Delicensing of generation leading to chaos - Prayas Energy Group

Submitted by VK Gupta on Thu, 01/09/2011 - 2:35pm

Delicensing of generation leading to chaos - Prayas Energy Group
Vinod Kumar Gupta
Thursday, 01 September 2011
NEW DELHIi: The delicensing of generation in the country is leading to chaos as environment Ministry has already accorded environmental clearances to thermal power plants with capacity of 192,913 MW and coal ministry has received applications for long-term coal linkage for 974 power projects with a generation capacity of over 5.96 lakh MW.

Prayas Energy Group, a Pune based NGO has analysed that the Ministry has accorded environmental clearances to a large number of coal and gas-based power plants whose capacity totals 192,913 MW. Another 508,907 MW are at various stages in the environmental clearance cycle. This means that there are around 701,820 MW of coal and gas plants waiting to be built in the coming years. The role of Central Electricity Authority in examining the viability of projects has been completely eliminated.

Coal-based plants account for an overwhelming 84% of these in-pipeline projects. These additions are more than six times the currently installed thermal capacity of 113,000 MW.

While the state and central sectors have a large share in existing TPPs (at 82%), private sector participation is set to increase significantly, with the private sector accounting for 73% of all projects in pipeline. Also, only 10 private corporate groups are planning to build about 160,000 MW.

Similarly of the 974 applications received by coal ministry , 107 are from central and state utilities for capacity addition of 1,22,405 MW, 434 applications from CPPs for 37,345 MW and 433 from Independent Power Producers (IPPs) for a record 4.25,836 MW capacity addition. Although Coal India Limited (CIL) has assured to supply about 600 million tons in 2016-17. However, the actual availability is likely to be 415 million tones leading to a shortfall of 185 million tons by the end of the 12th Plan. While India is said to have abundant coal, the country has not been able to achieve the required production from these reserves, and a steep rise in imports is forecast for the end of the 12th Plan.

With the delicensing of thermal power generation, it is now assumed that the market will weed out excess and inefficient capacity. However, key inputs like coal, gas, land and water are all allotted on the basis of non-market criteria, mostly with huge concessions and subsidies.

Prayas Energy Group report recommends an immediate moratorium on any further environmental clearance to new power plants. Further, projects that have already been given environmental clearance, leading to sub-optimal use of transmission, fuel, land and water should be put on hold