Power sector on the blink

The government is confident of meeting the capacity addition target of 17,956.3 MW despite the issues of fuel linkages, restructuring of power utilities, coal pricing and environmental clearances yet to be sorted out, Power Minister Jyotiraditya Scindia said on Tuesday.

“In the first and second quarters, we were on track (on capacity addition). For the first two quarters, I did see some reports in the media about the fact that public sector units have not commissioned in the second quarter compared to private sector. Let me clarify that is not the case at all,” he told Express.

However, data by the Central Electricity Authority shows a completely different picture. Against a target of 8,226 MW to be added in the first half (April-September) of the current fiscal, only 7,636 MW was added.

On the capacity addition targets for the second half of the 2012-13 financial year, Scindia sounded optimistic. “The Power Ministry will try to ensure that the capacity addition targets in the October-December and January-March quarters are achieved,” he said. The government has set a target of adding 9,730MW capacity in the third and fourth quarters. Of this it is targeting to add 5,402 MW in October-December period and another 4,328MW in January-March quarter.

Hinting that the government will rework the coal sampling procedure, Scindia said the Power Ministry is in discussions with the Coal Ministry on that issue.

“The process of coal sampling or quality check has to be looked at and revisited once again. We are in dialogue with the Coal Ministry in terms of looking at that process. We will evolve what we believe is a fair and equitable process of sampling of coal,” he added.

Earlier in the day, NTPC Chairman and Managing Director Arup Roy Choudhury had said: “The quality of coal that we received from Coal India is poor, we have informed the Power Ministry about that.”

On the issue of price pooling of coal, Scindia assured that the government is actively looking into it. “The whole issue of pooling of coal and taking fuel as a pass through is something that we are evaluating ourselves in the Power Ministry. Once we have clarity on the guidelines that we are going to put in place, then we will take it forward,” he said.

Price pooling of coal is a mechanism through which rates of both imported and domestic coal can be combined with the objective of offsetting the impact of high import costs. According to sources, the Power Ministry is likely to send a revised proposal on price pooling mechanism to the Coal Ministry by end of November due to objections raised by a few states on the issue.

Scindia also said his immediate priority is to ensure that fuel linkages for projects totalling to 60,000MW capacity is in place.