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Interaction | August 2015

Optimal utilisation of existing power generation plants is necessary

When questioned, Rajiv Rattan, Chairman, RattanIndia Power Ltd, felt that instead of announcing new projects, the government must look into arresting existing T&D bottlenecks, to pave the way for a fresh set of investment.

The government has claimed several records in its first year Does it suggest a positive environment?
Highest annual capacity addition in last one year is a fact that cannot be denied, but at the same time it is also a fact that PLF which was 77.5 per cent in 2009-10, has dropped to 64.46 per cent in 2014-15. This indicates that the capacity created is not being utilised optimally, and the reasons should be looked into and addressed.

While, this government is just a year old, PLF has been falling continuously since the past few years. Thus, it will be unreasonable to hold them responsible for it. But some positive steps have been taken to address this issue and we hope that the results will be reflected in due course of time.

With fuel supply issue arrested, which is the worrying factor hurting the power sector?
Though the fuel supply issue has been arrested to some extent and average fuel stocks at power plants have gone up, the number of power stations with critical supply of coal have reduced. Not all power plants are getting 100 per cent of their coal requirement.

What suggestions, would you like to propose, especially to increase the PLF?
The situation has to be seen in a holistic manner and thus we have to address supply as well as demand side issues. On the supply side, even if coal is available at the mines, its availability at power plants has to be ensured by removing bottlenecks in the railway network. On the demand side, we see that utilities are coming in the market with short term power procurement that reflects their short sightedness. Utilities should go for long term power purchase agreements which will ensure better PLF at power plants and at the same time will protect utilities from price fluctuations.

List out few ´structural reforms´, that will change the entire generation sector?
As mentioned earlier, bottlenecks in railway network need immediate attention. Investment in laying new tracks and purchase of new wagons should be taken as a priority.

´Own your Wagon´ scheme from railways should be made more attractive. Commercial coal mining should be allowed.

This will ensure more availability of coal in the market. On the demand side, the financial health of discoms needs to be addressed. If they are solvent and financially strong, they can go for long term PPA. The focus should be on ensuring efficient use of existing power generation facilities, besides adding new ones. In certain regions like W3 and south, there is demand, but power cannot be supplied due to transmission issues which need to be addressed.

With the government has stepping into its second year,list your agendas wake them from slumber?
We do not think that the government is in slumber. The power sector has been ailing since long and it will take time to revive it. The government has already taken a number of steps and we expect that in due course of time the rest of the things mentioned above will also draw the government´s attention. The need of the hour is optimal utilisation of existing power generation facilities, before going for new power plants.

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