Energy sector is the key thrust area in the upcoming five year plan

Availability and access to energy are essential catalysts for economic growth all around the world. With an eye on rapid development growth of energy sector in India has always been crucial and strategic part of the 5 year plans of the country. Initially India’s 11th five year plan targeted adding power capacity to 78,000 MW, however the target was revised to 62,000 MW. According to energy experts India will even miss the target of setting up the additional power capacity of 62,000 MW by March 2012 by about 4000 MW. This deficit calls for making energy sector the key thrust area in the 12th five year plan.

The approach paper of the 12th plan released by the Planning Commission presents “sustainable growth” as its main theme. Indicating that sustainable development is government’s priority to counter challenges while pursuing energy. Inclusive growth is being pushed as the social theme for development.

The Approach paper for 12th five year plan sets a target of 1,00,000 MW capacity building against 50,000 MW proposed in 11th plan. Planning commission says that India will need to import around 250 million tonnes in 2017-18 after making optimistic assumptions about Coal India achieving this target. India further needs expansion of new NELP (New Expansion and Licensing Policy) blocks wherein the stable and cleaner production sharing contracts will incentivize exploration and encourage further investments. The expansion of LNG pipelines is another focus area.

Talking about “other energy sources” the proposed plan stresses on continuing nuclear power programme with the required safety measures. It also underlines that the solar mission is seriously underfunded. Moreover, the approach paper mentions the foreseen constraints in the energy sector in India, such as – the coal availability, undermined long term health of power sector with yearly losses of Rs 70,000 crores, hindrance in hydro power developments owing to delay in forest and environment clearance procedures and regulators being held back from pursuing justified tariff increases.

But before India could start moving ahead to achieve the target set for the 12th plan the shortfall of around 4000 MW needs to be catered to. This would not only increase the target of the 12th plan but would further add to the perpetual constraints in the energy sector. It is imperative to look for other energy options which are not capital intensive for new capacity addition and that could be implemented in a comparatively shorter time frame.