India plans to reduce tariffs for daytime power usage while imposing a premium for electricity consumed during peak nighttime hours.
Why it matters? Per a Reuters report, this strategy, announced by the federal power ministry, aims to handle rising demand, promote renewable energy, and alleviate the burden on overworked fossil fuel power plants.
Starting from April 2024, this policy will apply to commercial and industrial consumers, expanding to other consumer groups, excluding the agricultural sector, by 2025. By incentivising customers to limit their air-conditioner usage at night, India hopes to decrease the risk of nighttime power cuts and cut down on emissions.
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India experienced severe electricity shortages over the year ending March 2023 due to record-breaking heat and a surge in economic activity. The country’s electricity demand grew at its fastest rate in 33 years.
Under the new policy, power tariffs will be 10-20% lower during “solar hours,” whereas they will increase by 10-20% during peak night hours when air-conditioning usage typically increases. Power Minister R. K. Singh explained that the cost-efficient nature of solar power justifies the lower tariffs during daylight hours.
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