With economic activity still in the process of restarting following the nationwide Covid-19 lockdown, Minister of Power and New and Renewable Energy RK Singh expects demand for power to “gallop”. In an interview to PRABHA RAGHAVAN and ANIL SASI, Singh discussed pent up demand for power, the status of the Centre’s emergency liquid funds to bail out discoms and its focus on hydro power as India shifts towards ramping up its renewable capacity. Edited excerpts:
Do you see Covid-19 impacting India’s demand for power in the long-term? How does the government plan to mitigate this?
On the first of August 2020, the energy requirement was 3,719 million units. The corresponding day last year, it was 3,713 million units, meaning there was an increase in 2020. So, we are already where we were (last year), despite the fact that we know all industries have not opened fully and, despite the fact that, in many parts of the country, there are still restrictions. So, any apprehension that that demand will go down just no longer holds water as of now. I will say (the demand) will increase because the economy has not started full tilt as yet, and when it (does) … we are bound to grow.
It was only in April that we had a major dip (in demand). But, I can tell you this: from what I have seen, I think our demand is going to gallop. It is going to start growing again at the same rate as it was growing, if not faster. Because, I see that pent up demand releasing itself — we had connected about 2.70 crore houses … in 15 months. The International Energy Agency called it the fastest and the largest expansion of access anywhere in the world, at any point of time. So all that is that demand we will see. They’ll buy fans, they’ll buy coolers, they’ll buy heaters.
How many states have submitted applications for the emergency one-time injection to clear discom dues? How much have they requested and how much has been sanctioned? Are there any challenges where certain states are concerned?
We’ve got applications of about Rs 1.02 lakh crore and another about Rs 35,000 crore applications will come as soon as the UDAY relaxation happens, for which we have floated a Cabinet note. Almost every state has (placed a request). No state is missing, except those states which have not been able to apply because of the UDAY limits.
The loan applications sanctioned is Rs 68,000 crore and Rs 32,628 crore are pending because of the requirement of relaxation of UDAY limit. Pending for processing is Rs 2,076 crore. The total we’re looking at is Rs 1,06,000 crore against Rs 90,000 crore.
But it is going to go up, because states like Jharkhand, for example, (want) to apply, but they have some formalities to go through. They have to get a government guarantee. Jharkhand has indicated that it has the intent to apply for Rs 5,039 crore.
In terms of fresh capacity addition, thermal is broadly tapering out and you’ve pushed for hydro. Given the fact that there is so much resistance to conventional storage-based hydro projects, is it a particular technology that is being preferred?
Almost every developed country has utilised most of its hydro projects and we have seen, by experience, that hydro projects in fact help the environment and do not lead to environmental degradation. All this propaganda going on (against hydro projects) had already delayed us. A 1,000-MW hydro plant replacing a 1,000-MW thermal plant will lead to CO2 emissions being avoided in billions of tonnes. It’s totally clean … it leads to flood moderation and, of course, it also leads to increased access to drinking water and improved agriculture. So, it has multiple benefits.
After being stalled for a number of years, now we have taken off again. Subansiri has started. Three-four committees went and every committee said it is fine. Dibang also, the scheme is taking off. Basically, if you want green energy, you have to have hydro. Otherwise, you can’t balance it with thermal. Thermal, you can ramp up and down, but right now, the (maximum) we have reached is 55 per cent. Beyond that, ramping is an issue.
Hydro has terrific ramp up and ramp down. And, it is because of hydro that, on April 5th, for nine minutes, (we were able to manage during the mass lights-off event). The demand drop was almost 32,000 MW in a time frame of 2-3 minutes, and a similar … rebound, again in 2-3 minutes. If it had not been managed well, the grid would have been in danger. Hats off to my engineers. They tried it out earlier, they had carried out their assessments, planned for it and were confident, they had carried out dry runs and said it will happen. I don’t think any other country has done this. So, we are determined. Our government is clear. We believe that we have to switch over to renewables and we will not only meet our commitment, we will exceed it.
With the government expected to notify a basic customs duty on solar equipment in addition to ongoing safeguard duties, do you expect this to impact addition of solar capacity and tariffs?
We are very clear in our mind that, (regardless of) whether there may be a slowdown because of Atmanirbhar Bharat or Make in India … we believe that it is important. It’s absolutely important and necessary that if we have the demand, we create jobs here, and (not) in other countries.
The apprehensions of a slowdown in this field also, I think, are unfounded because, during the lockdown, we finalised bids of almost 8,000-9,000 MW. And the participation in the bids was as competitive as ever. We were the only country which was finalising bids during Covid-19.
A safeguard duty is an inadequate instrument for impelling people to make in India because of its short duration and that is what happened … for example, the safeguard duty which was imposed for two years was just waited out for two years. Or they (developers) timed their development in such a way so that they will have to buy the modules and panels after the impact of that (safeguard duty) blows over. The extension now was possible only for one year. After that, there will be a two year gap.
(With basic customs duty), 20 per cent is what it will be in the first year. That’s what we have recommended, and we have said that it should go up … in the next year or the year after that, depending on how quickly our manufacturing capacities come up. But we are very clear in our mind that it has to be Make in India.
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