 "Union Minister of State for Power, Piyush Goyal with Lt. Governor of Delhi Najeeb Jung after an emergency meeting to discuss plan of action to tackle power crises, in New Delhi on Tuesday")
Piyush Goyal , the Union minister for power, talks to Sanjay Jog on government policy to boost growth in the sector. Edited excerpts:
When will the Centre's much-debated revival package for the ailing distribution sector be issued?
After cabinet approval. At this stage, the critical thing is to resolve the distribution companies’ (discoms’) problem, after having resolved the coal problem. Now, coal is available in plenty, and as the discoms' health improves, power offtake will improve. As that happens, coupled with reduction in aggregate technical and commercial losses, for which the Centre and states are working together, I am very confident that without significant stress on consumers, we will be able to bring the sector as a whole into good shape.
Some states are not coming on board, fearing the Centre might take back money if they failed to adhere to the norms on distribution reforms...
The Centre is not going to take back anything from any state. Every state has hailed the proposals. Already, five or six of the major states have fully come on board. Very soon, we will have a pan-India consensus on the entire proposal. Let us wait for some time.
Will there be any financial bailout package?
Not a single state has asked for this. They are happy at a package which might not be giving money in terms of a cheque but gives so many other benefits that will help them reduce the cost of power, of inefficiency. We will help them to get a lower interest rate for their borrowing. All of which will go to reducing the discoms' losses. The idea is to tap all possible avenues to save cost and bring better service to consumers. As for setting of rates, that it a regulator's role and I think they do their job very well. States and Centre are together in this effort, irrespective of political ideology. Last week, I had a very good meeting with the bankers, who were most understanding in their approach, in a positive frame of mind to look at the power sector as a positive avenue for investment in the years to come.
Is the target of 175,000 Mw in the renewable sector achievable by 2022?
At present, we have about 35,000 Mw of renewable energy (RE). We have commitments from stakeholders and investors to invest for 276,000 Mw in six and a half years, against our target of 175,000 Mw. Bankers and investment bankers are telling me the appetite for financing renewables is unheard of. Everybody in the world wants to come and invest in India today in RE, including the bond market. You can raise the money at below 10 per cent interest. All this will result in lower pricing of RE and help India's energy security.
Has the government put on hold further development of ultra mega power projects (UMPPs)?
Not at all. Right now, the demand for power has to be reassessed to make a clear projection for the future. I still have significant capacity which is not fully utilised. Then, there are lot of stressed plants which I am confident will come onstream and result in a lot of capacity. Once I have planned what is the capacity addition and what is the demand, I will know at what stage how much investment is required. As far as the imported UMPP in Tamil Nadu is concerned, the Pratyush Sinha committee report is awaited. We will soon be issuing a tender for that. Odisha is there. In Bihar, once the elections get over, we can look at that. We are going ahead and five UMPPs will be bid out in 2015-16. We will go for much more in states which give us land the fastest and give us a power purchase agreement.
When will the Centre's much-debated revival package for the ailing distribution sector be issued?
After cabinet approval. At this stage, the critical thing is to resolve the distribution companies’ (discoms’) problem, after having resolved the coal problem. Now, coal is available in plenty, and as the discoms' health improves, power offtake will improve. As that happens, coupled with reduction in aggregate technical and commercial losses, for which the Centre and states are working together, I am very confident that without significant stress on consumers, we will be able to bring the sector as a whole into good shape.
Some states are not coming on board, fearing the Centre might take back money if they failed to adhere to the norms on distribution reforms...
The Centre is not going to take back anything from any state. Every state has hailed the proposals. Already, five or six of the major states have fully come on board. Very soon, we will have a pan-India consensus on the entire proposal. Let us wait for some time.
Will there be any financial bailout package?
Not a single state has asked for this. They are happy at a package which might not be giving money in terms of a cheque but gives so many other benefits that will help them reduce the cost of power, of inefficiency. We will help them to get a lower interest rate for their borrowing. All of which will go to reducing the discoms' losses. The idea is to tap all possible avenues to save cost and bring better service to consumers. As for setting of rates, that it a regulator's role and I think they do their job very well. States and Centre are together in this effort, irrespective of political ideology. Last week, I had a very good meeting with the bankers, who were most understanding in their approach, in a positive frame of mind to look at the power sector as a positive avenue for investment in the years to come.
Is the target of 175,000 Mw in the renewable sector achievable by 2022?
At present, we have about 35,000 Mw of renewable energy (RE). We have commitments from stakeholders and investors to invest for 276,000 Mw in six and a half years, against our target of 175,000 Mw. Bankers and investment bankers are telling me the appetite for financing renewables is unheard of. Everybody in the world wants to come and invest in India today in RE, including the bond market. You can raise the money at below 10 per cent interest. All this will result in lower pricing of RE and help India's energy security.
Has the government put on hold further development of ultra mega power projects (UMPPs)?
Not at all. Right now, the demand for power has to be reassessed to make a clear projection for the future. I still have significant capacity which is not fully utilised. Then, there are lot of stressed plants which I am confident will come onstream and result in a lot of capacity. Once I have planned what is the capacity addition and what is the demand, I will know at what stage how much investment is required. As far as the imported UMPP in Tamil Nadu is concerned, the Pratyush Sinha committee report is awaited. We will soon be issuing a tender for that. Odisha is there. In Bihar, once the elections get over, we can look at that. We are going ahead and five UMPPs will be bid out in 2015-16. We will go for much more in states which give us land the fastest and give us a power purchase agreement.
