As per more figures compiled by the countrys power regulator, the DG capacity is growing at a rate of 5,000 MW to 8,000 MW every year. That is higher than the cumulative nuclear and solar capacities being added year-on-year in the country.
Besides, the estimate, presented by the Central Electricity Regulatory Commission (CERC) at a recent meeting of its Central Advisory Commission here, is largely restricted to just the big DG sets of over 100 kvA (kilo volt ampere) used by industrial and commercial units as a back-up to the unreliable and insufficient power supply to non-domestic consumers across nearly all states.
Taking into account domestic loadrunning on gensets would take this figure to beyond 90,000 MW.
Apart from the fact that they spew tonnes of carbon-dioxide, the gensets run on subsidised diesel. The cost of generation from a mid-sized DG set is over Rs 14-15 per unit.
Currently, thermal generation capacity of over 48,000 MW is stranded in the country in the absence of coal linkages and non-closure of power purchase agreements (pacts with buyers of electricity), or due to the lack of flexibility in diversion of coal.
Aggravating matters is the fact that despite a cumulative installed generation capacity (as on August 31, 2014) of 2,50,257 MW, demand up to only 1,40,000 MW is met, primarily due to transmission infrastructure failing to keep pace with generation capacity. Interestingly, as per the Central Electricity Authoritys latest estimate, the countrys diesel-fuelled power capacity is just 1,199 MW. This means that the massive capacity of 90,000 MW from DG sets is completely outside the realm of policymaking and official statistics.
While the break-up of this DG capacity was not available, officials involved in the exercise said the data was largely collated from manufacturers of DG sets.
At the consumer level, the spread of DG sets is increasing with every passing year, considering that practically all commercial establishments, mid-to-large sized factories and apartment complexes are equipped with back-up power that runs on diesel.
The specific suggestion put up before the CERC at the May 16 advisory commission meeting was that state electricity regulators (SERCs, which are the equivalent of CERC) be asked to impose restrictions on use of diesel gensets in order to mitigate the risk of energy security and for the protection of environment.
A CII representative countered this saying that industry, by and large, does not run DG sets out of choice, but as a matter of compulsion. In the absence of reliable and quality power supply from distribution utilities, most of which are state-owned electricity boards, industry is forced to rely on back supply, despite the prohibitive costs. This also involves bribing fuel pump owners to ensure a regular supply of diesel, the representative said.
A July 2014 report prepared by research and consulting firm GlobalData, focusing on energy and healthcare industries, also notes that while the US, China and India are currently the top markets for diesel gensets, their market share will improve only in China and India by the end of the forecast period of 2020.
According to Siddhartha Raina, Senior Analyst for GlobalData: China and India each face a considerable gap between their power supply and demand, creating attractive markets for diesel genset manufacturers. High power deficits, coupled with significant economic growth potential, are expected to be the strongest drivers behind these markets expansion.