Uttar Pradesh Energy Situation

Status of the Power Sector

Uttar Pradesh regularly experiences power crises because demand for electricity frequently exceeds supply significantly. Over the last 20 years power shortage has remained within the range of 10-15%, while shortages in periods of peak demand reaches at even higher levels. In 2013, even a gap of up to 43% opens up between the state's demand and supply of electricity. As per figures presented in the Power Ministry’s review meeting in March, the state's projected demand for summer 2013-14 is 15,839 MW showing a gap of 6,832 MW. This results in poor and unreliable power supply with rampant power cuts and prolonged periods of low voltage. As a consequence industrial investment in Uttar Pradesh has been constrained, with industries preferring to locate themselves elsewhere.

This situation also repeatedly forces the UP government to purchase power for high prices from other states in India. In 2011 for example the UP government bought power at rates as high as Rs 17 per unit from the central pool to ensure adequate supply in the state. This practice regularly incurs significant financial losses to the State Electricity Board, which (in part) have to be borne by the UP state government, constraining the state’s expenditures in areas social development such as education and public health.

In 1999 the UP government tried to address the problems of growing power shortage and poor financial condition of the State Electricity Board (SEB) by reforming UP’s power sector. The power sector was restructured in order to unbundle and privatize it. Accordingly the SEB has been divided into three independent cooperations: UP Power Corporation Limited (UPPCL), UP Rajya Vidyut Utapadan Nigam (UPRVUNL) and UP Jal Vidyut Nigam (UPJVNL) – responsible for transmission and distribution, thermal generation, and hydro generation, respectively. Another distribution company, Kanpur Electricity Supply Company (KESCO) was formed as a 100% subsidiary of UPPCL.

However, the UP Electricity Reform Act, formulated in 1999, had several shortcomings, which is a major reason for the problems of the UP power sector to persist until today. Besides not curtailing the enormous powers of the Uttar Pradesh Energy Regulatory Commission by making it accountable, and besides omitting the promotion of efficiency and energy conservation, the act did not address the main reasons for the financial problems of the SEB: High cost of power purchase in relation to the lower tariffs for consumers, which are determined by the UP government (no tariff adjustment), and arbitrary depreciation methods. Additionally, the unbundling of the power sector was limited and did not lead to competition.

Energy Capacity

Installed generation capacity in March 2009 and 2010 in MW

	03.2009	03.2010
Hydro	530	520
Thermal	4120	4370
New & Renewable	400	590
Total	5050	5480

Installed generation capacity by sector in March 2013 in MW

	Thermal		Total Thermal	Nuclear	Hydro	Renewable Energy	Grand Total
	Coal	Gas
State	4923	0	4923	0	524	25	5472
Private	3090	0	3090	0	0	799	3889
Central	2749	550	3300	336	1297	0	4933
Total	10763	550	11313	336	1821	824	14294

Energy Consumption

Total Energy Available for Sale in Million Units (MU)

Year	Total Energy Available	Transmission Losses	Total Energy Available for Sale	% of Loss
2008-09	56374	16844	39530	30
2009-10	61040	19677	41363	32
2010-11	65599	20344	45255	31

In 2009-10 the average per capita energy consumption in UP amounted to 387 KW/h, while the country’s per capita energy consumption stands at 734 KWh in 2008.

Electricity Consumption by Sector

Year	Industrial in MU (%)	Agriculture in MU (%)	Domestic in MU (%)	Commercial in MU (%)
2008-09	10153 (25.67)	6841 (17.12)	15809 (40.02)	2925 (7.40)
2009-10	10739 (26.23)	7317 (17.87)	15894 (38.82)	3106 (7.58)
2010-11	10558 (24.50)	7891 (18.30)	16230 (37.60)	3072 (07.1)

Energy Supply

Demand and Supply in Million Units (MU), and gap between those figures in %

Year	Energy Requirement (MU)	Availability (MU)	Surplus (+) / Deficit (-) (MU)	Surplus (+) / Deficit (-) in %
2011-12	76,292	64,846	-11,446	-15.0
2012-13	83,938	70,058	-13,880	-16.5

Peak Demand and Peak Supply

Year	Peak Demand in MW	Peak Supply in MW	Surplus (+) / Deficit (-) in MW	Surplus (+) / Deficit (-) in %
2012-2013	13,940	12,048	-1,892	-13.6

High transaction and distribution losses (T&D) are boosting the yearly deficits. In 2009 UP reported distribution losses of about 38%, which are higher than the national average T&D loss of 25.4%.

Average Energy Tariff Structure

Average Energy Charges (Rs./KWh) for Industrial Consumer	Average Energy Charges (Rs./KWh) for Domestic Consumer
3.2	2.4

The average electricity tariff for the country stands at Rs. 4.18 KW/h for large industries, while it stands at RS. 3.4 KW/h for domestic consumers.

Status of Renewable Energy

Under the State Electricity Act, 2003, the various state-level electricity regulators have specified a renewable purchase obligation. Accordingly, a set percentage of power must come from renewable sources. In case of UP this target has been set at 5%, of which 0.5% has to be from solar energy. However, UP has failed to achieve this target by falling short of about 50%.

Uttar Pradesh also lags behind other states in the country in production of electricity through solar energy. While Gujarat produces 850 MW of electricity through solar energy, followed by Rajasthan at 201 MW, in Uttar Pradesh this figure is a meager. The first megawatt-capacity solar power plant had become operational in Uttar Pradesh in January 2013 in Barabanki (a 2 MW project).

Rural Electrification

Number of Villages Electrified

Year	Total Number of Villages	Number of Villages Electrified	In %
2009-10	97942	86450	88.3

In 2007 about 89% of households have been un-electrified, while the number indicated that only about 40% of the villages in UP have not been electrified. This indicates that also today the number of un-electrified households is likely to be much higher than the number of un-electrified villages.

Constraints and Opportunities

The majority of power generated in Uttar Pradesh is reliant on coal, while the limited availability and high prices of coal have aggravated the precarious power situation in UP. Hence, there is an obvious need to develop alternate sources of energy. Uttar Pradesh is rich in renewable energy recourses such as biomass, solar and bio-fuels, of which only biomass has been considerably exploited. Uttar Pradesh is blessed with a good solar irradiation to the tune of 1,800 KW/h per m² on an annual average basis, which is considered necessary for operating a solar photovoltaic power plant. Thus, there are immense possibilities in this sector. Growth of renewable energy would definitely help the state in meeting its energy requirements.

Policy, Framework, Laws & Regulations

In January, the Uttar Pradesh Cabinet approved the first-ever solar energy policy of the state. Under this policy, a target of producing 1000 MW of electricity through solar energy has been set by March 2017. For the purpose of promoting production of electricity by solar energy, a U.P. renewable energy fund has been created.

Apart from that UPNEDA runs a number of programmes addressing energy access and renewable energy:

• Village Electrification Programme: Rajiv Gandhi Gramin Vidhutikran Yojna (RGGVY)
• Solar Energy Programme
• Bio Energy Programme
• Micro Hydel Programme
• Wind Energy Programme
• Energy Conservation Programme

Regulations:

http://www.uperc.org/Notified_User.aspx (Uttar Pradesh Electricity Regulatory Commission)

Institutions Involved

• Uttar Pradesh Non-Conventional Energy Development Agency (UPNEDA)
• Uttar Pradesh Power Corporation Limited (UPPCL)
• Uttar Pradesh Electricity Regulatory Commission (UPERC)
• Uttar Pradesh Rajya Vidyut Utapadan Nigam (UPRVUNL)
• Uttar Pradesh Jal Vidyut Nigam (UPJVNL)
• Kanpur Electricity Supply Company (KESCO)