Uninterrupted power, fuel should be Govt's top priority

Ensuring round-the-clock power supply and easing fuel shortages should be the top focus of the new government, the Ministry of Power said in a presentation to incoming Prime Minister Narendra Modi.

Steps should also be taken to tap the country's vast hydro power potential, reform the distribution sector and ensure the financial viability of distribution companies, the ministry said.

Fuel shortages can be mitigated by expeditiously granting environment and forest clearances to coal mines.

Capacity addition of thermal power plants has slowed because of staggered domestic coal production, which is mainly due to delays in land acquisition, getting environment and forest approvals, and in the execution of mining leases by states, the ministry said in the 14-page presentation.

The government should also review the cancellation of coal blocks for power projects in advanced stages of implementation, increase domestic production of gas, cap the rise in power tariffs due to a proposed gas price hike and provide financial relief to generation projects that are stranded because they haven't received promised fuel supplies.

Supply of coal from mines for generation of projects in the 13th Plan period (2017-22) should also be finalised.

The ministry also said the country's vast hydro power potential should be tapped.

The government has set a capacity addition target of 10,897 MW for hydro power generation during the 12th Plan period (2012-17), of which 1,559 MW has been achieved so far. In the 11th Plan period, 5,544 MW of hydro capacity were added against a target of 15,627 MW.

"The slippages are mainly due to geological surprises in hydro generation, law and order issues in the concerned states, adverse weather and natural calamities and resultant contractual issues," the ministry said in the presentation.

The hydro sector can get a boost by providing timely environment and forest clearances, improving infrastructure connectivity in states with potential for such projects, such as Arunachal Pradesh, and providing special financial incentives for hydel plants, the ministry said.

The ministry is of the view that 24-hour power supply to all is possible by ensuring adequate capacity addition by securing fuel availability and speedy regulatory clearances.

The peak power deficit in the country, when demand is the maximum, fell to 5.4 per cent at 7,556 MW in April from 7.4 per cent a year ago.

Reforms can be introduced in the sector by amending the Electricity Act 2003 to allow consumers to choose their power suppliers.

Periodic power tariff determination by regulators should be enforced without delay and grid safety and security can be ensured by enhancing penalties for non-compliance of grid discipline.

The ministry said loss of power during transmission and distribution should be cut down.

The aggregate technical and commercial (AT&C) losses, which is a true indicator of the total loss in the network, should be contained at 15 per cent from the current level of 27 per cent.

High technical losses are primarily due to inadequate investment over the years to improve systems, while commercial losses are mainly due to low metering efficiency and theft.

The country's total installed capacity stood at 2.45 lakh MW on April 30, according to the Central Electricity Authority.