Land acquisition,fuel top concerns in power sector

The cumulative capacity of power plants in India stands at slightly over 200,000 MW

Even as Budget 2012-13 threw in some positives for the power sector,there is still a lot that needs to be done to address the growing concerns of power producers,both with respect to their feedstock as well as downstream reforms in the power distribution and land acquisition sectors.

S Padmanabhan,executive director-operations at Tata Power told Indian Express that while reforms are a must,allocation of coal blocks in transparent manner is equally important.

There should also be a policy direction to address,how to deal with imported coal and what should be the solution to that,especially for companies that have already invested money on the ground, said Padmanabhan.

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The cumulative capacity of power plants in India stands at slightly over 200,000 MW and fuel for these is not fully available,especially for thermal stations that form the bulk of this capacity. Domestic coal meets 70 per cent of the requisite fuel needs,while remaining projects will have to fall back on imported coal.

Imported coal puts pressure on power plant because the price of domestic coal is roughly 25-30 per cent of the imported coal. Also there are companies who have assets built on gas,and gas is not available because of which those companies have stranded assets, said Padmanabhan.

While India imports a lot of coal from Indonesia,a change in its coal pricing law in September 2010 increased the price of imported coal by 140 per cent.

Since there is some risk there,we are looking at alternate coal sources in South Africa, said Padmanabhan adding that if the PPP mode were to be adopted for power distribution,Tata Power was ready for it. The end consumer is willing to pay and distribution reform will help. For any new circle,investment will amount to Rs 200-300 crore per year and we can manage that.