India bucks the trend in power development activity in Asia in March quarter

This comes at a time when power development activity in the Asian region tumbled 12% between Jan and Mar 2013 against the year-ago period

India recorded an unprecedented 46.5 per cent growth in new power capacity in the first quarter ended March this year, according to Platts, a global provider of energy price assessments. This comes at a time when power development activity in the Asian region tumbled 12 per cent between January and March 2013 against the year-ago period, it said.

Power development activity in Asia in the first quarter totalled 62,743 megawatts (Mw), Platts said in its newsletter, Platts Power in Asia. "This was 12 per cent lower than in the same period of 2012, but was well up on the prior quarter - in fact, more than a fifth higher than in the last three months of 2012," said the editor of the newsletter, Martin Daniel.

He, however, added the announcement of 21,000 Mw projects in Asia during first quarter, almost double that of the fourth quarter of 2012, appeared to indicate an improvement in developer confidence. In line with the overall boost to investor confidence, India added a record 10,768 Mw of fresh power capacity between January and March this year against 7,349 Mw during the same period in 2012, according to the latest data from the Central Electricity Authority, the planning wing of the power ministry.

A comparison of the new capacity additions in India with those in the rest of the Asia, as captured in the Platts report, also throws up the traditional Indian inclination in favour of coal-fired power generation. "In terms fuel and technology, a clear winner in the new power capacity build in Q1 was solar power. Solar sector development trebled in Q1 versus Q4," Platts said.

Coal continued to account for 45 per cent of the new capacity addition during the quarter, it said, little change from the prior quarter and the first quarter of 2012. However, 99.5 per cent of the new capacity in India was in thermal, based largely on coal.

According to Platts, the pattern of new capacity build in Asia was not uniform.

"In India, where new power development had been hindered for much of 2012 by fuelling and financing issues, there was a significant revival in activity of approximately 8,100 Mw during the first three months of this year. New power development in China, of nearly 12.5 Gw, also was up compared to a year ago and versus the last quarter of 2012."

Southeast Asia and West Asia also saw continued buoyant new capacity activity at 19,100 Mw and 12,500 Mw, respectively.

Govt intervention
The improved investor confidence in the Indian power sector is due to a host of policy-level clarity over the past year. Thanks to the government's intervention, Coal India Ltd has agreed to supply committed quantities of the fuel for new power stations.

Also, with the formation of the Cabinet Committee on Investment, fresh clearances have come through for mega infrastructure projects across power, coal and petroleum sectors.