There is a bizzarre situation in India’s power sector. Read up these two articles -

Some snippets -

“In 2014-15, 22,566 MW of capacity was commissioned. India now has an installed power capacity of 158,000 MW with 30,000 MW more in the pipeline”

“There are no takers for all the generation capacity that is in place. There is demand but they don’t have the money to pay for the power due to the health of the discoms (state distribution companies),” a senior government official told ET, adding that discoms across all states had incurred accumulated losses of Rs 2.51 lakh crore in 2012-13.

“Just six state discoms are not in the red - Karnataka, Gujarat, Punjab, West Bengal, Delhi and Sikkim and transmission and distribution sectors require an investment of Rs 3 lakh crore”

“…the state electricity discoms are facing cash crunch and are incurring annual losses of about Rs 60,000 crore.”

From above statements, DISCOMS are already around Rs. 3.7 Lac crores in debt, and increasing by Rs. 60,000 crores in losses per year.

The bigger question is why the states are bleeding money even when consumers and industry are ready to purchase the power produced. This year goal is to ship 1.1trillion units (KWh) of power, for 1.3bn population. That’s ~850 units per person, per year = ~2.32 units per person per day.

In 2013-14, industry sector accounted for the largest share (43.83%), followed by domestic (22.46%), agriculture (18.03%) and commercial sectors (8.72%), for the 0.88trillion units shipped (after deducting transmission losses).

Thus, domestic consumption roughly is 148 units per capita (2013-14). I can tell you my domestic consumption is ~1300 units for two persons, i.e. 650 units per person. That is 4.4x the national average.

Indian power sector is in perennial panic mode. There are many factors behind such a colossal mess

So what does it take to turn the situation around?

There are just a few reforms, there are many more such changes required to turn around the sector. However political establishment and bureaucracy are not interested in reducing their control.

Ultimately, who is accountable for ~60 to 70,000 crores annual losses in the sector?

Best, Umang