"We can tell the world that India is now power surplus"

Two years ago, the prime minister had entrusted Piyush Goyal the task of reviving the country's comatose power sector.
 Anilesh S Mahajan   Delhi     Print Edition: June 19, 2016
Piyush Goyal, Minister of State for Power, Coal, New and Renewable Energy (Photographs by Vivan Mehra)

The Narendra Modi government has promised power for all by 2019, the year its first term in office ends and it seeks a fresh mandate. The Indian electorate is likely to be unforgiving if Modi and his team fail to deliver on this promise. Two years ago, the prime minister had entrusted Piyush Goyal the task of reviving the country's comatose power sector. The CA-turned-politician has been given independent charge of three crucial ministries. In an interview with BT'sAnilesh S. Mahajan, Goyal assured that he is well on his way towards delivering on the promise by tapping the synergies between the ministries - coal, power and renewable energy - under him. Edited excerpts:

Two years ago, the Prime Minister gave you three ministries - coal, power and renewable energy - that were crucial to boost India's power sector. How have things changed?

The best thing to have happened in the whole process is the emergence of a 'Team India' spirit in the working of the government. The entire ecosystem works as one cohesive unit. People don't do ministry inter se, governments inter se or departments inter se. There is a lot of informal consultation, discussion and decision making, which has sped things up massively. Two years later, retrospectively, I believe the PM was a visionary to have realised the close interplay between these three ministries. For many years, these ministries could not perform to their true capabilities because each of them was running in a different direction. Now, when they are running together, in the same direction, you can witness the change in the country's power sector.

What sort of interventions went in to make this synergy work?

The biggest intervention or change was to get people to believe in themselves. To assist them realise their true potential and ability to deliver. This kind of empowerment, coupled with the highest level of transparency - which India has never witnessed - that PM Modi has brought in, is a defining feature of this government. If the system knows that you do not have any personal agenda and that your working is transparent, it offers full support. It is only when you ask them to do things out of the ordinary or make arbitrary decisions, do they hesitate, leading to bureaucratic delays.

Last year, you laid a roadmap for mining 900 MT out of the ambitious target of 1 BT for Coal India. But we are witnessing a unique problem of low coal off-take?

It is not of low off-take. In the last two years, CIL ramped up its production by an additional 74 MT. It hasn't happened ever in India's history. Things like absorption capacity and transpiration capacity take time to tie in with the system. Last year, we saved forex worth Rs 24,000 crore (revised figures) on coal imports, while this year's target is to save Rs 40,000 crore. The whole process needs to be calibrated and taken forward. You can't change it overnight. For example, the fuel mix in thermal power plants - those designed to use imported coal - require technological upgradation to absorb Indian coal. This has to be done systematically and carefully.

But do you think this 900 MT roadmap needs to be reworked?

Not at all?we need to do it. India's growth story has a long way to go, and we need a lot more power. India is the only country in the world where the need for power will grow three to four times of what it is today. This growth story is unparalleled across the world. The growth in demand in the US, Europe, Australia and Japan will fall in the next 15 years, because of technological innovation and energy efficiency. When you combine the effect of these two factors with their flat economies, you will see that all their energy demands are on a downward trajectory. India is that bright shining star which is seeing this trajectory going up. The one billion tonne of coal will be consumed very easily.

Do you think we are on the right track to achieve this target?

Absolutely. 2022 was to be the year for achieving this target. But, looking at the enthusiasm and effort this team (Coal India) has put in, and the work they have done in the last two years, I am very confident that we will be able to achieve this target by 2019 itself.

Piyush Goyal, Minister of State for Power, Coal, New and Renewable Energy (Photographs by Vivan Mehra)
The industry is expecting some development in commercial coal mining...

We are beginning with the PSUs. Mines have been identified; offers have been made to states to take these mines up. Since the prices of coal in the international markets are low, we may not want to bid out mines in the current scenario. People could raise objections stating that it was not the correct time to auction them. We can afford to wait for the correct time to invite other players for commercial mining. CIL has already ramped up its production; there is no immediate requirement either. In the long run, we will need extra coal. To complement the fast pace of the economy, we will have to plan this. I will calibrate and do it at the right time.

There is pressure from pro-environment lobbies to reduce the carbon footprint...

We are doing lot of work to encourage the switch from coal to gas. In the long run, because of environment conservation resolves, we have to move from coal to gas - coal-bed methane. Secondly, we are focusing big time on clean coal technology. I have had a discussion with MIT; my team will now take the discussion forward by way of research.

On the generation side, there is a dip in the interest of private players to set up greenfield power plants. What are your plans to revive their interest?

We focused on opening up several stranded, stressed and stalled projects. In the last two years, we got projects of additional 45-GW capacity commissioned. It is a record. No one will invest unless they can see these projects coming up and the power sector progressing. Earlier, there were delays of five to seven years?who would have invested then? Now you can see many people buying these stressed assets; they can sense a revival of the power sector. I believe that the investment cycle will see a revival once again.

What is the status of ultra mega power projects?

The document has been drafted based on the report of the Pratyush Sinha committee, which consulted with bankers and other stakeholders. Now this document will go to the Cabinet for approval. We want the UMPPs to come up in the plug-and-play mode. Land and environment approvals are done before the bids are called for.

This was one of the reasons the previous UMPPs could not take off...

There were a lot of reasons. I will try and ensure that everything is tied up between the environment ministry, the state governments and the power ministry, so that implementation can be much faster. We must encourage low-cost power.

By when can we expect bids?

I am not in a hurry. There is no shortage today, and I don't foresee any shortage in the next four to five years. I have enough time in hand, and will do it in due course.

There is a problem of abundance right now. The power plants are running on low PLF which will cause problems for the investors in these power plants...

Will anyone go to a country to invest if they foresee a power shortage? Under 'Make in India', too, we can tell the world that India is now a power surplus country, and they should come and invest. You will never have a power shortage?it is not a problem for investors at all. In two years, we added 45 GW - a 22 per cent increase in thermal installed capacity. If GDP grows at 7 per cent, power needs to grow by 5-6 per cent. In the last two years, demand in electricity grew by 14 per cent; the remaining delta would lead to a fall in PLF only. This also means that I have spare capacity to ramp up as the demand increases.

There are 32-GW capacities which may retire by 2022. Most of these belong to PSUs and state governments. What will be the impact of this?

There is no retirement commitment as such for these old plants. But I am trying to replace these old inefficient plants with new and modern power plants. This is a work in progress. We have to do a stakeholder consultation with the environment ministry, state governments and PSUs. A complete analysis of the requirements in the areas and the cost required to upgrade these plants needs to be done. We may decommission some of these plants and use the land for some other purpose.

On the solar front, you have been criticised for leading a steep fall in tariff...

Is it a matter of praise or criticism? There are certain people who crib about the dip in tariff, but they also take projects by bidding low. I can't help them. The bidding process is transparent; everyone has an equal opportunity. I can neither request them to bid low nor force them to quote higher. They have their own calculations. I believe they are bidding wisely.

Banks, too, are giving these projects the cold shoulder, and asking players to put in more equity...

I am not aware of this. No one has come up to me with this problem.

Then there are incidents such as SunEdison filing for bankruptcy...

If Kingfisher shuts down, does it mean the entire aviation industry will go for a toss? Indigo is making profits; Air India is in operating profits. One such incident (SunEdison) does not set the parameter for the whole sector.

The dip in tariff is also hurting domestic solar manufacturing...

I recently met with solar manufacturers addressed many of their concerns. I committed to them that whatever they produce will be consumed. We are working on a manufacturing policy and will support players if they are keen to expand operations.

This policy requires integrated projects, but globally there are no examples of manufacturers who can produce right from polysilicon to modules...

A team led by Niti Aayog's CEO, Amitabh Kant, studied the matter and drafted this policy. I am not aware of it. Now Upendra Tripathy's (Secretary, Renewable Energy) team is working on it.

What is your review of UDAY? Are states working on the plan suggested by you to cut AT&C losses?

The progress is very satisfactory. We have just reviewed how the data from states will be compiled, how we will sanitise and monitor it. Earlier, the data from states used to be accepted in whatever form they were sent in. The data itself is suspect. We are doing a root-cause analysis and sorting out this problem right from the beginning.

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