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Power capacity up, but income woes drive demand down

Rather than worrying about missing the power capacity addition targets for the current plan ending 2012, the babus in the power ministry under Sushil Kumar Shinde are busy making all-out efforts to project the fact that the power capacity addition during this plan is going to be 250% more than the 10th plan period.

business Updated: Feb 17, 2011 21:27 IST
Anupama Airy

Rather than worrying about missing the power capacity addition targets for the current plan ending 2012, the babus in the power ministry under Sushil Kumar Shinde are busy making all-out efforts to project the fact that the power capacity addition during this plan is going to be 250% more than the 10th plan period.

Against the target of 78,000 MW during the XI Plan, the actual capacity addition is likely to be about 62,000 MW. In the 10th Plan period (2002-07), against the envisaged 41,110MW, the capacity added was 20,950MW, 49% short of the estimate.

Despite a huge demand-supply gap in availability, power producers are seeking the ministry’s help to sell the power produced.

This trend is not just restricted to private power developers: even the country’s largest power producer, NTPC has informed the ministry that in the past few months, due to lesser grid demand, it has had to reduce its operating plant load factor.

Despite demand, distributing companies are unable to purchase power due to deteriorating financial conditions.

This issue, along with the need to fix power capacity addition targets for the XII Plan period, was discussed at a recent meeting of the ministry’s advisory committee comprising Shinde, power secretary P Uma Shankar and four former power secretaries, besides the chairmen of NTPC and BHEL.

“Although the ministry clarified there are no attempts to decrease the targets being set for XII Plan, even power minister Shinde underlined the need to fix achievable targets and not just ambitious ones for the XII plan,” an official who attended the meeting said.