Prime Minister Narendra Modi’s decision to integrate the ministries of power and coal is likely to mitigate the fuel shortage currently facing power plants across the country. The recently formed cabinet amalgamates three ministries – power, coal and renewable energy, under Minister of State with independent charge Piyush Goyal.

The integration of the ministries, particularly power and coal, has received strong support from experts in the field including the All India Power Engineers Federation. Lauding the Prime Minister’s decision, the representative body of degree holding engineers in the government power sector said the integration would help remove hurdles in allocation of coal to power plants.

The AIPEF has also sought the setting up of a high powered committee under the chairmanship of the Prime Minister with the objective of reviewing the energy policy of the previous government.

In an appeal to the Prime Minister and the Power Minister for setting up the committee, Chairman of AIPEF Shailendra Dubey said power plants in the country were suffering due to wrong policies pursued by the previous government. He stressed on the need to adopt a balanced approach in carrying out reforms in the power sector and opposed over dependence on the private sector.

Pointing out that two decades of power sector reforms had failed to achieve their objectives of ensuring adequate supply of electricity in the country, bringing down Aggregate Technical and Commercial losses, making the power sector vibrant, viable and profitable and bringing in benefits of competition in power generation and distribution by way of reduced tariff and better consumer services, Dubey said the financial health of the power sector had deteriorated and even private discoms were now being subsidized.

“The very purpose of Electricity Act, 2003, was to reduce the losses in power sector, improve the financial health of the sector and reduce the subsidy burden of government. But due to faulty execution of policies, the contrary had happened. The financial health of power sector has further deteriorated and the government was now even subsidizing private discoms. What is more serious is that due to continued wrong energy policies, the banking sector may collapse under the burden of non-performing assets being generated by power sector,” he said.

Elaborating further on the policy pursued by the previous government, Dubey said many states introduced privatization in a bid to reduce AT&C losses through input-based distribution franchise because of financial restructuring plan imposed on them. He claimed that the government did not take into consideration the performance of state sector discoms in Andhra Pradesh, Tamil Nadu, Karnataka and Punjab, where AT&C losses had reduced, while overlooking the poor performance of private sector discoms where the AT&C losses remained high with no improvement in financial health.

The AIPEF also sought review of the policy governing Ultra Mega Power Projects on the ground that private power companies were getting tariffs revised after the bidding process. On the issue of coal allocation, the power engineers’ body said that despite adequate availability of coal in the country an artificial shortage had been created leading to import of coal which was driving up the cost of power.

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