Art & Culture
- Sexual Harassment Charges against Chief Justice of India Ranjan Gogoi
- All You Need to know about Electoral Bonds
- Electoral Bonds controversy
- NaMo TV controversy
- General Elections 2019
- RBI Governor bats for a Permanent Status to Finance Commission
- PM Modi’s Mission Shakti Speech & Model Code of Conduct
- Sadhvi Pragya Thakur’s latest Controversy
- Rafale deal document controversy
- Should SC Judges be under RTI ambit?
- Supreme Court Judgement on Tainted Candidates
- VVPAT verification
Governance & Social Justice
- Candida Auris : Drug- resistant fungi
- Candida auris infection
- Healthcare System for India, Difference in USA & European healthcare model?
- Lateral Entry in Civil Services explained
- Model policy for Women in Police
- NIRF India Rankings 2019 declared
- Quality Assurance Scheme
- Sex on false promise of marriage is rape
- Survey 2019 Ambitions Beyond Growth report by UNESCAP
- World Health Statistics Overview 2019 report on Life Expectancy
- World Press Freedom Index 2019
- Supreme Court compensation order on Bilkis Bano case
- WHO guidelines on physical activity for children under 5 years of age
- Global Talent Competitive Index 2019
- Algeria Political Crisis
- EU’s new Copyright Law, Will it change Web Worldwide?
- India Pakistan Kartarpur Corridor Talks
- India to Become NATO Ally?
- Japan Starts a New Era
- Julian Assange Arrested
- Sudan Political Crisis
- Trump designates Islamic Revolutionary Guard Corps of Iran
- United Nations Has to Pay India $38 Million
- US labels Revolutionary Guard of Iran a terror organisation
- US Mexico border wall controversy
- Why is UAE Important for India?
- Why is Chile Important for India?
- India Pakistan Conflict De-escalation Mechanisms
- India suspends cross LoC trade with Pakistan
- What is Arab Spring 2.0?
- India to stop buying Oil from Iran
- Trump withdraws from UN arms treaty
- Asian Development Outlook 2019
- China’s growth after slowdown
- Foreign Investment in India
- India’s 20th Livestock Census
- India’s transition to Renewable Energy from conventional sources
- Indian Army Builds The Longest Bridge of India Over Indus In Leh
- India Energy Modelling Forum by NITI Aayog & USAID
- National Common Mobility Card launched
- Rise and fall of Private Airlines in India
- Rise in Global Crude Oil prices & weakening Rupee
- Slowdown in Industrial Growth & rising Inflation
- Supreme Court order on EPFO
- Supreme Court quashes RBI’s 12 February Circular on NPA
- What are Junk Bonds?
- What is Fixed Maturity Plans?
- What is GDP deflator? Is it more comprehensive compared to WPI and CPI?
- What is Trader’s Credit Card Scheme?
- What is Wholesale Price Index?
- 1st Bimonthly Monetary Policy review – April 2019
- National Rubber Policy 2019
- Sensex hits 7 months high, History & Functions of Bombay Stock Exchange
- Supreme Court orders RBI on RTI
- What is Dedollarisation?
- Asian Tea Alliance
- Pepsico vs Farmers Issue
Defence & Security
Science & Technology
- Dhanush Artillery Guns
- Combat Casualty Drugs
- The Indian Museum of the Earth (TIME)
- EMISAT Satellite Launched
- Faster Adoption & Manufacturing of Hybrid & Electric
- First Ever Image of a Black Hole
- India to Buy MH60 Romeo Helicopters
- Nepal and Sri Lanka Launch Their First Satellites Raavana 1 & NepaliSat-1
- Nirbhay Missile Successfully Tested
- High Bacteriophages in Ganga River
- Army invokes Emergency Powers for Missile Deal
- Cell Based Meat
- INS Imphal Guided Missile Destroyer
- Draft Indian Forest Act 2019
- Gujarat Fishermen’s victory in US Supreme Court
- Humpback Mahseer Fish included in Critically Endangered list by IUCN
- India Cooling Action Plan (ICAP)
- Jammu & Kashmir Environment Issues
- Madras High Court order on Chennai Salem Highway
- Monkey declared Vermin in Himachal Pradesh
- Neelakurinji Flower under Severe Threat
- Solar eWaste
- Special Postal Stamp on Ice Stupas released
- State of Global Climate report 2018
- What is Green Finance Ecosystem?
- Wind turbines are impacting ecology in Western Ghats
- All about Wild Food Plants
Spice of the Month
- GS 3 || Economy || Infrastructure || Power & Energy
Why in news?
- The rise of renewables has implications for the finances of Discoms. If not managed well, small & rural consumers could suffer.
- Higher conventional power generation: For the most part of the 20th century, planning broadly involved estimating future electricity demand, adding ever larger conventional generating power and connecting these to load centres through transmission lines.
- Electricity was supplied to consumers by a monopoly, a vertically integrated utility.
- Pricing was based on the principle of cross subsidy, wherein large industrial and commercial consumers paid higher tariffs to ensure affordable tariffs for agriculture and households.
- Energy choices are rapidly changing, largely due to national policy initiatives and global techno-economic changes.
- There is an increasing share of renewable energy in the supply mix due to –
- competitiveness of renewables
- reducing costs of battery storage and
- rising costs of coal-based power.
- In the long run, this is likely to drive electrification of other sectors such as transport, cooking, and industrial processes, partly addressing issues of local air pollution, energy security and rising energy import bill.
- These trends can effect a paradigm change in the energy sector.
- The broad commitment across parties towards universal, affordable and reliable access to electricity as well as modern and clean cooking fuels is welcome. However, a lot of work needs to be done to turn it into a sustained reality.
- Currently, there is limited rigour within the government in critically evaluating and prioritising needs, anticipating changes and risks and preparing for them.
- This can lead to serious long-term implications in terms of resource-lock-in and path dependency, especially considering the long life and capital intensive nature of the investments.
- Two steps are critical to avoid such lacunae.
- First, the gaps and discrepancies in public availability of crucial data should be addressed.
- Second, analytical capability within the government should be enhanced.
- Within the electricity sector, the emerging trends in renewables and storage create numerous opportunities for large consumers to explore alternative, economical sources.
- However, loss of revenue from these high paying consumers is likely to mark the end of the current business model of the electricity distribution companies (Discoms).
- Two serious implications for the Discoms’ future arise.
- One, given the uncertain demand, power purchase, which accounts for more than 70 per cent of the cost of supply, will become more complex and riskier.
- Simultaneously, the loss of cross-subsidising consumers would necessitate sharp increase in either the tariff for small, rural, and agricultural consumers, or the State subsidy.
- If not managed appropriately, these changes can lead to –
- severe financial stress for Discoms,
- poor supply quality for small consumers,
- stranded assets, and bailouts, with implications for the banking sector.
- To avoid such consequences, there is an urgent need for fundamental changes in the way Discoms plan and operate. Increasingly, markets and competition would need to play a substantial role.
- Allowing large consumers to choose their suppliers for the long term helps them reduce costs, while also enabling rational capacity addition.
- Discoms should avoid adding new baseload capacity without rigorous demand-supply analysis.
- Solarising agricultural feeders can help in capping subsidy while providing day-time reliable supply to farmers. These measures can allow Discoms to focus on improving supply and service to small and rural consumers.
- The energy transition offers an opportunity to avoid inefficient resource lock-ins with significant environmental and economic effects. But unless well managed, the transition will unfold chaotically, with the small and rural consumers being the likely sufferers.
- The rise of renewables has implications for the finances of Discoms. If not managed well, small & rural consumers could suffer. Discuss.