In a recent interview with Power Line, Dr Praveer Sinha, managing director and chief executive officer, Tata Power Company Limited, shared his views on the current state of the power sector, the emerging needs and requirements and the future outlook. Edited excerpts…
How has the power sector evolved over time? What have been the key achievements?
The Indian power sector’s trajectory has been nothing short of transformative. From its origins as a government-centric entity, it has metamorphosed into a diverse arena, enriched by the dynamism of the private sector. Cheap, reliable and abundant power is an essential ingredient for growth, and the power sector has a major role to play in propelling India towards becoming a $5 trillion economy. It is at the forefront of transformation with new energy sources and technologies emerging. The three Ds – decentralisation, decarbonisation and digitalisation – are playing a significant role in driving this energy transition. India is expected to witness the largest increase in energy demand worldwide in the coming decades and has set a target to install 500 GW of non-fossil fuel capacity by 2030.
The key achievements include improved efficiency in power generation, enhanced grid infrastructure and increased electrification. Moreover, smart grid implementation has enabled better demand management and reduced losses. Further, government policies and incentives have spurred investment in clean energy projects, driving economic growth and job creation. The sector’s evolution has also driven innovations in energy storage and microgrids, fostering energy independence and resilience. With India’s G20 presidency, mutually beneficial cooperation with our neighbours in realising the vision of interconnected green grids can also be transforming. Overall, the power sector’s journey reflects a dynamic shift towards cleaner, more accessible and technologically advanced energy solutions.
How has the sector’s performance been in advancing the energy transition?
The surge in demand for clean energy is propelled by both businesses and consumers. This momentum is fuelled by a growing recognition of climate change effects, the imperative for energy security and the drive to manage energy expenses. Technological innovations have made renewable energy generation more cost-effective and accessible. Grid modernisation and energy storage technologies have enhanced the integration of intermittent renewables. Policies and incentives have been pivotal in fostering investment in renewable projects and promoting energy efficiency measures. Collaborative efforts between governments, industries and communities are driving this transition forward. While challenges remain, including energy storage scalability and fossil fuel dependency, the power sector’s performance reflects a promising trajectory towards a cleaner and more sustainable energy future.
What is your view on the future energy mix in the country? What should be the key focus areas to achieve the desired energy mix?
India’s energy trajectory is unequivocally set to be dominated by renewable sources, with solar and wind energy playing key roles. In light of the rapid advancements in renewable technologies, adopting a proactive approach is both advisable and imperative. This calls for significant investments in research, development and the formation of alliances to build cutting-edge technologies. To seamlessly integrate the growing influx of renewable energy, strategic capital deployment in state-of-the-art transmission lines, substations and intelligent grid technologies is non-negotiable.
Concurrently, the pivotal role of energy storage cannot be understated. Given the sporadic nature of renewable sources, a diversified energy storage strategy, spanning battery storage, pumped hydro storage and other avant-garde solutions, is essential. Equally critical is the astute management of electricity demand, mitigating the need for superfluous power generation. In this regard, strategies encompassing energy efficiency, demand response mechanisms and dynamic pricing are instrumental in refining our energy consumption matrix. Furthermore, international cooperation and collaboration in renewable energy are both necessary and essential. Global synergies, characterised by shared technological expertise and low-cost financing, can amplify India’s renewable journey manyfold. In the financing and execution of renewable projects, the efficacy of public-private partnerships is undeniable.
What is your assessment of the current state of the power distribution segment? Do you see signs of improvement?
The majority of distribution companies (discoms) have been plagued by escalating aggregate technical and commercial (AT&C) losses, expanding financial deficits and mounting debt. The delay in tariff revisions in several states, as compared to the rising power costs, has increased the disparity between the cost of supply and the revenue generated. This precarious financial situation of discoms manifests in various issues, including their inability to remit timely payments to generation and transmission entities, and a shortfall in investments for long-term infrastructure.
In the face of challenges in the power distribution segment, Tata Power stands firm in its dedication to elevating the prevailing standards. Harnessing our advanced technological capabilities, we are diligently addressing technical and commercial inefficiencies within distribution networks. Our analytical and data-driven strategies, bolstered by the deployment of sophisticated infrastructure, aim to enhance power supply quality and dependability across the country.
Today, Tata Power serves over 12.9 million customers through its discoms using a public-private partnership approach. This model includes Tata Power Delhi Distribution Limited, which operates in North Delhi in partnership with the Delhi government, as well as TP Northern Odisha Distribution Limited, TP Central Odisha Distribution Limited, TP Western Odisha Distribution Limited and TP Southern Odisha Distribution Limited. These collaborations have been established as joint ventures with the Government of Odisha and Tata Power has been successful in reducing AT&C losses in double digits in the past three years. Tata Power is wholeheartedly committed to spearheading the evolution of the distribution segment towards greater efficiency and financial sustainability.
What are the biggest challenges facing the power sector? How can these be resolved?
India stands at a pivotal juncture in its energy journey. As the nation grapples with the dual challenges of meeting its burgeoning power demand and committing to a sustainable future, the power sector’s dynamics are rapidly evolving. The onset of summer leads to an unprecedented surge in power demand with households, industries and businesses consuming electricity at rates never seen before. This surge underscores the need for a robust and resilient power infrastructure that can withstand such peaks. However, the backbone of our power sector, coal-based thermal power plants, are under strain. Fluctuating international coal prices have posed a dilemma: whether to produce at a loss or to shut down. The situation is untenable in the long run and highlights the urgent need to diversify our energy sources.
For India to truly harness the potential of solar energy, it must invest in building domestic manufacturing capacities across the solar value chain. From polysilicon to solar wafers, from modules to the advanced electronics that power them, self-reliance is the need of the hour. Furthermore, significant investments in grid modernisation, transmission networks and energy storage solutions are essential. Along with a progressive regulatory environment promoting equitable tariffs, there is a strong need to invest in research, state-of-the-art technologies and innovation. By minimising losses and enhancing operational prowess, the sector can significantly improve its overall efficacy and navigate the complexities of this transformative era.
What is your outlook for the sector for the near to medium term?
In the near to medium term, the outlook for the power sector in India is promising and transformative. This is one sector that has performed exceedingly well and grown in spite of challenges like the pandemic and the energy crises in Europe. We recently crossed an all-time high in power demand in September. We further expect demand to grow by around 10 per cent this year. This shows the resilience and immense growth potential of the Indian power sector. The power sector will also complement the growing aspirations of our country by supporting the various economic drivers required to become a $5 trillion economy. The ongoing shift towards renewables should continue, with a focus on capacity addition and manufacturing.
Companies will increasingly look at bundled or hybrid solutions in their efforts to provide green power. There is also an ongoing effort by companies to provide green power that is affordable across various customer segments. One will see technology driving a positive impact in areas such as smart meters, smart grids, green hydrogen, energy storage and other integrated solutions. Companies and financing institutions are also investing a lot more in these technologies and solutions, which will enable clean energy adoption.
Overall, one can anticipate accelerated efforts by companies to go green. Recent global warming incidents have highlighted the need to step up the pace of the clean energy transition and G20 engagements echo this intent in a unified way. We have no option but to move fast on this front. We are also at a time when we see various synergies taking place among stakeholders working together to achieve the clean energy goals. The Indian power sector is slated for sustainable growth and will be one of the key sectors enabling the country’s future development.