Business

Power situation remains grim with meagre addition to capacity

NEW DELHI: Despite the Prime Minister Manmohan Singh having expressed ‘serious concern’ over the power situation and setting the agenda for power reforms in the country, the situation in the power sector remained grim with marginal increase in generation capacity and slow progress in augmentation of transmission and distribution networks.

Despite having announced at the Chief Minister’s conference held recently that a hydro policy would be put in place within three months, the Power Ministry has failed to come out with a new policy or finalise a policy on how to remove obstacles to attract major private sector investment in the sector.

On the brighter side, the award of three Ultra Mega Power Projects (UMPPs) — Mundra, Sasan and Krishnapatnam — of 4,000 MW each to the private sector was one of the positives this year although the UMPPs are not part of the Five Year Plan. However, the concerns on the generation as well as transmission and distribution fronts remained with questions being asked whether the ambitious target of 78,000 MW capacity addition during the XI Plan would be achieved or not?

As at the end of November this year, an additional generation capacity of a meagre 4,380 MW had been commissioned against a target of 16,335 MW during 2007-08.

The country’s total generation capacity as of November-end stood at around 1,38,251 MW with estimates showing that over 100,000 of the about 600,000 villages yet to be connected with electricity.

Although, in the transmission sector, Power Grid Corporation of India and Reliance Energy formed a joint venture to carry out the first project in the private sector, the process for awarding 14 transmission projects worth Rs. 14,000 crore to private players has yet to take off despite its announcement a year ago.

On its part, Power Ministry sources say that the situation was not bad claiming that orders for over 56,000 MW had already been placed.

The balance, it says, could be completed by this fiscal end. This target includes slippages of the X Plan, which saw an addition of just 21,000 MW against the targeted 41,000 MW. The power sector witnessed investment commitments of at least Rs. 1,00,000 crore by private companies such as Reliance Power, Reliance Energy (REL) and GMR Infrastructure. While REL has estimated an investment of Rs. 60,000 crore during the next five years, the GMR Group has targeted generation of nearly 12,000 MW during the next 5-6 years at an investment of Rs. 50,000 crore.

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