Private sector to scale up power generation

To add 17,000 MW during XIth plan

MUMBAI: Unlike the Xth five-year plan where private sector contributed just 5,000 MW of captive generation capacity, the XIth five-year plan would see capacity addition of up to 17,000 MW by the sector.

This would also include contributions from independent power producers (IPPs) and merchant power plants.

Rakesh Nath, chairperson, Central Electricity Authority (CEA), said, “The excessive demand for power in the country and subsequent crisis has led to an influx of private companies in the power sector.”

He said under the XIth plan, the government is targeting a total capacity addition of 78,577 MW. This would be achieved through contributions from the central, state and private sectors.

“We were expecting the private companies to contribute close to 10,000 MW under the XIth plan and rest was expected by the state-owned agencies,” Nath said.

However, currently the private sector seemed to be very aggressive to meet targets for power generation.

He said equipment orders for close to 10,000 MW have already been placed by the private companies and another 7,000 MW were being planned at different places across the country.

“A contribution of 17,000 MW in a span of five years is really a positive sign and signals that the XIth plan targets would possibly be achieved,” said Nath, who is also the ex-officio secretary to the central government.

According to the CEA website, under the XIth plan, the private sector would contribute 4,412 MW in the northern region led by Himachal Pradesh where capacities of up to 1,637 MW were expected to come up in the form of hydro power. All the projects are expected to be commissioned between 2010 and 2012.

In the western region, the contribution would be above 4,000 MW led by Lanco and Torrent. The southern region would see capacity additions of up to 1,500 MW while in eastern region, the private sector was expected to add 1,071 MW.

During the Xth plan, it was expected that the private sector would contribute up to 7,200 MW but only 5,000 MW was added, that too, as captive capacity. But this time, analysts feel that targets would be met as both, the government and the private parties, are not taking the targets lightly.

Debashish Mishra, executive director, PriceWaterhouse Coopers (PWC), said, “Banks and financial institutions are now showing a sense of confidence in the private sector and its plans and way of execution.”

Due to which, the some plants in the country were able to achieve financial closure much easily.