"Power to all by 2012" a distant dream

Government's ambitious target of 'Power to all by 2012' under the National Electricity Policy may remain a distant dream. The power sector is struggling to add about half of its initial planned capacity of 78,577 MW in the 11th five-year plan ending March 31, 2012, owing to shortage of fuel linkages (coal and gas) and environmental concerns. Prime Minister Manmohan Singh is expected to review the performance of power, coal and environment sector in a high level meeting on 06-07-11 to take stock of the situation. The meeting will address issues relating to stranded power projects owing to shortage of coal supply and environmental clearances.

The power ministry is struggling to reach a capacity of even 50,000 MW even after the Planning Commission has reduced the target to 62,000 MW in the mid-term review of the current 2007-2012 plan. The current capacity addition has so far been 34,462 MW till FY11.

"What capacities we add here in five years, China adds it in a year. The fuel linkages and environment ministry's no-go mining policy are major area of concerns for the power sector," said chairman of a PSU power firm, who did not wished to be named. Environment minister Jairam Ramesh has ruled out a review of the ministry's recent order directing all power projects to secure forest clearance before they commence work, thus virtually turning down the demand of power ministry. The power sector is expected to add only 7,675 MW of generation capacity this year against the Planning Commission's target of 17,601 MW. Even the new plants commissioned are running at half the capacity due to non availability of coal. "We are setting up our projects based on the assurance of the government that the feedstock will be made available to us. Our new capacities will be commissioned this year. We are hopeful that the government will keep its promise and the plants will not lie idle for the lack of fuel or operate below capacity," said a CEO of private power firm on conditions of anonymity.

The power ministry has asked the coal ministry to assure 347 MT of coal supplies to power units during 2011-12 to ensure that newly commissioned units do not lie idle. "I would request you to advise Coal India to make all out efforts to supply the full quantity of coal as our LOA to the newly commissioned plants. In any case we expect Coal India to supply 347 MT coal to the power plants during 2011-12 before resorting to e-auction of coal or sale of coal through MoU at e-auction prices," P Uma Shankar, the Union power secretary, wrote to coal secretary C Balakrishnan in a letter dated June 17, a copy of which is with TOI. However, the coal ministry intends to go ahead with its e-auction of coal and sell 45 MT of coal as it fetches over 80% premium over base prices. The power Ministry has set an ambitious target of adding 1,00,000 MW generation capacity in the next Plan Period (2012-17).