Why has the country very consistently failed in capacity addition targets? Is it short-sightedness of the government, lack of resources, lack of will or sheer indiscipline that plagues the sector?
For the 9th and 10th Plan periods, there was an inherent deficiency in the planning process, which was absence of advance planning. In addition, inadequate monitoring of project implementation was another big issue, thereby many projects failed to meet their deadlines. A realization of these problems, along with Ministry of Power’s measures to ensure a coordinated effort by public and private players helped a marked improvement in capacity addition achievement in 11th Plan, which at 54,000 MW was more than the total achievement of 9th and 10th Plans put together. The capacity addition for the 11th Plan would have been better if the uncertainties on account of fuel linkages and timely delivery of balance of plant equipment had been addressed.
In the last plan period capacity addition targets saw three downward revisions, progress has stalled in thermal power due to lack of clarity on fuel linkages, hydropower stations are all but not moving for want of environmental clearances, while safety issue is impeding growth of nuclear power. What do you think are the major problems?
The most important failings of the sector include, one, lack of coal reforms, two, inadequate coordination of efforts between ministries/ departments of power, coal, petroleum & natural gas, environment and forests, railways, road and surface Transport, and, three, dismal financial health of distribution sector—the revenue generating end for the power sector. Moving forward, there is an impending need for following reforms:
■ Fuel supply agreements to be signed at the earliest without undue benefits to Coal India Limited;
■ Enhancing domestic coal production;
■ Coal Mines (Nationalisation) Act, 1973 to be amended to facilitate progressive phasing in of commercial mining and de-linking coal mining from designated end-use;
■ Competitive bidding of coal blocks preferably on lines of production sharing contracts;
■ Appropriate pricing policy for surplus coal mined at captive mines;
■ Seamless coordination between rail, road and ports infrastructure for moving coal;
■ Greater priority for development of hydro-based projects towards having a more balanced energy mix;
■ Promoting peaking power stations;
■ Rationalise retail tariffs;
■ Implementation of open access regulations.
India’s per capita powerconsumption is among the lowest in the world while consumption is increasing rapidly. How can the government bridge the demand-supply gap?
India’s per capita power consumption at 733 kWh is indeed very low when compared with World’ average of 2,429 units and that of some of the developed countries (US-13,647 units, UK 6,749 units, China 2,456 units). However, what needs to be appreciated is that the per capita consumption has been growing at the rate of 7.3% p.a. during 1950-2009. Electrical consumption pattern across consumer categories has undergone noticeable change with the share of domestic and agricultural consumers going northwards and industrial consumption going down. Shortages are prevalent with peak shortages to the tune of 10-11 per cent.