No discrimination in Power allocation

 In conversation with Hardnews, Union Power Secretary Anil Razdan sheds light on the key measures being taken by power ministry to improve power availability in the country. He also replies to the allegation from some states that the centre is discriminating in allocation of central pool power

How is the capacity addition programme progressing? How much capacity is likely to be added in the 11th Plan?Our power generation capacity addition programme is on track. A total of 81,000 MW power generation capacity including 12,000 MW captive is envisaged to be added for benefits in the 11th  Plan. Of this, 11,300 MW capacity has already been commissioned while the rest is under construction. Equipment orders were placed for implementation of over 26,000 MW capacity in the financial year 2007-08. The process of placing orders for equipment supply for the remaining capacity should be completed soon.

Meanwhile, 10,750 MW of power generation capacity is also under implementation for benefits in the next Plan. This comprises 10,010 MW of thermal and 740 MW of hydroelectric generation capacity. Although our track record in adding power generation capacity in the previous Plans is not good, we are hopeful on meeting the target of the current Plan. On an analysis of the past performance, we found that delay in ordering for equipment by developers was the main cause of shortfalls in capacity addition target set in the previous Plans.

So now we are now trying to ensure that most of the equipment supply orders for 11th Plan power projects are placed by developers in the initial years of each Plan. The country's energy requirement is growing fast. To achieve matching capacity addition, we need to ensure that equipment orders for at least 20,000-25,000 MW capacity is placed every year. Ordering of equipment supply fshould not be spasmodic or come as a knee-jerk reaction.

We need to encourage captive power generation capacity addition. It helps in cutting power transmission and distribution losses. While the country already has 23,000 MW of captive power generation capacity installed, another 12,000 MW is planned for benefits in the current Plan. These captive power projects are expected to be commissioned as per schedule. Supercritical technology offers new hope for converting our power shortages into investment opportunities in the power equipment manufacturing sector.

Given the huge capacity addition requirement, we need domestic manufacturing of supercritical power generation equipment. This will provide a sense of ownership of technology besides making repair and maintenance of installed equipment easier.

BHEL alone cannot meet this increased demand. To remove bottlenecks in supply of supercritical power equipment, we need to seek foreign investment. If we do not set up a diversified manufacturing hubs  we might miss the bus for next 20 years.

In view of the huge shortfall in the 10th Plan power generation capacity addition target, what additional measures are being taken by the Union power ministry for project monitoring in the current Plan?

We have appointed one official from the central electricity authority (CEA) to report on every power project under construction in the country. We have set up an independent monitoring panel to advice on power project implementation. The panel's role is to hunt for problems in project execution and solve them. However, we need to set up an IT-based online monitoring system for all under-construction power projects. Such a mechanism will help us in monitoring status of equipment supply to power projects as also of implementation work. That will, in turn, ensure adherence to commissioning schedules drawn up for power projects.

But this system can be implemented only when equipment suppliers also set up a similar monitoring system at their own end and provide an interface for allowing tracking status of their equipment delivery schedules. A similar surveillance mechanism is currently being implemented at one green-field and one brown-field power project of NTPC under a pilot programme. We have also asked BHEL to implement such a monitoring mechanism at its end.

How the is work on a ‘national power grid' progressing?

Work is proceeding smoothly in this regard. I have been assured by the powergrid chief that the target of adding 37,000 MW of transmission capacity in the current Plan will be met. Another 14,000 MW inter-regional power transmission capacity is also being developed as part of the national power grid plan.

While the central government has envisaged wide-ranging reform through implementation of the Electricity Act, 2003, coal sector still remains regulated. Is this not a serious policy anomaly?

As yet, there is no regulator in the coal sector, though a move is afoot to set up an agency to supervise the sector on demand from the power industry. Although Coal India Ltd (CIL) has done a good job, coal supply has failed to keep pace with the fast-rising demand. The sector needs the best mining technology availabel to increase production. And I feel that the time has come to allow private players to pitch in.

How valid is the complaint of discrimination in allocation of central pool power by some state?

This charge is not valid. There is a fair and transparent mechanism for allocation of power from the pool.

The truth is that there is pressure on the central pool power quota as the private sector increases its presence in the power generation sector. The power ministry's share in power supply from central generating stations works out to 7,500 MW. But actual availability is only 70-75 per cent of the share due to technical and physical constraints involved in running plants at 100 per cent plant load factor and ensuring 100 availability factors.

In comparison, power shortages of the states are much higher and also rising sharply. Then, there is a seasonal factor that leads to increased demands for central pool power from the Himalayan states in winter. The peak power requirements of these states rise sharply in these months even as electricity generation at their hydro plants fall due to low water levels in the associated rivers.

Due to limited availability, power from the central quota is allocated to help the states meet their urgent needs. This supply cannot mitigate chronic power shortages being faced by many states. The fact is that the states where maximum power shortages are being encountered are those which have hardly added any generation capacity in the last 5-10 years, even as their demand rose sharply.

As a practical strategy to help the states improve their power availability, the central government has envisaged the ultra mega power project (UMPP) scheme. These UMPPs are being allocated to developers quoting the most competitive tariff. The states can procure power supply from these projects without having to invest any money. The UMPP scheme is proceeding well, with projects at Sasan in Madhya Pradesh, Mundra in Gujarat and Krishnapatnam in Andhra Pradesh already allocated to developers while the bidding for the fourth one at Tilaiya in Jharkhand in under way.

How realistic is the government's the target of ‘power for all by 2012'?

We expect to provide every household, at least, access to power by 2012. One unit of electricity a day can be supplied to every household. The Rajiv Gandhi Grameen Vidyutikaran Yojana (RJGVY) has proved very successful. The scheme is being financed with 90 per cent subsidy support from the central government. The fund allocation for the scheme has been raised from Rs 1,500 crore to Rs 2,200 crore for the 11th Plan.