Ramachandran said a four-pronged strategy should be developed to focus on fuel-mix required for power generation; optimal generation through renovation and modernisation; efficiency improvement of the existing stations; and investment needed in power transmission.

The country could not depend entirely on one type of fuel for power generation, said Ramacnandran. Apart from thermal power plants, hydel power generation should also be encouraged, he added.

Significant capacity addition could be done by using modern technology. Besides, renovation and modernisation (R&M) projects should also be given priority, he said, adding that 30 per cent of the country's plants need renovation.

Elaborating on the need for R&M projects, the Central Electricity Authority (CEA) chief engineer VS Verma said that efficiency of underutilised power plants could be increased significantly through renovation and modernisation.

The R&M programme was launched in 1984 by the Centre. This included renovation of 164 thermal power units aggregating around 13,500 mw at the cost of Rs 1,083 crore.

The ongoing second phase of the programme involves 198 thermal power units installed at 44 power stations. This requires an investment of Rs 2,383 crore. Lack of funds is the main obstacle in implementing the programme, he said.

The Government, however, is encouraging private sector participation in this sector. The state-owned BHEL and National Thermal Power Corporation (NTPC) have already set up separate joint ventures with German companies to undertake R&M projects.