Economy

Under pressure, private power producers seek Government help

Richa Mishra New Delhi Jan 15 | Updated on March 12, 2018 Published on January 15, 2012

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Ratan Tata, Anil Ambani to meet PM on Jan 18



Private power sector players, under pressure because of soaring imported coal prices and growing shortage of natural gas, are approaching the top leadership in Government in a bid to get urgent policy measures going.

Led by industry heavy weights Mr Ratan Tata, Chairman, Tata Group and Mr Anil D Ambani Chairman, Reliance Group, a delegation of private sector power producers will seek Government help to make their projects economically viable.

The delegation is expected to meet the Prime Minister, Dr Manmohan Singh, Finance Minister, Mr Pranab Mukherjee, and other senior Ministers on Wednesday.

“The power sector is going through a critical phase and unless urgent policy interventions are made it will result in idling of capacity. Besides, any rise in input costs will be a pass through, and thus power tariffs will also go up,” industry sources said.

The delegation, which also includes Mr Cyrus Mistry, Deputy Chairman, Tata Power Ltd, Mr Gautam Adani, Chairman, Adani Power, Mr G M Rao, Chairman, GMR Energy, and Mr Anil Agarwal, Chairman, Sterlite Energy, will be meeting the senior members of the Government under the aegis of the Association of Power Producers (APP).

The future of a number of power projects in the country including the ultra mega power project (UMPP) of Reliance Power at Krishnapatnam in Andhra Pradesh, hangs in the balance because of the stance of the Indonesian Government, which stipulates that coal mined in the country should be sold at international market prices. To secure fuel at competitive prices, a number of Indian power producers have either procured coal assets in Indonesia or have entered into long-term and spot contracts to import coal.

The producers are also likely to seek gas allocation for their yet to be commissioned gas-based power projects. Recently, in a letter to the Petroleum Minister, Mr S. Jaipal Reddy, APP has said about 8,200 MW of gas-based generation capacity can be commissioned in the next 18 months.

Of this, about 4,000 MW of power projects are ready to commence generation well before March 31, and are awaiting gas allocation from the Empowered Group of Ministers. The total gas-based power plants' capacity in the country is about 16,600 MW.

Availability of gas is also becoming scarce due to the steep and continuous reduction in gas production from Reliance Industries-operated D6 fields. Most of the States are rationing power to both domestic and industrial consumers.

The domestic power supply situation has deteriorated significantly and nearly 51 per cent of the coal-based projects are operating with less than seven days' stocks.

There is over 90 per cent of the total private sector capacity in India and over 80,000 megawatt of capacity is under development/ implementation. The total current market capitalisation of these private sector power companies is over Rs 3,00,000 crore and they are part of an integral group, with the group market capitalisation over Rs 8,00,000 crore.

These private sector power companies are expected to add 22,000 megawatt by the end of Eleventh Plan (ending in March 2012) and will represent 40 per cent of the total addition in this planned period.

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Published on January 15, 2012
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