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Goyal’s tenure: Reforms in coal auctions to UDAY, green energy push

On May 26, 2014, when Piyush Goyal took the oath along with the Prime Minister, approximately two-thirds of the major power plants across the country had critical coal stock of fewer than seven days.

Written by Deepak Patel | New Delhi | Published: September 4, 2017 1:09 am
modi cabinet reshuffle 2017, new portfolios, modi portfolios, cabinet reshuffle, nirmala sitharaman, piyush goyal, suresh prabhu, new cabinet ministers, new ministers list, full list of new ministers, modi cabinet, full cabinet of ministers modi, modi full cabinet, india, indian express news Newly inducted Cabinet Minister Piyush Goyal gestures after taking oath of office at a ceremony at Rashtrapati Bhavan in New Delhi on Sunday. (Source: PTI Photo)

In last three years, Goyal, as the Minister of State (Independent Charge) for Power, Coal, New and Renewable Energy, had some noticeable achievements during his tenure including, overseeing first set of auctions in the coal sector, a big renewable push and cobbling together a consensus among the states on UDAY Scheme.

While the solar capacity went up from by from 2.6 GW to more than 12.2 GW, solar tariff touched a record low at Rs 2.44 per unit at Bhadla in Rajasthan, and an increase in wind power capacity from 21 GW to 32 GW. While India is still far from reaching a total 175 GW of renewable energy capacity by 2022 — a target that has been set by the Prime Minister himself — the country has started facing various challenges in this sector.

Many states across the country are reneging on their old renewable energy contracts as the new ones — which have been granted through competitive bidding recently — are being signed at an extremely low price. Madhya Pradesh is planning to take away the “must run” status of the renewable energy projects in the state. R K Singh, who has been appointed as Minister of State (Independent Charge) for Power and New and Renewable Energy, will have to face these challenges.

Singh, however, is known to be a tough task master. Sources who know him say that he has displayed high administrative ability both as the home secretary and also as the principal secretary in the road construction department in Bihar. He is known for also conducting surprise on-the-spot inspections.

In power sector, be it distribution reforms under UDAY (Ujwal Discom Assurance Yojana), providing cheap power through DEEP portal or the subsidised LED program, Goyal’s ministries have been all out to make the poll promise of 24 hours power a reality by envisaged 2022.

However, there are many challenges in the power sector too. While most of the states across the country have signed the UDAY scheme, and around 90 per cent of the cumulative debt of states’ distribution companies has been issued as bonds as yet, they are still far from initiating the comprehensive operational turnaround that has been envisaged in the scheme. Under UDAY scheme, the states would have to meet certain targets — such as that of the tariff hike, rural electrification, urban power reforms, bringing down AT&C (Aggregate Technical and Commercial) losses, etc.
“Among laggard states, only Bihar has done tariff hike. Under UDAY scheme, all future financing is linked to the states meeting these operational turnaround targets. Therefore, the challenge in front of new power minister is huge as the central government has set the target of 24*7 power for every home by 2022,” a Delhi-based power expert stated on the condition of anonymity.

On May 26, 2014, when Piyush Goyal took the oath along with the Prime Minister, approximately two-thirds of the major power plants across the country had critical coal stock of fewer than seven days. After more than three years, with Goyal taking several measures, there is no shortage of coal in the market — and it is for this reason that the Prime Minister still wants him to handle the coal ministry.

In July last year, Goyal was handed the mines ministry too. While Goyal was successful in carrying out the coal auctions, the non-coal auctions have received a lukewarm response from the industry due to various reasons such as “delay in land and environment clearances, low demand for minerals, and the state governments’ inexperience in complex mine auctions”, according to a sector expert. The coal mines are allotted by the central government but non-coal auctions are in the domain of state governments, with the Centre acting as a guiding authority.

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