Investment In India | "Private sector investment in power sector high in Rajasthan"

By: Rachna Singh
Source: http://timesofindia.indiatimes.com
Category: Investment In India

JAIPUR: A recent Confederation of Indian Industry CII report on the power situation in north India, titled 'Power Scenario in Northern India', highlighted the significant gap between demand and supply in almost all the northern states.

According to the report, UP had the highest quantum of deficit among the northern states. Along with UP, Haryana and J&K witnessed a rise in energy deficits, while Punjab, Rajasthan and Uttarakhand witnessed a fall for the year 2010-11 from the previous year (2009-10).

A comparative analysis of the power situation in the northern states (on technical, financial and outlook parameters) reveals that Himachal Pradesh, Delhi and Rajasthan emerge as the best performers. In 2010-11, deficits in Himachal Pradesh were at a comparatively low level of 3.4%, thanks to the pro-activeness of the government in exploiting the state's hydro potential and reducing T&D and aggregated technical and commercial losses. Delhi has the lowest energy deficits among all the northern states at 0.3%. Peak deficits are also comparatively lower than other states. Further, Delhi has one of the best working T&D systems in the north. A remarkable improvement in all the parameters can be seen since Delhi privatised its distribution system in 2002.Like Delhi, Rajasthan too has one of the lowest deficits -- both energy and peak deficits.

"The government of Rajasthan has been successful in anticipating the increase in power demand and has accordingly invested in increasing installed capacity. During the period 2005-06 to 2010-11, Rajasthan had one of the highest Compounded Annual Growth Rates (CAGRs) in terms of capacity additions, both in public as well as private sector," stresses the report.

Rajasthan's success in attracting private investment can be seen in the fact that the percentage of private sector in total installed capacity in the state is 16.4%, higher than most other states. The state has also been successful in encouraging renewable energy. A quick overview of the power sector reforms in the country shows that the history and evolution of the power sector in India has been a chequered one, marked by fragmented efforts to reduce structural deficiencies, enhance performance and strengthen institutions.

The policy and legal structure that guides the power system in India today is a product of challenges perceived in the past and policy interventions that sought to overcome them. In most northern states so far, the strategy followed to improve power availability has mainly concentrated on capacity additions, with emphasis on coal-based thermal plants.

However, given the scarce coal resources in the country, a broader, more sustainable strategy needs to be adopted. Such a strategy should include supply side management, demand side management, improvement/modernisation of T&D network, load centre based flexible generation, tariff rationalisation and peaking power solution.

Source: http://timesofindia.indiatimes.com/business/india-business/Private-sector-investment-in-power-sector-high-in-Rajasthan/articleshow/15559289.cms