Mr. Deputy Chairman Sir, I will broadly divide what I have to say today under two heads:
- a successful model of financial and operational efficiency in one State
- the performance of the Indian power sector and some suggestions
The State of West Bengal, today, is considered a power surplus state. The Ministry of Power’s audit ranked the State of West Bengal 2nd in an All India ranking of Power Distribution Companies. The State has been awarded a high rating for good operational and financial performance by the Power Finance Corporation.
The West Bengal State Transmission Company Ltd has recently won the IPPAI “Power Award 2013” for the best performing State Load Dispatch Centre in the Eastern Region. The State Transmission Company was also adjudged the Best Performing Transmission Company in India at the Power Line Awards, 2012.
Generation
West Bengal has a total installed capacity of 5579 MW. In addition, The Calcutta Electricity Supply Company Limited has an installed capacity of 1,225 MW. The State has been allocated around 1300 MW from Central Public Undertakings. Power is also available through power swapping arrangements.
On account of expansion of rural electrification and rapid growth of small, medium and cottage industries, it is estimated that the demand for power will increase two fold in the next 10 years. Conscious of the same, the State Government is in the process of setting up new power plants to meet the growing demand. Three projects at Sagardighi and Bandel will be commissioned within the coming year and twelve new projects have been planned in the long term. The State Government, in co-ordination with the NTPC, has taken a proactive role in setting up a critical power plant at Katwa.
Transmission
On the power transmission front, the West Bengal State Electricity Transmission Company is a self financed company and does not depend on the State Government for its maintenance and upgradation programmes. The State Electricity Transmission Company had pegged its total Capital Expenditure at 589 crore for the year 2013-14 and at Rs 916 crore for 2014-15.
Major network up-gradation to achieve redundancy and system reliability is being taken up by the State. Construction of new Sub-Stations and transmission lines of all voltage categories over diverse and often difficult terrain is underway. The capacity of existing sub-stations is being augmented. In addition, 9 new sub-stations are expected to be completed by 2016. The company has formulated a Five Year Rolling Plan and is working towards enhancing capacity by 75% in the next 5 years.
Distribution
Energy distributed in West Bengal has seen a 19.3% increase between 2010-11 and 2013-14. A distribution network augmentation plan for the 12th Plan Period amounting to Rs 11,195 crore is under implementation. The West Bengal State Electricity Distribution Company Limited is taking concerted steps towards modernizing the existing power system, reducing technical and commercial losses, prompt disposal of applications for new service connections, participation of consumers in Parisheba Melas for extending better services and fast disposal of public grievances.
Rural Electrification
Rural electrification work is in full swing under various programmes like Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY), West Bengal Rural Electrification Programme, Special Backward Regions Grant Fund and with funds from the Sunderbans Development Board & the World Bank.
It is expected that the work of Special Backward Regions Grant Fund in 11 districts would be completed by 2014-15.
95% of BPL households in the State will have electric connections by the end of 2014-15.
The remaining 5% BPL households in 7 districts are expected to be covered within 2015-16.
Electrification work in these 7 districts will be taken up under the Rajiv Gandhi Grameen Vidyutikaran Yojana. The Government of West Bengal has still not received funds from the Government of India for this scheme, even though more than 2 years have passed since the commencement of the 12th Plan Period.
Renewable Sources of Energy
The State Government has been proactive in leveraging renewable sources of energy. The West Bengal Electricity Regulatory Commission has fixed Renewable Purchase Obligations for Distribution Utilities at 4% of their total quantum of distributed electricity during 2013-14 which will increase to 10% of total consumption in 5 years.
New Town-Rajarhat area under jurisdiction of New Town Kolkata Development Authority has been declared as a ‘Solar City’ with the objective of consuming 10% of its electricity from renewable sources and for adopting energy efficiency measures.
The Government is in the process of institutionalizing incentives for promoting renewable energy sources. A 10% deduction shall be available in building plan sanction cost and property tax for buildings that install roof-top solar power plants in the Newtown Kolkata Development Authority Area. Howrah Municipal Corporation and Madhyamgram Municipality are also in the process of implementing a ‘Solar City’ programme.
Significant progress has also been made in generation of electricity from rice husk. Till now 134 MW of power is being generated in the State in different establishments, mostly for captive use.
Electrification of Sagar Islands
The Electrification of Sagar Island in the Sunderbans in underway. Grid Power to Sagar Island has been extended by crossing the Muriganga river through towers and setting up of one substation. This is nothing short of a technological marvel. House hold electrification work at the Island has started with World Bank funding and is expected to be completed by the end of this year.
WB’s demand to new Government
Mr Deputy Chairman Sir, through you, I wish to draw the attention of the Government to the fact that West Bengal is mainly dependent on coal for power generation. The quality of coal received from the Central Public Sector mining companies is steadily declining and the percentage of ash often rises to more than 50%.
The price of coal has also increased by 43% from 2011-12. We urge the Central Government to access more coal from its reserves. We also request that efforts towards creating a Coal Regulatory Authority be expedited.
We urge the Minister to act on West Bengal’s demand for increased allocation of hydro power from Bhutan and the Subansiri project in Arunachal Pradesh.
West Bengal is at a disadvantage in harnessing solar energy because of its geographical location and low cost-benefit ratio. We suggest the creation of a new central policy to assist States located in low-radiation areas in leveraging solar energy.
Power-Macro
I would now like to address some larger issues in the Indian power sector. The Compounded Annual Growth in generation of power is around. 7.4%. Most of the capacity enhancement has been in coal based power plants. Our coal production has, however, lagged the increase in generation capacity.
Coal imports have increased from 21 million tonnes to a staggering 171 million tonnes in the last decade. They are expected to rise up to 250 million tonnes in 2016-17. Capacity utilisation in power plants has declined from 78% to 65% in the last 5 years. Power generation is unable to meet the limited from discoms and this is largely due to problems in availability of fuel.
I have already referred to problems in the availability of coal. Without venturing into details of coal mining and production, I would like to offer the new Government a few humble suggestions.
First, that the vacancies in Coal India Limited must be filled at the earliest. The position of the CMD has been lying vacant for the past few months. We need swift action in clearing administrative log jams.
Secondly, the processes of obtaining Environmental and Forest Clearances must be simplified and streamlined.
Thirdly, existing mines should be allowed to increase output by 25% to meet the shortfalls in coal supply.
Fourthly and finally, as we had urged during the discussion on the Railway Budget, the eastern leg of the freight corridor is very important for coal supply and must be expedited.
On the distribution front, the losses of distribution utilities have increased by 5 times and their debt has increased by 3 times, in the last seven years.
According to the Power Finance Corporation, the combined debt of discoms nationwide is at around 4.7 % of the nation’s GDP and their losses are 0.7% of the GDP. These numbers are alarming. We face a problem of inefficient tariff structures where domestic and agricultural users who account for 47% of total electricity users are cross subsidized anywhere between 25 to 71%. this is at the cost of industrial and commercial users.
States like Kerala and West Bengal have led the way in covering the cost of power supply without the infusion of subsidies. These models of financial and operational efficiency deserve to be emulated. Our goal must be to allow our distribution companies to be self-sustaining and eliminate cross subsidies completely.
The implementation of the Restructured Accelerated Power Development and Reforms Programme (R-APDRP) has fallen behind targets due to delays in implementation of Information Technology and Data Management reforms, poor metering in distribution transformers, poor metering for bulk users. There is a lack of data on actual extent of losses as no central databases are maintained. It is my hope that the Minister will address these matters swiftly.
I would like to suggest that the coverage of the R-APDRP be expanded to all towns with a population above 30,000 and to peripheral areas of towns currently under the project.
The Planning Commission has recommended that a ratio of 1:1 ratio be maintained for Investments in generation v. Investment in transmission and distribution. The current ratio is at 2:1. We need increased investment in transmission and distribution, for which we must improve our investment climate and augment domestic investments. I would like to advise the Minister against falling prey to the FDI bandwagon in this regard. Thank You.
