Power Sector Reforms In India Research Articles

Analysis of Perspectives on Social Welfare Evaluation of Power Sector Reforms in India

Analysis of Perspectives on Social Welfare Evaluation of Power Sector Reforms in India

Solar power sector reforms in India

Solar power sector reforms in India

Utility reforms in developing countries: Learning from the experiences of Delhi

The power sector reforms of Delhi, the capital of India presents an interesting case in the evolution of power sector reforms in India, targeting improvements in distribution side. The Delhi reform design has benefitted from the experience of an earlier partially successful experiment in the state of Orissa. The reform format has tried many new ideas such as defining Aggregate Technical and Commercial (AT&C) losses, auctioning of Discoms based on highest AT&C loss reduction, direct privatization and transitory support provision. In the span of a little more than a decade from the year 2002, there has been tangible progress on many fronts. Other utilities planning the reforms may benefit from this experience. However, newer challenges such as an unexpected increase in power purchase costs with limited scope of passing these costs to the end customers seem to have emerged in the recent years. The paper ends with a cautionary note that for any utility not having access to lower cost power, the distribution reforms will reach a dead-end unless a competitive market is created at the generation side too.

Rural Electrification in the Changing paradigm of Power Sector Reforms in India

Rural electrification is an integral component of poverty alleviation and rural growth of a nation. In India, electricity has not played effective role in the socio-economic growth of village. GDP is increasing with 8 percent where as contribution of agriculture sector is 1.9 percent. Government of India has ambitious target of providing electricity to all villages by 2008 and all rural households by 2012. Steps are already initiated with Rural Electric Corporation, Rural Electricity Supply Technology mission, State Electricity Boards, Reforms in Power Sector. An attempt has been made in this paper to assess the features of rural electrification in India and the problems faced by State Electricity Boards. Challenges of rural electrification in the changing scenario of power sector reforms are identified. DOI: http://dx.doi.org/10.11591/ijece.v2i2.149

Getting reforms done in inhospitable institutional environments: untying a Gordian Knot in India’s power distribution sector

When grand institutional reforms based on idealized models are stalled by the poor institutional environments and difficult politics which often surround large infrastructure systems in developing countries, partial reforms whose design and implementation take into account the different interests of the key stakeholders can provide valuable and immediate benefits while moving these systems from low- towards higher-level equilibria. Strategically negotiated, experimentally partial and purposefully hybrid, these reforms are based on careful stakeholder analysis and strategic coalition building that avoid rigid positions based on idealized models. Our findings are based on a study of power sector reforms in India, where we performed a micro-level and in-depth analysis of a partial and innovative experiment which has allowed private sector participation in electricity distribution within a hostile institutional environment.

Introducing competition in the power sector in India: adoption of the US model

PurposeThe twin objectives of power sector reforms in India – improving efficiency and attracting private investment – are far from being achieved. It is commonly acknowledged that competition in the sector can help achieve the objectives of the reforms, but although the Electricity Act of 2003 promised to usher in competition, even after seven years of its enactment there is very little competition in generation and absolutely no competition in retail supply. This paper seeks to find a road map for the introduction of competition in the power sector in India by discussing and drawing upon the US model of deregulating generation and retail supply whilst simultaneously keeping transmission and distribution under regulation.Design/methodology/approachThe study is a historical analysis of deregulation in the US power sector and its relevance for India by drawing upon both primary and secondary resources.FindingsThe introduction of competition in the USA has brought substantial gains for the consumer and India can follow this model by mandating all distribution utilities to procure their future requirement of power through open competitive bidding. For retail competition, the system of provider of last resort (POLR) with POLR price being fixed with reference to market price can be the way forward.Originality/valueThis paper offers some practical and implementable suggestions for introducing competition in the power sector in India.

Metering of agricultural power supply in West Bengal, India: Who gains and who loses?

As a part of the ongoing power sector reforms in India, the state of West Bengal is in the process of metering agricultural electricity supply. This paper presents a first cut assessment of this initiative. Results suggest that the majority of the pump owners benefit from the reforms in two ways: first by having to pay a lower electricity bill for same usage and second through increased profit margins by selling water. This is because in response to the changed incentive structure, water prices rose sharply by 30–50% immediately after metering. In contrast, water buyers have lost out by having to pay higher water charges and face adverse terms of contract. Impact of metering on operation of groundwater markets and volume of groundwater extracted is less clear; they may expand, contract or remain unchanged, though water use efficiency is likely to go up. At current tariff rates, the electricity utilities are likely to earn less revenue than before. These findings are context specific and hold good for West Bengal where high flat tariff had fostered competitive groundwater markets and hence cannot be generalised for other Indian states.

Power sector reforms in India: a case study from Delhi

After distribution privatization experience in Orissa, the only other utility that has been unbundled and privatized is that of Delhi. The model for privatization of the distribution business in Delhi has been fairly unique and has also come under enormous scrutiny, primarily due to political factors. No other state government in India has tried to replicate this particular model for privatization.

Sustainability of power sector reform in India: what does recent experience suggest?

India has been flirting with the idea of power sector reform for more than a decade. However, despite the enactment of a comprehensive legal framework for governing the electricity industry, limited progress has been made in terms of achieving widespread sector liberalisation and privatisation. This paper presents a systematic approach to analysing the sustainability of the reform model and the experience in implementing it. It argues that the reforms to date have not produced desirable political, economic, financial, social or environmental outcomes. Political instability and opportunistic behaviour of political parties in India have reduced the acceptability of reforms, while the poor financial performance of utilities and subsidy burden show little signs of improvement. Reform has not succeeded in rationalising tariffs or balancing supply and demand. Electricity market reform has not increased access levels, and the rise of captive power generation is likely to have an adverse impact upon the natural environment. In conclusion, there are doubts about the sustainability of reform measures, highlighting a need to find policy alternatives.

Power sector reform in India: current issues and prospects

Power sector reforms in India were initiated at a juncture when the sector was plagued with commercial losses and burgeoning subsidy burden. Investment in the sector was not able to keep pace with growing demand for electricity. This paper takes stock of pre-reform situation in Indian power sector and identifies key concerns that led to initiation of the process of reform. The paper discusses major policy and regulatory changes undertaken since the early 1990s. The paper also illustrates changes in the market structure as we move along the reform process. We also discuss some of the major provisions of the recently enacted Electricity Act 2003 that aims to replace the prevailing acts which govern the functioning of the power sector in the country. In this context, we discuss two issues arising out of it, namely open access and multi-year tariff that we think would have a significant bearing on the performance of the sector in the near future. The paper also evaluates the reform process in the light of some of the regulatory changes undertaken. Finally, the paper briefly discusses the issues involved in introduction of competition in the power sector primarily through development of a market for bulk power.

Towards a new paradigm for power sector reform in India

The purpose of this discussion note is to describe briefly the paradigms [1] 1 At any period in history, according to Thomas Kuhn, there is a ruling paradigm (or pattern of thinking or framework) within the constraints of which most thinking takes place. When its effectiveness diminishes and it begins to break down, a paradigm shift takes place and a new paradigm comes into being. that have guided the power sector of India, starting with the pre-1991 classical electricity utility paradigm which gave way to the current World Bank-led paradigm for power sector reform. Sankar's new innovative proposal for addressing the problem of the power sector in India suggests the possibility that a shift may take place to a new paradigm. The contours of this emerging paradigm are the subject of this note.

The Impact of Technical Performance and Debt Maturity on Independent Power Project Viability

Power sector reforms in India have focused initially on the privatization of power generation. The power purchase agreement (PPA) signed between an independent power project (IPP) and a state-owned electricity board determines the viability of the IPP and the tariff that consumers pay. This article builds a financial model for estimating the net present value of an IPP based on specific PPA contractual conditions. Partial derivatives with respect to the plant load factor (PLF), the benchmark heat rate, and the debt maturity are established. These partial derivatives provide an understanding of the sensitivity of the project viability to technical performance and debt maturity. Partial derivatives are also provided for the sensitivity of consumer gains to the above factors. Both these sets of partial derivatives provide an enhanced understanding of contractual conditions. A numerical illustration demonstrates that lengthening debt maturity can add considerable value to equityholders.

Regulating the power industry in a regime of incomplete information: lessons from the Indian experience

Establishment of independent regulatory commissions is the central element of the power sector reform in India. Incomplete information is a major difficulty that Indian regulators face while making decisions. This paper identifies information inadequacy under three broad categories: transaction related, accounting related, and performance related. Problems in each of these categories are analysed both for transmission licencees and distribution licencees. It also discusses the approaches taken by the Indian electricity regulators for decision-making in a world of incomplete information and the steps taken to improve the situation. We argue that the regulatory decision-making under information constraints has greatly affected the finances of the regulated utilities and the privatization process. Finally, we suggest some steps such as a standardized accounting policy and regulatory information system for improving information availability.

Economic Liberalization and Power-Sector Reforms in India

Economic Liberalization and Power-Sector Reforms in India