As on November 12 this year, the country had commissioned an additional generation capacity of just 4,380 MW, although it had targeted adding 16,335 MW by the end of FY'08.
Plans to enhance generation capacity by adding over 78,000 MW by 2012 notwithstanding, India continues to lose precious electricity in transmission and distribution, with the latter alone accounting for about 40 per cent wastage due to pilferage.
The T&D space is a monopoly of Power Grid Corp, which has also been designated as the Central Transmission utility. India's T&D sector has not seen any major improvement in the recent past, as all the focus remains on meeting the capacity addition targets.
The country's total generation capacity as of November 30 this year stood at 138,251.63 MW. Despite this, estimates show that over 100,000 of the about 600,000 villages in India were yet to get electricity.
Even the process for awarding 14 transmission projects to private players is yet to take off over a year after its announcement. The projects, involving an investment of Rs 14,000 crore (Rs 140 billion) , were to be awarded to private firms on the lines of Ultra Mega Power Projects. The third UMPP in Krishnapatnam was awarded to Reliance Power this year.
Reliance Power also bagged the Sasan UMPP, which came up for rebidding this year after its original bidder Lanco-Globeleq was disqualified.
It took the Group of Ministers seven months to decide upon the Sasan UMPP issue, which resulted in delay of the following projects as well.
While the UMPPs do not form part of the 11th Five-Year Plan targets, the government is all the same confident of attaining capacity addition of over 78,000 MW - out of which it claims to have placed orders for over 56,000 MW. The balance, it says, could be completed by this fiscal end.
This target includes slippages of the 10th plan, which saw addition of just 21,000 MW against the targeted 41,000 MW. A seemingly ugly row between the Ministry of Power and Ministry of Heavy Industries over alleged failure of BHEL to supply equipment was resolved amicably with the state-run power equipment maker agreeing to help power producer NTPC manufacture equipment.
The Power Ministry had earlier pinned the blame for missing the 10th Plan capacity addition target on BHEL. The sector witnessed investment commitments of at least Rs 1,00,000 crore (Rs 1000 billlion) by power houses such as Reliance Energy and GMR Infrastructure.
While Reliance Energy Ltd has estimated that it would have to invest Rs 60,000 crore (Rs 600 billion) in next five years to add 15,000 MW capacity, GMR Group has targeted generation of nearly 12,000 MW capacity in the next 5-6 years at an investment of Rs 50,000 crore (Rs 500 billion).
The investment does not include the amount which firms like NTPC Ltd, PTC India and a few others have lined up for securing fuel, primarily coal from Indonesia, South Africa and Australia.
In March, Tata Power signed a $1.1-billion deal to buy 30 per cent stakes in two Indonesian coal companies, and in a coal trading company, promoted by PT Bumi Resources.
Greenfield power projects, thrown open under public-private-partnership mode by both Central and state governments, received stupendous response from firms such as Tata Power, Larsen and Toubro, Lanco Infratech, Torrent Power, Essar, and Sterlite Industries.
A recent bidding process for setting up a 2,000-MW power project at Talwandi Sabo by the Punjab government attracted 10 local and overseas power firms.
While foreign companies like China Light and Power, Malaysia's Dian Wijaya and AES placed bids for projects to be located in India, local firms like NTPC, PGCIL and REL placed bids to set up or run power generation and transmission projects in Nepal, Singapore and the Philippines.
The Centre is also yet to introduce a hydro policy, which it said was finalised early this year. The policy, which proposes to attract private sector to utilise more than 1,50,000 MW of hydro power potential available in the country, needs to be put in before the Cabinet for discussion.
Having begun on a promising note with a startling debut of state-run PFC on the bourses, power firms found 2007 as just the right time to knock the capital markets.
Besides four issues and seven power IPO announcements, 2007 was also marked with establishment of a power index, and an electricity exchange - India Energy Exchange.
The government's plans to dilute 5 per cent stake in PFC did not materialise following opposition from Left parties and DMK. However, it divested a five per cent stake in Power Grid to mop up around Rs 995 crore (Rs 9.95 billion). It seeks to divest further five per cent and 10 per cent equity in NHPC and REC, respectively.
During the year, Reliance Power, REC and NHPC along with a few small firms filed their draft prospectus with SEBI to float initial public offerings.
