Chapter 17 - Not Seeing the Wood for the Trees? Electricity Market Reform in India

Abstract

This chapter discusses India’s electricity reforms over 1993–2013 and their mixed results. Of the three main phases of market reform since the early 1990s, the enactment of the Electricity Act 2003 established much of the groundwork for the transition to a competitive market. However, a chronic supply deficit that emerged during the 2000s arguably led to a shift in the original objectives of reform, toward capacity addition vis-à-vis addressing the core problems of high commercial and technical losses in the sector, resulting in an extremely fragmented electricity market focusing on short-term solutions. The emergence of market mechanisms to promote renewables, however, holds promise, particularly with regards to their integration with parallel markets in demand-based energy efficiency certificates. This chapter argues that the integrated solutions developed for the renewables market, which appear to have bypassed institutional and political rigidities, present an opportunity to reclaim electricity market reform and help to address the existing dichotomy in reforms involving conventional energy.