No project in the implementation stage to suffer for want of coal

Debjoy Sengupta, ET Bureau Nov 15, 2012, 04.45PM IST

KOLKATA: The government has assured power project developers including states that no project in the implementation stage will suffer for want of coal. "On the recent issue of fuel shortage in power plants, we can assure power project developers, including the states, that none of their projects in the implementation stage would suffer for want of coal. The ministry of power has allowed electricity firms facing coal supply crunch to sign fuel supply deals with state-owned operator Coal India Ltd, even if no prior power purchase agreements (PPAs) exist with distribution companies," said power secretary P Uma Shankar. "Demand for energy in India has multiplied manifold in recent years on the back of rapid urbanization, industrialization and usage of water for irrigation in agriculture. Energy being the building block of economic development, the focus is now firmly entrenched on finding the right energy mix for propelling a high trajectory, sustainable and inclusive growth path for India", said Rajiv Mundhra, president, Indian Chamber Of Commerce. P Uma Shankar said: "The centre has approved budgetary support approximating around Rs 49,730 crore for the power ministry's flagship rural electrification programme called Rajiv Gandhi Grameen Vidyutikaran Yojana during the 12th Plan. We have also harnessed Information Technology for ensuring quality power supply to different parts of the country. I hope a multi-pronged strategy encompassing increased resource exploration & exploitation,

capacity addition, and energy sector reforms would soon enable us to reach the goal of "Power for all by 2012." "With a view towards meeting the burgeoning demand for energy, Government of India has initiated an integrated strategy for sectoral development with the objective of providing reliable, quality and adequate power at optimum cost towards achieving a GDP growth rate of 8 per cent, while side by side maintaining the commercial viability of the power industry. The Government of India in fact plans to add 18,000 Mw to generation capacity this year. Capacity addition is targeted to reach 80,000 Mw by the end of the 12th 5 year Plan. Considering the limited reserve potentiality of petroleum & natural gas in India, the eco-conservation restrictions on hydel projects and the geo-political perceptions of nuclear power, coal providing for 55 per cent of the country's energy needs continues to occupy the centre-stage in India's energy scenario", he said. India's primary energy consumption in 2011 was 4.6 per cent of the global energy consumption, vis a vis China, which with an almost equal population consumed 21.3 per cent. A projected 1.6 billion population base for India would entail an annual electricity generation of 8 trillion kWh, while India's current share is only one-tenth of the global annual electricity generation. In year 2012 installed power capacity in India had reached 200, 000 MW, with an annual capacity addition of 20, 000 MW, equaling a five year capability of the past. "However, in the past four decades, consumption of coal, lignite, crude petroleum, natural gas, and electricity in India had grown by 6 per cent annually vis a vis a 4.5 per cent annual growth in production. India's increasing dependence on crude and coal imports has opened the economy to global price volatility, with severe ramifications for our balance of payments", said Mundhra. While policy activism and accelerated farm output growth have raised the prospect of a gradual recovery of India's GDP to 6.1 per cent in FY 2014, the Union government decision to usher in timely debt restructuring for the power distribution companies has further cemented the expansionary vibes.

ICC welcomed the government move of providing the much needed financial relief to the power utilities and hopes for an early rollout of the proposed coal linkages to the power projects.