The Indian government has formed a plan to eliminate power shortages in the country by 2012. This will require an additional 107 000 MW over the next ten years, 44 000 MW of which will be needed in the first five.
Of the 44 000 MW required by 2007, 22 800 MW is expected to be built by the national government and a further 11 000 MW by state governments. The private sector will add 7000 MW while non-conventional sources could contribute 3000 MW more. There is already 19 000 MW under construction and a further 8 900 MW has received approval. Energy conservation measures are also to be encouraged, with potential savings of up to 25 000 MW over ten years. Renovation and modernisation of existing plants could provide an additional 10 000 MW.
This expansion is included in the country's tenth and eleventh Five-Year Plans. Outlay in the tenth plan for the power sector has been increased by 270 per cent.
Expansion in India has been hit by the withdrawal of a number of foreign companies planning power projects, and lukewarm response from new investors. However the power minister has reportedly been encouraged by significant interest from the UK. Nevertheless the government appears to accept that it will have to make structural reforms if it is to secure new investment.
One problem has been transmission and distribution, which remains controlled by state governments. This has led to insecurity about payment for power delivered, resulting in a loss of confidence by foreign companies over the past 10 years.
The country is in the process of establishing a national grid linking all five regions of India. This could allow a further 5000 MW to become available to regions of high demand.
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