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More power to India

| 8/15/2011 4:20 PM Monday

Power Minister Sushil Kumar Shinde wants to bring modifications and a facilitating policy environment that will guarantee half the country’s electricity being generated and distributed by private players. The Prime Minister is keen that the common man should get a steady supply of electricity, and the Power ministry is working hard to achieve this goal, he says.

In an exclusive to PRAVEEN K SINGH, Mr. Shinde shares the government’s vision of ensuring power to all, by targeting more than 100000 MW of additional electricity capacity for the next five years.

Excerpts of the exclusive interview to DSIJ:
 
What are the Power ministry’s plans for the 12th Five Year Plan?

No target has been given to me so far, but we have fixed a target on our own. The Planning Commission will give us a target by the next month or so, but the goal we have fixed for our own work is of one lakh MW. 80000 of these are under construction, as of now. Internally, we have set ourselves an informal target of 8.5-9%, so that work can progress.

In the 10th Five Year Plan, our target was 42000 MW, but we could achieve only 21000 MW. In the last few months of the 10th plan, the department thought of giving us a target of only 42000-46000 MW. However, we took an initiative for a bigger target, and aimed at 78000 MW in the 11th plan.

The mid-term appraisal reduced this to 62000 MW. As on today, we have achieved more than 38000 MW. Every week, we see new projects coming in. We are confident of being able to reach 62000 MW by the end of this Five Year Plan.

As Power Minister, what are the major reforms that you are undertaking?

Reforms are already there, and we will have to push particularly towards modernisation. The Accelerated Power Development and Reform Program (APDRP) is there, and we have recently taken a decision to have underground transmission lines in tourist areas, religious places and historic sites. It will not be possible to tap wires from any part. Certainly, these measures will reduce theft.
 
What is the growth target of the Power sector? How do you plan to achieve this?

It is more or less similar to that of the economic growth target. Our target is to grow at 8.5%. We also aim to reduce distribution and transmission losses, which are being brought down by 2-3% every year — in fact, we have come from 38% to 28%. But in some places under APDRP, it has gone down to 12 to 15%. So, we have reconstructed our scheme.

We have a Rs 40000-cr budget for APDR, and Rs 10000 crs for the database line. That work is already done. Phase I has already been completed in the database. We have started the second phase now. For this phase, decisions like laying underground transmission lines have been taken.

For the current financial year, we have planned for 17000 MW. Last year, we achieved about 15000 MW synchronised, and the Capacity on Demand (COD) was around 13600 MW. In the past in the Five Year Plans, we had achieved a capacity addition of 10000 MW. Today, we are adding a capacity of more than 10000 MW in a year.

The Power sector is booming. This year, we have decided to go for 17000 MW. In the 10th Five Year Plan, private investment in power was only 10%. Today, it is over 30%. In the 12th plan, private investment will be more than 52%. There has been a great response, in spite of all the difficulties faced by the Power department. This is because the returns are very good in this sector.

Also, the speed has been upped for Ultra Mega Power Plants (UMPPs). We have already called for bids for four of these plants, and they are already in the market. Two were in the bidding process, but were faced with some environmental issues. Of these two, one is the Orissa UMPP, which is likely to be cleared soon. This is a prestigious plan for the country, and we have been fighting for it.

Nowhere else in the world has a USD 4 billion 4000 MW UMPP project been completed. Our total projection is to have about 12-14 ultra mega projects.

How much access have you given private players, and how do you plan to attract private investment in the Power sector?

We have given open access for generation as well as transmission. In 2006, when I joined, the private sector’s participation was only 6%. Today, it is 29%, and it will go up to 52% by the end of the 12th plan. This is a projection. It is in the offing.

The government has also awarded four UMPPs, with an aggregate capacity of 16000 MW worth around Rs 64000 cr (USD 14.2 billion), to private players. Twelve more are to be awarded soon.

Projects of almost 80000 MW capacity are under construction, and some of 50000 MW capacity are being implemented by private players such as Reliance Power, Adani Group and Tata Power.

Today, when almost 40% people in the country do not have access to power, what is your plan towards expanding transmission?

The basic thing is that the country requires much more electricity. Consumption has increased. An increasing number of people are using power equipment and appliances, like refrigerators. This will only increase as the capacity of earnings goes up. I don't accept that 40% of the population has no access to power. We have found out 115000 villages are not electrified. The first UPA government had decided to electrify these villages. So far, we have electrified almost 98000 villages.

We will fulfil the desire of the UPA government. However, this is all conventional energy. In remote villages, where a grid cannot reach, we will have to see the standalone system using non-conventional sources of energy.
 
The supply of coal has been a big hurdle. How do you plan to tackle this stumbling block?

At the moment, we are limping a bit. This country had never expected such a big capacity addition. Suddenly, it is going up. I concede that the supply of coal is becoming a problem. I have written to the Prime Minister, and he has appointed a group of ministers under the chairmanship of Finance Minister, Pranab Mukherjee. The group is asking to increase production.

Other policy initiatives and reforms are also being undertaken, to make this sector attractive. I have requested an increase in coal production and supplies to the Power sector, and am hopeful this will be done. As of now, only 10-15% of the coal requirements of power companies are being imported.

Coal is an important feedstock for electricity-generating companies. 65% of such energy is being produced by thermal power plants, despite some new gas finds. Yet, a thrust is also being placed on clean energy. The hydropower segment now accounts for nearly 22% of India's supplies, other forms of renewable energy sources account for around 11%, and nuclear plants amount to 2%.

I don't think there will be much of a problem, though. We will have to sort it out. Import is very less, only 10-15%.

 

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