Power Generation and Private Sector

Private companies have kept on complaining about the dismal condition of the power sector of the country, but have hardly contributed as much as it could to solve the power shortage of the country shielding themselves with some or the other excuses and shortcomings of the government machinery. As on April 30, 2007 private sector players account for only 13% of India’s total installed generation capacity of 132,110 MW

Reliance Energy and Tata Power are the two major private players in power generations. But they seem to be pygmy in comparison with public sector giant NTPC with total installed capacity of 27,904 Mw through 25 power stations.

Reliance Energy

Reliance Energy currently produces a total of about 950 MW of power through its 500 MW (2 units of 250 MW each) Dahanu thermal power plant near Mumbai, and from power projects at Kochi, Andhra Pradesh, Goa as well as a wind farm in Karnataka. However, it has a number of power projects under development and construction: a 1,200 MW (2 units of 600 MW each) coal-based power plant at Rosa, a 7,480 MW project at Dadri in Uttar Pradesh, a 300 MW coal-based power plant at Butibori near Nagpur, and a 4,000 MW power plant at Shahapur in Raigad district of Maharashtra at an estimated investment of Rs 15,000 crore, comprising a 2,800 MW gas-based project and a 1,200 MW imported coal-based project. As reported in media, Reliance Energy is planning a capacity addition of 15,000 MW from power generation projects using coal, gas, hydro and other renewable fuels at an investment of over Rs.60, 000 crore over the next five years.
Even the 4,000 Mw Sasan ultra mega power project has gone to Anil Dhirubhai Ambani Group (ADAG) company Reliance Power (formerly known as Reliance Energy Generation) after the disqualification of the original winning bidder, a consortium of Singapore-based Globaleq and Lanco Infratech.

Tata Power

Tata Power has an installed generation capacity of 2323 Mega Watts. The Thermal Power stations of the company are located at Trombay in Mumbai, Jojobera in Jamshedpur and Belgaum in Karnataka. The Hydro stations are located in Raigad district Maharashtra and the Wind Farm in Ahmednagar. Tata Power has now the ultra mega power project of Mundra in Gujarat too in its fold.
Reliance Industries Ltd.

As per the media reports, Reliance Industries Ltd (RIL) is also trying to come in business of power generation and is planning to set up 4,000 MW of gas-based power generation capacity at multiple locations at an investment of Rs 10,000 crore, in addition to a mega fertiliser plant at Kakinada in Andhra Pradesh. Around 1,000 MW capacity will come up at Jamnagar in Gujarat, where RIL is building a 27 million tonne per annum (mtpa) refinery alongside its existing 33 mtpa refinery.

Many new enterprises such as Lanco Infratech from South are also trying to enter power sector seeing a future in power generation because of the huge gap in the demand and supply. Lanco currently generates 518 MW of power in six operational independent power projects. Interestingly Lanco was the company that got awarded Sasan ultra mega power project.

The Rs 5000 crore K K Birla group outfit Chambal Fertiliser and Chemicals Limited (CFCL) proposes to set up a 2000 MW power plant in Orissa at an investment of around Rs 10,000 crore.

RPG’s CESC has been a significant player in power generation in West Bengal. CESC has a total generation capacity of 975 MW. It has planned to invest Rs 12,000 crore for building a 2,000 MW power plant in one of the eastern states of the country.

Captive Power Capacity

However, captive power generation capacity over the years has grown as a measure source to cope up with the failure of the government in providing this basic input for the growth of the industries in the country. As per an estimate, captive power capacity now exceeds 50,000MW, as most in the industry sets up its own plants to assure power for their units. Around 12,000 mega watts (MW) of new captive power capacity that is expected to come through over the next five years, according to estimates firmed up the Central Electricity Authority. According to another estimate, the installed captive power capacity is about 19,485 MW in the country of which 14,866 MW is already connected to the grid while the remaining 4,619 MW is currently operating in isolation to meet captive requirements of the plant owner.

It is common today to see a diesel gensets that powers homes and colonies. And perhaps, private India has found solutions to public problems.

I can only say that private sector must not keep on blaming government and go for power generation in big way and create competitive conditions as it has been created in telecom sector. If Reliance Energy provides the power at the tariffs of around Re 1 per unit agreed in its bid for Sasan Ultra Mega Power Project, the benchmark gets fixed. This can only be the way out for the country’s growth rate in two digits.