December 03, 2008

Indian power capacity addition falls short of target – Report

BS reported that the capacity addition during 2007-08 of 9,263 MW is a little over half the target of about 17,000 MW and like the previous years, power ministry officials blamed delays in equipment supply. This is even lower than the 10,000 Mw announced by Mr P Chidambaram union finance minister in his budget speech in February 2008.

According to latest data, the average energy shortfall went up to 13.4% in February 2008 as against 12.8% in January 2008. Peak power deficit in February 2008, though, was 17.1%, the same as in January 2008.

Mr MS Verma member of Central Electricity Authority said that "I think we are better placed this year. The main reason for this confidence is the increase in equipment production capacity. This year, the main equipment supplier, Bharat Heavy Electricals Limited, has expanded capacity to 10,000 MW per annum from January 2008 from 7,000 MW at the beginning of the last financial year. It plans to further expand it to 15,000 MW per annum in the next 2 years."

Mr Verma said that "We will be adding about 12,500 MW capacity in 2008. About 16,500 MW will be added in the next 2 years and 23,500 MW is projected to be added in the last year of the Plan."

According to the 11th Plan document, about USD 20 billion was to be invested in the power sector in the first year of the Plan. Most economists guesstimate that the investment target is unlikely to have been met given the poor capacity addition, though the final numbers will only be available with a time lag. If the performance in the first year of the 11th Plan sets the tempo for the rest of the plan period, India is headed for even higher power shortages in the coming months and years.