Power Sector – Reforms & Renewable Energy
🟠 Topic 36: Power Sector – Reforms & Renewable Energy
📌 Introduction
The power sector plays a pivotal role in economic development, influencing industrial growth, agricultural productivity, and overall quality of life. India, being the third-largest producer and consumer of electricity, has undertaken significant reforms to ensure affordable, reliable, and sustainable power supply. Simultaneously, India’s commitment to renewable energy is driven by climate concerns, energy security, and economic diversification.
🔹 Structure of Power Sector in India ⚡
| Segment | Key Activities |
|---|---|
| Generation | Production of electricity (thermal, hydro, nuclear, renewable) |
| Transmission | High-voltage transfer from plants to substations |
| Distribution | Delivery to end consumers (households, industry) |
Installed Capacity (2023)
| Source | Share (%) |
|---|---|
| Thermal (Coal, Gas, Diesel) | ~57% |
| Renewable Energy (Solar, Wind, Biomass) | ~40% |
| Hydro | ~11% |
| Nuclear | ~2% |
🔹 Key Reforms in Power Sector
1️⃣ Electricity Act, 2003
- Consolidated laws on generation, transmission, and distribution.
- Delicensed generation to promote private investment.
- Allowed open access for large consumers to choose suppliers.
- Established Central Electricity Regulatory Commission (CERC) and State Electricity Regulatory Commissions (SERCs).
✅ Impact: Encouraged competition and private participation.
2️⃣ UDAY Scheme (Ujwal DISCOM Assurance Yojana)
- Launched in 2015 to address financial distress of DISCOMs (distribution companies).
- Key Features: ✔️ States took over 75% of DISCOM debt. ✔️ Mandated operational efficiency improvements (billing, loss reduction). ✔️ Promoted smart metering and tariff rationalization.
✅ Impact: Partial success in debt reduction, but many DISCOMs remain financially weak.
3️⃣ Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY)
- Focused on: ✔️ Rural electrification. ✔️ Separation of agricultural and non-agricultural feeders. ✔️ Strengthening rural distribution networks.
✅ Impact: Achieved 100% village electrification, but household connectivity remains a challenge.
4️⃣ Saubhagya Scheme
- Launched in 2017 to provide electricity connections to all households.
- Focus on remote and poor households.
✅ Impact: Over 2.8 crore households electrified.
5️⃣ National Tariff Policy
- Ensures: ✔️ Cost-reflective tariffs. ✔️ Promotion of renewable purchase obligations (RPOs). ✔️ Efficient power procurement by DISCOMs.
6️⃣ Integrated Power Development Scheme (IPDS)
- Focused on: ✔️ Urban distribution network strengthening. ✔️ IT-based monitoring and transparency. ✔️ Reduction of Aggregate Technical & Commercial (AT&C) losses.
🔹 Key Challenges in Power Sector
1️⃣ Financial Distress of DISCOMs
- High AT&C losses (20-25% in some states).
- Poor billing and collection efficiency.
- Tariff gaps – Political interference in tariff setting.
2️⃣ Dependence on Fossil Fuels
- 57% capacity still from coal.
- High carbon emissions.
3️⃣ Transmission Constraints
- Inadequate inter-state transmission corridors.
- Renewable-rich states like Rajasthan unable to evacuate surplus power.
4️⃣ Renewable Integration Challenges
- Intermittent nature of solar and wind.
- Need for grid balancing and storage solutions.
🔹 Renewable Energy – Transition to Green Power
📖 Why Renewable Energy?
1️⃣ Energy Security – Reduce dependence on imported fossil fuels.
2️⃣ Climate Commitment – Achieve Net Zero by 2070.
3️⃣ Employment Generation – Green energy creates new jobs.
4️⃣ Cost Competitiveness – Solar power prices have fallen below thermal.
India’s Renewable Energy Target (2023)
| Target | Value |
|---|---|
| Renewable Capacity (2030) | 500 GW |
| Solar Target | 280 GW |
| Wind Target | 140 GW |
| Hydro Target | 70 GW |
| Non-Fossil Share (2030) | 50% of total generation |
Key Renewable Energy Programs
| Program | Focus |
|---|---|
| National Solar Mission | Large-scale solar parks |
| KUSUM Scheme | Solar pumps for farmers |
| National Wind-Solar Hybrid Policy | Combined renewable projects |
| Green Energy Corridor | Transmission infrastructure for renewables |
| Offshore Wind Policy | Offshore wind farm development |
Renewable Energy Achievements
✔️ 4th largest installed renewable capacity globally.
✔️ Solar tariffs among the lowest in the world (~₹2/kWh).
✔️ Renewable energy contributes ~40% of installed capacity.
Challenges in Renewable Energy Expansion
1️⃣ Land Acquisition Issues – Solar parks require large contiguous land.
2️⃣ Grid Stability Concerns – Managing variable renewable generation.
3️⃣ Financing Risks – High initial capital requirements.
4️⃣ Environmental Concerns – Solar farms affecting grasslands, wildlife.
5️⃣ Delayed Payments – Renewable power producers face payment delays from DISCOMs.
Case Study – Gujarat’s Renewable Push
- Gujarat leads in: ✔️ Solar park development. ✔️ Wind-solar hybrid projects. ✔️ Innovative models like distributed solar rooftops.
- Contributes over 15% of India’s solar power.
🔹 Role of Private Sector in Power & Renewable Energy
- Major private players: Adani Green, Tata Power, ReNew Power.
- Increasing foreign investment in renewable projects.
- Private developers also lead transmission projects under tariff-based competitive bidding (TBCB).
📊 Summary Table – Power Sector Reforms
| Reform | Focus Area |
|---|---|
| Electricity Act, 2003 | Delicensing, competition |
| UDAY Scheme | DISCOM financial turnaround |
| Saubhagya Scheme | Universal household electrification |
| National Solar Mission | Solar capacity addition |
| Green Energy Corridor | Transmission for renewable energy |
📚 Practice MCQ
1️⃣ Consider the following statements regarding UDAY Scheme:
- It aimed at financial turnaround of DISCOMs.
- It promoted smart metering.
- It was implemented by the Ministry of New & Renewable Energy.
Which of the above statements are correct?
✅ Options:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2, and 3
2️⃣ What is the target year for achieving 500 GW renewable capacity in India?
✅ Options:
(a) 2025
(b) 2030
(c) 2040
(d) 2050
3️⃣ Which scheme promotes solar-powered irrigation pumps for farmers?
✅ Options:
(a) KUSUM
(b) UDAY
(c) DDUGJY
(d) IPDS
