One of The Most Exhaustive and Exclusive Interviews of Union Minister Of State (IC) For Power, Coal And RE, Piyush Goyal
“Keep a watchful eye on the progress of our programs, so that every stakeholder, whether it is the state, or the DISCOM or even the Centre, is put to notice if we fail in any of our performance,” Piyush Goyal.
By Anupama Airy
A little over a year back, on January 9, 2015, in a similar interview with me, the union minister of state (IC) for power, coal and RE, Piyush Goyal had set an ambitious target for himself for tiding over the power crisis in India within 2-3 years and had also promised to make the National Capital “free of power cuts” in this time period. In a yet another free-wheeling discussion with the minister, Anupama Airy revisited the issue and spoke to him in detail about his plans and policies to make India an “Invertors and diesel generators free” nation. Alongside, the Modi government completes two years in office on May 26, 2016. At the outset, the minister also shared his thoughts on the achievements so far and the journey ahead. He gave a detailed overview on the pace of reforms and policies apart from new schemes and plans for India’s power sector.
Q: I start with the famous Uday and Ujala that have become the keywords for reforms today. After your LED Bulbs scheme, which has been a bit hit, we now know that you want to bring in energy efficient pumps for agricultural sector, ceiling fans and air conditioners and that too through the EMI route. Give us a sense of these new programs?
A: The energy efficient fans will initially be launched on the 7th of this month –starting with Andhra Pradesh and once we get a little sense of the market, demand and the feedback from the customers then we will scale it upto very large levels from there, just like we did in the LED program. These will highly efficient energy fans, which will cut down the consumption by actually 25%.
Our first tender of 1,00,000 energy efficient fans which have discovered a price of Rs 1250, far better than the existing cost of in-efficient fans. And this cost can be recovered back by the consumers within 2 years.
Once we complete the LED program which is 2019, we will be decreasing the energy consumption—and mind you, only on the lighting side– street lights and home lighting, by around 112 billion units.
That’s 11,000 crore units, which means a saving of 40,000 crores of saving for the consumers or aboput$6.5 billion. This savings will come after we distribute and install around 770 million (77 crore) bulbs in homes and 35 Million (3.5 crore) LED’S as street lights.
Air conditioners is still some time away as we are still experimenting, tampering some processes and trying to see what will be the savings as also the confirmation of payback.
But more importantly, we are focusing on agricultural pumps, India uses nearly 20 million (2 crore) very old agricultural pumps, which are energy guzzlers. We also have about 10 million (1 crore) agricultural pumps which are working on diesel or other forms of power. Therefore, the effort is to make these old pumps energy efficient and replace diesel pumps with electrified pumps.
Q: What is the timeframe for this changeover?
A: I am looking at accomplishing this in the next three or four years. This is a big effort and lot of background work has gone into it– lot of discussions on quality specifications, how this program can become economically viable, stand on its feet and independent of government subsidies. We want to make it a win-win for all for all stakeholders.
Q: You have also spoken about electric cars at zero down payments? Again a very innovative and a great concept? How are you moving on this front?
A: Prime Minister Modi has been very concerned about the environment. We believe that as the days progress and renewable energy becomes more attractive coupled with cost of storage falling in the years to come (this will help us reduce coal-based power plants in the future), we should simultaneously see how we can bring down the expanding demand for petroleum products. So it’s a 360 degree approach to bring down all fossil fuels, going forward. Electric vehicles, particularly on the passenger side, is something which is very much doable. Costs are falling and as storage costs fall and electric cars are made at a larger scale, our estimates demonstrate that we will be able to pay back the costs of the car in 7 or 8 years.
From the savings of petroleum or diesel imports vis-a-vis the lower costs of electricity that will power the car and at the same time while we help the environment, we will also be saving a lot of money for the consumers of India. So all our programs are focused on how we can empower the common man and the man on the street, who wants a greater degree of accessories, means of transport with better service standards and all of this.
Q: Any time frame for this roll out?
A: Well I think we should plan to do this by 2030 but all this is still at a very preliminary and concept stage. But we have got some small teams working and exploring the availability of products so that we can scale up such a program.
Q: Will there be any partners from the Industry assisting you in this program?
A: It is too early to comment on this but we are open to all sorts of ideas.
Q: With the onset of summers, how prepared are we as far as power situation is concerned?
A: We are absolutely prepared. Last year, I think the entire summer we did not have any problem, expect one state Karnataka, which had a severe hydel shortfall because of bad rains and where there is not much of transmission ability which of course cannot be created overnight. So except for some specific locations, where the constraints are beyond human management – like transmission or the last mile connectivity, or break down of a major power plant and not enough time to ramp up the rest of the supply lines of a particular locality are instances that one cannot plan for entirely.
But by and enlarge the nation has as a whole has got sufficient ability to generate more power and any amount of demand the people of India need, where ever there is transmission ability , we are geared up to meet that requirement.
Q: How about Delhi. How well prepared are we in our National capital?
A: I have already asked my department to review the position in Delhi and discuss with the officials of Delhi on what there preparedness is for power. Then I have also sought to set up a meeting and have asked my people to write to Delhi’s power minister and the officials of the Delhi government and call a review meeting along with officials of my ministry, Power Grid Corporation and other companies supplying power in Delhi.
I would like to review both the preparedness for the summers for the people of Delhi as well as see the progress of the works that I had initiated a year and a half ago on various fronts to augment and strengthen the capacity of Delhi to withstand increased demands or support or provide for increased demand particularly in the summer months.
It is not directly part of my work but now I have become a resident of Delhi and I can say it is my “Karma Bhoomi”, So I am also taking a personal interest .
Q: You once mentioned in an earlier interview that in Mumbai (and you yourself being from Mumbai) no one has ever heard of Invertors or Gensets. But Delhi and NCR is just the opposite. You have also spoken about making India a DG set free and inverter free country. How far have we moved on that front because if you go towards the NCR, you see all industries using diesel guzzling gensets and using them for power ?
A: The Delhi bit, I have already responded to. The NCR you are talking of includes Gurgaon and Noida– area’s where transmission and last mile connectivity or sufficient ability to move large volumes of power is a constraint, something which sitting in Delhi I cannot plan for. It has to be something that has to be initiated by the states to augment and strengthen their transmission capabilities.
But I am fairly confident that all the teams in the state are also conscious of their responsibility for their people. I am working closely with them for the 24×7 power for all and UDAY program. Large parts of NCR are in UP and Haryana, both of which are part of UDAY 24×7 plans and I do believe that by 2019 they should be able to have adequate capacity We are trying to speed it up.
We have already put in place short, medium and long-term mechanisms to ensure ample power for the country. Energy savings schemes like the LED bulbs scheme, smart and efficient agricultural pumps for farmers, energy efficient fans and going forward air conditioners also…all are plans to reduce energy consumption. This energy saved is also meeting additional demand which we are also ensuring through other measures that are currently in place. With reforms like UDAY and UJALA, I am confident of achieving this by 2019 when power cuts will become a thing of the past.
Q: You have focused a lot on Renewable Energy especially solar. Can you give us some realistic achievable targets for say the next year and what have you achieved over the past two years?
A: In the first year that I came in, was obviously dependent on what had happened in the previous year… yet both the two years gone by, we have executed our targets that were set earlier. We have reset the targets (about 7 or 8) about a year ago and I have since then been creating the policy of framework — the tariff policy came out, UDAY became a reality, energy efficiency schemes under UJALA have gained a lot of momentum.
Simultaneously we have taken out tenders of nearly 19,000 megawatt of solar power in the current year which ended yesterday. Our target for next year is 12,000 Megawatt of additional installed capacity as against the original capacity of 3000 or whatever it was.
Now we are planning to scale it to that level for which it was obvious that unless if you bid out a large number of contracts now, we wouldn’t be able to achieve that That’s why we focused our energies on the Solar Parks, transmission lines, working with the states for power purchase agreements, and with these 19,000 MWs, of which nearly 10,000 is awarded, another 5000-6000 mw will get awarded in this month of April and then balance by May probably,
So I am fairly confident that in the current year itself by March 2017, we will exceed 12,000 mw, which will be twice as what we are today.
Q: And what about the wind energy? Is it also moving at the pace of solar?
A: The wind also has seen a 40% growth last year and I am fairly confident that we will continue to achieve the targets of wind also. There are certain very specific issues related to wind particularly with regards to their ability to manage the grid, forecast the demand and supply, make sure the grid does not become unstable. My people are working in the wind industry to emulate these issues.
Q: How would you like to see the ideal combination of thermal, renewable, hydel, gas based power in India’s energy basket?
A: Well, it will keep evolving. It is a dynamic structure and it will also be dependent on pricing because our aim is not only ensuring 24×7 power but also keeping it affordable and ensuring high quality. Simultaneously, we are very responsive towards the environment, so we have to keep calibrating and keep responding to changing times as the year’s progress.
I do see coal continuing to play a very important role (for the base role) and I do see growth also in the coal sector both to reduce the imports of thermal coal, further beyond what we did last year, as well as to support the expanding coal-based power because that will have a very-very important role in the power mix.
Gas we are looking to encourage more and more domestically in terms of gas exploration, which will be a great support to the gas based plants. In the meantime we are supporting them through PSDF (Power System Development Fund). The last PSDF round of transparent auction, infact earned us some money rather than giving support to them. So that also has been a resounding success.
And renewables, with the new tariff plans which have been 40% lower than what they have been years ago, I am very confident that you will see a resurgence in renewables and once storage becomes more attractive, then it is a great future for the world.
Q: Your government is completing two years on 26th May. Give us your sense of the journey so far and the road ahead?
A: Well, we have a long journey ahead of us. I do hope that in these two years, we have been able to create a structural frame work where people have hope and confidence that things can be done honestly, things can be done with a great degree of participation and cooperation amongst difference sections of all the stakeholders.
I am also finding that the confidence has come back for fresh investments in this sector.
Look at the progress of power transmission in South India where a lot of stalled projects have also been revived. As a result of this, power prices for the southern region– Tamil Nadu, Kerala, Telangana, Andhra Pradesh have fallen by nearly 60 or 70 % in less than 2 years
Transmission has gone up by 71% in only 18 months and most of the southern region today is now is power surplus– from an era when they used to buy power at as high as Rs 16-Rs 18 a unit to have reached a point when they do not have to pay more than Rs 4-5 now. Usually, it is available under 3 Rs and with the launch of Vidyut Pravah, I am sure the people of India will be benefitted with more power in their hands… or literally in their mobile phones.
Q: You recently made an important statement saying we do not need tariff hikes and it is all about managing it right? Pl elaborate.
A: Personally, I think efficiency gains in terms of UDAY — where we are talking about Rs 1,80,000 crore savings per year that all the states which join into UDAY can enjoy. My sense is that when all states come on board, which I am quiet sure of. All these gains will be enough to take care of the existing requirements of the DISCOMs. I think we will have to perk up our acts, we will have to be efficient across states and the political pressure of people demanding better quality service and affordable power will make sure that (hopefully) we don’t have to increase tariffs. Unless in some stray cases where efficiency gains are not as much as we desire them to be.