3rd Power Focus Summit: Ratul Puri on India’s Energy Challenge

Today the 3rd Annual Power Focus Summit took place at Hotel Le Meridien, New Delhi. Different personalities were present at the conference including Mr. P K Pujari, Secretary, Ministry of Power, Government of India, Mr. Deepak Lamba, President TCL – BCCL, Mr Gopal Saxena, Director, BSES Rajdhani and Yamuna Power, Mr. Sanjay Sagar, Joint MD & CEO, JSW Energy and Mr Sudip Sural, Senior director, CRISIL Ratings.

Mr Ratul Puri, Chairman, Hindustan Power Projects referred during his inaugural address to the huge potential that the Indian power sector contributes to the country’s investment in energy supply. ‘A lot has changed in the last few years. India is on a growth path with high GDP growth rate, a thin sliver of current account deficit and a considerably low fiscal deficit ratio. We have seen multiple programs like Make in India, Skilling India, Start Up India that will help India to sustain this growth over the medium and long term. After a long time, people outside are looking at India as a country that can truly deliver. The next decade will be the decade for India. There is a lot of faith in Indian potential which if we miss the bus this time around will be difficult to deliver in the future. One sector which has seen a major movement and change in recent times has been the power sector.’

Ratul Puri’s words show us how poorly India fared when it came to providing electricity. Today, talking about 24 by 7 power is something possible in the near future,’ Puri said. However, we still have a long way to go. At the same time, we need to be cautious as there are still many issues that need to be addressed,” Puri further said. 

One of the other variable’s Mr Puri brought up was the ability for discoms to uplift the surplus of generated power, as this lack of absorbing power is an issue India is currently grappling with, especially when talking about meeting the renewable energy targets India has set for itself. “The Government has been working proactively to rectify this anomaly. The launch of UDAY for financial restructuring of discoms is a welcome step in this regard. However, we must ensure its speedy implementation and look to improve fiscal discipline of discoms at the earliest to see the desired results,” Mr Puri says.

The recent trends in power and energy demand seem to have affected Mr Ratul Puri, since he mentions that there has been a downturn in the emerging need in the energy sector while the energy prices have taken a dive during exchange trading sessions. He however expects 6000 MW worth of bids to be completed in the next two years which I would say is quite conservative as there is a much larger thirst of over 15, 000 MW worth of energy resources that the market has left dormant. As far as the coal sector is concerned, Mr Puri stated that we have still a long way to go so we must continue to boost coal production while working to redistribute the mines that were lost due to the ruling of the Supreme Court.

On the solar front, while appreciating the falling solar tariffs in India, Ratul Puri cautioned that as stakeholders in the sector, we need to be circumspect and careful in bidding to avoid a repeat of the situation witnessed in case of coal block auctions which saw a number of unsustainable bids “There has been a lot of talk recently on the low price bids we have seen on solar side. I think we need to be careful in not celebrating this too early. Maybe it is a good move but if investors don’t generate a reasonable return on their capital and banks, once again, get hurt in this renewable cycle, I think we have set ourselves back by a couple of years,” Mr Puri noted.

Mr Puri further accentuated the need of making greater efforts in order to revive the hydro sector. In his opinion, hydro power is a great resource for India’s energy mix for it is clean and indigenous. But most importantly, hydro can be an ideal foil to solar and wind, with the ability to store energy and release as per demand. In addition to this though, almost all of hydro generation occurs during the monsoon season when solar generation is not significant. On the other hand, the present risk reward ratio cannot accommodate the development of new assets, which should be considered.

Hindustan Power – Overview

Hindustan Power with a dream of developing Power of 6000 MW by the year 2020 in thermal, solar and hydro is one of the prominent players in the power sector from India. The Company is in advanced stage of commissioning over 5000 MW by 2017 of combined power assets with an investment outlay of estimated INR 32,000 crores ( USD 5.15 bn ). Apart from the above, the company is also developing more than 6100 MW of capacity through conventional and non conventional energy sources in India, Europe and USA. India is the world’s 4th largest consumer of energy after the USA, China and Russia, but does not have the privilege to possess ample energy resources. Hence, it has to fulfill its developmental requirements by utilizing all the resources at hand. This understanding helped the Company to consider their focus as: renewable energy in short-mid term and conventional energy for mid-long term. Secure supply chain management, diversified customer mix and focus on the right technology for the right geography ensures a low risk growth.

Hindustan Power is of the view that achieving maximum corporate growth must go hand in hand with fulfilling the social responsibility of the corporation The company’s registered office is based in New Delhi and its power generation facilities are located in the states of Chhattisgarh, Gujarat, Tamil Nadu, Odisha, West Bengal, Madhya Pradesh, Punjab, Uttar Pradesh and Himachal Pradesh in India and in other regions such as Germany, Italy, US, UK and Japan.

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