States put the ball into Centre's court on capacity addition woes

Written by Sanjay Jog | Mumbai | Updated: Nov 16 2009, 09:24am hrs
Putting the ball in the Centre's court, states, in a meeting convenyed by the power ministry on Sunday, said capacity addition of 26,783 mw of the total 78,700 mw in the 11th Plan would be possible only if it addresses issues related to adequate fuel supply, early forest and environment clearances and ensures timely supply of power plants & equipment by the state-run Bharat Heavy Electricals (Bhel).

States expressed reservations over the open access in transmission. Even though the Centre reminded states that open access in transmission under the Electricity Act, 2003, was mandatory, states called upon the Centre not to apply instruments of free market in the market of power shortage where peaking deficit is around 9% and energy shortfall is 10%.

State representatives participating in the meeting told FE, The Centre has admitted that against the target of 78,700 mw only 62,000 mw plus will be achieved by end of 11th Plan. The centre sought active cooperation of states in the achievement of the goal of power for all. However, it is an impossible task given the shortfall in indigeneous coal availability of 46 million tonne in 2010-11 and 74 million tonne in 2011-12. Besides, there are limitations on the fulfillment of gas requirement of 17.38 million metric standard cubic meters of gas per day by 2011-12. The Centre needs to act fast and address these issues.

Power ministry sources said the states were requested to lay special emphasis on completion of works with respect to units falling under the latter category keeping in view the growing requirement of electricity. Strict monitoring of critical projects, facilitation in land acquisition, water allocation, placement of order for balance of plant equipment was re-emphasised.

Further, states complained about the inordinate delays in the approval of forest and environment clearances. States brought to the Centre's notice that it takes at least 16 months to get environment clearance which delays project implementation. As far as delays in the supply of power plants and equipments by Bhel go, states claimed that there have been slippages from Bhel to meet its commitment, which is causing delays in the project completion. Eventhough various companies including L&T, JSW, Toshiba, Alstom, Bharat Forege, Bhel-NTPC JV have launched their plans for production of main and balance of plants, it will need another four to five years for actual supply from these undertakings till that time states need to rely on Bhel, a senior official of a state utility said.

On the contentious issue of open access, the power ministry reiterated that states should provide it as per the provisions of Electricity Act, 2003. However, several states justified invocation of powers under section 11 of the Electricity Act, 2003, to restrict open access in the situation of power shortages. When the electricity market is perverted, the Centre should not insist on application of free market instruments such as open access in transmission. When power shortages are over let the market control electricity prices, the official said.