Government aligns major reforms to boost India's electricity market

NEW DELHI: The government is aligning major reforms in the electricity sector that will change the architecture of domestic electricity market , make it more responsive and reduce the cost of public distribution services and consumers through intense competition.

The energy ministry has established a group of experts headed by a special secretary in the ministry to chart a course for deepening energy markets in India. Simultaneously, the ministry has also designated EY (Ernst u0026 Young) consultants to suggest ways to bring the life to life. energy market identifying the gaps in the current system.

The reforms push, potentially the largest since the promulgation of the Electricity law from 2003, started as part of the minister of power RK Singh 's efforts to lay a roadmap for a thriving domestic energy market by 2030 to ensure the Narendra Modi The government's goal of providing 24X7 of affordable and quality energy.


"We are going to bring about a wholesale change the way we approach the energy market . The idea is to make the sector more responsive and viable so that investments can come. Make it accountable to consumers on quality of service. Giving rights to consumers. Deepening of market is to create competition and encourage efficiency and flexibility," Singh told TOI on Wednesday, confirming the ministry's move.

The broad contours of the current year revolve around encouraging discomforts to buy most of the power through commercial platforms, as in developed markets such as Europe. This will cause several changes in the value chain. The generators will optimize their capacity and source (coal, hydel, renewable energy) and will compete to offer lower rates. This will reduce the cost of purchasing energy for discoms, which will have to manage the supply and demand list more efficiently and be agile to be able to link cheaper energy when it is offered. Trade is also expected to address the problem of delayed payments to generators by discoms, improving the viability in the sector.

Most of the basic components for this phase of reforms are already there: India has an almost surplus generation capacity and has a decade of operational energy exchanges. Utilities and generators received flexibility to use their carbon bonds in more efficient plants. Recently, Singh allowed the generators flexibility to supply from any plant of their choice instead of the plant designated in a PPA (power purchase agreement. To ensure timely payment to the generators, he used the PPA provisions to introduce a system Prepaid for discoms.

On the consumer side, pre-paid meters are being rolled out. There is plan for introducing time-of-the-day tariff and open access for large consumers by separating carriage and content. Large-scale trading will bring all these together to turn India into a viable, thriving energy market .