By P.S. Anantharaman, IANS
Ahmedabad : Prime Minister Manmohan Singh’s assurance to make Gujarat free of power shortages in the next three years if voted to power in the state could turn out to be a tall promise if past performance is any indication.
According to statistics issued by the union ministry of power, electricity shortage in Gujarat at the end of March 2007 was estimated at 3,509 MW or a gap of 30 percent between maximum demand and maximum supply.
This shortage could only be overcome by building new power plants. A power ministry working group set up to finalise power projects in the 11th five-year plan (2007-12) said a target of adding 11,545 MW capacity could only be achieved on a national basis.
It means Gujarat alone cannot hope to add 3,509 MW in three years.
India’s current policy is to build bigger power plants. So, to close the demand-supply gap in Gujarat, it needs to install at least seven units of 500 MW each.
Normally it takes a minimum of three years for a thermal power plant to start producing electricity from the day of financial closure. In the past, the exercise of achieving financial closure for power projects has been a minimum three years on an average.
In the immediate future, the central government has cleared a 4,000 MW project at Mundra in Kutch district to be built by the Tatas. The project will have five units of 800 MW each.
The first unit is expected to be operational only in August 2012, 64 months after signing of the power purchase agreement. The second unit is scheduled for February 2013, the third for August 2013, the fourth for February 2014 and the fifth for August 2014.
Power shortage is not confined to Gujarat. According to the working group report, there was a 14 percent power shortage countrywide at the end of December 2006, compared with 11.7 percent when the present government assumed office at the centre in 2004.
This shows that demand for power does not remain static. As the economy grows, the demand for power increases.
Setting up a power project also depends on a host of factors like availability of fuel. The report says that projects to generate 46,355 MW are under construction. But these projects have ensured supply of coal only for 7,350 MW, including 1,350 MW capacity based on imported coal.
For the 11th plan it is proposed to create an additional 50,000 MW capacity based on thermal generation. Of this 47,000 MW will be based on coal and 1,400 MW will be based on lignite.
The report has also pointed out that a number of projects envisaged in the 10th plan have slipped into 11th plan due to three factors.
The first is that state-owned power project builder Bharat Heavy Electricals Ltd (BHEL) lacked critical technologies for power projects, which affected projects with a total generating capacity of 3,960 MW.
The second factor was related to delay in awarding contracts, which affected projects with a generating capacity of nearly 1,000 MW.
The delay in securing financial closure has resulted in power projects with a total installed generating capacity of 1,500 MW to carry over to the 11th plan.
However, all is not lost for Gujarat. While the Modi government had not invested much in the power sector, it had encouraged independent power producers (IPPs) to invest Rs.250 billion in projects which will create new generating capacity of nearly 5,000 MW.
The projects have been proposed by Essar Power Ltd, China Light and Power Ltd, Torrent Power Ltd and Adani Power Ltd. These are all in addition to Tata’s Mundra project.
So there is a glimmer of hope that Gujarat will be better off on the power front, regardless of whether the Congress party or the Bharatiya Janata Party gets the mandate next week to rule the state.