General Studies (Paper - 3) : Model Question & Answers

Question: 'The power sector reforms hold key to the achievement of energy security goal.' Comment and critically analyse the most important power sector reforms chalked out by the government.

Answer: The statement is well justified as power sector is crucial for all sectors of the economy ranging from agriculture to the services. Through the clearance of supply-side bottlenecks, power generation is one front on which the government has indeed done well. The assurance of coal linkages in particular has brought life back to power generation units that were idle without fuel. Moreover, additional facilities have been added to the nation’s total power capacity over the last one year.

There are a few states which are trying to solve multiple problems related to the sector. Goa, Uttarakhand and Meghalaya have joined hands with centre to ensure
(i) an increase in power generation from local energy sources
(ii) an improvement in the inter-state transmission network, a revival of the sick distribution sector, enhancement of the use of renewable energy and
(iii) the use of energy-efficient measures.

Among the other initiatives suggested was a strong communication, information technology and monitoring division. The Centre will provide assistance in terms of central financial assistance from the Ministry of New and Renewable Energy for various schemes and the power ministry’s support under various schemes for rural and urban electrification.

However, the same degree of attention has not been directed towards distribution channels. A paradoxical situation where state electricity boards (SEBs) lack the means to buy power from power generation units, leading to surplus power in the hands of power generators and a record low PLF, sums up the poor state of power distribution. One solution is to encourage more production by allowing the companies to charge market determined price, but critiques argue that these are intended to help private monopolies.