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Power Generation Will
Grow at 9% Per Annum in 11th Plan
CEA Chairman
New Delhi, September 05, 2008
The government is taking concrete steps for record power
augmentation at a growth rate of 9 percent during the Eleventh
Five Year Plan and projects are already underway to achieve
the target of 78,500 MW additional generation capacities by
the end of the Plan, according to Rakesh Nath, Chairman,
Central Electricity Authority (CEA).
Nath was speaking at a Conference on Developing Power Market
organized jointly by PHD Chamber and PTC India Ltd in New
Delhi. He said that the planning canvass for power projects
should be extended to ten years from six to seven years as of
now. This is on account of the long gestation period
experienced in executing the power projects, both hydro and
thermal. Within the next fifteen days, a discussion paper on
the Power Sector in the Twelfth Plan would be circulated to
get the responses and comments of the stakeholders including
industry, he added.
Nath mentioned that the private sector’s contribution to the
additional capacity of power would be 27,000 MW, of that
11,000 MW would be from the captive power units. The proposed
plan for the augmentation of the power capacities would also
focus on building coal linkages and developing railway
networks in order to help the plants access coal in time and
in required quantities. He said that there would be
substantial increase in the coal imports by the power plans to
meet their generation targets.
Nath observed that the issue of open access to power should be
addressed so also open bidding for leased mines as in the case
of ultra modern power plants. He also underscored the need for
completing Case 1 bidding by the States and extending the
timeframe for such appraisals to more than five years.
T N Thakur, Chairman & Managing Director, PTC India Ltd, in
his presentation said that with growing competition and
capping on short term margin by CERC at 4 paise/kwh, the risk
appetite of the intermediaries have been considerably
affected. He said that in order to attract more investment in
the power sector and to give adequate return to the
shareholders of trading companies, the power should be allowed
to be traded at the market prices. That will help more players
to come up in the intermediation space, building competition
and subsequently bring down the unit price of the power. “For
augmenting investment, it is critically important to move from
fixed rates to market determined rates,” he added.
Thakur said that currently, 20 billion units of power are
traded, including the 5 billion units bought from the
neighboring countries. In 2007-08, that constituted only 2-3
percent of the total power generated in the country. “Our
effort should be to increase the total volume of power traded
in the country. That would ensure optimal use of power by
drawing power from surplus production bases to scarce areas,”
he added. He also informed that presently, there are 26 power
traders are licensed under CERC and in future the number of
traders would grow up considerably as is the case in developed
countries.
Thakur disclosed that PTC India Ltd has been able to sign PPP
with Independent Power Producers for generation of 11,000 MW
and negotiations for generation of another 30,000 MW is under
advanced stage of negotiation. A total investment of Rs.50,000
crore is already been committed in this regard. He said that
capping of power rates, as discussed in some quarters would go
against the interest of more investment in the sector. A
liberal and pragmatic approach towards power trading could
help innovating new products, which can help consumers. More
trading slots based on various timeframes should be created
for power. Presently, there are only two types of open access
available, that is for period up to three months and the other
is for 25 years or more on long term.
Ravi Wig, Past President, PHD Chamber and Chairman, NRD
Council, said that the basic idea of creating power trading in
the country is to enhance investment. The power traded in the
country is miniscule as compared to the volume in developed
countries. He wanted that legal framework should be such to
promote trading and induction of more companies as
intermediaries.
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