India after COVID-19: A conversation with Anil Sardana, the MD of Adani Transmission

The Free Press Journal on Thursday held a webinar in association with IIM Indore. The event which is a part of the series "India after COVID-19" saw FPJ Consulting Editor RN Bhaskar in conversation with Anil Sardana, MD & CEO, Adani Transmission Ltd. The discussion was moderated by Himanshu Rai, the Director of IIM Indore.

The topic under discussion on Thursday was the Future of Energy in India".

"In the present volatile times, everyone is sitting at home...enjoying electricity. As long as you don't have interruptions, you certainl don't have reason to recall the power warriors working at the ground level," Sardana said. He added tht alongside the first respondents battling the novel coronavirus outbreak, he also wished to salute all the "power warriors".

Sardana voiced concern for the fact that "our commitment to the green concepts" is changing. "What's also changing is the the way the markets are going to re-orient and treat electricity as a commodity," he added.

Sardana said that in his 40 year service period, he had seen that change is not very easy in this sector as the last mile in this sector is 89% in state owned hands.

"The biggest issue is that many customers don't see the advantages of many changes in a holistic way," he added.

The power demand has slumped since the COVID-19 outbreak began. How long will this last? What does it really mean for private power companies that have power purchase agreements already in place...but their power is not being taken up?

Anil Sardana: The slump in demand is in terms of the commercial and industrial segments having been put under lockdown. The residential demand has gone up -- which seems to have compensated somewhat. What's happening in this country is that since we have subsidised residential customers and subsidising commercial and industrial customers -- the revenue is going to be impacted. So the revenue of distribution companies is going to get affected during this lockdown -- especially if it gets extended. This is going to create a big issue going forward in terms of tariff, because the regulatory assets will get created and in the next two-three years consumers are going to have to pay for this period. Because the expenses continue to be the same, but ultimately, the revenues are going to be impacted badly.

Power purchase agreements continue to be honoured. In the merit order, people will want to buy only power that is lower in variable cost.

What are some of the ways in which the industry can become more vibrant and meaningful to the country?

Anil Sardana: The govt should have a single-point agenda that the last man has to be looked after before looking at the global picture. The customer must enjoy electricity 24x7. They should not know who their supplier is. The quality supply of electricity should be supplied to everyone equally.

At the rural level, do you think solar will become the key power source?

Anil Sardana: There are several places distribution companies have started using such micro-grid concepts. Not just solar, but also biomass. You can also use hydros in the streams that run in several undulated areas. The trouble is, when someone other than a distribution company tries to do it, since there are no zoning concepts, if a private entity or even the community tries to invest -- then you see the last mile coming from a distribution company with an announcement that your tariff will be Re. 1 because they are BPL consumers. Then, the private sector investment will go for a toss.

Where do you think oil is going to go? What about thorium based power?

Anil Sardana: You can never predict commodity and exchange prices. Your will need to make your own guess. Maybe one day, Hydrogen will replace nuclear power. But we need R&D for it. Today, people are scared of nuclear power after Chernobyl and Fukushima disasters.

Do you think Hydrogen will be a feasible possibility?

Anil Sardana: We're still worried about the concept of the hydrogen bomb. Electricity is a slave. If we let it become a master, then we're in trouble. We are familiar with hydrogen as a medium, and hydrogen can't be pressurised.

Sardana has spent over 40 years in this industry. When asked by Rai about what had given him the greatest joy, he spoke about the enjoyment one can get from building teams and working "with some fantastic people".

"For me, 18 years of working with TATA, 14 years of working with NTPC during its formative years and now working for the last two years with a growth oriented group -- it's a matter of giving back to society and at the same time, working with some fabulous people," he added.

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