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India won't need any new power plants for the next three years as it is flush with generation capacity, according to a government assessment. But, ironically, more than a third of the country's population still lives without power. The country can manage for the next three years with existing plants that are currently under¬utilised, and those that are under construction and upcoming renewable energy projects, assessment made by the power ministry for reviewing the National Electricity Policy shows. The policy, originally issued in 2005 as a roadmap to the Electricity Act of 2003, is being altered in the backdrop of changes in the power sector.

 

"Demand for electricity is not likely to rise substantially in the next three years and hence India is expected to be power sufficient without any addition. This clearly signals that any thermal power plant that is yet to begin construction should back off," a power ministry official said. India has power plants with capacity to generate 300 GW. These are operating at 64% capacity because of inability of state distribution utilities to purchase electricity and sluggish economic growth.

 

About a tenth of the total capacity is stranded due to lack of power purchase agreements while another 50 GW is under various stages of construction. Meanwhile, there are plans to build renewable energy capacity of 175 GW by 2022. India's per capita electricity consumption, though increasing, is lowest among the BRICS nations and about one¬third the world's average. The energy deficiency is a low 2.1%, but experts feel latent demand from remote areas is not being accounted for. The glut¬like situation is a result of the previous government's initiatives to boost electricity generation, coupled with high investor interest the sector had witnessed.

Demand for electricity is likely to pick up after 2019 as the scheme to revive distribution utilities and village electrification programmes start yielding results, the official said. Ten states have joined the government's Ujwal Discom Assurance Yojna and the Centre plans to electrify 18,000 villages by May 2018. Issues surrounding project clearances, coal, finance and poor health of distribution companies had hampered the growth of the sector.

Source: Economic Times