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Posts Tagged ‘Power sector’

We think the increase in installed power capacity from 1362MW to over 100,000MW since 1947, and the electrification of more than 500,000 villages is impressive in absolute terms. However, annual per capita consumption in India of about 350 kWh is among the lowest in the world and many people in a large number of villages do not have access to electricity.

The power sector is in a critical phase, in our opinion. State electricity boards (SEBs) are responsible for providing electricity, but most are cash-strapped and the power sector has a large deficit because of the deteriorating financial performance of the central power generating companies.

The government initiated sector reforms in 1991 to turn around the financial health of the power sector. The sole objective in launching the reforms was to mobilise private sector resources for expanding power generating capacity, and the Government of India amended the Electricity Supply Act, 1948 and the Indian Electricity Act, 1910 to facilitate private sector participation.

Electricity Act 2003

The objective of the Electricity Act 2003 is to introduce competition, protect consumer interests, and provide power for all. The Act provides for National Electricity Policy, rural electrification, access to transmission, phased access in distribution, mandatory state electricity regulatory commissions (SERCs), licence-free generation and distribution, power trading, mandatory metering, and stringent penalties for electricity theft.
This comprehensive legislation replaces the Electricity Act 1910, Electricity Supply Act 1948, and Electricity Regulatory Commission Act 1998. The aim is to push the sector onto a trajectory of sound commercial growth and to enable better coordination between the states and the central government.

State reforms

Orissa, Haryana, Andhra Pradesh, Uttar Pradesh, Karnataka, Rajasthan, Madhya Pradesh, Delhi, and Gujarat have enacted their respective State Electricity Reforms Acts, which provide, inter alia, for unbundling/corporatisation of SEBs, and the establishing of SERCs.

The SEBs of Orissa, Haryana, Andhra Pradesh, Karnataka, Uttar Pradesh, Uttaranchal Rajasthan, Delhi and Madhya Pradesh have been unbundled/corporatised. Orissa and Delhi have privatised distribution.

Power sector

Power sector-Organisation Chart