Subsidised power is here to stay: Goyal

A deregulated electricity market in India is a distant dream.

“We won’t see a completely deregulated power market in the near future, unless some States go in for a Direct Benefit Transfer of subsidy,” said Piyush Goyal, Minister of State (Independent Charge) of Power, Coal, New & Renewable Energy, and Mines.

“As far as I am concerned, the poor and the agriculturalists of this country are getting cheaper or low cost power, which is good,” he added.

In a conversation with

BusinessLine, Goyal said that he was open to the idea of having a fixed electricity tariff for industrial consumers to attract investments. The Minister said that States are working on it, “Once they work on it they will go to the regulator, I think they will do it.”

Punjab has already experimented with it and now Uttar Pradesh was also proposing to explore the concept.

Asked if it will distort the power market, Goyal said, “Not at all. Earlier people used to give excise and sales tax benefits, now all that will be over after GST. Now they will have to give affordable land and things such as power.”

In fact, in the last three years (since NDA government came to power), the cost of electricity has fallen in every State, he said adding “This is despite coal cess going up to ₹400 a tonne and rail freight going up. We have been able to mitigate and manage it by efficiency and improvement in specific heat rates of coal-based power plants.”

No new power purchase agreements (PPAs) have been signed in the recent past because every discom has surplus power, he stated.

But when asked about former Power Minister Jyotiraditya Madhavrao Scindia’s claims of “surplus power”, Goyal states, “I wish when he had the opportunity he had made sure that across the country people got power when they wanted.”

He further said that there was a time when everyone feared that electricity will not be available and so excessive PPAs were signed. It was a psychology of shortages, he added.

UDAY, a success

Goyal dismisses any suspicion about Ujjwal Discom Assurance Yojana or UDAY hitting a roadblock. “Discoms have not failed. In fact, their payment terms have become better now because of a grip on their working. No cash has been given to anybody under UDAY. All we have asked from them is to regulate themselves and improve efficiency.”

“If we had given cash or allowed more borrowing, then we would have remained where we were prior to 2014. Even now it’s voluntary. Look at it like this, UDAY is a voluntary thing, which is accepted across the States and seven union territories with no pressure and compulsion from the Centre,” he argued.

Except West Bengal all States have come on board.

According to Goyal, the States which are not improving their discom’s health or power supply are making a grave mistake. “The public does not forgive these days. In UP, people were unhappy with the way the whole government was functioning,” he added.

On whether India will see ultra mega power projects, “yes, they will be a reality, as they will assure cheap, clean power over a long term.”

Goyal agreed that the country’s energy mix is changing as more green energy is being flushed into the grid, but he maintained that thermal will remain the base load for power supply.