TEight months into the new assignment, the Minister shared his concerns and priorities for the power sector in a chat with Business Line.

Excerpts from the interview:

What have been your key focus areas as MoS Power?

When I came in, I set three main priorities for myself, namely, generation capacity addition, empowering the key PSUs and technology interventions in the power sector. When I joined this Ministry, I was presented a target of 11,000 MW of capacity addition this year (2008-09). Then I discovered to my horror the definition of commissioning was completely erroneous (synchronisation on oil, a pre-commissioning test, was the definition being followed for declaring a unit commissioned). It was a political, and not a professional, definition. That has been changed now (to commercial operation date) and it took me three-four months to change that.

With the changed definition of commissioning, I expect that we should be able to bring into commercial operations at least 9,000 MW of capacity this year.

Besides, I wanted to put in place a system because I found that there was no mechanism of systemic monitoring, tracking and problem solving. All three are important — real-time monitoring, real-time tracking and real-time problem solving.

The other thing that I’ve focused on is the empowerment of the PSUs. The fact is, for a long time to come, public sector companies will remain central to the generation programme. In distribution, we may try to bring in more private parties, through a variety of models. In generation and transmission, particularly, public sector will remain, and so also in main equipment manufacturing, which is boilers and turbines.

So the empowerment of the public sector has been a key priority — vigilance procedures, better works manuals, autonomy to field units… So in both NTPC Ltd and Bharat Heavy Electricals Ltd (BHEL), you would see major shifts in autonomy within the organisations.

The third focus area has been to get new technologies into the sector, including the shift to supercritical technology, the Integrated Gasification Combined Cycle (IGCC) project among others.

Under the revised definition for commissioning of new units, does the 78,000 MW capacity planned during the current Eleventh Plan undergo a change?

Under the new definition, if we go by COD (commercial operation date), we should get about 60,000 MW over the five-year period. But I hope we will stick to the definition of COD. This is very important… and at full load.

Fuel shortages are hurting the power sector. There’s shortage of coal, gas and uranium. What are you doing about it?

Well, we have around 14,000 MW of gas-based capacity operating at 53 per cent currently. Then there’s about 7,000 MW capacity that can come on-stream tomorrow if we get 38 million cubic metres of gas a day. Besides, of the 4,120 MW of nuclear capacity, only around 1,600-1,700 MW is being generated. So the gas-based plants are operating at 53 per cent and nuclear plants, at 45 per cent PLF. We do have a big problem on our hands.

What about coal shortages?

Yes, that too is a worry. Some of our major coal plants, like Talcher, have also been affected. Talcher has been running at 77 per cent PLF (mid-last week) while it can run at 94 per cent PLF. Coal shortages are beginning to hurt, there’s no question about it. Talcher is a classic example. Fuel shortages are a big issue.

I’m glad that we are now going to have the first FSA (fuel supply agreement) signed sometime in the first week of January between CIL (Coal India Ltd), its subsidiaries and NTPC and the minimum figure is 90 per cent PLF (CIL is going to assure a coal supply for 90 per cent PLF). I, for one, have never believed in coal imports as a panacea. Because, like I discovered in Bellary, the blending of domestic and imported coal creates its own problems. In any case imported coal is three times the cost of domestic coal.

So ultimately, the new Government that comes to power, the first item of priority has to be coal reforms. The blueprint is already available… the T. L. Shankar Committee report is there. We have carried out homeopathic reforms so far. You need major surgery. This coal linkage policy is no reform.

On the nuclear fuel front, when do you see the situation getting better?

May-June next year is the earliest we see supply of uranium to alleviate the shortage. By mid-next year, we expect the fuel supply shortage to ease and we expect Koodankulam-1 to come on-stream by May-June.

We are implementing a big project in Cuddapah district (Tummalapalle project), Andhra Pradesh, that will start mining and processing of uranium by 2011, which will add to domestic supplies. I’m seeing some light at the end of the Meghalaya tunnel, which has got some of the best reserves. I’m hoping that work will start by the end of 2009 in the West Khasi Hills.

For uranium imports, when do you see a breakthrough? And where?

We are looking at various options. It could be Africa… Uranium Corporation of India Ltd is looking at Kazakhstan, Namibia, Uzbekistan, Mongolia...

What is the status on the NPCIL-NTPC-BHEL joint venture (JV)?

For the JV, we want to sign the agreement in the first week of January. This is mainly for export of PHWRs (pressurised heavy water reactors) to countries with small grids.

One worry aspect is that NTPC, the biggest utility in the power sector, is continuously getting into contractual disputes. Be it Barh, or the gas deal with RIL. Is there a problem in the way PSUs carry out contract discussions?