UP’s electricity quest may hold the key to Indian power sector revival

New Delhi: The Bharatiya Janata Party (BJP) government’s promise to provide round- the-clock electricity from October 2018 in Uttar Pradesh may hold the key to revive India’s electricity demand.

This comes at a time when the National Democratic Alliance (NDA) government is focusing on rural electrification and leveraging Ujwal DISCOM Assurance Yojana (UDAY) for turning around debt-ridden state power distribution companies.

In view of the problems in the state and the economic benefits of electrification, Yogi Adityanath-led Uttar Pradesh government plans to provide electricity to every citizen of the state by 2019.

With UP’s per capita electricity consumption of 317 kilowatt-hour (kWh) way below the country’s per capita electricity consumption of 1,075 kWh recorded in 2015-16, pent-up demand will kick in, in turn helping the sector’s turnaround.

According to Central Electricity Authority, India’s apex power sector planning body, UP faced peak electricity shortage of 4.4% in May. This in a state which is the third largest economy of India and contributes 8.4% to the country’s gross domestic product (GDP).

The early indicators of UP’s electricity demand picking up are already there. According to India Ratings & Research, UP was among high energy-consuming states with over four billion units per month.

“Demand (year-on-year) increased by around 12% in Maharashtra, 20% in Uttar Pradesh, 12% in Andhra Pradesh, 14% in Telangana and around 11% in Haryana,” the agency wrote in a 28 June report. This demand is expected to further go up with the industrial policy announced by UP government last week with incentives such as subsidized electricity.

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