The Hindu Business Line : ‘Energy sector needs $500 b during 11th Plan’

‘Shortage of skilled manpower, increasing concern over greenhouse gases and lack of Government’s commitment to process simplification are stumbling blocks in power sector growth.’

Our Bureau

Ahmedabad, Dec 10 India’s energy sector would require $500 billion worth of investments during the Eleventh Five-Year Plan period , Mr R.V. Sahi, former Union Secretary, Ministry of Power, said here on Friday.

The Indian power sector group companies have achieved 154 per cent growth in market capitalisation indicating phenomenal amount of investors’ confidence, he said as chief guest while addressing the India Energy Conclave 2007, organised along with the three-day Third International Exhibition, ‘Energy Expo 2007’ by the Confederation of Indian Industry (CII), here.

Quoting an international banking group, he said the power sector companies have grown by 19 per cent during 2006, compared to 16 per cent in the year before.

The growth cycle turned from negative to positive during 2002-03 and since then it is growing continuously.

The utility power which is produced by the State electricity boards along with the private sector IPPs is at 1.35 lakh MW and is expected to touch eight lakh MW during the next 25 years.

For the 11th Five-Year Plan, he said the Government has set a target of 78,000 MW of new capacity out of which 55,000 MW is already in the process of commissioning.

Highlighting the challenges faced by power sector, Mr. Sahi said an apparent inability of the manufacturing sector to support the growing demand for equipment etc may be one of the many hurdles which may hamper future growth in power sector.

A severe shortage of skilled manpower, increasing concern over greenhouse gases and lack of Government’s commitment towards process simplification in power sector could be the other stumbling blocks in the power sector growth story.

Mr Sudhir Trehan, Chairman, India Energy Conclave & Energy Expo 2007, highlighted the difference in return on investment between India and China. According to him, India offers 19.33 per cent return on investment compared to 14.3 per cent by China. This particular parameter indicates better investment opportunities in India compared to China.

New age transformers and accurate meter reading and digital meter reading from remote locations would help solving power sector problems to a large extent.

Mr Sahi also released the CII –KPMG Report on India Energy Inc – Emerging opportunities and challenge, dwelling about the rapidly growing Indian economy which requires an investment of around USD $120- to 150 billion over the next five years in the energy sector. It also highlights the key opportunities in the different sectors i.e., coal, oil, gas, nuclear, hydro, and renewable energy. On electricity, the report covers generation, transmission, distribution and trading.

In his welcome remarks, Mr Shrinivas Dempo, Chairman, CII - Western Region, said that as per the statistics provided by the International Energy Agency, the per capita electricity consumption (in kilo watt per hour, kWh) in India is not event one-fourth of the world average of 2516 (kWh) as recorded in 2004. The India Energy Conclave was expected to bring synergy between the manufacturers and the end-users, provide a broad overview of the performance of the sector and to draw attention to the major hurdles in the sector.

Mr V. Raghuraman, CII’s Principal Adviser and Chief Co-ordinator, Energy, Environment and Natural Resources, said that, by 2032, an estimated 19 per cent of energy needs can be reduced mainly due to efficient energy utilisation that would contribute to saving 7.5 per cent of the energy needs.

Mr D.J. Pandian, Managing Director, GSPCL, pointed out lost opportunities in tapping natural gas and LNG in when LNG was available at less than half the price today.