New Delhi: To keep the Indian economy growing at the current growth rate of 9.5%, the country’s power generation capacity will have to grow at a similar pace, according to a report prepared by the power ministry.
The report sees a 1:1 correlation between Gross Domestic Product (GDP) growth and addition of power generation capacity in the initial years of the Eleventh Plan, which starts in 2007.
A 9.5% growth per year over the next five years will add 68,700MW to India’s power generation capacity at a cost of Rs10,31,600 crore.
That growth rate, however, is almost double the 5.1% compounded annual growth rate achieved between 2002 and 2007.
At the end of the current plan period, in March 2007, the country would have added around 23,000MW of capacity, compared to a target of 41,000MW. Still, the 5.2% rate at which generating capacity has grown in this period is much higher than that at which it grew in the previous five-year period. Between 1997 and 2002, power generating capacity grew by 3.2%.
“The 9.5% target sounds very ambitious as the growth rate in generation was only around 5.2% during 2002-06,” said an analyst who did not wish to be named. He added that the “real picture” would emerge only in 2012, at the end of the Eleventh Plan.
A senior official at the power ministry pointed out that the current year’s performance had been better. “During 2006-07 (till January 2007), the growth rate in power generation was 7.6%. It is, however, expected to come down towards the end of the current financial year,” he said.
If the 9.5% target for growth in generating capacity is not met, India could find it difficult to sustain its current pace of economic growth.
Out of the 68,870MW capacity addition that is expected over the next five years, 16,000MW will come from hydropower projects, 46,600MW from coal-based ones, 1,400MW from lignite projects, 2,100MW from gas-based projects and 3,160MW from nuclear power plants.
The 68,870MW target is expected to be largely met by the Central sector or plants that are owned by public sector companies controlled by the Central government.
“The Central sector is expected to contribute 53% and the state sector 34%, with the balance being contributed by the private sector,” the power ministry official said.
Following the Central government’s success in getting private participation in two ultra mega power plants, the governments of various states are now in the process of launching their own large power projects.
India has a current installed generating capacity of 1,28,182MW.