Integration of Short and Medium/Long Term Planning in the Indian Power Sector

Abstract

The power supply situation in India is characterized by shortages. In response to this situation, many industrial consumers have invested in captive generation facilities for their own use. Although the use of small, expensive, diesel-based captive generator sets may be rational from the viewpoint of the industrial entrepreneurs, their use is not the least-cost option for the Indian economy. While it is recognized that medium- to long-term planning is essential, it is realized that additional shortages will emerge in the short term if the utilities prefer to invest largely in hydro, nuclear and steam thermal technologies--all of which have relatively long gestation periods of over five years, but are more economical than small decentralized diesel generators. The relative economics of gas turbines in the combined cycle mode (which may be commissioned within three to four years) is demonstrated by using a linear programming approach.