India’s aggressive agenda to build power network

INVESTMENT of up to US$1 trillion may be needed to allow India to meet growing energy needs over the next 15 years, says Piyush Goyal, the man charged with implementing India’s One Nation, One Grid
policy, which aims to ensure that power can be made available at any point in time at one price across the country . . .

India’s Minister for Power, Coal, New and Renewable Energy, Piyush Goyal, considers it a national shame that almost 70 years after independence, India has not be able to deliver electricity to all of its population.
But under the Government of Narendra Modi, a concerted effort is being made to ensure that, by 2019-20, most Indians will have “24-7 uninterrupted power”, Goyal told ATI during a visit to Sydney.
“All these years after independence, there are still 250 million-odd Indians who are deprived of energy. I think it is a matter of national shame that we have not been able to deliver power to these people,” he says.
Goyal, a trained lawyer/accountant who was recruited into the Modi Ministry from the private sector, says his first priority is to ensure that the people of India can count on the Government delivering “quality” power.
One of India’s problems is uneven power distribution, with some regions suffering from shortages while others enjoy surpluses. It does not have the transmission system to move power from one region to another.
“We have had an aggressive agenda for the last 18 months to improve transmission capacity. Our aim is to ensure power can move seamlessly across the country,” he says. “We have a policy of One Nation, One Grid and the ultimate aim is to ensure that power can be made available at any point in time at one price.
“Whenever there are shortages, prices tend to move up. In fact, December 29, 2015 was a day when, for the first time, we had one price throughout the day across the country.  We had three more days like this in January, and we are moving in the next year-and-a-half to ensure seamless flow of power across India.”
“As we connect more people to power, we are also bringing in more manufacturing and expanding the economy,” he says, adding that he expects per capita consumption of electricity to rise from a current low 1,000 units per person. That compares to the world average of 5,000 units per person.
“In the next five years,” he says, “an estimated investment of US$250 billion will be required. If I talk about a 15-year horizon (until 2030), then we will need about a US$1 trillion investment to meet the growing energy needs of the country.”
Goyal says there is a huge amount of appetite from domestic and foreign investors for investment in the energy sector. “The primary focus is to reduce the interference of Government, to reduce Government rules and regulations, and to streamline everything. Transparency and equal opportunity for all are the objectives of the reforms. We want this to be the hallmark of Government businesses in the power and utilities sectors.
“We are trying to create an enabling framework to encourage investment into these sectors. So if you are to ask me to name the two or three defining features of what we are doing — it is making sure that all our processes are transparent and honest.  This is one of the most important things when investors are making decisions.”
Goyal says that, according to the international corruption watchdog, Transparency Internat-ional, India’s rating improved by seven notches last year, and he expects it to improve further — and  significantly. “We are looking to create a predictable, stable and simple regulatory framework, so there is ease of doing business — we’re talking about less Government in business and better-defined systems and processes.
“This is an area of focus for this Government. International ratings on ease of doing business show that India’s position rose 12 notches last year — and when this year’s ratings are out, we expect further improvements.
“The important element of our efforts is to bring to India the best of class in the world, the most modern and advanced technologies,
calibrated to the Indian context that we can leverage to our economy of scale.”
Goyal says India is like all developing countries which have to contend with vested interests when undertaking reforms. He told ATI that Prime Minister Modi’s priority is to bring integrity into Government processes and to create a corruption-free regime.
“This is the reason that investors across the world are more actively looking at India now. Our FDI grew by 39 per cent in the last 18 months. And this is why the rupee is one of the best performing currencies and has not depreciated.”
By 2030, India plans to have 40 per cent of installed capacity provided by renewable energy.  Goyal says India has one of the most ambitious targets in the developing world when it comes to renewables.
“We hope to bring down carbon intensity by 25-30 per cent by 2030,” he told ATI. My Prime Minister supports a clean environment. It is an article of faith to leave a better and clean planet.
“We will come out with a policy to attract manufacturing capacity in renewable energy. Today, India’s renewable energy roll-out is the largest anywhere in the world. We are expanding 34 gigawatts to 175 gigawatts by 2022.”
But it is inevitable that India will need to increase the use of coal.  “We are still going through a growth phase in our economy,” Goyal says, pointing out that developed economies like the United States and Europe have shifted out of manufacturing into services, and that their energy usage reflects that shift.
“India has large quantities of coal, so an ideal situation for us is not to have to import. As a Government, we are moving towards that goal.” But, he adds: “We don’t have sufficient coking coal required by the steel industry, which is expanding, so we will continue to import in big measure.
“On thermal coal, several plants which we set up several years ago are not suitable for Indian coal. These plants have boilers designed to take imported coal with low sulphur and fly ash. They will necessarily have to remain dependent on imported coal.”
Goyal says new plants will be built to use indigenous coal, except in certain coastal areas where there is no ability to move large volumes of domestic coal. Coal is mined in the central part of India.
“So, in fact, if I can get good quality coal at good prices, in some cases it is better to have imported coal coming to coastal plants so that I reduce pollution levels while servicing my people with power.”
He adds that gains in energy efficiencies are coming in, so energy requirements are falling rather than growing.
Goyal says nuclear will contribute five to eight per cent of India’s installed capacity by 2030.  A Government agency is drawing up a roadmap for the country’s energy development.
“India needed strong leadership to create an enabling framework which can cater to decades of growth. I personally think that India will enjoy decades of double-digit growth as we harvest the efficiencies gained from reforming the economy.
“This Government had two choices when it came into office . “One was the quick fix with band-aid type solutions to give the people a sense of prosperity very quickly. But taking short cuts to resolving problems will lead to other weaknesses in the system. The second is to take a methodical approach to ensure a sound, lasting foundation for growth.”
Goyal offers the analogy of building a skyscraper. He says the Government is digging deep into the foundations, taking out the dirt and debris to ensure that the building will sit on solid ground. He believes the work now being undertaken is laying the groundwork for decades of growth. “And that is the future we want for our people — prosperity for years and years to come” .