Coal supply shortage forces government to plan a capacity addition of only 7,675 Mw for the year 2011-12

Households and industries are unlikely to get any respite from power shortages in near future, with the country’s power capacity addition targets clearly fizzling out.

The power ministry has pegged capacity addition of a mere 7,675 mw in 2011-12, the lowest for any year of the 11th Plan period (2007-12). The government initially targeted over 20,000 mw in 2011-12 to reach the revised 11th Plan target. This would mean that the Five year Plan period will end with a new generation capacity addition of about 44,000-45,000 mw far below the revised target of 62,000 mw and substantially lower than the original target of 78,700 mw.

“This is extremely unwelcome development at a time when the country is targeting over 9% growth in the next Five -Year Plan. This only means that despite growth, we will have to live with power shortages for few more years,” said a power sector analyst asking not to be named.

The startling disclosure of reduced target came at a meeting convened by the by the Planning Commission to finalise targets for annual plan 2011-12 last month. It is learnt that at the meeting, power secretary Uma Shankar stated that capacity addition will slip further in current year mainly due to coal supply constraints. The situation on coal supply front is so bad that is make all plants commissioned in 2010-11 are not operational due to the shortage of fuel and others commissioned in 2009-10 are operating at lower plant load factor.

“The main culprit for slippages in the capacity addition programme has been erratic supply from Coal India. In 2010-11, CIL had committed to supply 335 million tonne of coal, though the ctual supply has been only 302 milion tonne,” said an official of the power ministry adding that projected addition in 2011-12 could be scaled up if necessary gurantees were in place on fuel supply.

It is expected that power ministry would formulate a new coal import strategy to tide over the coal shortage and prevent itself from an embarrassment in its ambitious capacity addition programme. The slippages in 11th Plan is also expected to overshadow the plan to add over 100,000 mw of new capacity in 12th Plan period (2012-17).

The slippages on capacity addition is not new for the country’s power sector. The targets has been missed by wide margins in previous several Five year Plans. Even after the slippage in 11th Plan, it will be best plan in terms of new capacity added. In fact, despite missing the yearly targets, the power ministry has boasted about high addition of 9585 mw in 2009-10 and 12,160 mw in 2010-11.