India Falters on Power Targets, Launches Spate of New Projects

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Researched by Industrial Info resources (Sugar Land, Texas)--India's Ministry of Power appears to be preparing for a downward revision in the country's power-generation-addition targets for the 2007-11 period of the 11th five-year plan. During the first nine months of the plan in 2007-08, it was reported that only 6,485 megawatts (MW) of additional power was commissioned against a target of 13,152 MW. The negative trend was compounded by the fact that several projects had passed into the new plan from the 10th five-year plan when targets were also missed by a significant margin. The total additional power target for the current plan is 78,577 MW.

Despite this negative start to the 11th plan, new power projects are being announced on an almost daily basis. If they are all executed, the power sector could be seen challenging the disappointing trend. In Chhattisgarh, 40 power projects with a total investment of $39.5 billion are planned over the next eight years that would add 39,500 MW. At the beginning of this month, the state's electricity board signed memorandums of understanding covering 11,680 MW in 16 projects with an investment of $11.75 billion.

The state claims to have enough coal reserves to feed the generation of 100,000 MW for the next 50 years and has assured the new project developers of coal linkage, land and water. Allocations are based on generation of 1,000 MW requiring 5.2 million tons per annum of coal. Developers with already established coal linkage will be allowed to sell 65% of the power generated outside Chhattisgarh. Those with new allotments will be allowed to sell 62.5% of the power outside the state, and the balance will be sold to the electricity board. The board's current installed capacity is 1,412 MW of which 1,280 MW is thermal.

Tata Power Company Limited (Bombay, India) continues to initiate large power projects and has just raised $780 million from the Bank of India to develop the 1,050-MW, coal-fed Maithon Right Bank project in Jharkhand. The total investment in the project will be more than $1 billion. Tata Power will hold 74% of the project with Damodar Valley Corporation holding the balance. All major permits and clearances have been obtained for the project, and preparatory work is in progress. Main equipment orders have been placed. Long-term coal supplies have been allotted from Bharat coking coal mines. The first unit will be commissioned in October 2010, and the second will follow in March 2011.

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