Pricing of Energy 15.23 In parallel with action on the technological, front, an appropriate energy pricing policy would have to be followed in order to induce economies in the use of energy in all sectors and encourage the desired forms of inter-fuel substitution. In the past, the pricing of energy has not always reflected either the true costs to the economy or helped to ensure the financial viability of the energy industries. This situation cannot be allowed to continue for long. It is wrong to think that an adjustment in the prices of a basic input like energy would aggravate the inflationary situation; the costs to the economy are not reduced by not reflecting them in proper pricing. Indeed, the continuance of wrong pricing policies has a far more deleterious effect on the health of the economy than is often realised. Given the pressure of international oil prices and rising domestic energy costs, a high priority will have to be given early in the Plan period to the evolution of a structure of energy pi-ices which reflects true costs, encourages economy in energy use and promotes replacement of scarce fuels.
New Energy Sources 15.24 As mentioned earlier, India's endowments of energy resources are by no means large. There are also obvious limitations to the extent to which savings in energy consumption could be achieved through conservation. It is apparent, therefore, that if the country's growing demand of energy are to be met, new and renewable sources of energy must be developed. The new energy technologies are particularly suited for the introduction of decentralised or small scale energy supply systems which fit in with India's rural agricultural economy. Remote communities which cannot be reached by an electricity grid except at prohibitive cost or do not have easy access to conventional commercial fuels could, through renewable energy technologies, be provided
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with energy sources for domestic use as well as for rural industry and agriculture. In general, these technologies have the additional merit of having less adverse impact on the environment than the conventional fossil fuel systems. Even though the immediate contribution of the new energy technologies to energy supply may be limited and many of them are not economically competitive at the moment, there is no doubt that they will play a predominent role in future.
Animal and human energy 15.25 The heavy dependence of the rural economy on inputs of animal and human energy has already been stated. This situation is bound to continue for several decades to come. The main effort would have to be to reduce the drudgery of life in villages by developing devices, e.g., pedal operated mechanisms, which are more productive and less tiring than hand operated ones. Only some stray efforts have been made so far in this direction with little impact. The development of technologies which put human energy to more productive use and reduce drudgery needs to be set on a more organised basis with the requisite institutional support. Likewise, efforts should be made to raise the draught power of animals through improved breeds so that they become more efficient converters of fodder into energy.
The Programme 15.26 As mentioned earlier, conventional energy technologies are characterised by long gestation periods. It takes even longer to bring about significant changes in the pattern of energy consumption. Appropriate policy and investment decisions have therefore to be taken without less of time if the country is to meet the challenge which the energy problem will pose in the coming decades. This concern is reflected in the increased allocation made in this Plan for accelerated exploitation of India's domestic resources of oil, coal, hydro and. nuclear power. The scale of the energy forestry and bio- gas programmes is being expanded sharply. Funds have also been provided for a more intensified research, development and demonstration effort in the area of renewable energy technologies as also for a more efficient harnessing 6f animal energy- The details of the programmes and schemes are set out in the sections which follow. As for measures of energy conservation, the need is not so much for Plan investments as for appropriate fiscal policies and establishment of institutional mechanisms for regulation, extension and training. These will be pursued during the plan period.
POWER
Review 15.27 The total installed generating capacity which was only 2300 MW in 1950, increased to a little over 31000 MW by the end of March, 1980. The total generating capacity at the commencement of the Sixth Plan was as below:
Table 15.1
Installed capacity as on 31-3-1980
MW
Region Installed capacity
Hydro Thermal Nuclear Total
(1) (2) (3) (4) (5)
Northern 3945.28 4082.94 220 8248.22
Western 1790.30 5624.04 420 7834.34
Southern 4593.23 2613.88 .. 7207.11
Eastern 906.48 3959.28 .. 4865.76
North-Eastern 145.93 188.35 .. 334.28
Total Utilities 11381.22 16468.49 640 28489.71
Total non-Utilities
(as on 31.3.1979) 2.56 2532.44 .. 2535.00
Total (All India) 11383.78 19000.93 640 31024.71
15.28 During the decade 1970.80, installed capacity has grown at an average annual rate of 7.2 per cent. While over this period, thermal capacity increased at the rate of 8.0 per cent the capacity of hydro units registered a growth rate of 6.4 per cent The share of nuclear capacity continues to be modest, accounting for a little over 2 per cent of the total capacity at the end of March, 1980.
15.29 In parallel with the increase in generation capacity, there has been a steady expansion of the transmission and distribution networks. It is estimated that by March, 1980, the total length of 400 and 220 KV lines was of the order of 33000 ckt. kms., while that of 132 and 110 KV lines was about 58000 ckt. kms. Apart From the increase in number of lines, a significant step in the recent past has been the introduction of 400 KV transmission for bulk power transfer over long distances. Considerable progress has also been made in the construction of inter-State and inter-Regional lines to facilitate grid operation and transfer of power from surplus to deficit areas.
15.30 As a result of the high priority extended to rural electrification, there has been a spectacular increase in the last three decades in the number of villages electrified and irrigation pumps energised. This would be apparent from the table below:
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Table 15.2
Progress of Rural Electrification
Year No. of Number
villages of pumps
electri- energi-
fied sed
1950-51 3061 21000
1960-61 21750 198704
1968-69 73732 1088804
1973-74 156729 24266133
1979-80 250112 3949120
With a coverage of 2.5 lakh out of the total 5.7 lakh villages in the country, the percentage of villages which have access to electricity has touched 43 per cent. Though, since the commencement of the Third Five Year Plan, the primary focus of the rural electrification programme has been on the stabilisation of agriculture through the exploitation of ground water resources, village electrification gained importance with the introduction of the Minimum Needs Programme in the Fifth Plan, which aimed among other things at providing basic amenities to the rural areas. Since 1973 special schemes have also been introduced for accelerating electrification in the remote and backward areas.
15.31 Substantial as the growth of the power sector has been, power shortages have become almost endemic in various parts of the country. The rate of growth of power generation has not matched the growth of installed capacity, much less the growth of demand for electricity. There have been persistent delays in construction of projects, the commissioning of new capacity falling short of targets year after year. In the five year period 1974-79, the shortfall in the addition of new generating capacity compared with the target was as high as 40 per cent. Delays in equipment delivery by manufacturers, inadequacies in the organisational capabilities of State Electricity Boards in regard to investigation, project formulation, project implementation and management, and in a few cases, mismatch between actual flow of funds to Elecetricity Boards and project requirements, have been the major factors responsible for the time and cost over-runs of power projects. The slippages in commissioning schedules hive been aggravated by deterioration in the performance of thermal power stations, whose plant load factor came down to 45 per cent in 1979-80 as against the peak level of 56 Per cent achieved in 1976-77. The abnormal time taken for stabilisation of new generating units, deficiencies in operation and maintenance and inadequacies in coal supply and deterioration of quality of coal, have been identified as the major factors responsible for the sub-optimal performance of thermal power units in the recent years.
15.32 The percentage of energy lost in the transmission and distribution systems continues to be high and has remained at about 20 per cent over the last several years. Non-availability of aluminium, steel, insulators, etc., have adversely affected the progress of construction of major transmission lines. in general, the growth of transmmission and distribution system has not fully matched the expansion of generation capacity thereby affecting both the quality and reliability of supply and posing problems in transfer of power between different electricity systems. While no doubt the growth of rural electrification has been phenomenal when viewed from an all- India angle, a disaggregated analysis discloses wide interState and intra-state differences in coverage Even in villages to which the power supply lines have been drawn, the proportion of rural families using electricity continues to be quite low and the impact on rural industrialisation has also not been significant. These are all areas of concern which call for remedial action.
PLAN 1980-85
Generation 15.33 Considering the deleterious impact of power shortage on the productive sectors of the economy, the objective has to be to achieve a balance between supply and demand in as short a time as possible. The all-India consumption of electricity in 1984-85 is estimated at 148 Twh. This will require a generation of 191 Twh compared with the actual generation of 112 Twh in 1979-80, implying an average annual growth rate of 11.3 per cent during the Plan period. Taking into consideration the gestation lags in the construction of power projects, advance action had been taken to meet the power demand anticipated to arise during the Sixth Plan period. At the end of March 1980, generating capacity totalling 29,665 MW bad been sanctioned and the projects were in different stages of construction. Of this, it is anticipated that 19666 MW would be commissioned during the period 198085 comprising 13.846 MW of thermal, 5130 MW of hydro and 690 MW of nuclear units. As would be apparent from these figures, the bulk of the addition would be thermal, by the end of the Sixth Plan, the proportion of thermal units in the total installed capacity would increase to 65 per cent. The commissioning programme, while being realistic, is predicated on the maintenance of delivery schedules by the various manufacturers and timely availability of cement, steel, etc. Arrangements for monitoring the progress of the projects and flow of materials have already been made.
15.34 In a sector like power, it is obvious that planning has to be based on a longer time horizon, specially a% the construction period of hydro and nuclear power projects extends well beyond a Plan period. The economic perspective indicates a generation requirement of 287 Twh in 1989-90 and 380 to 400 Twh in 1994-95 which would call for an addition of 20,000 to 25.000 MW of capacity in the Seventh Plan period. Of tells the schemes already under construction would
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contribute about 10,000 MW between 1985 and 1990. For the rest, action will be initiated during the next five years to take up construction of new projects to synchronise with the build-up of power demand. Every effort will be made to give an impetus to hydro power generation since this is a replenishable form of energy. This will by no means be easy; in a situation of resource constraints, high initial costs and long gestation periods of hydro development can prove to be formidable hurdles, apart from the fact that the balance of the unexploited potential is largely in remote and inaccessible areas, sometimes also posing major technical problems. In the choice of locations for thermal power stations, preference will be given to pit head sites, but given the rigidities inherent in the pattern of investment flows in the Central and the State Plans as well as technical considerations of system stability and the economics of power transmission, these would necessarily have to be supplemented by some load centre based power stations.
15.35 As explained earlier, it has become necessary to acelerate nuclear power development in the country. While the full benefits of the Rajasthan and Madras atomic power stations would become available during the Sixth Plan, the construction of the Narora Power Station will reach an advanced stage, the first unit at this station going on stream in 1985-86. The Plan makes provision in addition. for investments on phased starts on three more nuclear power stations, each of which would have two generating units of 235 MW capacity. While this would undoubtedly mean a step up in the tempo of exploitation of nuclear power, it has to be recognised that in relation to the total capacity of the power systems in India and their rates of growth, the contribution of nuclear power will remain relatively modest in the coming two decades.
15.36 For historical and other reasons, the burden of power development has mostly been borne by the State Governments in the past. To begin with, the role of the Central Government in power generation was confined to the atomic power stations. Thereafter the Centre entered the area of hydro Power development in a limited way, taking up construction of selected projects in the relatively remote areas of the North and the North-east. It was only during the Fifth Plan that a marked increase in the Central involvement in power generation was visualised and a beginning made in the construction of super thermal power stations, which would benefit More than one State. For construction, operation and maintenance of thermal and hydro projects in the Central Sector, the National Thermal Power Corporation and the National Hydroelectric Power Corporation were accordingly set up. Having regard to the special conditions of the North Eastern region, another agency, viz., North-Eastern Electric. Power Corporation was also established to take up the construction of medium sized power Projects in the region.
15.37 The future approach to the demarcation of responsibilities between the Central and the State Governments in respect of power generation has become a crucial issue for the long-term power planning of the country. Power development has become increasingly capital intensive and the, construction of big hydro power projects or large pit head thermal power stations involves investments of an order which is beyond the capacity of individual States. With increasing capital intensity. it has become more important than before that the country should derive optimal benefit by the integrated operation of power stations, which confer the dual benefit of minimising costs and improving system reliability. Past experience indicates that multiple ownership of power stations and the tie lines leads to almost 'insuperable technical and commercial problems in the way of truly integrated operation of electricity grids. The Committee on Power (Rajadhyaksha Committee) has suggested that the majority of the new Power stations should be implemented in the Central sector in order that about 45 per cent of the total generating capacity in the country may be under Central ownership and control by the close of the century. The recommendations of the Committee are as yet under examination. Meanwhile, the new Plan seeks to continue the process of enlargement of the Central power sector. though not at the pace contemplated by the Committee on Power. At present, the total installed capacity in the Central Sector stands at 3277 MW. With the completion of the various schemes already under execution, this will go up to about 7742 MW by 1984-85. Provision has been made in the Plan for taking up the super thermal power stations at Singrauli, Korba, Ramagundam, Farakka and Neyveli to their full capacity; a start has also to be made on a new set of similar stations at other pit head locations. Nuclear power capacity, as already stated, would be expanded. A few hydro electric projects are also slated for Central implementation.
15.38 Installation of captive power stations will be encouraged in industries where there is scope for combined beat and power generation. Captive units will be permitted in large power intensive industries such as steel and aluminum which require installation of power stations of reasonable size and efficiency to cater exclusively for their requirements. Fertilizer and other plants, which have expensive equipment sensitive to power system flunctuations would also be allowed the facility of having, their own power supply arrangements. The other cases, the present policy of discouraging captive units will continue.
15.39 Over the years, the trend has been to install thermal generating units of increasing1v larger capacity in order to take advantage of higher thermal efficiency ad accelerate the rate of addition of new capacity. During the Sixth Plan, the overwhelming bulk of new thermal capacity will be accounted for by units of 210 MW each. This plan period will also witness a move to the next ,size of 500 MW. the first unit of which is being installed in the Trombay power station during 1982-83. Installation of similar units in the second phase of the Central super thermal stations is programmed. The location of such large units and their phasing would naturally have to take into account considerations of system stability.