A report by global accounting and consultancy firm Deloitte Touche Tohmatsu says lack of fuel availability and weak finances of distribution utilities are crippling the growth of Indian power sector.

Coal linkages awarded to projects under construction had actually less reserves compared to estimates, increasing risk of inadequacies in supply, said the report ‘Empowering Ideas 2011- A Look at Ten of the Emerging Issues in the Power and Utilities Sector’.

‘Even if the plants begin to increasingly depend on imported coal, the increased cost may not always be a pass-through in tariffs determined through competitive bidding,’ the study pointed out.

‘Non-approval of expenses by state regulators due to non-achievement of efficiency targets and lack of investment by utilities due to poor financial health have become a vicious cycle’ the report stated.

The report commended the progress in the wind and solar power sectors, but said the growth of small hydro projects, with installations of a mere 307 Mw in the last financial year, had been slow.

On nuclear energy, the report identified calls for enhanced safety standards in the post-Fukushima scenario another emerging issue globally. In the Indian context, the report noted the proposed 10,000-Mw Jaitapur and 6,000-Mw Bhavnagar plants were seeing increased opposition.

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