Thursday, April 3, 2014

Factors Influencing Lower Utilization of Power plants


àIndia has about 42,000 MW Installed capacities but can’t get commissioned due to lack of availability of fuel. Nearly 15,000 MW of gas-based power plants are under shutdown due to Shortage of Gas. There are more than 50 gas-fired power plants in India, but most of them are facing shortage of fuel. This is due to fall in Gas from RIL KG Basin. It’s not economical to run these power plants at Imported R-LNG which is very costly.

àCoal scam hits India in March 2012, which shows that it had impacted India big way and leads to loss to India as much as 1.9 Lakh Crore. During Scam it has been find out that out of the 195 coal blocks allocated between 1993 and 2008, production had begun in only 30 blocks. Out of 195 blocks, 160, were allotted by the UPA government between 2004 and 2008, so far production has begun only in two. Most of allocation was done to  Power and Steel companies but they failed completely They were given coal blocks only taking into mind that this will leads denationalize coal production and will leads to effective and effective mining of coal but all get in Vain.

àEnvironment policies on clearance of mining also added to more difficulties as new norms set under Environment Jairam Ramesh were not met by most of companies.
àCoal-fired power plants capacity in India has by 10% every year between 2008 and 2012 but coal production increased by just 4% annually. This gap has led to an increase of coal imports for the power sector by 300% over the period. In the meanwhile there was also a significant rise in international coal prices that will leads to threatening the country’s energy security.

à Power distribution companies are in losses as State governments are reluctant to increase tariffs and which will lead to power distribution co.s are getting defaulted to power producers which will leads to burden on Banks as they had taken loans from banks.