The government wants to raise solar power generation capacity from the current 8 GW to 100 GW by 2022. How will such an aggressive solar programme impact India’s electricity distribution companies? How will it affect the cost, availability and quality of electricity for consumers? Does the pace of solar adoption being pushed by the government serve the public interest?

The extremely liberal regime ushered in by the Electricity Act 2003 allowed a few existingprivate captive thermal generators to make handsome profits, particularly in certain regions with perceived advantages in terms of availability of coal and water. But the majority of proposed projects were abandoned without cost to the communities of the area they were to be located in. Of the rest, only a few are operational with partial capacity, while others are under construction with delayed schedules or have gone into limbo.

When Delhi's electricity distribution was privatised in 2002, power was allocated and its cost set by the government. Power purchase costs were considered pass-throughs for the operations of the distribution utilities. However, with signifi cant changes in the electricity generation and trading business in the interim, Delhi's consumers are paying not only for the regulated guaranteed profi ts of the state-owned generation, the transmission companies and the private distribution companies, but also for the unregulated profi teering of the merchant producers and other market players.

The currently planned expansion of thermal power generation capacity works out to 1.3 times the existing generation capacity. The geographic distribution of this expansion is highly uneven, showing clustering in certain coal-mining states, and further within districts and regions. By backing independent power producers through comprehensive memoranda of understanding, state governments have forsaken the communities that will bear the environmental, health and livelihood impact of these thermal clusters.