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Record power addition but fuel remains the big question mark

Hitherto,the record for generation capacity commissioned in a single year was in 2010-11,when 12,160 MW was added.

Written by Anil Sasi | New Delhi | Published: March 22, 2012 1:21 am

Fuel woes notwithstanding,a record 13,332 MW has been commissioned in the first 11 months of this fiscal — the highest power capacity addition ever in a single year. With another 2,000 MW expected to come onstream in March,the last month of 2011-12,the cumulative power capacity addition this fiscal is likely to be 15,000 MW,thanks largely to private sector players.

Hitherto,the record for generation capacity commissioned in a single year was in 2010-11,when 12,160 MW was added. The challenge for developers,though,is how to run these newly commissioned projects,as nearly all of them are facing fuel shortages. The private sector added 8,230 MW of the 13,332 MW (or over 60 per cent). The surge in project commissioning during the current fiscal,especially by private sector players,is explained by the fact that most of these projects were conceived back in 2005-06,when short-term power tariffs were ruling at well above Rs 10 per unit (kWh) and the outlook on fuel availability was still positive. Coal India Ltd’s output was broadly on track with estimates,global coal prices were much lower and the KG Basin gas output projections looked optimistic.

Now,even with the dire fuel situation,developers in advanced stages of commissioning have no option but to go ahead with rolling out their units. A majority of the projects commissioned so far this year (12,055 MW of the 13,333 MW) are coal-fired. On the whole,despite the record project commissioning this year,the achievement would be short of the 17,716 MW target set for 2011-12. While the stalemate over the Kudankulam nuclear power project in Tamil Nadu has now ended,the actual commissioning of the two near-complete 1,000 MWe (mega watt electrical) units could spill over to the next fiscal.

Key private sector generation units commissioned during the course of the current fiscal include Adani Power’s 660 MW Mundra (second unit),Tata Power-DVC’s 525 MW Maithon project (Unit 1),Tata’s Mundra unit (800 MW),two 300 MW units at JSW Energy’s Ratnagiri project and Sterlite Energy’s 600 MW Orissa unit. The strong private sector performance is in line with the progressively improving trend of private developers to capacity addition during the first four years of the current Plan period.

To put things in perspective,the cumulative capacity added during just two years of the Eleventh Plan (25,492 MW added during the first eleven months of 2011-12 and the 12-months of 2010-11) is way above the cumulative capacity addition achieved during the entire five years of each of the last three Plan periods. The country had seen a capacity addition of 20,950 MW in the Tenth Plan (2002-07),19,119 MW in the Ninth Plan and 16,423 MW in the Eighth Plan.

With the sharp surge in project commissioning during each of the last five years,a cumulative capacity addition of around 50,000 MW is seen as a distinct possibility during the Eleventh Plan period (April 2007-March 2012),another record by a wide margin. Despite the record,the actual commissioning would be well short of the target of 62,000 MW pegged for the current Plan period.

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