Course Code: ECOM525 Course Title: Managerial Economics

Course Instructor: Dr Nadeem Ahmad Bhat

Academic Task No: 1 Academic Task Title: CA-1

Date of Allotment: 4th November 2023 Date of Submission: 16th November2023

Evaluation Parameters:

Declaration:

IdeclarethatthisAssignmentismygroupwork.Ihavenotcopieditfromanyotherstudent’sworkor
fromanyothersourceexceptwheredueacknowledgementismadeexplicitlyinthetext,norhasany
partbeenwrittenformebyanyotherperson.

Student’sSignature
ShrikantJaiswal,MayankChetwani,Saurabh Kumar,AugustineSunil

Name Reg no Roll no Peer rating

Shrikant Jaiswal 12314671 13 10

Sourabh Kumar 12319395 16 10

Mayank Chetwani 12314658 14 10
Augustine Sunil 12319395 15 07
Table of contents
Introduction
Problems in the case
Current scenario
Solution of problems prevalent in case
Case summarization
Conclusion

Introduction
The power sector in India is going through the rapid change since from the year 2012 when
government has promised power for all. For a humble beginning of 1700 MW in 1950-51 to 1,
18,400MW in 2004-05, the development of power sector has travelled a long way. There has
been a rapid rise in thermal power generation in 1970-71, 1980-81, 1990-91 and greater rise in
hydro electric power production since 2000-01.

Government of India has promised "power to all" by 2012. They are using different strategies to
achieve this mission. These are power generation, transmission, distribution, regulation,
conservation, and communication. The electricity sector in India had an installed capacity of
223.625GW as of April 2013, the world's fifth largest captive power plants generate and
additional 34.444GW per capita average annual consumption in india-96KWH in rural areas and
288KWH in urban area. India is world's largest energy consumer after United States, china and
Russia.
India has the fifth largest power generation capacity in the world with an installed capacity of
152 GW as on 30th September 2009 which is about 4% of global power generation. The top 4
countries which include US, Japan, China and Russia together consume about 49% of the total
power generated globally.
The state of Uttar Pradesh is largest in India and having population more than 160 million
according to census 2001. It is one of the largest software exporting state in India. It has
satellite towns like Noida, Ghaziabad Greater Noida etc that are emerging as new industrial
hubs therefore there is growing demand for infrastructure facilities like power, transport,
health, education, road, shopping malls, multiplexes, etc.

The power situation in the state of Uttar Pradesh is that of deficit, i.e., demand exceeds the
supply and generation of power. The government of India through electricity act 2003 is
implementing a 'power for all' plan, under which 1,00,000MW of new installed generating
capacity is to be added by the year 2012.
Problems in the case
As it is clearly revealed in the case that before the year 2012, the power situation in the state of
Uttar Pradesh was in the deficit i.e., demand exceeds the supply and generation of power. The
Uttar Pradesh is the Indian's largest state as well as growing industrial hub of India were many
local and multinational companies are operating the business. If UP were to be a country, it
would be the 7th largest country in the world. So, the need of electricity in state like UP is
growing day by day as because of arrival of new as well as operation of existing industries. The
UP had a power generation capacity of 4000MW against the demand of 6500MW of power.
Recognizing the demand-supply gap at the national level. the government of India through
electricity Act 2003 had implemented a "power for all" plan under which 100000 Mw of new
installed generating capacity was to be added by the year 2012. Even with the present
electrification levels, the additional capacity requirement for supplying continuous power in the
state was 1300MW. For universal access the capacity requirement in the state was over than
14200 MW, if UP were to attain the national per capita consumption. Compared to this
requirement, the availability in 2009 was just 8650 MW as per the estimates of year 2012, if all
the projects fructify.

Later on, the situation was further exacerbated due to the state reorganization in 2000. Prior to
this U.P's hydel capacity was 1497MW and thermal capacity was 3909MW. After the
reorganization, U.P retained only 516MW of low-cost hydel power while the balance hydel
capacity had been allocated to Uttaranchal. The cost due to the unavailability of the cheap
hydel power which had since gone to Uttaranchal was Rs 400 crore.

It can also be revealed from the case that U.P's ability to supply power to its customers was
limited by the financial capacity of the state power utility to purchase power under the export
group recommendation that mandates regular payment of current dues. There was a vicious
cycle of poor recovery that leads to inability of UPPCL to purchase power and attract
investments leading to the poor quality of supplying power even to the remunerative
consumers which results that these consumers move away from the grid.
Current Scenario

The electricity sector in India has witnessed substantial growth, with an installed capacity of
232.164 GW as of 2013. Non-renewable power plants make up the majority, constituting
87.55% of the total capacity, while renewable power plants account for the remaining 12.45%.
India generated 855 billion units (855 TWh) of electricity during the 2011-12 fiscal year. Coal-
fired plants contribute 57% to India's installed electricity capacity, followed by renewable
hydropower at 19%, other renewable energy at 12%, and natural gas at 9%.

Uttar Pradesh, India, hosts a significant number of thermal power plants. However, the reliance
on traditional biomass energy sources by about 800 million people in India for cooking and
other domestic needs raises environmental and health concerns. The use of fuel wood,
agricultural waste, and livestock dung for cooking leads to indoor air pollution, causing between
300,000 to 400,000 deaths annually and other chronic health issues.

In an effort to meet the increasing demand for power, Uttar Pradesh Power Corporation
Limited (UPPCL) has set objectives, including the establishment and operation of electrical
transmission lines, managing extra high voltage transmission, and undertaking the functioning
of the State Load Dispatch Centre. The organization is also involved in planning and
coordinating activities related to power generation, transmission, and distribution.

UPPCL is actively working on acquiring land for two proposed coal-based mega thermal power
projects in Allahabad district, aiming to boost power generation in the region. The corporation
has sent proposals to the state government for land acquisition, with plans to award the
projects to the private sector through tariff-based bidding. The success of a similar project, the
1,000 MW Anapra C thermal power project, has encouraged the government to pursue
additional plants.

Efforts are underway to address environmental concerns, improve technology in thermal power
plants, and reduce CO2 emissions. The overall goal is to balance the growing demand for
electricity with sustainable and cleaner energy practices.

Solution of problems prevalent in case

Solution 1:- Since U.P has become the commercial hub from past few decades and hence more
local as well as

multinational companies are attracted towards it to grab the market. So, the need of power in
these sectors is growing but as revealed from case, government was not able meet the rapid
demand of growing power which finally became the problem for the state. In simple words we
can say demand for energy was more than its supply.

Solution 3:- Since the demand for electricity in this state is more but supply at early stage was
not satisfactory.

the government was not able to provide avenues to generate electricity. Due to this the price of
electricity rises in this state. Soon after the government started power for all in year 2012 due
to which the state gets some new projects and was able to satisfy the need to somehow.
However, we cannot say that prices for electricity in Umpired less but because of new initiatives,
the government was able to keep the prices of electricity at its bay. Moreover, the demand is
further rising in the state, if some new projects were not developed it is obvious that prices
may further rise.
Case summarization

The government has promised power to all by 2012. The growth of power sector in India is
constant. From the humble beginning of 1700 MW in 1950-51 to 118400 MW in year 2004- 05,
the development of power sector has travelled a way. There has been constant quantum rise in
thermal power generation in 1970-71, 1980-81 and 1990-1991 an enormous rise in
hydroelectricity power production since 2000-2001. Similarly, to meet the demands of growing
electricity in state of U.P the government has started working on next projects.

Conclusion

Government of India is moving towards using the non-conventional source of energy. The
Indian government has strictly laws for tapping electric wires. Government has launched
programmed namely:

Village electrification programmed: The Central government has come up with a draft mini grid

policy which should give a big boost to them in the country. The need is to have a coordinated
plan to extend the existing grid and to set up more mini grids in remote villages. This would
require not just coordination but active collaboration among the states and the Centre. Only
this can turn the dream of 'power for all' into a reality.
Solar energy programmed: - The sun is a powerful source that can help our planet by giving us
clean, reusable

energy to power our world. The use of this energy is free, does not create pollution, and if used
wisely can help us become less dependent on other more costly and damaging forms of power.
After participating in this Web Quest, I hope you are able to see the benefits of this valuable
resource and help change the future for energy use.

Energy conservative programmed: - To make sure we have plenty of energy in the future, it's up
to all of us to use erg wisely.

We must all conserve energy and use it efficiently. It's also up to those who will create the new
energy technologies of the future.

All energy sources have an impact on the environment. Concerns about the greenhouse effect
and global warming, air pollution, and energy security have led to increasing interest and more
development in renewable energy sources such as solar, wind, geothermal, wave power and
hydrogen.

But we'll need to continue to use fossil fuels and nuclear energy until new, cleaner technologies
can replace them. One of you who are reading this might be another Albert Einstein or Marie
Curie and find a new source of energy. Until then, it's up to all of us.

The future is ours, but we need energy to get there.