World Energy Outlook 2007

Unreliable power damages business and has a high cost for power-intensive and
continuous-process industries in particular. Unscheduled power cuts also cause
considerable inconvenience to households. Poor reliability has led some
consumers to instal generators as a backup. In Delhi, for example, demand for
generators, inverters and batteries is increasing by an estimated 20%-25% per
year. 8
As in many developing countries, the distribution sector in India is the
weakest part of the power-supply chain. Losses of electricity due to theft and
technical factors remain stubbornly high, averaging around 32% to 35% of
total generation. They are even much higher in some states. Allowing also for
poor bill collection, around 40% to 60% of total potential revenue is lost,
depending on the state. The central and state authorities have made some
progress recently in improving payment discipline, reforming the regulatory
framework and strengthening efforts to improve the financial performance of
the SEBs and other publicly-owned power companies to reduce their financial
losses.
Energy Administration and Policy
Responsibilities for policy making and implementation in the energy sector
are split between five different ministries and several government commissions
and agencies (Figure 15.2). The Planning Commission is responsible for
assessing energy, capital and human resources in the country, formulating
plans for their effective utilisation and appraising progress in meeting targets.
Its main function is to formulate India's five-year plans (see Box 14.1 in
Chapter 14). Due to administrative bottlenecks and overambitious
expectations regarding GDP growth and energy capacity additions, targets are
rarely met in practice.
The development and administration of energy policy lies with the various
federal ministries and departments:
■ The Ministry of Power is concerned with long-term power-sector planning,
policy formulation, assigning investment priorities, monitoring the
implementation of power projects, training and manpower development,
and the enactment and implementation of legislation with regard to thermal
and hydropower generation, transmission and distribution. It liaises within
the central government, with the SEBs and with the private sector. The
Bureau for Energy Efficiency (BEE) is a statutory body under the Ministry
of Power, set up under the Energy Conservation Law 2001, to co-ordinate
energy efficiency and conservation policies and programmes. The Central
8. According to information from the Associated Chambers of Commerce and Industry of India,
available at www.assocham.org.
450 World Energy Outlook 2007 - INDIA’S ENERGY PROSPECTS