Power Sector Post Lockdown - Challenges and Way Forward
A part of India’s think thank who chalks out strategies to drive energy sufficiency in the country, Ratul has a penchant for innovation, and willingness to take calculated risk.
There is no doubt that COVID-19 has upended the economic structure of the entire world. In India, the effect of the pandemic and the subsequent three-month long nationwide lockdown has been disruptive. Practically all sectors have been severely hit, notably transportation, automobiles, aviation, manufacturing, tourism and hospitality tourism etc. The shutdown was particularly harsh on the power sector. Due to the closure of industrial establishments during the lockdown, power consumption in India dropped by more than 22 percent. The road to recovery will be long and tough, particularly for the power sector.
However, the recent announcement of a Rs.90,000 crore bailout package for power distribution companies is a much-needed measure to revive the distribution sector and can be a stepping-stone for more reforms. The relief measures included cut in payment security, three months’ moratorium on payments to gencos and no curtailment of supply to them. This money will help the discoms, restart the virtuous cycle of liquidity, higher investments and rapid growth for the power sector.
To ensure the sustenance of the sector and smooth functioning of power supply across the country a strategic support would be required both from the government and aligned industries. Support from the government in the form of a deeper intervention in the sector considering the important pain points will ensure a robust power mechanism. Relaxation to electricity duty and extension of moratorium by RBI are some of the other critical support that will accelerate the speedy revival of the power industry. With the gradual easing of the lockdown, demand for power is beginning to pick up, as end-use industries start producing again. The recovery in the energy sector is expected to follow that of the overall economy.
For the energy sector, it is important to plan under extreme uncertainty, across jurisdictions, domains and ministries, as well as across the public and private sectors. This is made more complex by the long lifespans of many investments, not only in generation capacity but also more broadly in transportation, natural resources and consumption. There is a need for the industry players, government bodies and domain experts to brainstorm out of the box solutions. Also, there is an urgent need to change prediction models, considering the present scenario and to develop an effective plan to cope up with the crisis which is a major challenge ahead for policymakers, private industry leaders and experts in the power sector,
Prime Minister Narendra Modi is truly worthy of all the appreciation he today receives from various countries for seamlessly tackling the pandemic with timely and needful decisions. In these unprecedented times, India has united significantly to fight the pandemic that resulted in minimalizing the damage. The frontline health workers and police personnel have proven to be no less than a warrior during these trying times. A continued support from the center will ensure a stronger comeback of the power industry. At this hour, all must unite with a solution driven approach to fight the aftereffects of the pandemic and build a stronger nation.
India’s road to recovery is long and full of uncertainties. The challenges left ahead for the country will be difficult and draining but a consistent approach with timely decisions will stimulate the recovery of the power industry.
There is no doubt that COVID-19 has upended the economic structure of the entire world. In India, the effect of the pandemic and the subsequent three-month long nationwide lockdown has been disruptive. Practically all sectors have been severely hit, notably transportation, automobiles, aviation, manufacturing, tourism and hospitality tourism etc. The shutdown was particularly harsh on the power sector. Due to the closure of industrial establishments during the lockdown, power consumption in India dropped by more than 22 percent. The road to recovery will be long and tough, particularly for the power sector.
However, the recent announcement of a Rs.90,000 crore bailout package for power distribution companies is a much-needed measure to revive the distribution sector and can be a stepping-stone for more reforms. The relief measures included cut in payment security, three months’ moratorium on payments to gencos and no curtailment of supply to them. This money will help the discoms, restart the virtuous cycle of liquidity, higher investments and rapid growth for the power sector.
To ensure the sustenance of the sector and smooth functioning of power supply across the country a strategic support would be required both from the government and aligned industries. Support from the government in the form of a deeper intervention in the sector considering the important pain points will ensure a robust power mechanism. Relaxation to electricity duty and extension of moratorium by RBI are some of the other critical support that will accelerate the speedy revival of the power industry. With the gradual easing of the lockdown, demand for power is beginning to pick up, as end-use industries start producing again. The recovery in the energy sector is expected to follow that of the overall economy.
For the energy sector, it is important to plan under extreme uncertainty, across jurisdictions, domains and ministries, as well as across the public and private sectors
For the energy sector, it is important to plan under extreme uncertainty, across jurisdictions, domains and ministries, as well as across the public and private sectors. This is made more complex by the long lifespans of many investments, not only in generation capacity but also more broadly in transportation, natural resources and consumption. There is a need for the industry players, government bodies and domain experts to brainstorm out of the box solutions. Also, there is an urgent need to change prediction models, considering the present scenario and to develop an effective plan to cope up with the crisis which is a major challenge ahead for policymakers, private industry leaders and experts in the power sector,
Prime Minister Narendra Modi is truly worthy of all the appreciation he today receives from various countries for seamlessly tackling the pandemic with timely and needful decisions. In these unprecedented times, India has united significantly to fight the pandemic that resulted in minimalizing the damage. The frontline health workers and police personnel have proven to be no less than a warrior during these trying times. A continued support from the center will ensure a stronger comeback of the power industry. At this hour, all must unite with a solution driven approach to fight the aftereffects of the pandemic and build a stronger nation.
India’s road to recovery is long and full of uncertainties. The challenges left ahead for the country will be difficult and draining but a consistent approach with timely decisions will stimulate the recovery of the power industry.
