Power Vision: What is missing in the draft national electricity policy

The government has finally decided to take the plunge and revise the National Electricity Policy (NEP) by invoking Section 3 of the Electricity Act, 2003. The Act mandates that the central government shall prepare the NEP in consultation with the state governments and the Central Electricity Authority.

The first NEP was formulated in 2005 and a lot of water has flown under the bridge since then as far as the power sector is concerned. Just to give a few instances, between 2005 and 2021, generation capacity (inclusive of renewable capacity) has gone up by about 251 GW, renewable generating capacity has gone up to 94 GW (from wind, solar, small hydro and biomass) from almost nothing, leading to about 10% of generation from renewable sources, an additional 2.5 lakh circuit-km of transmission lines (above 220 kV) added, per capita consumption has almost doubled from 630 units to approximately 1,200 units today, peak and energy shortages have come down from double digit figures to about half a percentage point, and rural electrification is almost complete with near 100% electricity access to households (not necessarily 24 hours supply).

surprising that despite the paradigm shift that was taking place in the power sector not only in India but across the world, especially towards decarbonisation, the government did not bother to revise its NEP for almost 16 years. Although the government keeps pointing to the fact that peak and energy shortages have come down drastically implying that all is well, the reality is quite to the contrary. The situation of excess supply is illusory because our demand has not grown at the rate it should have because of the economic downturn since the last couple of years, even before the pandemic.