core sector communique

The power-for-all dream

With barely 10 months to go for the Eleventh Plan (2007-12) to conclude, only 40 per cent of the planned power generation capacity has been achieved. The Planning commission estimated a 78700 MW of capacity addition during the current Pan.

State sector (Sate electricity boards) and private sector have achieved 58 per cent of the planned addition till May 2011, while the Central sector with the likes of NTPC, NHPC, DVC and SJVN achieved only half the originally estimated capacity. NTPC, for instance, previously had an ambitious plan of reaching 50,000 MW by the end of the Eleventh Plan. However, the company's current installed capacity is 34,194 MW with an additional 4320 MW of capacity expected to be added by Plan-end. The targets always seemed ambitious, given that the capacity addition achieved over the last two Plans were 19,100 MW and 21,000 MW, excluding renewable energy. To date, in the Eleventh Plan, more than 34,000 MW of conventional power capacity has been added with another 27000 MW in final stages of development. Execution delays in power projects were due to delays in obtaining equipment, land acquisition, balance of plant construction delays and regulatory issues.

Low growth in generation

But has such a huge capacity addition translated into a strong growth in power generation? India's power capacity addition grew at 7.2 per cent compounded annually over the four year ended March 2011, while the total power generation grew by only 5.1 per cent during this period. However, if one excludes the renewable energy sources (low load factors) from the equation, the power capacity addition growth at 5.6 per cent annually matched power generation growth.

The energy deficit (difference between demand for power and that actually generated at any given point in time) and peak deficit (power deficit during the peak hours), which did not improve till FY-10, improved to 8.5 per cent and 10.3 per cent in March 2011. In March 2007, the energy and peak deficits were 9.9 per cent 13.5 per cent respectively. Higher generation from hydro-power projects due to good monsoon last fiscal was instrumental in reducing the peak-deficit to some extent. Hydro power generation grew at 7.2 per cent year-on-year in FY11.

Private sector share improves

The private sector share in total installed capacity went up from 13 per cent as of March 2007 to 21.7 per cent in May 2011. Additionally, around 4,900 MW of captive power was added during the last five years which is mostly private. With more than 8,000 MW more to be added, the share of private sector as a proportion of total installed capacities would further improve. While private generation capacity has gone up significantly, it is noteworthy that only 12,300 MW came from conventional sources while the rest of the 7,300 MW came from renewable energy plants. Going forward, shortage of fuel and any further execution delays can prevent the ‘power for all' dream the government had in 2012 from becoming a reality.

Umesh Shanmugam