Power for all

Govt must address operational challenges

As reported by this newspaper on Monday, the government may set a deadline of March 2025 to achieve 24x7 electricity supply to households across the country. Notably, something close to 24x7 power has already been achieved, with an average of 23.5 hours of electricity being supplied to households in urban areas, and 22 hours or so to those in rural areas. However, this aggregate number conceals as much as it reveals. In certain parts of the country, the deficit is far more than two hours a day for much of the year. Closing the last remaining gap may be difficult as it will require much more than a technical or technocratic solution. The changes will need decision-makers to summon more political will than hitherto shown.

To be sure, the problem is no longer one of generation capacity. India’s total electricity production grew by almost nine per cent in 2022-23. On paper, the country’s capacity is by and large keeping pace even with the rapidly growing demand. The problem is twofold: At crucial times, including high summer, some forms of generation can drop out of the grid and others can face a shortage of raw material, causing broader shortfalls. To this must be added the perpetual problem of intermediation: While generation is sufficient and distribution has reached most parts, the distribution companies (discoms) and state boards are failing in the task of mediating between these two ends. Most regions where the last mile of electricity provision needs to be worked out in order to meet the government’s target of 24x7 power are also burdened with inefficient or debt-ridden discoms. In Uttar Pradesh, for example, discoms reported in filings to the state electricity regulatory commission last year that they had accumulated losses of about ~70,000 crore and would further have underrecoveries of ~11,000 crore to ~12,000 crore in 2024-25. Ensuring uninterrupted power supply would require investment and capacity that such burdened discoms simply cannot provide.

The government is hoping, no doubt, to create structures that would allow them to bypass such problems. One such solution is smart meters, which is part of the Revamped Distribution Sector Scheme. This might allow increasing discoms’ ability to target paying consumers, for example, through pre-payment mechanisms. Meanwhile, the proposed modifications to the Electricity Act are supposed to nudge state electricity regulators to license additional discoms in parallel to existing ones. The hope is that better last-mile identification and competition in the distribution space will allow amelioration of political economy problems associated with paying for power. Once individuals who want to pay for uninterrupted power are able to do so with ease, the system will be able to provide them with that service. This is sound in theory, but if the government wanted to have it in place by March 2025, it should have taken such steps years ago. It would still be important, however, to reform discoms in states and get the pricing policy right to achieve the target. Sustained losses make it difficult for discoms to make necessary investments. As India moves more towards renewable power, investments would be required to manage the transition and ensure uninterrupted supply of power from different sources.