India fails to meet electricity targets

Jan. 24, 2012 at 3:06 PM
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NEW DELHI, Jan. 24 (UPI) -- India is likely to miss its electrical power capacity addition target for the five-year plan that ends this year, a government official said.

While India had initially aimed for a generation capacity addition of more than 78,000 megawatts during that time, the Planning Commission reduced the target to 62,000 megawatts in its mid-term review.

Now the added power capacity is expected to be about 52,000 watts, said Indian Power Minister Sushilkumar Shinde, speaking on the sidelines of the India Energy Congress, Press Trust of India reports.

The revision comes as India's power sector faces a host of problems, including coal shortages, high fuel prices and delayed environmental clearances, prompting a meeting last Wednesday with Prime Minister Manmohan Singh and a delegation of chief executives from the country's top private power producers.

Singh said a "practical, pragmatic and viable solution" would be found to the power issues.

As India grapples with frequent blackouts and power shedding, at the end of 2011 more than 300 million Indian citizens still had no access to electricity.

A member of the planning commission said the government may raise the power capacity addition target to approximately 100,000 megawatts for the 12th five-year plan period (2012-17), with investment in power generation projects likely to total $119 billion.

Also on the sidelines of the energy congress, Indian Coal Minister Sriprakash Jaiswal said that by next Monday India's coal price would be revised downward.

While state-run Coal India, which supplies 80 percent of the country's coal, introduced a new gross calorific value-based pricing mechanism Jan. 1, it has been opposed particularly by the power, cement, aluminum and steel sectors, who say that the measure has led to higher coal prices and would thus lead to price increases in their respective commodities.

Some analysts are skeptical that India can cut coal prices at a time when global prices are on the rise.

"There is an upward pressure coming from (the) unavailability of coal and the fact that the deficit is imported," said Shubhranshu Patnaik, senior director at Deloitte and Touche Tohmatsu India, noting that Coal India's prices are still 25 to 30 percent lower than international prices, reports.

Coal-fired plants account for 55 percent of India's installed electricity capacity, the Ministry of Power says.

The ministry has indicated that India was likely to face a coal shortfall of 238 million tons during the 12th five year plan.

While India has about 10 percent of the world's coal reserves it has faced hurdles in land acquisition and environmental clearances for mining.

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