The Modi government’s recently announced Saubhagya scheme is expected to bring respite to independent power producers without long term power purchase agreements (PPAs) to sell their electricity. The government said on Wednesday that “considering an average load of 1 KW per household and average uses of load for eight hours in a day, there will be requirement of additional power of about 28,000 MW and additional energy of about 80,000 million units (MU) per annum” about 33,000 MW of power generation capacities are currently stranded without PPAs. The estimates were calculated considering an average load of 1 KW per household and average uses of load for 8 hours in a day. “With the enhancement of income and habit of using electricity, the demand of electricity is bound to vary,” the explanation added.
The industry has blamed the tepid rise in electricity demand behind low utilisation level of power plants. Plant load factor (PLF) of coal-based power plants across the country was 59.9% in the April-August period, marginally higher than the 59.2% recording in the corresponding period in 2016. Peak demand in the same period has grown by 6.8% to 1,63,314 MW in the same period. Since electricity cannot be stored, power generation is the most robust estimate for power demand. Overall generation in April-August has grown by 6.2% to 5,57,890 MU.Concurrently, installed power generation capacity has grown by 7.7% in one year to 3,29,226 MW at the end of August.
The government clarified that the Saubhagya scheme would cover three crore households of of the four crore currently without power connection as the remaining households has been covered under the Deen Dayal Upadhyaya Gram Jyoti Yojan. It reaffirmed that the Rs 16,320 crore is over and above the Rs 43,000 crore allotted to DDUGJY. It also said that there would not be any upfront fund allocation and projects under the scheme would be sanctioned based on reports submitted by the States. The scheme will also not cover defaulters who were disconnected. The projects under the Saubhagya scheme shall be executed by the states’ power departments, through turnkey contractors, departmentally or through other capable suitable agencies. “About 1000 lakh man-days works would be generated for implementation of the scheme,” the government said.