On 6th October 2017, the Maharashtra Electricity Regulatory Commission (MERC) vide its order in case no 135 of 2017 allowed the Maharashtra State Electricity Distribution Company Ltd (MSEDCL) to procure around 1000 MW of short-term power at higher cost than the ceiling rate of Rs. 4 per unit that the commission had set for such procurement about a year ago. The reason for this was that MSEDCL claimed that around 6600 MW of its contracted capacity was unavailable due to coal shortage. As a result of this, MSEDCL was also forced to undertake distress load shedding in the state. Out of MSEDCL’s total contracted capacity of 33,496 MW, more than one-third belongs to Maharashtra State Power Generation Company Ltd (MSPGCL) and more than 60% of MSPGCL’s coal based capacity was unavailable during this period. It is important to note that the claims regarding coal shortage made by MSPGCL are contrary to the public statements made by the Ministry of Coal regarding coal availability and the data published by Coal India Ltd (CIL) regarding coal production and supply. Hence, it becomes important to evaluate whether the coal shortage claimed by MSPGCL and some other generators in the state could have been avoided by better planning.
Therefore, in order to bring in more clarity regarding coal procurement and generation planning processes, Prayas (Energy Group) has filed a petition before the MERC seeking a thorough analysis and examination of the reasons leading to sudden fall in availability of MSEDCL’s contracted capacity during September 2017. Prayas has demanded that the MERC should undertake such analysis based on data such as actual indents issued by MSPGCL to the concerned coal companies for coal requisition, coal supplied by CIL against such indents, and the details regarding how MSPGCL is utilising the coal supply contracted for its capacity (4522 MW) that is under planned economic and/or reserve shut down.
Prayas has submitted that the crisis like situation that emerged in September 2017 should be used as an opportunity to thoroughly evlauate generation planning and coal procurement processes in the state. Based on this analysis and to avoid such issues in future, the Commission should consider issuing specific process directions to the concerned companies. The petition is yet to be listed for hearing before the Commission.
Readily available and reliable energy data is fundamental to effective analysis and policymaking for the energy sector. Energy statistics of high quality, systematically compiled and effectively disseminated, not only support governments to ensure national security and evaluate energy policies, but they also guide investment decisions in both the private and public sectors.
In this study, energy data management in four countries – Canada, Germany, the United Kingdom and the United States – are examined from both organizational and operational perspectives. With insights from these best practices, we present a framework for the evaluation of national energy data management systems. It can be used by national statistics compilers to assess their chosen model and to identify areas for improvement. We then use India as a test case for this framework to assess how India may adapt and evolve its energy data management systems.
This study was published in the August 2017 issue of the journal 'Energy Policy' (link to the paper). The manuscript submitted to 'Energy Policy' is attached below.
NITI Aayog published a Draft National Energy Policy in June 2017 and invited comments. Following are the comments submitted by PEG for the same.
The Government of India announced a new policy called SHAKTI to allocate coal to power sector consumers in May 2017. This article analysing SHAKTI and its impact on the power and coal sectors was published in Business Standard of 25th June 2017. It concludes that, while the policy announcement will bring in short-term relief, it is unlikely to contribute to the long-term goals of the sector which requires efficient thermal generation, competitive markets and flexible contracts. Instead, it could fragment coal and power generation along public and private sector lines, with consumers having to bear the costs of the resultant inefficiencies.
Effective policy formulation in the energy sector relies on rigorous analysis of readily available, accurate and reliable information. Availability of such information in the public domain will also help independent researchers contribute more effectively to policy analysis in India.
Despite a rich variety in energy data sources in India, it is often difficult to analyse issues in the energy sector without investing significant time, effort and money in data gathering and processing.
In this context, Prayas (Energy Group) has developed a proof-of-concept energy data portal with support from NITI Aayog under the socioeconomic research grant scheme. The portal showcases a subset of official Indian energy statistics in one place and makes the statistics accessible to the general public by presenting them in a visually interesting, easy-to-understand and interactive manner. This data can also be downloaded into machine readable formats such as csv.
The portal is hosted online through NITI Aayog's energy portal at http://indiaenergy.gov.in/edm/. The Energy Division within NITI Aayog will be maintaining and enhancing the portal going forward.
The full-day event "Reflections on contemporary issues in the electricity sector" consisted of three sessions, with each session focusing on one recent publication from Prayas. The event was well attended with each session having between 20 and 30 participants from across a wide spectrum consisting of regulators, senior bureaucrats, utility representatives, trade union representatives, civil society organisations, consultants, energy and environment researchers and think tanks.
In the first session, PEG presented its report Price of plenty analysing the "surplus" power situation in the country, its causes, implications and possible solutions. The report presentation was followed by remarks from Mr. Anish De (KPMG) as a discussant. This was followed by a robust discussion among participants sharing their perspectives on the topic.
In the second session, discussion revolved around the PEG report In the name of competition which analyses the saga of retail electricity competition in Mumbai. The analysis looks at the history of evolution of retail competition in Mumbai, the roles of various players involved and lessons for future reforms in this direction. Daljit Singh (independent researcher) and Geeta Gouri (former Member, Competition Commission of India) shared their views as discussants, following which participants shared and discussed their ideas on this issue.
The last session was based on a recent book published by PEG reviewing India's electricity sector reforms over the last 25 years. PEG made a presentation on the book titled Many sparks but little light which covers thermal, hydro and renewable generation, electricity distribution and associated fuel sectors of coal and gas. After PEG presented the motivation for the book and its major conclusions, Srinivasa Murthy (former Chair, Karnataka ERC) and Mahesh Rangarajan (Professor, Ashoka University) complimented PEG for publishing the book and shared their thoughts on it. Participants in the session also shared their views on the book as well as the future of the sector.
The event agenda and presentations made at the event can be accessed below.
The Ministry of Coal sought comments on the discussion paper on auction of coal mines for commercial mining vide notice 13011/1/2017-CBA2 dated March 27, 2017. The approach towards introducing commercial mining should be seen in the larger context of the coal and energy sector. PEG's comments and suggestions on the matter are provided in this spirit.
Following the 2014 Supreme Court judgement cancelling allocations of 204 coal blocks, the Government of India had promulgated the Coal Mines (Special Provisions) Act in March 2015 and also allocated over 60 coal blocks for captive use in various sectors. The Government hoped to achieve a few important objectives through the allocation process, such as minimal disruption to production from captive blocks, rich revenue stream to states, reduction in electricity tariffs, and enhancement in transparency and competition.
Prayas (Energy Group) recently undertook a review of the status of captive coal blocks that were allocated with a view to assessing the achievements of the government’s stated objectives. The review findings are captured in a brief note and an article on Scroll.in. It concludes that most of the government’s objectives in allocating blocks have not been realized. This, together with the possibility of tempered demand for coal, calls for a different and more deliberative approach to the sector.
The Ministry of Coal published Draft Rules to replace the Auction by Competitive Bidding of Coal Mines Rules, 2012 and invited comments and suggestions on the same. Prayas reviewed the Draft Rules and submitted its comments and suggestions to the Ministry. The important comments related to
a) Need for much greater clarity and checks-and-balances related to commercial sale of coal
b) Need for much more transparency in the entire process of block allocations
c) Tighter and better eligibility and evaluation criteria for both auctions and allotments and
d) The role of current national coal companies such as CIL and SCCL in the new regime
The year 1991 was an inflection point in the history of modern India. The country embarked upon wide-ranging economic reforms in what came to be known as the Liberalisation, Privatisation and Globalisation or LPG era. The electricity sector — indeed, the entire energy sector — has seen multiple waves of reforms since then. It has been a quarter century since the beginning of the reforms and there are indications that a fresh wave of reforms are in the offing in the electricity sector. Over this period, Prayas (Energy Group) has keenly followed and participated in the reforms process as a proactive, independent organisation offering constructive critique and suggestions to further public interest.
Prayas (Energy Group) has authored a book born out of this unique engagement and understanding of the sector. The book critically examines many of these reforms and the impacts they have had, to understand if they achieved their expected objectives and if they helped in achieving the desirable socio-environmental outcomes. The in-depth analysis over eight chapters covers thermal, hydropower and renewable generation, electricity distribution, and associated fuel sectors of coal and natural gas. We hope that the book contributes to improve the design and implementation of further reforms, so that the sector overcomes its challenges in an equitable and sustainable manner.
The book is dedicated to Girish Sant, founder coordinator of Prayas (Energy Group), who continues to inspire our work.