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One Lakh MW in 11th Five Year Plan Possible, But Lot of Inputs are Essential, Shri R V Shahi, Former Secretary, Ministry of Power

Ministry of Power and the Central Electricity Authority organized a two day International Conference on "Key Inputs for Accelerated Development of Indian power Sector for 11th Plan and Beyond", on 4th & 5th July, 2007. I had the opportunity of chairing the session on Thermal Power Plant. During the inaugural session, which was addressed by Union Minister of Power, Member, Planning Commission, Secretary Power, Chairman, Central Electricity Authority and a senior representative of the CII, the following important points emerged:

  1. The most important and positive feature of the 11th plan preparations, which were done during last 3 years, is that projects aggregating to a capacity of about 49,000 MW are already on ground under construction at various stages of their development, so much so that about 26,000 MW (in Thermal group) and over 10,000 MW (in Hydro group) could be expected to be commissioned during the first three years 2007-08, 2008-09 and 2009-10 itself. If we compare the preparation for the 10th plan, as in March 2002 only about 20,000 MW of projects were under construction.

  2. Power projects are long gestation projects and therefore, only five year plan may not be adequate. Specific preparations need to be done for atleast two plan periods, while keeping a perspective even for longer periods.

  3. Manufacturing capacities not only for main power plant equipment but also for balance of plants (BOP), will have to be expanded substantially. Industry Associations such as CII should coordination with Govt. agencies and interact with the manufacturing organizations for expeditious actions on expansion of their manufacturing facilities and capabilities.

  4. Skilled man power and managerial personnel, of right quality and in required number, is emerging as a constraint, both for utilities as also for manufacturing and support service organizations.

  5. Experience of China was mentioned by a number of speakers - their manufacturing capability, which is almost equal to 70,000 MW per year, three large manufacturing organizations having the facilities not only for main power plant equipment but also for a number of associated systems, their supporting construction and erection capabilities and so on.

  6. In this context it was strongly suggested that the need for enhancing manufacturing capability would mean not only expansion of existing plants but also setting up of new factories.

  7. The 11th plan begins with a large number of projects in advanced stage of construction, which could have been completed and commissioned during the year 2006-07 itself. About 9,000 MW of capacity slipped from 2006-07 and are now being attempted in early months of 2007-08. Thus, the earlier programme of 68,700 MW as recommended by the Working Group on Power for 11th plan, (which I had the privilege of chairing as Power Secretary), gets now revised to 78,600 MW including the carryover projects of the last year of 10th Five year plan.

  8. The following table presents the complete picture of 11th plan programme by the utilities:

Central Sector

9685 26800 24310 1000 1454 3380 39865

State Sector

3605 24347 23135 450 762 0 27952

Private Sector

3263 7497 5460 0 2037 0 10760

All India

16553 58644 52905 1450 4289 3380 78577

  1. In view of the liberal and facilitative provision of Electricity Act 2003 on captive power plants, a large number of industrial units are setting up their own power plants. As in the end of 10th Five year plan, based on an exercise that was done by Ministry of power and CEA during 2006, and on the basis of information given by the manufacturer on whom the orders have been placed for these captive plants, as much as 12,000 MW of capacity can now be expected during next few years, but definitely within 11th Plan.

  2. Similarly in response to the policy announced by the Ministry of Power in December 2006, on Merchant Power Plant, CEA estimates that about 10,000 MW of capacity can be expected from this group.

  3. Thus, about 78,000 MW of capacity to be done by utilities, 12,000 MW under the captive plant category and 10,000 MW as Merchant Plants, all these aggregate to a total capacity of 1 Lakh MW in the 11th Five year plan.

Considering the fact that manufacturing units, construction agencies, erection agencies and various Central, State and Private utilities, all put together have not been able to do more than about 22,000 MW of capacity in any five year plan, one lakh MW of capacity obviously is very ambitious. On the face of it, it appears virtually impossible. However, what gives us the confidence that it can be done is the following:

  1. Preparations for 11th Plan started in early 2003-04, and a concept of Letter Of Award Schedule Matrix was evolved. This meant that not only monitoring will be done for the progress of construction but also for activities leading to contract award so that construction of a plant is made to commence. This approach has helped in getting a large number of projects on ground and at the beginning of 11th plan 49,000 MW of projects are under construction as per the table given below:

Projects under Construction

Central Sector








State Sector








Private Sector








All India








  1. Ministry of Power initiated in early 2004, a series of interactions with BHEL to impress upon them to augment their manufacturing facilities and capacities. It had been assured by them that from beginning 2007 the capacity would enhance from less than 5,000 MW to 8,000 MW per year. Since then BHEL started preparing for augmenting their manufacturing factories. The process has been, however, somewhat slow. Though there has been some slippage on this score, it now appears that BHEL would have their capacity increased to about 10,000 MW per year by the end of 2007.

  2. A mechanism was put in place in the MOP and in CEA to constantly interact with Central generating organization, State utilities and private sector to see that orders for all the plants in thermal category are placed before the end of December 2007 and for hydro capacity before March 2007. This approach has helped in preparing in last one year, for all the activities leading contract finalization, and it appears quite feasible to meet these deadlines on placement of balance orders for project meant for 11th plan. Constant monitoring on this, however, would be necessary.

  3. So far as the hydro electric projects are concerned, even though the desire was to have a much larger capacity for the 11th plan, considering the peculiar nature of problems that are faced during construction in these projects, it was unanimously agreed, in the Working Group meeting in Nov-December 2006, that for hydro projects we must allow a five year gestation. There would be no use putting them in the plan and not being able to complete them. Accordingly, keeping this principle in view only about 16,000 MW of capacity was fixed for the hydro electric projects and each of these projects was identified on the ground that in the beginning of the 11th plan construction would have started on them. Therefore, there should be no difficulty in getting all these projects through. In all these cases financial tie ups are also available.

  4. The nuclear capacity of 3,380 MW should also not be a problem because all of them are under construction. In fact, couples of these units were being targeted for 10th plan on best effort basis. They have got carried over to the 11th five year plan.

The session which I had the privilege of chairing, i.e. on Thermal Power Plant, discussed in detail all the issues relevant for meeting the target. Out of about 78,000 MW of total capacity, thermal capacity alone, excluding nuclear, is more than 58,000 MW, and including thermal more than 61,000 MW.

During this session we had comprehensive presentations by Member Thermal, CEA, Director Power BHEL, and representatives of Dong Fang Electric Corporation, L&T and Mitsubishi Heavy Industries Ltd. and Ansaldo. Very important observation during this session were also made by the panelist which included CMD NTPC, CMD BHEL and Managing Director Andhra Pradesh Generation Company. Salient points which emerged during this session are presented below under two heads (a) positive aspects which provide a reasonable degree of confidence, and (b) area of concerns requiring concerted actions.

There are a number of positive features of the plans & programmes for the 11th five year plan which should give us confidence for achieving the targets. The presentations made by the Member Thermal, Central Electricity Authority brought out the following:

  1. Lessons learnt while implementing the 10th plans targets are going to guide all the concerned agencies so as to avoid slippages.

  2. The amount of pressure on manufacturers and suppliers of plant and machinery, which have been put on them in last few years has, enabled them to better appreciate the need for a more systematic and sequential delivery of power station equipment.

  3. They now better understand the need for timely sourcing of their own raw materials and bought out items, particularly such items which are long delivery items, which will include boiler pressure parts, critical piping, forgings, CRGO steel for transformers etc.

  4. Efficiency of main plant manufacturers gets severely impaired if their vendors are also not equipped adequately for timely manufacturing and delivery of various parts and components. This has been particularly true for BHEL works at Trichy, Raniphet and Piping Center Chennai. Obviously for more than double of the quantum that BHEL did in the past, they will prove totally inadequately. . The lessons learnt are going to be used by them for expanding their base for vendor supplies, which will include both quantitative and qualitative enhancement of vendor's capabilities.

  5. The stresses and strains experienced during construction and execution have provided not only an opportunity for self introspection but a better appreciation for much larger increase in the number of construction and erection agencies, for substantial enhancement of the capabilities of existing agencies and also for the need for taking proactive measures for having larger number of qualified, skilled personnel such as welders, fitters, electricians etc.

  6. Not only BHEL but a number of agencies in the electrical manufacturing have started expanding their capacities. Perhaps, the pace of such expansions will have to be accelerated.

  7. All the agencies have understood that if more than 15,000 MW of capacity has to be commissioned in one year, it is a three fold increase as compared to the activities they have undertaken and experienced in the past. Commissioning teams and commissioning hardware accordingly will need to be increased almost three fold.

  8. Appreciation of the challenge and concomitant preparation is definitely going to enable achievements of targets.

From among the panelist a number of important points were made by CMD BHEL, CMD NTPC and Managing Director of Andhra Power Generating Company. Some of the important issues brought out included the following:

  1. BHEL has geared up to deliver, latest by Dec 2007, at a rate of 10,000 MW per year, from Dec 2009 at a rate of 15,000 MW per year and from Dec 2012 at a rate of 20,000 MW per year (it maybe relevant to mention that BHEL rate has normally been in the range of 4,000 MW per year so far).

  2. Balance of plants are going to emerge as major areas of shortfalls. In a number of areas such as coal handing plants, ash handling plant etc. we have very few agencies and their capacities are rather limited.

  3. Considering the size of expansion, that has been planned, construction and erection agencies are far two less not only in respect of their numbers but also in respect of their capabilities.

  4. For some of the critical items on pressure parts, indigenous steel & engineering industry will need to create required capacities even though dependence on import may not be ruled out. At present, total import of these items, many a time put the manufacturing and supply schedules out of gear.

  5. Responding to the points made by BHEL CMD, NTPC CMD highlighted that the manufacturing industry will need to change its strategy for sourcing of material - domestic and imported - so that they would be able to meet the schedule of supplies. Logistics such as transport and movement of materials will need to be planned well in advance so that the requirement of sequential supplies followed by erection as per programme is not put into difficulty. These agencies need to flag the issue of constraints and movement and get these constraints addressed well in time. The construction machinery, construction technology and construction monitoring all will need to be suitably improved and enhanced so as to cope with the challenge of almost three fold increase in the annual commissioning program. Fuel availability will also be a measure area of concern and the linked issue would be commensurate manufacturing and supplies of coal mining equipment.

MD Andhra Pradesh Generation Company gave a critical appreciation of the role of the manufacturers of main plant and machinery and stressed the need for better performance from them. He emphasized that the country did need more than one power plant equipment manufacturing organization.

In conclusion, the following few major points need to be highlighted:

  1. The commitment made by BHEL to enhance its annual capacity to 10,000 MW by Dec 2007 to 15,000 MW by Dec 2009 and by 20,000 MW by Dec 2012 needs to be ensured. This point is being stressed because in the past there have been delays in taking timely action to expand their capacities, inspite of the fact that the issue had been flagged with them in early 2004 itself.

  2. Expansion of BHEL capacity alone may not enable them to fully meet their committed schedules of deliveries including their commitments on supply of spare parts. It would be essential for BHEL to ensure that the ancillary units and all such outsourcing facilities also augment their capacities, taking due regard to the quality requirements.

  3. Considering the fact that the 12th plan and subsequent plans are going to witness even much larger expansion programmes, inspite of the indicated expansions of the BHEL, there will be need for other players to be engaged manufacturing of main plant equipment. This needs to be facilitated.

  4. There is a total mismatch in respect of preparedness of balance of plant equipments. A number of agencies to handle manufacturing of equipments like coal handling, ash handing, transformer etc. will need to be facilitated. It goes without saying that the existing players also need to expand their capacities. Responsibilities for this goes to larger generating utilities which must facilitate this process, particularly by encouraging new entrants. This alone will create a larger manufacturing base in B.O.P. segment.

  5. Availability of steel forgings, CRGO, piping materials within the country is an issue. While a long term view and preparation can be facilitated through interactions with the indigenous steel manufactures, the power plant equipment manufactures should take advance action of blocking materials wherever they are available so that their own programme of manufacturing and supplies don't get delayed.

  6. Large manufactures need to take proactive measures so as to create a number of new agencies, and motivate the exiting agencies to enhance their capabilities, in the fields of construction and erection activities.

  7. Fuel availability would emerge a critical factor. A part of this requirement could be and should be met through imports. But, the associated facilities like port and further transport would need to be expanded in time to match these requirements.

  8. Finally, inspite of all assurances and commitments by concerned agencies, regular and close monitoring of placement of contract orders (where not done), of timely and sequential supplies, and of construction and erection will be essential. Monitoring of the action plans of manufacturing organizations including those in B.O.P. group and of augmentation programmes of construction / erection agencies, creation of new agencies in manufacturing / construction / erection, would also be equally important. Monitoring mechanism will also be necessary for the development and supply of fuel and related inputs.