Rising Sun & Ever Failing Rajasthan DISCOM

So the Distribution companies a.k.a. DISCOMS did it again; Power prices in Rajasthan are set to be raised by 6-12% within the coming months of this financial year. So, we here in our ‘Rangeelo’ Rajasthan are all set to feel the heat of Sun as well as DISCOMs.
Let’s see how DISCOMs have failed miserably in the past and how we can save ourselves from mounting electricity prices.

analysis Trend

As evident from the above analysis, power tariffs in Rajasthan are rocketing upwards to catch up with the debt burden of DISCOMS. And the bad news (for your pocket) is, these are not going to stabilize in the near future i.e. we should start preparing to shell out more and more mullah as electricity charges. On the other hand, the price of solar power has fallen constantly during the same period.
Let’s see another analysis regarding the trends and projections of conventional (DISCOM power) and solar power prices . Herein, we compare the price of solar power against actual as well as forecasted price of power in Rajasthan

analysis Tariff Graph

We can easily understand that as tariff for solar is decreasing starkly up till now, the scenario is completely the opposite for DISCOMs who are raising the power tariffs constantly to match up with rising debt; this increase in price per year is primarily targeted toward debt payoff and our DISCOMs have grossly failed there too.
Now take a look at the article that showed up in a leading Hindi daily where they claim that the Government is all set to increase the power tariffs

20150826_173923

Another Article that appeared in financial express on 17th Aug claimed RVPN has dropped 7 out of 9 PPA owing to low demand as well as high debt burden; Rajasthan is a state that regularly resorts to load shedding in summer, also Rajasthan is one among 5 states that were blamed for the grid failure of Aug 2012 which affected the Northern grid and sent the northern part of country into darkness for hours keeping in mind these facts we would all agree that the claims regarding low demand are all hoax, so the only other logical reason that loom large is Debt.
Something worth sharing is that official website of RVUN( Rajasthan Vidhyut Utpadan Nigam) claims that total installed capacity is just 5357 MW as of today; interestingly during August 2014 the peak demand was more than 10,000 MW.
Probability of such sharp decline in demand that it came down by 5 GW seems implausible, another interesting fact that I will like to remind here is that total PPAs signed initially out of which 7 were cancelled added up to just 1975 MW, here on I cannot fathom how DISCOMS plan to face three key problems
1. Meeting existential demand
2. Paying off debt
3. Keeping price in check

Now, apparently the debt burden on electricity companies is INR 80,000Crore and there doesn’t seem to be any other action plan apart from cutting down on power purchase expenses (and means load shedding) as well as raising the power tariffs.
Hence, what we faced last summer was just the tip of the iceberg i.e. the problems for industrial, commercial business and domestic consumers are just getting started and power cuts are going to get ever more prevalent and tariffs are going to sky rocket.
Hence, the Time is now to get smart, switch to Solar and Generate your Own Power.

Reference

1.) Rajasthan GOVT. scraps 7 PPAs
2.) Load shedding AUG 2014
3.) Rajasthan Energy

  • Mayank Sharma says:

    Could you please provide a graph w.r.t. ROI to understand it better, that how solar will be a smarter move?

  • Anurag Dubey says:

    The points you raised here are valid, but one thing i need to mention here is that, under JNNSM scheme and under state solar policy govt is trying to increase the installed capacity of the state, god knows how DISCOMs will be able to honour the PPAs under severe financial crunches they are facing now, but govt has promised the investors for PPAs. At this particular point of time i think distributed generation through solar can relief the customers from the burden of tariff rise, but to what extent? As we all know that generation through solar is fluctuating and when there is no sun there is no generation. So can you just answer, How switching to solar will enable me to get reliable 24*7 power throughout the year at a tariff which can compete with the tariffs given by DISCOMs?

    • Balaarka Encon says:

      Hey Anurag!

      As you said points raised from our side our valid but here you question the effectiveness of solar, especially in case of distributed or off grid i.e. there ain’t no existing grid.

      So an off grid system as it may be called, shall be supported suitably with a backup battery system such a system would allow us to consume energy even when there is no sun, such support may be availed with very small extra burden on our pocket; to be truthful on a well designed system it might even be below 10% of the whole project cost excluding backup.

      Another point that I would like to raise here in support of such Ilanded or distributed or off-grid system is that they are serious improvement when it comes to quality of power, a well designed load and solar system would eliminate any kind of fluctuation; fluctuation that are horror for village & communities at the tail end of our grid.

      Also If we can slowly move toward communities with such distributed system say each house in this habitation has some solar capacity with a decent night time battery support such homes can be interfaced for to & fro motion of power among them which effectively is sharing of resource.

      Now to address your last concern tariff % how competitive it might be; let me ensure you there that as shown in the graph solar tariff at least in states like Rajasthan has already moved below DISCOM tariff even with extra levy with support “IT IS COMPETITIVE NOW” and with each year this competition will become more and more skewed towards solar unless DISCOMs come up with a plan to get rid of there Debt burden some how in a day. Also as we develop sharing communities the option of solar will become ever more relevant and cheaper.

      THANKS a ton for the reply!!!!
      Happy Posting!!!!!!

  • Rishav says:

    U explained the present situation very well, which common people do.
    Can u please propose some financial viable solution or force majeure to mitigate this problem.

  • Byju Joy says:

    Great work guys!!! Yr product looks interesting. Would like to know what all innovation you bring to the table….

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