Russell Green, Will Clayton Fellow in International Economics, recently wrote a blog entry for the Wall Street Journal’s India blog, India Real Time, titled ” Can India Even Acquire Enough Coal?” Green makes the point that it is difficult to quantify how many new power projects have been scrapped because of upstream and downstream uncertainty for India’s power producers. One article in the Indian Express (“Coal supply low, power projects of over 32,000 MW shelved, delayed” recently provided specific quantities of power capacity affected. However, it did not cite a source and public data would necessarily not be available. Perhaps the Center for Monitoring the Indian Economy (CMIE) proprietary CapEx database could be examined. Another recent article in the Economic Times (“Lenders Turn Away Power Cos, say CIL Fuel Pacts not Bankable“) provides similar support from the Association of Power Producers on the number of projects on hold because of the same financing uncertainty, but does not discuss projects scrapped.
Also, here’s a graph of where new power supply in India came from last year. Note that while the private sector coal producers are a small share of total generation capacity (19 of 187 GW), they provided almost all new capacity (53% year-on-year growth or 39% of total new capacity in 2011).
Source: Central Electricity Authority of India
Russell A. Green, Ph.D., is the Will Clayton Fellow in International Economics at the James A. Baker III Institute for Public Policy. Green spent the past four years in India, where he served as the U.S. Treasury Department’s first financial attaché to that country. His engagement in India primarily focused on financial market development, India’s macroeconomy and illicit finance, but included diverse topics such as cross-border tax evasion and financing global climate change activities.