September 2020

If Covid-19 was a test, the Indian power sector passed it.

Along with telecom, it has played a crucial role in keeping the economy operational and the lights on during the pandemic. There have been few power cuts. And, perhaps more importantly, no grid failure. Even during the 9-minute lights-out drill on April 5, when demand plunged from 117 GW to 85 GW in 20 minutes. The managers and workers rose to that occasion, kept the grid running and the frequency stable, some working for 48 hours straight. The power sector professionals can be proud of this contribution and should savour the moment.

Their political paymasters should get to dealing with the serious issues that still afflict the sector. The average price of electricity is still lower than the average cost of production. AT&C losses are still too high. There is still too much of political interference in the running of state-owned utilities. The independent regulators, for the most part, are still not independent. We still move from one bailout to another, in one form or the other.

This is not to deny the progress that has been achieved over the past 10 years or so. The power sector’s response to the challenge of the last few months would not have been possible without the tremendous addition in generation capacity, the development of a truly national grid and the centrally funded technological upgradation of distribution networks.

Even before the pandemic, the gap between demand and supply was much smaller than it used to be, though it had not disappeared. Customer service was also much improved, if still far from perfect. The digital transformation had begun, if only in silos.

But the pandemic has again put the spotlight on the poor financial state of our discoms. While the discoms should be compensated for losses caused directly by Covid-19 (and the central government is helping), we need to tackle the long-term issues mentioned.

The passage of the amendments legislation is important but only part of the answer. The same is true of the increasing private participation in distribution. More important will be the political will (and forbearance) of state governments. To accept rational tariffs. To let regulators be independent. To not interfere in the running of their utilities.

There is nothing new in this prescription. Every committee and expert has said as much. It is also true that some of the states have already progressed along this path. But it is also true that some of the biggest states (and we know them all) have steadfastly resisted, account for much of the red ink and thus, tar the whole sector. Till they move, we will remain stuck.

This issue also marks our twenty-fourth anniversary. As in our past special anniversary issues, we have reviewed trends and developments in the previous 12 months, examined key issues and discussed the future outlook. All this with a special focus on the impact of Covid-19. We hope you will find it useful and relevant, not just now but for reference later.

We take this opportunity to rededicate ourselves to the mission of the magazine: to be the most trustworthy source of information and analysis for the Indian power sector. We are proud that, in trying to meet this mission, we have not missed a single issue during the pandemic. We have printed and delivered the magazines across India during this period, even as we have increased our digital delivery. For this, we are particularly thankful to our advertisers, subscribers and contributors who have helped us make this possible.

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