time.

In 2014, BJP won 22 seats in Bihar but now the party is contesting on 17. Why give up 5 seats to JDU?

If you get into an alliance, you need to give sufficient space to your partner. You don’t look at it at as two different parties but one party. Together we will win more seats than we won in 2014.