Uttar Pradesh Energy Situation

From energypedia

Overview

Status of the Power Sector

Uttar Pradesh regularly experiences power crises because demand for electricity frequently exceeds supply significantly. Over the last 20 years power shortage has remained within the range of 10-15%, while shortages in periods of peak demand reaches at even higher levels. In 2013, even a gap of up to 43% opens up between the state's demand and supply of electricity. As per figures presented in the Power Ministry’s review meeting in March, the state's projected demand for summer 2013-14 is 15,839 MW showing a gap of 6,832 MW.[1] This results in poor and unreliable power supply with rampant power cuts and prolonged periods of low voltage. As a consequence industrial investment in Uttar Pradesh has been constrained, with industries preferring to locate themselves elsewhere.[2]

This situation also repeatedly forces the UP government to purchase power for high prices from other states in India. In 2011 for example the UP government bought power at rates as high as Rs 17 per unit from the central pool to ensure adequate supply in the state.[3] This practice regularly incurs significant financial losses to the State Electricity Board, which (in part) have to be borne by the UP state government, constraining the state’s expenditures in areas social development such as education and public health.[4]

In 1999 the UP government tried to address the problems of growing power shortage and poor financial condition of the State Electricity Board (SEB) by reforming UP’s power sector. The power sector was restructured in order to unbundle and privatize it. Accordingly the SEB has been divided into three independent cooperations: UP Power Corporation Limited (UPPCL), UP Rajya Vidyut Utapadan Nigam (UPRVUNL) and UP Jal Vidyut Nigam (UPJVNL) – responsible for transmission and distribution, thermal generation, and hydro generation, respectively. Another distribution company, Kanpur Electricity Supply Company (KESCO) was formed as a 100% subsidiary of UPPCL.[5]

However, the UP Electricity Reform Act, formulated in 1999, had several shortcomings, which is a major reason for the problems of the UP power sector to persist until today. Besides not curtailing the enormous powers of the Uttar Pradesh Energy Regulatory Commission by making it accountable, and besides omitting the promotion of efficiency and energy conservation, the act did not address the main reasons for the financial problems of the SEB: High cost of power purchase in relation to the lower tariffs for consumers, which are determined by the UP government (no tariff adjustment), and arbitrary depreciation methods.[6] Additionally, the unbundling of the power sector was limited and did not lead to competition.[7]


Energy Capacity

Installed generation capacity in March 2009 and 2010 in MW[8]


03.2009

03.2010

Hydro

530

520

Thermal

4120

4370

New & Renewable

400

590

Total

5050

5480


Installed generation capacity by sector in March 2013 in MW[9]


Thermal

Total Thermal

Nuclear

Hydro

Renewable Energy

Grand Total


Coal

Gas

State

4923

0

4923

0

524

25

5472

Private

3090

0

3090

0

0

799

3889

Central

2749

550

3300

336

1297

0

4933

Total

10763

550

11313

336

1821

824

14294


Energy Consumption


Total Energy Available for Sale in Million Units (MU)[10]

Year

Total Energy Available

Transmission Losses

Total Energy Available for Sale

% of Loss

2008-09

56374

16844

39530

30

2009-10

61040

19677

41363

32

2010-11

65599

20344

45255

31

In 2009-10 the average per capita energy consumption in UP amounted to 387 KW/h, while the country’s per capita energy consumption stands at 734 KWh in 2008.


Electricity Consumption by Sector[11]

Year

Industrial in MU (%)

Agriculture in MU (%)

Domestic in MU (%)

Commercial in MU (%)

2008-09

10153 (25.67)

6841 (17.12)

15809 (40.02)

2925 (7.40)

2009-10

10739 (26.23)

7317 (17.87)

15894 (38.82)

3106 (7.58)

2010-11

10558 (24.50)

7891 (18.30)

16230 (37.60)

3072 (07.1)


Energy Supply


Demand and Supply in Million Units (MU), and gap between those figures in %[12]

Year

Energy Requirement (MU)

Availability (MU)

Surplus (+) / Deficit (-) (MU)

Surplus (+) / Deficit (-) in %

2011-12[13]

76,292

64,846

-11,446

-15.0

2012-13[14]

83,938

70,058

-13,880

-16.5


Peak Demand and Peak Supply

Year

Peak Demand in MW

Peak Supply in MW

Surplus (+) / Deficit (-) in MW

Surplus (+) / Deficit (-) in %

2012-2013

13,940

12,048

-1,892

-13.6


High transaction and distribution losses (T&D) are boosting the yearly deficits. In 2009 UP reported distribution losses of about 38%, which are higher than the national average T&D loss of 25.4%.[15]


Average Energy Tariff Structure[16]

Average Energy Charges (Rs./KWh) for Industrial Consumer

Average Energy Charges (Rs./KWh) for Domestic Consumer

3.2

2.4

The average electricity tariff for the country stands at Rs. 4.18 KW/h for large industries, while it stands at RS. 3.4 KW/h for domestic consumers.


Status of Renewable Energy

Under the State Electricity Act, 2003, the various state-level electricity regulators have specified a renewable purchase obligation. Accordingly, a set percentage of power must come from renewable sources. In case of UP this target has been set at 5%, of which 0.5% has to be from solar energy. However, UP has failed to achieve this target by falling short of about 50%.[17]

Uttar Pradesh also lags behind other states in the country in production of electricity through solar energy. While Gujarat produces 850 MW of electricity through solar energy, followed by Rajasthan at 201 MW, in Uttar Pradesh this figure is a meager. The first megawatt-capacity solar power plant had become operational in Uttar Pradesh in January 2013 in Barabanki (a 2 MW project).[18]


Rural Electrification


Number of Villages Electrified[19]

Year

Total Number of Villages

Number of Villages Electrified

In %

2009-10

97942

86450

88.3


In 2007 about 89% of households have been un-electrified, while the number indicated that only about 40% of the villages in UP have not been electrified.[20] This indicates that also today the number of un-electrified households is likely to be much higher than the number of un-electrified villages.



Constraints and Opportunities

The majority of power generated in Uttar Pradesh is reliant on coal, while the limited availability and high prices of coal have aggravated the precarious power situation in UP. Hence, there is an obvious need to develop alternate sources of energy. Uttar Pradesh is rich in renewable energy recourses such as biomass, solar and bio-fuels, of which only biomass has been considerably exploited. Uttar Pradesh is blessed with a good solar irradiation to the tune of 1,800 KW/h per m² on an annual average basis, which is considered necessary for operating a solar photovoltaic power plant. Thus, there are immense possibilities in this sector.[21] Growth of renewable energy would definitely help the state in meeting its energy requirements.[22]


Policy, Framework, Laws & Regulations

In January, the Uttar Pradesh Cabinet approved the first-ever solar energy policy of the state. Under this policy, a target of producing 1000 MW of electricity through solar energy has been set by March 2017. For the purpose of promoting production of electricity by solar energy, a U.P. renewable energy fund has been created.[23]


Apart from that UPNEDA runs a number of programmes addressing energy access and renewable energy:

Institutions Involved


Further Information

References

  1. The Times of India (Apr 2013). Power Crisis looms over UP,http://bit.ly/HIZTDM
  2. Planning Commission, GoI (2004). Uttar Pradesh Development Report. http://planningcommission.nic.in/plans/stateplan/upsdr/vol-2/Chap_b7.pdf.
  3. The Economic Times (2011). Greenpeace called upon Uttra Pradesh government to demand a bigger share of decentralised renewable energy. http://articles.economictimes.indiatimes.com/2011-10-21/news/30306656_1_renewable-energy-rggvy-arpana-udupa
  4. Planning Commission, GoI (2004). Uttar Pradesh Development Report. http://planningcommission.nic.in/plans/stateplan/upsdr/vol-2/Chap_b7.pdf.
  5. Review on Power Sector Reforms in Uttar Pradesh. http://bit.ly/1i0Xfr2
  6. Gurtoo, A. and Pandey, R. (2001): Power Sector in Uttar Pradesh: Past Problems and Initial Phase of Reforms, Economic and Political Weekly 36 (31), pp. 2943-2953.
  7. Planning Commission, GoI (2004). Uttar Pradesh Development Report. http://planningcommission.nic.in/plans/stateplan/upsdr/vol-2/Chap_b7.pdf.
  8. PHD Chamber of Commerce and Industry (2011). Comparative Study on Power Situation in the Northern and Central States of India. http://www.phdcci.in/admin/admin_logged/banner_images/1334554564.pdf.
  9. Central Electricity Authority (CEA) (2013). Monthly Executive Report, March 2013. http://www.cea.nic.in/reports/monthly/executive_rep/mar13/mar13.pdf
  10. UPPCL (2010-11). Statistics at a Glance 2010-11. http://www.uppcl.org/uppcllink/documents/14022013030910Statistics_UPPCL_2010_11.pdf.
  11. UPPCL (2010-11). Statistics at a Glance 2010-11. http://www.uppcl.org/uppcllink/documents/14022013030910Statistics_UPPCL_2010_11.pdf.
  12. PHD Chamber of Commerce and Industry (2011). Comparative Study on Power Situation in the Northern and Central States of India. http://www.phdcci.in/admin/admin_logged/banner_images/1334554564.pdf.
  13. PHD Chamber of Commerce and Industry (2011). Comparative Study on Power Situation in the Northern and Central States of India. http://www.phdcci.in/admin/admin_logged/banner_images/1334554564.pdf.
  14. Central Electricity Authority (CEA) (2013). Monthly Executive Report, March 2013. http://www.cea.nic.in/reports/monthly/executive_rep/mar13/mar13.pdf
  15. PHD Chamber of Commerce and Industry (2011). Comparative Study on Power Situation in the Northern and Central States of India. http://www.phdcci.in/admin/admin_logged/banner_images/1334554564.pdf.
  16. PHD Chamber of Commerce and Industry (2011). Comparative Study on Power Situation in the Northern and Central States of India. http://www.phdcci.in/admin/admin_logged/banner_images/1334554564.pdf.
  17. One World South Asia (2013): Greenpeace for revision of renewable energy policy in India. http://southasia.oneworld.net/news/greenpeace-calls-for-revision-of-renewable-energy-policy.
  18. The Times of India (Feb 2013). Next big move in UP, energy from the sun: http://articles.timesofindia.indiatimes.com/2013-02-13/lucknow/37078773_1_solar-energy-renewable-purchase-obligation-solar-power
  19. UPPCL (2010-11). Statistics at a Glance 2010-11. http://www.uppcl.org/uppcllink/documents/14022013030910Statistics_UPPCL_2010_11.pdf.
  20. Transaction Advisory Services (2007). Models of Rural Electrification: Report to Forum of Indian Regulators. http://www.forumofregulators.gov.in/Data/Reports/Final_Foir_Report_5th_March07_Models_of_RE_E&Y%5B1%5D.pdf.
  21. The Times of India (Feb 2013). Next big move in UP, energy from the sun: http://articles.timesofindia.indiatimes.com/2013-02-13/lucknow/37078773_1_solar-energy-renewable-purchase-obligation-solar-power
  22. Udhyog Bandhu (2012). Renewable Energy in Uttar Pradesh: http://udyogbandhu.wordpress.com/2012/04/17/renewable-energy-in-uttar-pradesh/
  23. The Times of India (Feb 2013). Next big move in UP, energy from the sun: http://articles.timesofindia.indiatimes.com/2013-02-13/lucknow/37078773_1_solar-energy-renewable-purchase-obligation-solar-power