India will miss the target of adding 78,577MW of power generation capacity by 2012 because of shortage of equipment, according to a senior government official who is involved in monitoring the addition of such capacity.
The target for the government has been set by the government itself in an effort to ensure that the country has enough power to meet the needs of an expanding economy. The Indian economy grew by 9.4% last year and is expected to grow by more than 8% this year.
Feelinh the crunch: NTPC’s power plant at Badarpur in New Delhi. India currently has a power generation capacity of 1,35,006MW, which is insufficient for the second fastest growing major economy in the world.
“If we are not able to achieve the target, it will be a big set-back to the economy,” said Hitul Gutka, an analyst at India Infoline. The power ministry says that to keep the economy growing at around 9.5%, the country’s power generation capacity will have to grow at a similar pace.
The government is expected to miss its target by around 60%, which could possibly result in a power shortage. “We can, in no way, reach 78,577MW. The maximum that we can add... is 25,000MW, with a yearly capacity addition of 5,000MW,” said the official.
He added that “with best effort” the country could add 7,000MW of power generation capacity a year, taking the total to 35,000MW over five years but that “it is not possible” to do anything more.
“The problem is not only due to the paucity of power generation equipment but also due to few contractors available in the country for the balance of plant equipment,” said the official.
The power ministry has already said that Bharat Heavy Electricals Ltd, the state-owned firm that is the country’s largest manufacturer of equipment such as boilers, turbines, and generators, was responsible for delays in several projects because of its inability to cope with demand and supply on time. There is also a shortage of firms that can make coal and ash handling, water treatment, and auxiliary services equipment for coal-based power projects.
Companies such as Toshiba Corp., Hitachi, Dosan, LMZ (Russia), Technoprom (Russia) and Dongfang have evinced interest in setting up manufacturing facilities in India, but their facilities may become operational only after 2012. It takes at least four years to set up power equipment manufacturing facilities.
In the five months of the 11th Plan period (2007-12), India has added 1,350MW of generation capacity, according to the government official. “Projects need to be awarded by December this year, if they have to be commissioned within this plan period,” said India Infoline’s Gutka.
India has a power generation capacity of 1,35,006MW today which is not sufficient for the second fastest growing major economy in the world. Power shortages have been identified as a key infrastructure bottleneck.
In the 10th Plan period (2002-07), the government had envisaged additional power capacity of 41,110MW. It ended the plan period with a capacity addition of only 20,950MW, 49% short of the estimate. The government cited delays in technology alliances, lack of funds and natural calamities such as floods as reasons for its inability to meet the target.