In the past, the central government had introduced `restructuring packages’ for discoms -the most recent being 2013 -but it hadn’t been able to eliminate the problem.
“There will be no package for discoms. What they need to do is set efficiency right, eliminate corruption in the system, reduce losses, cut transmission and distribution losses. I need to handhold them and put on my investment banking hat to help them sort things out,“ minister of power, coal and renewable energy Piyush Goyal told ET.
The minister added that the `onesize-fits-all’ principle doesn’t work here. “We have started dialogue with state governments last year. The central government, state governments and outside experts are working together for a 24×7 electricity plan by 2019 for each state,“ he said. No state had signed new power purchase agreements since 2013, and many continue to opt for load shedding rather than buy power, forcing the industry and commercial outfits to depend on expensive power from diesel generator sets. India has a total installed capacity of 90,000 Mw of diesel generator sets, providing power at upwards of . `20 a unit.
“We will eliminate consumption of electricity through diesel generator sets. This requires a lot of distribution capacity augmentation and improving transmission network. We are also looking at changing the existing transmission lines in parts to double capacity ,“ Goyal said.
The ministry plans to bid out contracts worth ` . 1 lakh crore over the next 6-8 months to scale up transmission infrastructure.
“The transmission projects that we are planning are not to take care of requirement for the next 2-5 years, but for 20 years. For the power sector, our short-term mission is 2019, `24×7 power for all’. In the medium term, we want energy security in the next 15 years, and the longterm plan has a horizon of 20-30 years,“ the minister said.
The recent coal mine auction and bids for gas have given the sector some relief and visibility to in crease generation. In the year ended March, India added 22,566 Mw of new generation capacity , its highest ever in a year. But these projects were those which had been stranded or stuck and thus delayed.
Given that most power companies are shying away from new projects and banks have burnt their fingers in the past, what about new projects?
“We need $250 billion (. `15 lakh crore) in the next five years and there’s no problem with money.Both nationally and internationally, the appetite for the sector is increasing by leaps and bounds.The best of companies in India are looking at renewable energy in a big way and international investors we have met are extremely excited about the India growth story,“ Goyal said.
The minister said that bankers, both local and international, are keen to invest in equity in power projects and debt too will be available to power projects, but selectively to “good projects.“
The ministry is working on issuing ‘masala bond’ for state-run generator NTPC and is enthused by the initial response.
“I have offers, as we speak, for NTPC to raise $20 billion should we want to. We are looking at doing a ‘masala bond’ very soon for NTPC. It will be for $500 million initially but we will keep going up,“ Goyal said.
‘Masala bonds’ refer to rupee-denominated borrowings by Indian companies in the overseas markets.