Needed, an integrated energy policy to diversify fuel sources and encourage the private sector to invest in generation.

Even if half of what was discussed in terms of capacity addition and demand management at the recent State Power Ministers Conference is implemented, theelectricity sector would see a transformation. The conference, called by the Power Minister, Mr Sushil Kumar Shinde, to review the Tenth Plan achievements, discussed critical aspects of demand management such as time-of-day metering and differential tariffs along with such issues as the need to instil greater grid discipline and fully tap surplus captive power capacity. On capacity addition, though only up to 83 per cent of the Tenth Plan revised target of 36,956 MW is likely to be achieved, the conference took note of the ambitious 66,463 MW to be added in the Eleventh Plan ending 2012.

As Mr Shinde remarked in his address, power saved is power generated; distribution utilities need to adopt strategies to manage demand by bringing in concepts such as time-of-day tariff which will help even out the load curve for the utility. But the question is if the distribution utilities can implement these concepts, technologically. Also, political will is important for implementing such forward-looking concepts and this is where the Power Ministers have a role. Interestingly, though these ideas were discussed, the list of final conclusions does not state any of them other than in a broad way relating to demand management. Much needs to be done on the capacity-addition front; the country has added just 17,744 MW in the last five years which is less than 50 per cent of the revised mid-term Plan appraisal target. With just five months remaining for the end of this fiscal and the Tenth Plan, the Power Ministry is trying to add a hefty 12,898 MW before March 2007. It is anybody's guess on whether this is possible.

On a broader note, the country must have an integrated energy policy that will look at diversifying fuel sources and encouraging the private sector to invest more in generation. Of the 66,463 MW projected for the Eleventh Plan, just 11 per cent will be from the private sector and these include projects already under implementation. On the fuel front, the Government needs to focus on gas-based capacities given the huge reserves that are close to being tapped in the Krishna-Godavari deep waters. Gas-based schemes are quicker to implement and a pragmatic approach is needed to gas pricing that is linked to the market. This is where an integrated approach to the energy sector acquires importance. The government also needs to sort out the woes of the non-conventional energy producers, such as wind-power generators who have been complaining of un-remunerative tariffs and reduced offtake. With a good part of such capacity being under-utilised, it is not clear how the Government is now talking of adding 14,000 MW from non-conventional energy sources in the Eleventh Plan period.

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(This article was published in the Business Line print edition dated November 21, 2006)
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