The other day, during a casual chat, one of my colleagues pointed out that, in early eighties, a 1000 MW (500 X 2) Thermal Power Project award by Indian Govt. to a UK firm had the distinction of reviving the then ailing British economy. An eye opener, at least to me, that an investment of Just Rs. 2000-2500 Cr can have such a far reaching consequences in the global economy. Any way, there can be no debate on this issue because these are some one’s personal views. But, think for a moment, if this was true. Then, the “Mega Picture” which I am going to share with you shortly can change the face of world economy in the near future. Growth rates of 3-3.5 % could become a thing of past and could put the world economy into fast track with growth rates of more than 4-4.5 % on a sustainable basis. Now some facts and figures to ponder upon.
India’s current power generation capacity is 141080 MW as on 31.01.08. The electricity demand supply imbalance is about 9 % and the peak shortage is about 16%. It means, India immediately needs about 21, 000 MW to meet its current peak shortages.
As per Integrated Energy policy, to deliver a sustained growth of 8% p.a. in GDP through 2031, India would, in the very least need to grow its electricity supply to 3,00,000 MW by the year 2017; to 4,10,000 MW by the year 2022 and to 9,62,200 MW by the year 2032.
In the short term, if the GDP is projected to grow at the rate of 8%-10% p.a on a sustainable basis, then the growth rate of demand for power is generally higher than the growth rate of GDP. For the coming decade the elasticity ratio is projected to be about 1.2. In this situation the growth in power sector is required to be about 11% on an average. Now let us project the required capacity addition for the next 5 years, i.e., upto 2012.
Current peak shortages + CAGR of 11 % for next 5 years= Net capacity addition required.
21,000 + 1, 41,080*1.685 = 21,000 + 96640 = 1, 17,802 MW.
i.e., approx. 23,560 MW per year up to the terminal year 2012.
The investment required will be Rs.5, 89,010 Cr @ Rs. 5 Cr per MW. Add another Rs. 5, 89,010 Cr. To install matching transmission system, then the total investment required is approx. Rs. 11, 78,020 Cr.
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Now, the planned Capacity addition for the period 2007-12.
Central Sector- 39865 MW
State Sector- 27952 MW
Private Sector- 10760 MW
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Total Planned addition- 78577 MW
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Planned Short fall - 39225 MW? Why and by whom? How to build this planned short fall? Is any one willing to come forward and build this capacity in next 5 years ?
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Indian Govt. has planned about 9 Ultra Mega Power Plants of about 4000 MW each. But will they be suficient to add 78577 MW in the next 5 years? In the past 61 years we have added only 2300 MW per annum @ CAGR of about 8 %. This was scaled up to 4300 MW per annum in the last 5 years.
Now the required run rate for the period 2007-2012 is 24000 MW per annum! and beyond 2012 to 2032 it is 35000 MW per annum.
A gigantic task by any means!. Any takers!.
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How to achieve this run rate? What are the options available to us? Can any one brief as to how to achieve this gigantic run rate?
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17.06.08:
The sector will need an investment of over Rs. 2,40,000/- to 3,50,000 Cr. per annum for the next 24 years to build 8,20,000 MW Capacity.
In addition, it will also need at least 7,00,000 trained personnel to man this gigantic capacity!.
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18.06.2008
Challenges:
Can the average size of each Ultra Mega Power Project be scaled up to 25,000 MW each or even more?
Can the average size of each unit be scaled up to 1200 MW or even more? In case of Nuclear power, unit size of upto 1600 MW each is available.
Production capacity of equipment manufacturing is also to be scaled up to 35,000 MW or more per annum.
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Till date there is only one Indian Pvt. co., Reliance Energy, re- named as Reliance infrastructure, who has decided to think big and put up thermal generating capacity of over 20,000 MW in next 5-6 years time, which will not be adequate to meet even one year's capacity addition. Another co., Tata Power, who has decided to put up India's largest unit size of 800 MW in near future. Still not adequate to meet gigantic targets.
India's largest equipment manufacturing Public sector Co., BHEL , has production capacity of about 7500 MW only and will be enhancing it to 15,000 MW by 2009. Another Private sector Co. L & T is building up production capacity of 4000 MW per annum. A far cry from what is required !.
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Indian power sector has entered a high growth phase and is posing great challenges to planners, EPC firms and also to the manufacturers of power equipments world wide to accept these challenges and make big gains.
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Time has come to think big and act fast or else the run rate will keep on climbing and will become un-achievable.
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