PTChronicle - October 2012 - PTC India Limited

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44 | | PTCHRONICLE | | OCTOBER 2012
DISTRIBUTION TARIFF REFORM MISSING LINK Dr. Harish K Ahuja President- Strategy and Corporate Affairs, Moser Baer Power Projects Pvt Ltd In an exclusive guest insight for Metis, Dr Harish K. Ahuja, President- Strategy and Corporate Affairs, Moser Baer Power Projects Pvt Ltd has highlighted the focal points which need to be acted upon by Electricity Regulatory Commissions, discoms and consumers to make distribution reforms a success. The recent tariff hikes by Delhi Electricity Regulatory Commission (DERC) is being seen more like “Regulatory Capture than Regulatory Activism”. The debate on increasing electricity tariff does not seem meaningful if we simply start seeing the reality and treat electricity as a commercial good rather than a politico economic perception created so far of it as a public good. Similar to any other commercial good, paying true cost of energy should be acceptable to customers provided rates are determined based on supply and demand forces operating transparently in the market. Keeping in view the ability to pay, being an advocate of affordable prices for poor category of consumers it is desirable to have lifeline subsidies but that too only through direct allocation to beneficiaries by the government. The electricity prices across the countries are paid based on the true cost of energy. The table below captures the electricity prices in some major countries. Though there are certain other countries such as China, Iran, Saudi Arab, Russia etc who also offer huge amount of subsidy on all sources of energy. However, most of these countries offering subsidies are blessed with abundant energy resources and can afford to throwaway such precious resources. However when looking towards energy deficient India, no such correlation between highly subsidized energy goods and indigenous energy resources could be substantiated. Our overreliance on imports while meeting our energy requirements i.e. 80 percent for oil, 16 percent for coal and 35 percent for natural gas seems to testimony this harsh reality. In the medium to long term such populist measures distort the energy markets and ultimately lead to a detrimental impact on the economy. The recognition of this fact is evident when the kingdom of Saudi Arabia recently decided to invest $109 billion for setting up 41 GW solar capacity within next 20 years to displace its oil run power plants (62% of installed capacity in Saudi Arab is oil based electricity plant) and consequently save precious crude oil resources the prices of which is touching $100 per barrel in the peak oil era. Post the recent revision, the average tariff in Delhi would be 12 cents per kwh very close to Finland where more then 50% power is traded on spot and prices are determined OCTOBER 2012 | PTC INDIA LIMITED | 45
Page 1 and 2: NOT FOR SALE October 2012 Journal f
Page 3 and 4: From the Chairman’s Desk “A dev
Page 5 and 6: CHARGE OF THE LIGHT BRIGADE 24 Form
Page 7 and 8: Opinion Sh. Tantra Narayan Thakur C
Page 9 and 10: And to ensure sufficient coal, open
Page 11 and 12: Total Volume Traded in Short Term v
Page 13 and 14: a sustainable and secured energy su
Page 15 and 16: a power component of 1,200 MW, esse
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Page 19 and 20: 3 States oppose coal pricing formul
Page 21 and 22: DERC to introduce new power tariff
Page 23 and 24: Power failure: Panel for smart grid
Page 25 and 26: Charge of the Light Brigade power r
Page 27 and 28: POWER PARLANCE The government would
Page 29 and 30: Harish Saran Executive Vice Preside
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Page 33 and 34: The county witnessed a major grid d
Page 35 and 36: 5. Power market need to be strength
Page 37 and 38: “Short-term transactions of elect
Page 39 and 40: Shahid Hasan Associate Director, TE
Page 41 and 42: power finance 100 percent equity ho
Page 43: Energy Efficiency Services PTC has
Page 47 and 48: "The journal is rich with content p

PTChronicle - October 2012 - PTC India Limited

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