Record show powers Shinde's smile

The country added 9,700 Mw power capacity this financial year after a record 9,585 Mw in 2009-10.

Given the poor performance in the past, Power Minister Sushilkumar Shinde has reasons to celebrate a record 9,700-Mw capacity addition in the current financial year so far. A record performance in successive years for a sector traditionally considered laggard among infrastructure sectors certainly has something to cheer about for the minister.

The country had added 9,585 Mw of capacity in 2009-10 which also was a record. Broadly, the good performance is attributed to two factors — first, policy makers and companies took lessons from slippages in the 10th Plan; and second, the slippages themselves. About 9,000 Mw of the 32,032 Mw added so far in the current Plan period has been on account of the projects that were to come up during the 10th Plan.

The government had fixed a target of 40,000 Mw capacity addition in the 10th Plan, but only 21,180 Mw was achieved, which led to a spillover to the current Plan. Some of the hydroelectric projects supposed to come up in the previous Plan but commissioned in the current one include NHPC’s Sewa-II U 1,3,2 in Jammu & Kashmir, NHDC’s Omkareshwar in Madhya Pradesh and OHPC’s Balimela ST-II unit 7,8 in Orissa. In the thermal space, the spillover includes NTPC’s Sipat – II unit 4,5 in Chandigarh and Kahalgaon II unit 6,7 in Bihar and PSEB’s GHTPP-II U-3,4 in Punjab, among others.

Power sector experts say a change in approach has yielded good results. “If you compare capacity addition in the 10th Plan with that achieved till now in the current Plan, you will know that the government has progressed quite well on this front. About 20,000 Mw capacity addition was achieved in the 10th plan. Even if we are able to achieve 50,000-55,000 Mw addition in the 11th, it is a big achievement,” said former power secretary, Anil Razdan. It was very easy to fix low targets and show achievable results, but fixing huge targets and achieving them was a challenge. The government had done very well, he added.

Ernst & Young Partner Kuljit Singh was also positive about capacity addition in the 11th plan. The year 2009-10, with addition of about 10,000 Mw, had been quite good, he said. The situation would further improve in the 12th Plan, as many of the private sector projects, for which groundwork had already been completed, would come up. “In the case of public sector companies, the main hurdle is the time taken in placing orders, while environmental clearance, land acquisition and fuel linkage are some of the main problems faced by private sector companies,” Singh said, while commenting on the bottlenecks that companies faced while setting up power projects.

The power ministry has already said that the private sector would account for 62 per cent of the total capacity in the 12th Plan. Razdan pointed out to the significant change in the 11th Plan from the government’s side, with due encouragement given to the private sector. Earlier, the entire capacity used to come from public sector power companies. In the current Plan, about 35 per cent of the capacity has come from the private sector. This is expected to increase to 60 per cent in the 12th Plan.

Five manufacturing units were expected to come up with global partners in the 12th Plan. For this, groundwork had already been done in the current Plan which was a big achievement, he said.

The government had set a target of adding 75,000 Mw in the 11th Five-Year Plan. This was later revised to 62,000 Mw. Till December 2010, 32,032.2 Mw of power-generation capacity had been commissioned, compared to the target of 62,374 Mw. The rest of the projects are under construction and expected to be commissioned before the end of the 11th Plan in March 2011, according to data available with the Central Electricity Authority.

Missing targets has not dampened the spirits of the government, which is now looking at fixing the capacity addition target for the 12th Plan at 100,000 Mw.