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Piyush Goyal's dream of 24x7 power supply


Power Minister Piyush Goyal

Power Minister Piyush Goyal wants to resolve the electricity crisis, which is mounting every passing day. Moreover, he has promised 24X 7 power supplies to a few states including New Delhi, Rajasthan, and Andhra Pradesh.  How would he fulfill this dream? If the supply of coal is the main hindrance then he has yet another plan to double coal production from present 500 MT to 1 billion Tonnes in the next four years.

The new government has accorded top priority to the energy sector and the Minister of Power has announced that he has blueprints ready for his ambitious plans. However, since the Narendra Modi government does not believe in sharing every detail of their plans, programmes, and schemes at initial stages, it can be safely assumed that the Piyush Goyal too is maintaining this secrecy.

Broadly, the Power Ministry will spend Rs 7,700 crore for providing uninterrupted electricity to the national capital. He has yet another blueprint for strengthening the transmission and distribution systems and would be spending over Rs 75,000 crore in that direction. But presently the main worry is acute shortage of coal supply and the government needs to come out with a clear strategy to resolve the crisis for the short as well as the long term.

Fuel Crisis: Major Challenges

  • With the quantum of minable resources pegged at around 116 billion tonnes, the country is mining just 1 billion

  • The Supreme Court’s verdict on coal blocks can result in the de-allocation of 218 coal blocks and will affect investments worth Rs 2 lakh crore.

  • At coal-fired plants coal stocks have gone down to less than seven days worth of reserves. As per official data, the stock levels are at the lowest since mid-2012, when large swathes of the country had to go without power, plunging millions of homes in darkness.

  • The largest electricity generator, NTPC Ltd is facing acute fuel shortage and the situation is critical in at least six of its 23 thermal power plants across the country.

  • Plants are running short of fuel due to decreased supplies from Coal India (CIL), which accounts for almost 80 per cent of India’s coal production. CIL is unlikely to meet the growing demand of coal for the power sector.

  • Nearly 12 major power projects with 7, 230 MW capacities entailing an investment of Rs 36,000 crore are stranded due to a shortage of coal.

  • Power generation capacity of 42,480 MW commissioned in the country after 2009 is presently entitled to only 65 per cent of their Letter of Assurance (LoA) commitment for the fuel supply.

  • The shortage of coal is increasing dependence on imports. And the imports are expensive, thereby increasing the cost of per unit substantially.

  • Coal Ministry anticipates local supply to fall as much as 185 million tonnes short of the country's projected demand of 950 million tonnes in 2016-17.

  • Coal companies both public and private are facing difficulties in augmenting production due to issues like environment & forestry clearances, land acquisition and rehabilitation issues, and the law and order situation.

The power minister has correctly assessed the situation and knows that the current situation has the potential to unfold into a major power crisis. Thus, he is all set to review and restructure existing policies and come up with ones targeted at the sector.

If the power minister has ambitious plans then it is also true that he is making sincere efforts to find out instruments in various forms to roll out them as quickly as possible. If he talks to media about his blueprints and plans one day then very next day put his advisory panel on toes to chalk-out a clear-cut roadmap for the ministry to roll out its plans and programmes. Goyal is well aware that India’s developmental goals are now more pressing, its dependence on coal will continue and by 2031-32, the fossil fuel for power generation will need to grow by five times to support growth rate of 8 per cent.

His dream to double coal production in four years has a realistic side as well. Our reserve base is huge with nearly 116 billion MT mineable resources and there are no constraints regarding the availability of financial resources. With investment friendly and hassle free, transparent policies, coal production certainly can be increased exponentially to meet the growing demand of the power sector.

Meanwhile, there is tension because the fate of over 200 coal blocks hangs in the balance. Whether or not, this tension will lead to a higher stage of advancement would be interesting to wait and watch.

(B K Jha can be reached at braj@skoch.in)

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