Rajiv Mishra, Managing Director, CLP India
This year the power sector has been much in focus for reaÂlising the high GDP growth foreÂcasts in the country. Compared to previous plans, the 11th Five Year Plan, ending this fiscal, is expected to culminate with one of the better performances (in terms of MW capacity addition).
However, fuel shortage (both coal and gas) and distribution companies' health (high AT&C losses and unsustainable tariffs) continue to plague the sector. Thankfully, steps for addressing these issues have been initiated. The Appellate Tribunal for Electricity (ATE) has also directed all state power regulÂators to carry out tariff revisions annually. The most affeÂcted state-Tamil Nadu-is expected to join the bandÂwagon of states hiking the electricity tariffs by up to 38 per cent. Additionally, AT&C losses' decline pace is too slow to trigger any significant optimism in the near future.
SBDs to the rescue? PowerGrid's proposal of a smart grid may leapfrog the country to much lower levels of AT&C losses. The government has shown an inclination towards a possible re-look at the Standard Bidding Documents (SBDs) for competitive bidding guidelines (the primary issue to be addressed is a provision to cusÂhion unforeseen fuel price fluctuations for power prodÂucers). If implemented, this should help relieve generÂators of the pressure building up from the change in the Indonesia law (prohibiting the sale of coal below the international market price to any country) that's affeÂcting them adversely and making many projects based on imported coal unviable.
With the government's increased focus on significant reforms in the sector, the coming year promises to be much better. It should also promise excitement with two UMPPs on the anvil and a considerable additional caÂpaÂcity scheduled to go online. The Government is also treaÂding cautiously now, with the proposed 12th Plan target being revised from the initial 100 GW down to 75 GW.
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