Power sector reforms: Perspectives from new Institutional economics

Abstract

The objective of the thesis is to address the issues of power sector reforms. The newlinepolicy changes in energy sector began 1990. Electricity sector experienced the most newlineintensive reforms. We address the problem of lack of access to modern energy Services newline(MES). MES is defined as gas and kerosene for cooking and electricity for lighting. newlineMissive levels of deprivation in MES- In India, 576 million people lacked access to newlineelectricity and 782 million people lacked access to clean fuel for cooking in 2003-04 newline. This leads to poor performance in human development parameters as measured by newlineUNDP (United Nations Development Programme). A measure of inequality adjusted newlineaverage to assess the performance of states in ensuring equal access to MES has been newlinedeveloped. Reasons for failure of gTid based electricity system to ensure universal newlineaccess have been identified. A realistic assessment of institutional cost along with newlineenvironmental cost of grid based provision of access to to electricity would lead to newlinejustification renewabl~ energy projects. If a significant portion of increments in energy newlineconsumption due to provision of MES in rural areas are sourced from renewable energy newlinesources, it would lead to offsetting of the adverse environmental effect of coal based newlineurban energy system as India has sufficient coal reserves. This model of energy-mix newlinewould imply less dependence on international energy resources leading to reduction if newlinenot elimination of projected increase in energy prices by International Energy Agency newline(IEA) in its World Energy Outlook of 2007 (chapter 2). newlineMost important input to thermal electricity generation i.e., coal and oil and gas newlinesector are plagued with series problems. Review of coal and oil and gas sector shows newlinethat credible regulatory trajectories are yet to develop which will help investors to newlinemake informed decisions. The lack predictable regulatory trajectory in these sectors newlinemay lead to underinvestment in production capacities by private sector.