22,000 MW of power capacity needs to be added annually: Anil Razdan, former power secretary
ET Now: CERC has advocated for a compensation for Adani Power due to issues in Indonesia. Do you think this is a step in the right direction?
Anil Razdan: It was a very difficult decision to take because they were charting on hitherto uncharted territory, but we had reached a situation where it was virtually impossible for the generators to be able to supply power at the previously contracted rates. These are long-term transactions going into several years, 25 years.
So we had to take a fair and equitable view of the situation because even if you see these were to convert to NPAs, financial institutions would not have been able to rejig or restart these operations and produce power and there would have been continued losses. However, we have to keep in mind that the hit on the consumer is not unduly high and that the hit is also shared by the power producers. The power producers will have to come clean wherever they are owning the mining assets abroad. They will have to declare what is the profit they are making, the net profit on the hiked coal prices there if they are owning the coal assets abroad.
We do not expect this to be a normal situation, but then the UMPP law or the law relating to long-term buying of power through a competitive bidding is also an evolving law and it is quite clear that I do not think we can take a 25-year or a 10-year call on power prices when fuel is not entirely in your hands. Even domestic prices can keep rising. The mechanisms for procurement of power will have to tweak in those factors and at this point, it is particularly important because the good work done in the 11th plan has brought us to a compatibility where we are now setting up almost 20000 to 22000 MW, I would say, capacity addition in a year, which is our five-year achievement.