As India grapples with power shortage problems, Power Minister Piyush Goyal is expecting an investment of USD 250 billion in the next four to five years. Speaking at World Economic Forum’s India Economic Summit 2014, the minister said renewable energy will be a feed-in for power sector and government will engage top 250 tax payers to invest in solar and wind projects.
The investments, totaling USD 250 billion for power generation, coal mining as well as electricity distribution and transmission sectors, would help the government increase power generation and ensure electricity supplies to all households in the country by 2019, Goyal said.
“We are expecting around USD 250 billion investments in the next four to five years… About USD 100 billion will be in the renewable energy,” Goyal said.
The country’s electricity transmission segment is anticipated to see an investment of around USD 50 billion during this period, he added.Stating that power is going to drive the economy, Goyal said that government will focus on long-term bankable Power Purchase Agreement (PPAs) for renewable energy. He expects power demand to double in next five years.
Goyal also stressed that there is a need to increase utilisation of current and stranded power projects while private sector will have an important role in enhancing coal production in India.
The government is pushing ahead with ambitious plans for the renewable sector, especially solar energy, where the generation capacity is to be increased to 1,00,000 MW by 2022, he added.
The government is sincere in its efforts and “will protect investments”, the Minister said. To meet the increasing electricity generation requirements, Goyal said, Coal India is expected to double its production to around one billion tonnes by 2019.
The private sector is also expected to play an increasing role in the coal sector and an ordinance issued recently by the government addresses many of the issues, he said. The ordinance related to the coal sector came after the Supreme Court cancelled a large number of coal block allocations.
About 53 million homes in the country are yet to get electricity and many industries depend on diesel generation sets to meet their requirements.
According to Goyal, all households are expected to have electricity access by 2019. In the renewable space, the government expects to nearly double the installed wind generation capacity to more than 40,000 MW by 2019, he said, adding that the government is pursuing the strategy of improving the utilisation of existing assets and freeing up stranded assets.
Efforts are also on to improve the bankability of power projects, he added.
India has an installed power generation capacity of over 2,50,000 MW but many plants are facing fuel supply problems resulting in lower production. Besides, many other issues such as hurdles in getting clearances and poor financial health of power distribution companies are adversely impacting the power sector.
Responding to a query on the health of electricity grid, Goyal said steps are in place to ensure its stability, including heavy penalties for erring entities.
(With additional inputs from PTI)