Articles by Amulya K N Reddy

Using a discounted cash flow methodology, this paper performs a detailed analysis of the current costs of electricity from two of the Department of Atomic Energy's heavy water reactors. It compares these costs to that from a recently constructed coal-based thermal power plant. The cost so computed is a sensitive function of the discount rate (a measure of the value of capital) used and the results show that for realistic values of the discount rate, electricity from coal-based thermal power stations is cheaper than nuclear energy.

What appears to be an unstoppable and unquestionable 'consensus' regarding the necessity of restructuring/reforming the electricity sector in India has been shattered by the unbelievable news of the California energy crisis. In a state at the forefront of the IT revolution, there have been unscheduled interruptions of power and rolling blackouts covering hundreds of thousands of consumers. Suddenly, the situation there appears no different from backward developing country cities. This paper is addressed to the task of understanding the California energy crisis through a factual description of the crisis and a discussion of the causal factors responsible for it. It concludes with drawing the lessons from the California energy crisis particularly with regard to power sector reform in India.

The Indian power sector was opened with much fanfare to private participation in 1991 to hasten the increase in generating capacity and to improve the system efficiency as well. However, although several plants are under construction, till early 1999, generation had commenced at private plants totalling less than 2,000 MW. In contrast, some state undertakings have completed their projects even earlier than scheduled. Independent power producers (IPPs) claim that their progress has been hindered by problems such as litigation, financial arrangements, and obtaining clearances and fuel supply agreements. On the other hand, the state electricity boards have been burdened by power purchase agreements (PPAs) that favour the IPPs with such clauses as availability payment irrespective of plant utilisation, tariffs reflecting high capital costs and returns on equity, etc. The process of inviting private participation in the power sector and the problems experienced seem to have spurred on the restructuring of the power sector, including the formation of Central and State Electricity Regulatory Commissions. However, some important problems have not been addressed. Additions to the generation capacity without corresponding improvement of the transmission and distribution facilities is likely to further undermine the system efficiency. What is more, issues like the reduction of 'commercial losses' appear to have been ignored. Most importantly, investment in infrastructure has been a state responsibility because the intrinsically long gestation coupled with the relatively low returns from serving all categories of consumers have rendered such projects commercially unprofitable. Whether or not private participation can take on such tasks is to be seen.

Enron and Other Similar Deals vs New Energy Paradigm Amulya K N Reddy Antonette D'Sa In searching for alternative solutions, it is important to realise that genuine solutions are those that simultaneously resolve all the crises of the electricity system the crisis of capital performance, equity/access and environment. Solutions that focus on only one of those, for instance the capital crisis in the case of Enron-type deals, are sub-optimal and defective solutions that aggravate other crises.