The Hindu Business Line : Power-less

NOBODY SHOULD BE surprised by the darkness that has descended on Maharashtra following an acute power shortage the last few weeks. With no focus on long-term planning for power demand, following the Dabhol fiasco, and with policies such as free power to farmers, the once progressive, industry-pioneer State had this coming. The fact that the power deficit is not just of a few hundred mega watts but a whopping 4,000 MW at peak period is proof of the sector's neglect the last few years. The extent of lack of long-term planning and investment in new generation capacity is shocking indeed. The State Government, as is always the case, is now in damage-control mode and is talking to private power producers such as Tata Power to increase their production apart from making short-term supply deals with power traders and Central utilities such as the National Thermal Power Corporation (NTPC).

The sad fact is that Maharashtra may not be alone in facing a power shortage; due to a combination of factors, a number of other States could be heading for a similar predicament in varying degrees of severity. And these factors all arise from wrong policies, bad planning and a singular lack of foresight. Like the coal shortage, for instance. Is it not strange that the third largest coal producer in the world should be complaining of shortage of the key input for power generation? Coal stocks with generating stations have been running dangerously low since last August, forcing the likes of the NTPC to import the commodity. Domestic coal producers have not been able to meet their supply commitments for their own reasons forcing a crisis on the coal-based power generation plants. If coal production has stagnated it is certainly not due to paucity of reserves. Similarly, the gas-based stations of the NTPC have been operating at substantially below capacities following inadequate gas supplies. The recent wrangling between the company and the gas supplier, Gail India, over pricing issues did not help matters. A couple of gas-based projects in Andhra Pradesh being commissioned by private players could also be heading for trouble following the inability expressed by Gail India to supply the contracted quantity of gas to these projects.

Clearly, there is much to be desired in terms of proper policy and planning. For instance, the coal shortage would not have happened had the Government enabled private investment in coal mining. The public sector Coal India is unable to invest enough in exploiting the ample coal reserves that the country is blessed with. There is also need for better coordination between the Ministries of Power, and Petroleum and Natural Gas in the matter of allocation of gas and its pricing. The projected increase in gas availability in the next few years would lead to more gas-based generation projects. The Government can no more look at each of these sectors — coal, power and natural gas — in isolation. It has to acknowledge the linkages among the three critical sectors and take a holistic approach to devise policies for the energy sector as a whole.

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