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11th Plan power target likely to be missed too

Sudheer Pal Singh in New Delhi | August 21, 2008 14:52 IST

Central Electricity Authority data reveal that orders for some higher capacity (500-800 Mw) equipment have not been placed.

India is set to miss the 11th Five-Year Plan's power capacity addition target as some orders for higher-capacity equipment have not been placed yet.

Experts say even if the orders are placed today, it is not possible to commission the equipment within the 43 months that remain of the current Plan period, which ends in March 2012.

The power ministry has set a capacity addition target of 78,700 Mw in the period.

Orders for eight out of the 14 proposed units in the 660-Mw category and seven out of the 58 planned units in the 500-Mw category have not been placed so far, according to the Central Electricity Authority, the country's apex power planning body.

A 660-Mw unit takes around 45 months to be commissioned, while it takes around 40 months to commission a 500-Mw unit.

"With only 43 months left in the current Plan period, no 660 Mw or 800 Mw equipment can be commissioned by the end of the period. Also, we will have to place orders for the 600-Mw equipment by September, after which we will only have 42 months in hand. Similarly, for the 500-Mw equipment, orders should be placed by December," said K Ravi Kumar, chairman and managing director of Bharat Heavy Electricals Ltd [Get Quote] (BHEL), India's largest power equipment manufacturer.

The power ministry has denied any delay in placing the orders. "Equipment-ordering work is on. We are trying," said Minister of State for Power Jairam Ramesh.

Other players in the sector also fear delays. "It is not possible to commission more 660-Mw equipment in the current Plan period. After November, it will be very difficult in other categories too," said Wen Ya, chief representative of Dongfang Electric Corporation, one of the major Chinese equipment suppliers in the country.

The non-placement of orders for the remaining eight units in the 660-Mw category will mean a shortfall of about 5,280 Mw. And if the orders for the remaining seven units in the 500-Mw category are not placed by September this year, the lag will exceed 9,000 Mw.

CEA data show that orders have been placed for 73,428 Mw capacity as against the target of 78,700 Mw.

The fact that orders should to be placed in the first year of the Plan period was even stressed by the CEA in the National Electricity Plan. While a target of adding 41,110 Mw capacity was set for the 10th Plan (2002-2007), only 21,180 Mw, or 51 per cent of the target, was met. While about 25,400 Mw of thermal capacity was targeted, only about 12,100 Mw could be added. About a half of this slippage (6,480 Mw) was on account of non-commissioning of three units of 660-Mw capacity and nine units of 500-Mw capacity.

Experts believe that all the orders for the current Plan period should have been placed in April. "A major chunk of the planned capacity addition target for the current Plan period might not come. Impending elections may have an effect on the speed with which the projects are implemented.

The government plays a major role in implementation of projects, either as a financier or a provider of clearances," said Kuljit Singh, a senior analyst with Ernst & Young.

The CEA has also accepted that seven units in the 660-Mw category will be commissioned in the 12th Plan period. "Those orders (of 660 Mw equipment) which are not placed by August will be placed in the 12th Plan period," said a senior CEA official.

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