Indian government has once again missed the target for ramping up generation capacity, meeting only 36% of the goal set for the quarter ended March 31.
Only 2,430 MW generation capacity was added in the fourth quarter of 2010-11 against a target of 6,691 MW.
The delayed progress may force the government to revise downward the target for the 2011-12 and may also impact the 12th five-year plan period starting April 2012. The government had reduced the 11th plan target to 62,347 MW from over 78,000 MW.
China, in contrast, ramped up its generation capacity by 10% in 2010-11 to 962,190 MW and plans to add 100,000 MW every year for the next five years.
What is more alarming is the fact that but for the third unit of the Wardha-Warora plant in Maharashtra, which was not part of the 2010-11 plan target, the actual capacity addition would have been even lower. The private sector project contributed 135 MW.
Besides, five units that contributed 1,195 MW capacity in the quarter under review were actually projects that had been carried over from the previous quarter after missing the goal post. Some 22 units aggregating a capacity of 5,591 MW that were included in the fourth quarter target did not get switched on. This means that capacity addition in the December 2010-March 2011 period came only from the carried over projects.
Central sector projects contributed the most to the lag, with 10 units aggregating 2,354 MW included in the target. The state sector list had eight units aggregating 1,695 MW and four units in the private sector with a combined capacity of 1,542 MW. In addition, some 26 units aggregating 4,868 MW that were to be commissioned in the first three quarters of 2010-11 could not be commissioned even in the fourth quarter. These include three units in the central sector aggregating 1,250 MW, 11 units totaling 2,472 MW and 12 units of 1,145 MW in the private sector.
Reacting to the shortfall, Industry Body representative, Mr. Vimal Mahendru, President IEEMA (Indian Electrical & Electronics Manufacturers’ Association) said “The Q4 power generation shortfall is acute considering that only 2,430 MW generation capacity was added in the fourth quarter of 2010-11 against a target of 6,691 MW. This is disturbing by any stretch of imagination especially for the infrastructure story of India. To be considered a super power or a developed nation, providing adequate electricity is a very basic necessity.
At IEEMA we continue to engage in a meaningful dialog at three crucial levels: various ministries, utilities and regulators. We are also preparing recommendations to government in which we will be suggesting ways and means to improve India’s power generation capacity. It pinches to see that China, in contrast, ramped up its generation capacity by 10% in 2010-11 to 962,190 MW and plans to add 100,000 MW every year for the next five years.
As for IEEMA, our members have ramped up production and plant capacities. Today the Indian electrical industry is fully geared to supply all equipment, even at shorter delivery schedules”
Mr. Ramesh Chandak, Vice-President IEEMA & Managing Director & CEO - KEC International said, “It is a matter of great concern for the domestic electrical equipment manufacturing industry that the cumulative addition to the power generation capacity in the Eleventh Plan period will not exceed 50,000 MW and will be much less than the scaled down target of 62,374 MW for the Plan.
While land acquisition and availability of fuel are main reasons for the shortfall, there are several other problems, which also need to be tackled urgently. These include inadequate domestic engineering, procurement and construction (EPC) abilities which is delaying erection and commissioning of power plants; weak project management and execution, including civil construction, competencies; inordinate delays in commissioning of balance of plant (BOP); shortage of domestic supply of skilled manpower; delays in environmental and other clearances; poor logistics infrastructure, including access roads to projects sites, etc.
The shortfall in achieving the generation target is also adversely impacting the downstream transmission & distribution projects for evacuation of power. This is impacting the commercial viability of domestic electrical equipment manufacturing industry, which is already facing stiff competition from imported Chinese equipment.
We hope that the Government will look into these issues on an urgent basis and undertake remedial measures during the remaining portion of the Eleventh Plan period and beyond”.
