Union Power Minister Manohar Lal has asked the states to improve the performance of state power distribution firms (discoms) and list utilities with good finances at stock exchanges to get investments. In a speech to a meeting of state power ministers in New Delhi, he pointed out that the power sector will need some Rs 42 lakh crore by 2032 to handle India, with its increasing energy needs, consuming 250 GW in May 2024, and 200 GW through fossil fuel and rest through renewables.
Lal was vocal about the necessity of states to have to curtail aggregate technical and commercial (AT&C) losses and have better operational efficiencies. Gujarat and Haryana have expressed interest in listing their power utilities as a way to collect large funds to take-up mega projects in generation, transmission and distributions. Outstanding debt of discoms is Rs 6.84 trillion with accumulated losses of Rs 6.46 trillion as noted by the minister and hence the urgent need of reforms.
In order to aid in the growth of infrastructure, Lal prompted states to use an interest-free loan of Rs 1.5 lakh crores, which would be provided in the Union Budget of 2025-26. He further focused on the diversification of the power generation mix such as the enhancement of nuclear power generating capacity to 20 GW by 2032, which is currently at 8 GW and 18 possible locations were identified. Moreover, the smart metering projects would enable discoms to earn an extra revenue of Rs 4 lakh crore in next seven years, as a bonus to financial health.
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Their solution would have to be innovative, as they need smart grids and efficient transformers to achieve the 500 GW renewable energy in India by 2030, in accord with the national settings of climate commitments.
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