Peak crisis looms as power misses mark by 23,000 MW

NEW DELHI, May 15: During the Ninth Plan, addition to power generation capacity is estimated to be around 34,000 MW against the required 57...

NEW DELHI, May 15: During the Ninth Plan, addition to power generation capacity is estimated to be around 34,000 MW against the required 57,000 MW. The shortfall, says an assessment by the ministry of power, is due to inadequate availability of funds, slow progress of ongoing projects, limited fuel linkages and slipshod project preparedness.

As a result, all-India energy and peak power shortages during the plan period would be 3.8 % and 14.4 %, respectively. “Thus, the problem envisaged in the medium term is more of peak power shortages rather than energy shortages,” says an internal note of the ministry of power.

To overcome the shortfall, the ministry has proposed the following steps:– States must ensure that first priority for Plan fund allocation should be for the ongoing power projects and schemes which can be expedited for early commissioning;

Story continues below this ad

— An inter-ministerial committee be set up for monitoring projects cleared by the Central Electricity Authority so that key constraints — technical and environmental clearances, fuel linkages, power purchase agreements and financial closures are resolved. (This would result in addition of 12,666 MW);

–Permit electricity boards of Bihar, UP, etc. (which are presently non-eligible for funding from Power Finance Corporation) to borrow finances for renovation and modernisation of existing plants; and

–Monitor progress of private projects costing less than Rs 400 crore and ensure speedy clearances/implementation so that 5,600 MW may be added during the period.

Simultaneously, the power ministry says that improvements in operational parameters plant load factor, reduction of transmission & distribution losses, renovation & modernisation of existing power stations — should be undertaken to bring down energy and peaking shortages.

Story continues below this ad

Though the working group on power has estimated a capacity addition of 57,000 MW during the Ninth Plan to meet the energy and peak power requirement of 569 billion kilowatt-hour and 95,757 MW, the power ministry document states that 34,000 MW is “certainly feasible” from the sanctioned ongoing and CEA cleared projects.

The cautious projection of 34,000 MW by the power ministry is a fallout of the experience gained during the Eighth Plan. Though the working group had initially assessed a capacity addition of 44,000 MW by the end of Eighth Plan, it suggested only 36,646 MW addition due to lack of availability of suitable projects. The National Development Council subsequently reduced the capacity addition to 30,537.7 MW with an annual addition of 6,108 MW.

However, actual capacity addition realised during the Plan period has been estimated to be 17,668 MW an achievement of 57.8 % “due to contractual delays, inadequate resources, transfer of sanctioned schemes by the state governments to the private sector, resettlement problems and law & order factors.”