Out of 55,000MW of power capacity added during the eleventh plan, TN accounted for a mere 842 MW.
THE STATE THAT accounts for 8.5 per cent of the nation’s capacity and consumption of power had accounted for a mere 1.6 per cent of capacity addition, pointed out Anil Razdan, former Union Secretary of Power, Oil and Natural Gas.
For nearly a decade, IE has been pointing to the neglect of the power sector that has landed the state in the crisis today. Outside Chennai metro, the state suffers power cuts up to 16 hours, crippling industrial and agricultural production. Even within the metro there is a scheduled two hour power cut daily apart from unscheduled outages and dips in voltage.
Razdan pointed to inadequate additions to create fresh power capacity even during the twelfth plan: against plans to add 90,000MW all over India, Tamil Nadu is working on an addition of mere 4891 MW(5.4 per cent).
Where is the private sector?
Yet another fact of concern is the absence of private sector in power generation in the state. Razdan mentioned: “against 16,732 MW of capacity added by the private sector across the country during the eleventh plan, Tamil Nadu’s share was a mere 92 MW.” The reasons are understandable: the off repeated boast of the DMK supremo, M Karunanidhi, of his leftist leanings; a more valid cause is the extremely bad state of the electricity board’s finances that results in delays, of around 15 months and more, to settle bills on power delivered by power producers, mostly through wind mills.
Former Chairman and Managing Director of NTPC and President of India Energy Forum, P S Bami provided a comprehensive picture of the power scenario of the country. He described the power position of the state as very bad and pointed to the losses suffered by electricity board shooting up from Rs 1219 crore in 2006-07 to Rs 27,719 crore for the year ended March 2011. “the net worth has become negative. The expenditure incurred on power purchase is more than its revenue and loans have been mounting. Even the audited statements of the board are not available for the last two years,” he pointed out. R Raghuttama Rao, Managing Director, ICRA Management Consulting Services, K V Rangaswami, Advisor to Chairman, L&T and S Kabilan, former Chairman, Tamil Nadu Electricity Regulatory Commission who addressed the seminar on TN power dynamics and future prospects, referred to the different aspects of the current crisis. Understandably, TN Minister of Electricity who was listed to participate and officials from the government and the electricity board were absent.
While the meet provided a picture on the crisis, there was not much discussion on the way forward.
Relief from solar may take time
One hears of the state’s plan to resort to solar power for bringing about some relief. It is true the price of solar modules have fallen steeply over the last one year, after the emergence of China as a large manufacturer. Director IIT-M, Bhaskar Ramamurthy points to the potential of solar power to take care of bulk of the requirements of domestic power through roof top solar panels and of agriculture where land space may not be a constraint. Dr Ramamurthy argues that since these two segments account for nearly half of consumption, their switching to solar power can bring about a lot of relief to industry and public utilities. But he cautioned that the technology is still evolving and may take time to stabilise.
Consortium for power plants
The Congress government of TN was closely involved with two giant institutions- Neyveli Lignite Corporation and BHELTiruchi. Both are highly efficient and profitable. In L&T Construction, the state has another top class institution in the infrastructure area; besides these, the state is blessed with four large ports- Chennai, Ennore, Kattupalli and Tuticorin. It can leverage these strengths to build capacity quick. As early as 2002, IE suggested a scheme to form a consortium of these institutions to build large power projects.
The contrast provided by Gujarat
A basic reason for the ills of the electricity board is the lack of attention to power production and distribution. D J Pandian, Energy Secretary from Gujarat, provided his state’s experience in building a profitable enterprise. Look at the record of the state:
• Power capacity increased from 8000MW in 2001 to 16,500MW in 2011. By December 2013 an
additional 4400MW of fresh capacity, including 1000MW based on gas, is anticipated.
• Transmission network expanded over the last ten years, from 705 substations to 1275.
• An investment of Rs 12,000 crore made on the transmission network.
• Seven years ago through the Jyoti Gram Yojana, village power plan, the state set up separate feeders to meet agriculture and other rural power needs. Through these 24x7 uninterrupted power is supplied for domestic consumption, small industries and other institutional needs; uninterrupted, 8-10 hours of power supply is made for agriculture through the separate feeder.
• Agriculture continues to be the largest consuming sector accounting for nearly 35-40 per cent of total
consumption.
• There is no free power.
• In 2005 separate companies were set up for generation, transmission, distribution (four companies for four regions) and a holding company for co-ordination and trading.
• The power sector recorded a loss of Rs1932 crore in 2003-04; reduced this to Rs 927 crore next year but has been making profits in each one of the seven subsequent years. In 2011-12 the profits were at a record Rs 834 crore.
Tamil Nadu provides the contrast. After being in the wilderness for 22 years from 1977, the DMK announced free power for agriculture in its election manifesto in 1989; the party fulfilled its promise as the first act after assuming power. What started as a subsidy of Rs 200 crore per year has snowballed to Rs 6000 crore over the next two decades. The state failed to draw any long term policy for power development. Significantly, the expanding volume of subsidies has been eating into the vitals of the state’s finances. Over the last twenty years, Tamil Nadu, among the developed states, has the record for adding the lowest capacity for power.
Gone with the wind…
One is too familiar with the hype created in wind energy. Though Tamil Nadu accounts for the lion’s share of wind energy capacity on which huge investments have been made making use of tax incentives, it is not steady power and the reliability factor is low. A similar hype should not be created for solar power. One should also caution against the dependence on the handsome subsidies indicated. It is so much more difficult to avail these given the bureaucratic hurdles.
Fast track the UMPP
I make a couple of suggestions:
1. To speed up the Ultra Mega Power Plant at Cheyyar announced nearly four years ago working on environmental clearance, coal linkages, etc TN should get this plant operational over the next 48 months. Remember this capacity is outside the plan.
2. Gujarat provides a model for inviting private investments in a big way. The state took bold to set up capacity in anticipation of gas allocation and as a result got priority in this. The Krishna-Godavari Basin has a lot of promise to produce natural gas in copious volumes. With the pricing issue decided by then, one may expect production in large volume by Reliance, ONGC, GSPC,... The TN government should invite private operators with experience and resources to work on this, guaranteeing full back up.
IE, the business magazine from south was launched in 1968 and pioneered business journalism in south. Through the 45 years IE has been focusing on well-presented and well-researched articles. When giants in the industry stumbled to keep pace with the digital revolution, IE stayed affixed embracing technology.
