Wednesday, March 21, 2007

India's Power Scenario Brightens Up

Power is one of the most critical components of infrastructure required for economic growth and better standard of living. Historically, the growth in the power sector has been always sluggish compared to the economic growth in India where as it should have been the other way. Now that India's GDP is growing at the rate of 8-10% and is projected to grow at 10% during the XIth Plan period (2007-2012), the desirable growth rate for the power sector ought to be at least 12%.
Despite such an apparent deficiency in its infrastructure, the famous financial analyst Golden Sachs stunned the world with their recent conclusion that India's economy would emerge as the second largest in the world - next only to China by 2050 and it would surpass Japan by 2032. It would be safe to presume that such conclusions were made definitely after taking into consideration the strategies and blueprint prepared by the Government and planners which aim to add a whopping 1,00,000 MW additional generation capacity by 2012 to bridge the gap between demand and supply of power.
It involves the capacity addition target of 45,500 MW for central Public Sector Undertakings under the Ministry of Power, 41,800 MW for State Electricity Boards/State Utilities and private sectors. Nuclear and non-conventional energy have been given more importance to augment power. A target of 6,400 MW of nuclear power and 10,700 MW of non-conventional power has been fixed for the period upto 2012.
With such massive capacity addition, the per-capita consumption of electricity would reach 1000 KWH/year from the level of 606 KWH/year (2004 - 2005). This is still much below per-capita consumption of 10,000 KWH/year in some developed countries. The latest provisional figures show a peak demand of 100,423 MW where as the demand being 86,425 - a deficit of 13.9% (April 2006-January 2007). Taking into account the gigantic task as well as the huge potential in growth of power sector, the Government of India has set its goal - Mission 2012: Power for All. In line of its commitment, the annual budget for 2007-08 (which essentially is a statement of accounts) has increased the budgetary support for power reforms and development from Rs650 crores ($148 million) in 2006-07 to Rs800 crores ($180 million). It has also given emphasis on Ultra Mega Power Projects (UMPP). These projects involve huge investment in the region of Rs20,000 crores ($4.5 billion) or more with capacities of 4000 MW. Two units at Sasan and Mundra have been cleared and two more are expected to be cleared out of seven UMPPs by July,2007. For accelerated growth in the power sector, such projects hold out great promise.
So, there I see light at the end of the tunnel. Do you?

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