Brace yourself for a cruel summer this time, as coal and gas shortages may cripple the country’s existing power generation capacity during the peak demand period.
The crisis is likely to worsen since the power ministry has fallen 8,000mw short of the 11th plan target — ending March 31 — of an additional capacity of 62,000 mw due to the fuel shortages.The power ministry carried out a downward revision of the 78,500-mw target mid-term to 62,000 mw. But the actual capacity addition at the end of the plan period is much behind at 54,000 mw.
Union minister for power Shushilkumar Shinde told HT: “Fuel shortages have led to missing the targets… I am afraid that fuel shortages may hit the 76,000mw generation target we have set for the next plan period (2012-2017).
Since coal is the mainstay of India’s power sector — more than 55% of the 192,792-mw installed capacity is coal-based — the situation looks grim, especially because state-owned Coal India Ltd’s production has remained stagnant at 420-430 million tonne a year since 2009.
The company has resorted to coal imports to make up for the shortfall, resulting in a sharp rise in generation costs.
At present, power producers are importing 40 million tonne a year, but the figure could go up to 60-70 million tonne by 2012-13.
This will put an immense pressure on the power firms as the imported coal costs R4,000 a tonne against the domestic coal price of R1,000 a tonne.
Similarly, gas output from India's largest fields, the KG D6 in the east coast, has dropped to 28.16 mmscmd, or million standard cubic metre per day — used as a unit of measurement for liquids and gases — in March 2012 against the projection of 80 mmscmd for 2012.
Arup Roy Choudhury, chairman of India's largest power producer NTPC, said his company would have to put on hold the capacity expansion plans at it 4,000-mw gas-based plants at Kayamkulam, Kawas, Gandhar, Dadri, Anta and Auraiya.
Also, the fate of a significant number of coal and gas-fired projects of private sector producers, including those of Tata Power, Reliance Power, Essar Power, Adani, Lanco and GVK — expected to produce over 70,000 mw — has become uncertain.
What's more, the state electricity boards are refusing to pay higher prices for power since in most states, power tariffs cannot be hiked mainly for political reasons.