Interventions: ENERGY JUSTICE

Energy and Infrastructure: Role of Financial Institutions in Development

28-29 September, 2018 | Bhopal
CFA, PAIRVI and Hum Sab, Bhopal called upon different organizations and networks working on ground level movements against energy projects related to coal power plants, nuclear power plants, natural gas power plants and hydro power plants to participate in a workshop titled “Energy and Infrastructure: Role of Financial Institutions in Development” and build an agenda to be presented before elections of 2019 at Pastoral Centre, Bhopal from 28-29 September, 2018.
The speakers at the meeting were Soumya Dutta, Rajendra Agarwal, VKS Parihar, Rajesh Kumar, Himanshu Damale, Pratyush Mitra, Yogesh Diwan, Nishant, Gaurav Dwivedi, Vivek, Khumendra.

In Day 1, The consultation started with the welcome of the participants by the moderator of the session Soumya Dutta. He put forth the objective of the workshop is to talk about energy sector with electricity in general, political economy and to develop a joint statement regarding our demands to be presented in front of government before the forthcoming elections of 2019. He stated that electricity constitutes 16 % of total energy consumption in India. Out of 135 crore population, 33.3 % lived in urban areas which consumed 75 % of energy. Politics is forcing conversation towards electricity and not energy to construct more power plants. Total 3,35,000 MW is the energy capacity of India. According to Central electricity authority (CEA), 1,75,000 MW is the maximum consumption at peak season in June. Acc to CEA report 2016, there is no need for more power plants till 2024-25. But 90,000 MW capacity is under construction using public money. In march 2017, TERI report showed that there is no need of more power plants till 2026-27. If by 2023-24 any more power plants are to be built, they showed be renewable energy powered (solar powered or wind powered).  Out of the total power plants currently existing, 34 of them are not able to sell their electricity which are of 50,000 MW capacity. Cost of electricity produced by solar energy is Rs 2.5 to 3.0 per unit. This concludes that electricity produced is greater than electricity needed in our country. Also, coal based power plants are more costly than solar power plants. Nuclear based power plants generate electricity at Rs 9 per unit which amounts to Rs 6.20 per unit after government subsidy. In Chutka, nuclear power plant generates electricity at Rs 5 per unit. Hydropower plants have total capacity of 1,45,000 MW electricity generation. Out of which, 45,000 MW capacity is already made in deccan peninsula of India. 1,00,000 MW capacity is suggested to be made in Himachal Pradesh, Uttarakhand, Arunachal Pradesh.  These areas are geographically disaster prone. 10,560 families drowned in construction of Tehri Dam. The main reasons for disparity in supply, demand of electricity were lacking last mile connectivity and cost to buy electricity is not there with poorest of poor. In 2006, integrated energy policy was bought by planning commission. 50 % of population in India is employed in agriculture which constitutes 14 % of GDP and 10-15 % Industry constitutes 50 % GDP. Two main reasons for building more power plants were increase in GDP and political economy. He claimed that basis of electricity requirement is wrong. We projected that GDP will grow at 9 % but GDP did not grow as projected. Also, services sector constitutes 55 % of GDP which doesnot consume that much of electricity. Manufacturing sector like petrochemicals, paper consume high electricity which happens in China.

Rajendra Agarwal mentioned about Madhya Pradesh electricity sector. In 1910, electricity act came into force which was amended in 1948. Latest electricity act came into action in 2003 which changed everything for worse. After electricity act 2003 till now in 2018, half of electricity generating companies were dead. NTPC is working at 60 % capacity. Electricity generation companies are working in losses. In banks, NPA amount to 10 lakh crore, out of which maximum is from power sector which amounts to 5 lakh crore. 26 lakh electricity consumers which are agriculture farmers do not have meter in Madhya Pradesh. Since 2011, electricity act stated that new power plants should come up using competitive bidding. NTPC has not come up with any power plant from 2011. After 2005, integrated energy policy has not been amended. Government is purchasing PPA from Adani and Tata mundra at Rs 3 violating supreme court order of Rs 2.20. Current scenario is that we are exporting electricity to Bangladesh, Nepal and Maldives and importing coal from Indonesia.  A change has been suggested in Tariff policy called direct benefit transfer (DBT) which asks agriculture farmers to deposit Rs 20,000 to gain subsidy benefits.  

VKS Parihar suggested about Madhya Pradesh electricity sector. Electricity act, 2003 was amended stated it will bring competitive advantage and cheap rate of electricity for consumers. It suggested making one Distribution Company, one Transmission Company and one generation company but instead more than one distribution companies were made. Example- 3 distribution companies in Madhya Pradesh were made. Instead, power purchase agreement cost increased as more load was put on tariff which led to power being purchased at higher cost. Theft of power due to failure of law and order decreased to 30 %. Government scheme of Rs 200 electricity bill for all benefitted lower middle class. 20 lakh people belonging to poorest of poor did not benefit from this scheme at all as already their electricity bill was below Rs 200. He also emphasized to look at 24*7 electricity access for all scheme of government critically. Agriculture sector gets 10 hours of electricity per day. He questioned do we have enough workforce for implementing the same? Do we have infrastructure for providing the same?. There is a suggested electricity amendment act, 2040 which suggests dividing the distribution sector into two parts, supply and carrier. Supply will be under control of government and carrier will be under control of private sector.  Out of 1 crore population in rural areas of MP, 80 lakh population do not have metering. A report by pricewatercoopers (PwC) suggested that 75,000 MW of PPA is signed by government with Emami for next 25 years. PwC suggested that electricity demand will increase immensely, so PPA was signed between government and Emami. But, electricity demand did not increase as projected by PwC. In 2012-17, 1700 contract workers died due to no personal protective equipments (PPP) and lack of training.

Himanshu damale suggested that in 1991, liberalization, privatization and globalization happened. In 2003, electricity act was amended. In the same year, world bank said India needs energy to bring in Industrialization. Earlier than 2003, state electricity regulatory board (SERB) used to handle generation, transmission, distribution of electricity. World bank suggested to separate these three sectors of electricity. World bank suggested that separation of generation, transmission, distribution will bring in competitiveness. This was bought in for the first time in Orissa. Orissa failed badly in implementing the same. World bank said to reduce load from SERB to separate generation, transmission and distribution. He talked about delicensing which was bought in electricity act, 2003. Delicensing allowed anyone to open power plants. Actual privatization of power started in 2003. Generation and transmission were privatized, distribution was kept with public sector. 34 companies are NPA with 40,000 MW generating capacity. Out of which,. 32 companies are private sector, 2 companies are public sector. Of 40,000 MW NPA, 25,000 MW is generating electricity. 15,000 MW of generating capacity power plants are about to get ready. He concluded by demanding to demolish electricity act 2003. To bring generation, transmission and distribution under one governing body. Kerala and Himachal Pradesh did not separate these three sectors and there power sector are working at their best. He summed by adding a positive note that since January 2018, 80,000 MW of coal power plants in pipeline have been demolished by government.

Rajesh Kumar talked about over projection of energy demand. In Singrauli, MP 203 villages donot have electricity. An Indian parliament report on Non performing assets (NPA) has not given any decision. RBI should take their own decision on giving loans to NPA. The report talks about 3-4 projects which were stressed projects which have become NPA. 4 projects in MP have become NPA. One project of 12,000 crore has become NPA in MP. The major reasons for NPA were no PPA signed with government to sell electricity and no coal availability. NPA have led to loss of natural resources like land and water and displacement of humans. The promoters of NPA have not been questioned by this committee report on NPA. He also talked about delicensing of industries and how it has had a bad impact on power sector. 

Pratyush stated that land acquisition act, 2013 is employed on land acquired before 2008. Section 24 (2) stated that farmers got money in place of land acquired in their bank accounts. Also, people are doing agriculture on land since past 5-10 years.  The documents required to claim that indigenous people are inhabitants of land acquired are school documents of children studying preferably in government school and panchayat card. Rehabilitation and resettlement should be done before project has started. Rehabilitation and resettlement should be done at a place beforehand agreed by indigenous people. Social impact assessment for projects should be done. Section 10 says that acquisition should not be done for land which grows multiple crops at same time. If land is acquired by project, project should employ project affected communities in the project. He concluded by saying that individual people should complaint about problem. The affected people should give a letter in writing to magistrate once any problem is faced. He suggested to get a receiving document of every document submitted and not to submit originals. Lastly, do not take any compensation for land acquired.

In Day 2, Rajendra Agarwal discussed about 5 proposals which were suggested in group discussions with all grass root groups and support groups after the session got over. He pointed out about all 5 proposals in detail giving explanation for each proposal to get unisom approval from the people present in workshop, as these proposals will be presented in different regions before upcoming elections of 2019. The proposals were as follows:
  1. Madhya Pradesh has surplus power when compared between generation and consumption, so no need of more power plants. Generation is 18,500 MW + 3000 MW, total is 21, 500 MW. Consumption is 12,200 MW which rises to 13,500 MW during peak season. Average consumption is 7600 MW.
  2. Return of land acquired by farmers as no need to build more power plants immediately.  No jobs and no money given as compensation.
  3. Adani power, Chinwara, Madhya Pradesh was given contract for building power plants since 2010 for past 5 years. It has been 8 years now, so till now no power plant. Then, please return the land to government.
  4. Chutka nuclear power plant work should be stopped immediately as no environment clearance and they donot have PPA signed with the government. Cost of power chutka nuclear power plant is generating is Rs 8-10 but generating power using solar energy cost around Rs 2-3.
  5. Pump connection subsidy given to farmers should not be changed.  If subsidy to be deposited in bank, first Rs 25000 to be deposited by farmers in their bank accounts, then farmers can get subsidy.
  6. RNR policy of MP, 2002 should be followed when doing relocation and rehabilitation of project affected communities in power plants.
  7. Environment Impact Assessment should be followed where power plants have been made and are under pipeline.
Soumya Dutta suggested out of total 25.5 crore families in India, 10 crore families have electricity connection but no reliability of electricity. Primary energy basket contains different sources of energy like solar, wind, coal, oil, gas, hydro energy. 40 % of energy goes into irrigation in rural areas. Out of 135 crore population of India, 70 crore do not have proper electricity. A human being generates 100 W of energy and 20 W is used in human brain whereas an animal generates 400-500 W of energy. 26 crore animals are firral animals which can be used for generating energy. He commented that solar energy will be the highest energy source all over the world in coming years.  In kudankulam, Tamil Nadu while revolting against power plant, government has cut 12 hours of electricity in village per day. Similarly, chances are there that same can happen during revolting against Chutka nuclear power plant. He questioned that can we villagers always remain consumers or can we generate our own electricity?. We can use solar micro grid to become owners of our own electricity. Installing microgrid will lead to dual use of land. India has 3,06,000 MW of wind energy generation potential upto 100 m. He concluded by saying that irrigation of crops in villages can happen by solar energy, wind energy and energy from animals. Drying of crops in villages can be done by solar energy.

After this session, a book launch took place. A book titled “Riding on Debt: Financial analysis of Delhi Metro after phase III” was done which is authored by Nishant and Rajendra Ravi of CFA. In next session, Gaurav talked about smart city mission. 100 cities will be made smart cities in India. Government projected 1000 crore needed for 1 smart city for next 5 years. Instead, 15000-20000 crore will be needed for each smart city. Private sector will invest as government does not have enough money. Yogesh stated about privatization of infrastructure after independence, 1947. Bombay plan came out to bring in foreign money. He questioned about development model which has led to destruction of ecology and environment and also why hydrodams only built in rural areas and not in urban areas. World trade organization sees everything as commodity. Example water is bottled and sold. In coming years, air will also become a commodity. He discussed about Special Economic Zone (SEZ). The failure of SEZ has led to bringing in of smart city project.

Nishant argued that policies and projects are being implemented without consent of people following top bottom approach. He questioned about who is the actual benefiter of these smart city projects. He also made a point about bicycle sharing scheme in every smart city project. Bicycles costing Rs 1 lakh each have been installed in MP smart city project. He talked about delhi metro which is looked as role model for other states which is not true. Delhi metro model is being implemented everywhere in India, without changing it according to local needs. The cost of delhi metro project is Rs 70000 crore after completion of phase III of which 60 % is loan costing upto Rs 40000 crore which came from Japan. Reasons given for bringing in delhi metro were ease of transport, reduce congestion, reduce noise pollution which are not true. Delhi metro is currently running at Rs 300 crore loss per year. It has reduced from Rs 800 crore due to making detailed project report (DPR) for other metro projects in other cities.

Himanshu Damale talked about 100 cities smart city project. Smart city means controlling a city with help of technology. Reducing power of decentralized government and make it more centralized. Smart city will be financed by central government, state government and municipality. He suggested about special purpose vehicle (SPV) which got registered under companies act, 2013 with collaboration between Madhya Pradesh government and Bhopal municipality. A special committee was formed consisting of 5 members. 2 members from MLA of Bhopal government, 1 member was bureaucrat from ministry of urban development (MoUD), 1 member was from municipality and 1 member was from corporate sector which is the head of the committee. Head of committee had veto power with him. He mentioned about public private partnership (PPP) and clony capitalism. He concluded by saying the objective of smart city project is privatization of governance which is the most dangerous thing happening to the nation.

Vivek and Khumendra discussed about smart city project in Bhopal city. The 4 main components were: retrofitting, redevelopment, greenful development and PAN city development.  Main promoters of smart city were companies like IBM, micro software, oracle, GE, Hitachi. Financial institutions like WB, ADB, NIIF, JICA promote smart city project. Smart city project started on 25 june 2015 in Pune, Maharashtra. Bhopal smart city cooperation limited is SPV in Bhopal. Area based development in Bhopal smart city. 7 cities were chosen to be smart cities in Madhya Pradesh namely Bhopal, indore, Jabalpur, Gwalior, Ujjain and sagar satna.

Energy Justice

It works to enhance understanding on energy, renewable and energy alternatives and energy justice. It advocates just energy transition which promotes equity, democracy and peoples controls over energy systems. PAIRVI believes that drastic reduction in energy use in industrialized countries is a pre requisite for climate stabilization, sustainable development and just energy transition. PAIRVI works with peoples groups and the government to reduce fossil fuel dependence and promote decentralized, locally viable and community controlled energy alternativesas well as promoting equitable renewable energy policies.