Power capacity addition falls short of target, again

This year too, officials blame delays in equipment supply.

On the first day of the new financial year, there was a sense of dejà vu in the power sector. As has been the case for the last many years, the capacity addition during the year, of 9,263 Mw, is a little over half the target of about 17,000 Mw. And like the previous years, power ministry officials blamed delays in equipment supply.

This is even lower than the 10,000 Mw announced by Finance Minister P Chidambaram in his Budget speech in February.

If the performance in the first year of the Eleventh Plan sets the tempo for the rest of the Plan period (2007-12), the country is headed for even higher power shortages in the coming months and years.

According to latest data, the average energy shortfall went up to 13.4 per cent in February 2008 against 12.8 per cent in the preceding month. Peak power deficit in February, though, was 17.1 per cent, the same as in January.

Power sector officials are, however, confident of a better performance in the current year. "I think we are better placed this year," said MS Verma, member (planning), Central Electricity Authority (CEA). The main reason for this confidence is the increase in equipment production capacity.

This year, the main equipment supplier, Bharat Heavy Electricals Ltd (BHEL), has expanded capacity to 10,000 Mw per annum (from January 2008) from 7,000 Mw at the beginning of the last financial year. The company plans to further expand it to 15,000 Mw per annum in the next two years.

Power projects slated for commissioning in 2007-08 have been added to the current year's target to ensure that the Eleventh Plan target of 78,577 Mw is met.

"We will be adding about 12,500 Mw capacity this year. About 16,500 Mw will be added in the next two years and 23,500 Mw is projected to be added in the last year of the Plan," said Verma.

According to the Eleventh Plan document, about $20 billion was to be invested in the power sector in the first year of the Plan "" the largest chunk of the $68-billion investment earmarked for the 10 main infrastructure segments during the year.

Most economists guesstimate that the investment target is unlikely to have been met given the poor capacity addition, though the final numbers will only be available with a time lag.