Budget analysis -2017

Budget disappoints power sector: expert

Dr. D. Shina

• The sidelining of the sector in the budget could lead to its disorientation at the very crucial stage of high expectations of growth.- Dr. D. Shina

Stakeholders are of the opinion that the failure on the part of Union Finance Minister Arun Jaitley to consider power sector as part of the infrastructure sector in the Union Budget presented last week will severely dampen the impressive growth initiated in the electricity installed capacity of the previous years.

Electricity finance expert D. Shina, who analysed the situation post-budget, said that while the budget gave a boost to the infrastructure sector, it had given a shock to the power industry.

The sidelining of the sector in the budget could lead to its disorientation at the very crucial stage of high expectations of growth.

‘No more sops’

“This is because the power industry pivoted around many sops. In fact, the ambitious steps taken by the government in the past years succeeded in eliminating the supply-demand gap to a considerable extent. But an abrupt end to these now can divert many investors from the scene thereby arresting the growth,” Dr. Shina said.

To add to the woes of the sector power, the cost can go up by a considerable amount due to various reasons. The budget said that the 80-IA tax holiday for the sector would be discontinued from April 2017, disappointing solar power developers and thermal power players who were expecting an extension of this clause, Said, Dr. Shina, a professor at Sree Narayana Guru College of Legal Studies, Kollam.

The Economic Survey was vocal on difficulties being faced by the private power generation sector. The industry had expected some relief in terms of corporate tax and minimum alternate tax (MAT). But there was no such mention in the budget speech. The lack of major provisions for hydro or nuclear energy was also glaring.

Rural electrification

A positive attempt in the budget was to maintain focus on rural electrification. The Finance Minister was confident of meeting the country’s ambitious 100% rural electrification target by May 2018 and he allocated a sum of Rs. 4,814 crore to its flagship scheme Deen Dayal Upadhyaya Gram Jyoti Yojana.

This was sure to brighten up rural India, but it was not clear how its increased energy demand could be met without ensuring a matching growth in the generation sector, Dr. Shina said.

Source; The Hindu dated 06/02/2017

Power sector hopeful of sops in Budget - Dr. D. Shina

Power sector 

hopeful of sops in Budget 

- Dr. D. Shina

Provisions for tapping more hydel power expected

Dr. D. Shina

With the Narendra Modi government laying stress on infrastructure development to ensure a two-digit growth for the country, the power sector could expect provisions in the Union Budget, which will be tabled on February 1, for attracting indigenous and foreign investment in the sector, electricity finance expert D. Shina has said.

In a statement on Sunday, Dr. Shina said the government could more or less achieve expected growth in the power sector in the current year. The national installed capacity has grown to 3,10,015 megawatts and energy target of 1,178 billion units is to be achieved soon, reducing energy shortage to a negligible 0.7%.

Dr. Shina said the current growth has to continue for a few more years if the requirements ignited by the projected economic growth are to be met. Progressive amendments to the Electricity Act, steps to enforce renewable energy purchase obligation, policies to encourage solar, wind, small hydro and other renewable energy sources, and new hydrocarbon policy have benefited the private sector in the electricity industry.

However, the enormous hydel potential of India remains untapped and a drastic policy reorientation was needed on this front, she said. The national hydel potential is estimated to be nearly 1,50,000 megawatts and only less than one-third of it has been tapped so far. Tapping hydel power not only offers cheap energy during peak hours but also helps meet carbon credit obligations. Proactive steps in this direction, with sufficient funds to meet environmental reconstruction obligations, are expected in the Budget. Clean energy cess levied at the rate of ₹400 a ton on the production of coal has fetched a good amount to the exchequer.

The non-utilisation of the available capacity of certain power plants like the Kayamkulam NTPC, due to its high energy cost can be resolved through proper remix in energy allocation or through budgetary support from the likes of the National Investment and Infrastructure Fund, said, Dr. Shina of the Sree Narayana Guru College of Legal Studies,
Source: The Hindu dated 30/01/2017

Kerala Power - New year review 2017

Kerala

Power situation looks dim, 

says Dr. D. Shina

Dim prospects loom large over the power sector in the State for 2017 since not much bright reasons can be seen for consolation, electricity finance expert D. Shina has said.

Dr. D. Shina

Even the year 2016 started with much concern for the power sector and as that year ended the situation has become worse and complex.

In a statement here recently after a comprehensive study of the situation, Ms. Shina said that Kerala’s already poor internal generation growth was currently under serious threat from corridor congestion, the new Central policy of greater allocation to States with generation plants, internal and external opposition to the construction of internal projects and drastic fall in rain.

She said that while the Ministers of the Left Democratic Front that came to power last year aired positive signals at the start and though there were indications of a positive attitude from the Central government, the State government could do little in solving the stalemate in electricity capacity addition in the State.

“The failure of rain during 2016 has pushed the State’s power scenario to a precarious condition. The current water storage at hydroelectric generation stations is sufficient to generate just 1,900 million units. It portends that the power sector of Kerala is soon going to be at the mercy of outside agents and traders and the authorities try to convince that those power purchase agreements will save the situation,” said Dr. Shina of the Sree Narayana College of Legal Studies(SNGCLS), Kollam.

Dr. Shina said that amidst the explosive growth in electricity generation capacity nationwide, Kerala alone lagged behind.

While Indian power sector grew by 82,415 MW during the 12th Plan period due to end in March 2017, Kerala’s contribution during the period did not cross two digits, to be precise it was a mere 83 MW.

“When some of us believe that hydroelectric projects are avoided as a policy on environmental issues and Kerala resources revolve around hydroelectric ones, the striking fact to be noted is that the 12th Plan target which is going to be somewhat achieved is adding 10,897 MW of hydel power.”

The big question is how far we can afford to go solely depending on external sources without enhancing our internal generation capacity, Dr. Shina said.

2016 started with much concern for power sector

The year ended with the situation becoming complex

Source: The Hindu dated 03/01/2017