Energy crisis and coalgate scam

There is a crippling energy crisis in India .This is a sorry state of affairs,especially in the context, that nearly one third of the nation's population has no access to electricity .The gap between supply and demand is ever increasing.The most worrying factor is the deficit in power supply is continously increasing.It is estimated the power demand in the nation is increasing every year by over 10  per cent..Recently in last July ,over 300 million people in 8 North Indian states had to face an unprecedented black out.This power black out created bedlam and disrupted railways and hospitals across these states .India's predominantt energy source is thermal. This sector is badly affected by coal shortage.This is  a knotty issue .Resolving this issue requires political will,capable leadership,vision and clarity on policies.Above all we need a system that does not feed unscrupulous elements to make money out of every deal.The demand for coal is around 650 million tonnes .But Coal India Produces only 538 million tonnes of coal.Because of the shortage of coal,most of the power generating companies are functioning at half the capacity.Prime Minister's office made Coal India to sign Fuel supply agreements with power generating companies,so that it would supply atleast 80 % of their coal requirement .It was beleived this mandatory condition would force Coal India to go for imports and would meet its contractual obligation.But look at the wisdom of Coal India.Coal India suggested a 0.01 per cent penalty for not delivering coal in time and the penalty would become applicable after 3 years of signing the agreement.Coal India is hesitant to import coal to meet the rising demands,because Coal India wants the consumers to bear the brunt of the increased cost of coal likely due to imports.

On one side the government is worried about the slow economic growth.But it is  due to a cascading effect of the power shortage.The coal shortage has hit not only the  existing power generation companies, but also new power generation projects that are supposed to augment the power situation in the country are also put on hold in many states due to coal shortage.On one side the power industry is screaming for fuel shortage.On the other side,most of the coal blocks allotted in the last eight years have not mined a single gram of coal.To enhance the production of coal,government allotted coal blocks to private companies.But the CAG report says the loss to the government by not allocating coal blocks through competitive bidding is 1.86 lakh crores.Coal blocks were allotted based on the recommendations of a screening committee.As usual government's defense is it is a notional loss,since not even a single gram of coal has been mined .Mr.Chidambaram said the coal is still with "Mother Earth" .It is a shameful defense .When the country is reeling under severe power crisis,due to insufficient supply of coal,how could a responsible minister take solace from the fact that not even a single gram of coal has been mined .Does it not loudly proclaim the inefficiencies of those in power and at the helm of affairs.It is also a fact that Coal block allottees have sold their mines to other companies and made money.some companies have added the coal mines to their list of assets.This would enhance their borrowing capacity from banks.Coal blocks were not acquired by these companies for the purpose of mining coal.Many nationalized banks have allotted huge loans to these companies. This makes the government hesitant to cancel the allotments .Because ,this in turn would affect another Public sector enterprise.It is alleged some media companies are also involved in this malpractice.

The irony is India holds the fifth largest coal reserve in the world and is not able to meet the domestic coal demands.Chattisgarh, Orissa, Jharkhand and West Bengal account for nearly 80 % the Indian coal reserves. Nearly 70 % of our coal production is used by the power industry .Remaining is used by Steel,cement and fertilizer industries.There is no co ordination between government departments .They work at cross purposes . Several private licencees of captive mines could not start production,since environment clearance is denied to them.Similarly there are problems in coal mining related to land acquisition, forest and environmental clearances.In areas under Naxal control,illicit mining is also reported.This is done to fund their operations.

There are lot of challenges ahead,if India is to come out of the power crisis that dampens the economic growth.The political leadership should take some stern and tough decisions to tide over the crisis.Else this could turn out to be a major setback for India's overall progress in many other diverse fields.

Power crisis - A case of mismanagement

Tamil Nadu is reeling under a severe power shortage.Even before the onset of summer,people are put to hardships due to the frequent power cuts.The deficit in power supply is said to be the tune of 4000 MW.It is very evident there can not be any instant magical solution to bridge the gap between generation and demand. But the government has to manage the summer deftly .The only plausible solution to tide  over the situation could  be borrowing power from energy surplus states.With the establishment of the National power grid,inter regional power exchange has grown.Many ambitious projects are underway to improve the inter regional transfer capacity.But the problem is, there are just 4 power generation surplus states and all other Indian states have power generation shortage to meet their own demands.Punjab,Gujarat,Goa and Kerala are the only 4 power surplus states.National power grid could become meaningful only when a majority of the states become self sufficient to meet their on power demands and go on to produce surplus power .

In a recent meeting with power sector chief's PM admitted power crisis is a "National Problem". On one side government sources say  coal shortage as the cause for the low power generation.The indigenous poor quality of the coal is also blamed for low power generation .Power sector chief's believe importing coal form Australia or Indonesia is not a viable option as the prices are prohibitive. The irony is Coal India is producing only half of its licensed capacity .Private sector power generation companies are seeking a revision in tariff as they are using imported coal.In Tamil Nadu few Private sector power generation companies have stopped production since the government has not paid their dues.

Those in authority seem to forget that uninterrupted power supply is the engine for growth and development .We don't seem to learn from states that have managed to generate surplus power .In 2001,Gujarat was a power deficit state.Now Gujarat produces over 7000 MW surplus power. They have drawn plans to minimise transmission losses  also. With the exception of few states, all the electricity boards in the country are running on losses.Each successive government tries to announce populist schemes to attract the vote bank and offer free electricity to farmers.Fiscal management has been the casualty of all Electricity Boards in the country due to vote bank politics.They seem to forget there is an ever growing increase in demand,a consistent drop in supply and the gap between demand and supply has been widening precariously.

It is estimated at least 32 % of the power generated in the country is lost in transmission and distribution. The total power deficit in the country is lesser than this.This is apart from the power theft reported in various places by unscrupulous elements.In our country even politicians and political parties indulge in power theft for their pompous meetings and celebrations.One must bear in mind,when we talk about power interruptions and the consequent discomfort ,we forget there are still over 300 million Indian citizens who have no access to power in India .But our politicians are happy in just announcing freebies to hoodwink the electorates at the time of elections and mismanage the resources of the country.At the time of elections two remote villages with less than 50 houses received 100 percent solar power in Himachal Pradesh ! .How do you explain this ?

The other day I read in a Tamil magazine that potable water is distributed to all villages in Gujarat ,taking in to account the requirement of each house ,based on the members in each house and a cumulative quantity thus arrived is supplied to the entire village .The water supply is controlled electronically to avoid wastage.But on the contrary one  can witness water tanker lorries going through the roads with heavy leaks day in and day out in other parts of the country .No one bothers to plug the leak and save the precious depleting resource.This is because those in authority lack vision.When people are unconcerned,even after seeing a visible wastage, how can one expect action on invisible losses like transmission and distribution  in power ?What is required is a sound fiscal management and a visionary administrator.

The government should give thrust to the use of unconventional renewable energy sources. Use of solar energy panels should be made mandatory for new residential buildings,apartments,educational institutions and create awareness about the renewable energy sources .When rain harvesting could be made mandatory to preserve ground water ,why not make use of solar energy panels mandatory to ease the power situation ?.The Ministry of renewable energy is giving a grant of Rs1.5 lakh per kilowatt for installing a wind-solar hybrid power plant to educational institutions .How many of them have utilised this subsidy is another  moot point !This grant should be extended to small industries also .Experts say a 100 KW hybrid power plant can be installed at a cost of Rs 1.6 crores .A sizable portion of the initial capital can be funded by the government.Encouraging more and more private participation in power generation is required until we reach self sufficiency in power generation.Not allowing nuclear energy plants ready for commissioning to function on perceived dangers is ludicrous.No one is disputing the potential hazard of a nuclear plant.A firm decision can be taken on the future of nuclear power plants in the country and steps needed to ensure safety of existing nuclear plants .Why should the government dilly dally taking a firm decision on this ?

The entire country except few power surplus states are likely to face the hardships of a severe power shortage this summer. The power cuts would surely bring in its wake a host of cascading issues like closure of small industries,lay offs,unemployment and untold miseries to students,house wives,and elders.Some drastic and out of the world steps are required to make the ailing electricity boards of the country turn the corner.Simultaneously a draft plan on future power demands for the next decade should be drawn to enhance power generation capacity in excess of peak demand .