PowerMin cuts target for 11th Plan period

The power ministry does not believe the capacity addition of 78,700 mega watts (MW) remains a feasible target for the 11th Plan period, without placing particular emphasis on the final 8,000 MW to achieve the goal. As a result of project delays on more than 80 power projects, a shortage of manpower and lack of fuel, power minister Sushilkumar Shinde unofficially revised the target to 70,000 MW during today’s conference for Accelerated Development of Indian Power Sector for 12th Plan and Beyond.

Although the minister said “

we are now on target for the future

”, stretching beyond 2012, his statement does not erase the shortfalls of existing plans. Thus, raising questions about whether missing current goals will make the Centre’s future targets — such as more than 100,000 MW capacity addition during future five-year-plans — as unachievable as the current objectives. Even if the ministry reaches the 70,000-MW mark, which the Planning Commission deputy chairperson calls a “hopeful” target, “then it’s clear that in 12th Plan, we’ll have to make 100,000 MW,” said Montek Singh Ahluwalia. “These are rough estimates,” he said. “To revise the targets, it would require Planning Commission to say we’ve scaled down our targets.”

With seven months remaining in the 10th Plan period, the power ministry is reporting that only about half of the plan’s capacity addition target of 41,100 MW has been reached. The potential for the Centre, state and private projects to meet this target is bleak. Power players have added just 21,180 MW to the nation’s total generation capacity, which stands at around 151,000 MW, resulting in a shortfall of approximately 20,000 MW. The Centre leads in achievements during the 10th Plan with 13,005 MW added, followed by the states which have managed to add 6,244.64 MW and the private sector with 1,930.6 MW.

“The sector is likely to achieve about two-thirds of the target,” reads a special report issued by CLSA Asia-Pacific Markets. “The shortfall is due to overly optimistic targets set by the government.” During the first 100 days of the newly formed UPA government, the ministry had set a target of 5,653 MW. According to Central Electricity Authority data, 1,681 MW has been achieved since June 1. The government will reach its hundredth day in power on August 31.

In its plans to bump power capacity, the ministry holds a drastic 37,700 MW difference between the 10th and 11th Plans. Despite specific initiatives to meet or reach the 11th Plan target, India’s power shortages are likely to remain fairly high in the 11th Plan as the potential for supply-demand balance stretches into the 12th Plan. During the capacity overhaul from the 10th Plan to the 12th Plan, a transition will take place on the matter of sharing the burden of expansion.