Amendment to Act will change power sector: Dr. D Shina

Amendment to Act will change power sector: Dr. D Shina

Dr D Shina

The Hindu

The amendment to Electricity Act 2003, tabled in Parliament, will cause drastic changes in the electricity sector and hence it warrants discussions among stakeholders, electricity finance expert D. Shina has said.

“The change will destroy the distribution companies which are mostly in the public sector and will pave the way for increase in the tariff. The amendments will only add to complexities and will affect the power industry, which is already limping, in the country,” she said.

In a study report, Dr. Shina of Sree Narayana Guru College of Legal Studies, Kollam said the major change was a provision for supply companies that do not own distribution lines. Instead they will have mandatory access to the existing lines owned by ‘discoms.’

Theoretical

Theoretically, consumers would be free to purchase electricity from multiple suppliers operating in their area. The terms of access would be decided by the regulatory commissions. Despite severe criticism from consumers and trade unions the Union government had opted to go ahead with the amendment.

Dr. Shina said the government blindly believed that the new amendment would pave way for free competition in the sector resulting in tariff reduction. Supporters of the amendment ignored the fact that when demand exceeded supply, which was the case in the country, free competition would lead to increase in price. “It is unwise to reduce demand of electricity through price elasticity as reduction in electricity demand will arrest the country’s economic growth.”

The amendment, if passed, would affect the existing power set-up in Kerala because KSEB Limited was cushioning losses in the distribution sector through surplus in generation. The government now managed to reduce tariff for household consumers by generating higher income from other categories like commercial consumers.

If new supply companies were allowed, “cherry picking” of the attractive set of consumers would result, and a steep increase in tariff of household consumers would follow, she said.

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·  Amendment may hit the existing set up

·  It could ring in free competition and price rise

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Source:  The Hindu

‘No proposal to bring down power price - Dr D Shina

Dr D Shina

Big players in the power sector have many reasons to welcome Thursday’s Union Budget but nothing to cheer up the ordinary consumers, says electricity finance expert D. Shina. “This is because there are no proposals to bring down power price inflation,” said.

In a statement Dr. Shina said that failure of the Budget to identify weak links and an equitable allocation among generation, transmission and distribution sectors could retain many problems in the sector. The extension of 10 year tax holiday to 2017 is clearly an indication to attract more investors into the sector.

“But the fact of under-utilisation of even the existing capacity did not get much attention. Encouraging cheaper power to ensure a suitable power production mix to suit the distribution companies and the ordinary consumer has been overlooked,” she said.

There were no efforts to remove the hurdles in utilising huge renewable energy sources in the hydel sector. There was also no mention about the much awaited Environment Preservation Fund to ease clearance of hydel projects. The Budget has neglected the regional imbalance and transmission corridor congestion.

Dr. Shina said that the accelerated implementation of the Green Energy Corridor Project aimed at synchronising electricity produced from renewable sources, such as solar and wind, with conventional power stations in the grid will ease the congestion in intra-State transmission and distribution to some extent. But the Budget offers no solution for the inter-State and inter-regional transmission capacity inadequacy and that will defeat efforts to solve the generation-demand gap.

The failure to complete transmission capacity targets has virtually paralyzed electricity trading between the surplus eastern region and the ailing southern region, she said.

“It has to be noted that the present power crisis in Kerala is not a result of non-availability of power to be purchased, but because of non-availability of transmission corridor,” Dr. Shina, Professor in Commerce at the Sree Narayana Guru College of Legal Studies, here

said.

The due importance given to solar energy and allocation of Rs.500 crore for ultramodern solar power projects in State like Rajasthan, Gujarat and Tamil Nadu is a welcome step but offers no consolation to Kerala, which had to forego generation projects totalling 2,000 MW, she said.
Source The Hindu - Ignatius Pereira

Budget failed power sector: Dr D Shina

‘Thrust on thermal power cannot be termed wise’

Though the power sector had not expected much of the Union government’s 2014-2015 interim budget, the absence of indications for a change of policy towards the sector is disheartening, electricity finance expert D. Shina has said.

Dr D Shina
Sree Narayana Guru College of Legal Studies,
Kollam

In a statement on the power sector in the budget, Dr. Shina said Finance Minister P. Chidambaram had failed to address the real and immediate problems of the sector.

Mr. Chidambaram highlighted the doubling of the country’s power capacity from 112,700 MW to 234,600 MW in 10 years, disregarding the fact that much more was needed considering India’s industrial growth during the decade.

Even now power shortage was a main bottleneck in industrial growth, she said. Though there was mention of 50,000 MW additional capacity under construction in the thermal and hydel sectors, the budget failed to take a serious note of the slow progress towards realisation of this additional capacity.

The thrust in the budget was for thermal power since most of the new projects under construction were in that sector. The target for the 12th Plan was more than 88,000 MW of which 60,000-65,000 MW was thermal, mostly from private sector. Since coal supply was fast depleting, and there was huge hydel potential in the country, this policy could not be regarded wise, she said.

Dr. Shina said that the lack of a single window clearance and coordination between Central agencies hampered the tapping of the enormous hydel potential of the country. An environment preservation fund to compensate environmental damages due to hydel projects was a long-standing demand of the sector. Without finding solutions to the stalemate in hydel power development, the country would not be able to strive for energy self-sufficiency, Dr. Shina said.

However, efforts made towards augmenting solar power generation were welcome. Announcement in the Budget on four mega solar power projects each, with a capacity of over 500 MW, was encouraging.

The results of the Delhi election, in which power tariff was a main issue, was to be taken as an indication of the public opinion on power sector. Providing budget support for the power sector was the need of the hour, she said.

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‘Hydel power needs to be tapped adequately’

‘Delhi poll result indication of opinion on power’

Source:The Hindu

No succour to power sector: expert

‘No allocation for newly formed KSEB Ltd.

’Solar power scheme has been 

totally ignored: D. Shina(ഡോ : ഡി  ഷൈന) 

Dr D Shina
Sree Narayana Guru College
of Legal Studies, Kollam

‘Union government, other States 

make allocations to sector’

In spite of the pathetic power situation in the State, the Budget presented by Finance Minister K.M. Mani on Friday had no allocation to the newly formed Kerala State Electricity Board Ltd., electricity finance expert D. Shina has said.

In a statement here on Saturday, she said the Finance Minister had blindly followed the misconceived post Electricity Act 2003 practice of avoiding any government support to the State-owned electricity utility.

The KSEB would prepare its own Budget, incorporating its own projected funds and expenditures every year. For the last several years, the practice was to include this in the Budget speech without allocating any additional funds from the State exchequer barring small allocations for some specific projects, such as done the CFL distribution scheme a few years ago.

Dr. Shina said the KSEB budget of Rs.1,176 crore had been included in the State Budget without announcing any assistance from the government. Allocation for energy sector was just Rs.3,980 lakh for the Agency for Non-conventional Energy and Rural Technology (ANERT), and smaller allocations of Rs.340 lakh to the Meter Testing and Standards Laboratory (MTSL), and Rs.338 lakh for the Energy Management Centre (EMC).

The solar power scheme had been totally ignored, she said. Now that the KSEB had been converted to a company, the practice of including its Budget in the State Budget could not be the right practice.

The Budgets of other government-owned companies were not included in the State Budget. Only profit or assistance could be brought forward to the State Budget.

Dr. Shina said the Union government and other States were slowly coming out from the concept of distancing themselves from the power sector and were making some allocations. Considering power to be a basic infrastructure for development, the idea of providing it ample budgetary support was gaining momentum among financial experts, Ms. Shina, Professor at Sree Narayana Guru College of Legal Studies, Kollam, added.

Solar power scheme has been totally ignored: D. Shina

‘Union government, other States make allocations to sector’

Source The Hindu