Ad Here  
Oil sector reform: missed opportunity The rebirth of the Indo-US nuclear collaboration Dawn of a New Energy Era? The time for it is now Ambitious goals, uneasy path Anachronism of Asian premium Riddle wrapped in a mystery A golden age of gas? Allow market forces to shape destiny Current impasse short-lived… Ending the mother of all corruption Welcome improvements in coal production Gujarat has 2200km gas grid, TN shuns this! Rural prosperity will propel development Awaiting a new(nu) year(clear)! A praiseworthy pricing policy Clean energy sector catches up with thermal power Piped gas a pipe dream Why has it not fallen enough? CEA versus CEA A sound energy strategy... Maha merger – a beginning Why ONGC should pay nothing to buy a stake into GSPC’s KG block path One of a kind project... Huge under-recoveries continue Where is Moily’s prophecy of energy independence? Paying for sins of the past... A small first step towards the state’s solar mission Game changer in unexpected way How prepared are we for the energy transition? Clean energy sector catches up with thermal power A sun-rise industry turning sun-set
Huge under-recoveries continue
Tamil Nadu had passed through a severe power crunch through 2012-13. This was the result of the neglect of making adequate investments in power in three successive plans – the eighth, the ninth and the tenth.

Even when corrections were made to step up investments in the subsequent plans, humongous delays suffered in implementing the ambitious projects landed the state in an unprecedented crisis. These delays extended to six to seven years for the Kudankulam Nuclear Power Project to 56 months for the Neyveli TPS II and 45 months for Tuticorin thermal plant. The least delay of 15 months was suffered by the Vallur thermal plant Phase II and the Mettur thermal power station.

The massive under-recoveries of power supply due to the reckless policy of heavy subsidisation without due and timely compensation from the state budget, landed TANGEDCO with humongous losses cumulatively adding to over Rs 41,000 crore.

Madras Chamber of Commerce & Industry, with the expert lead of ICRA Management Consulting Services Ltd and in cooperation with the India Energy Forum has been focusing on the power situation in the state. The annual conference participated by some of the best energy experts of the country like former Power Secretary Anil Razdan, former Chairman and Managing Director of NTPC, PS Bami, who along with D V Kapur, built NTPC into a global power producer and senior leaders from major power generation and equipment producers in the country have been presenting a clear picture of the state’s power position.  

While there has been relief over the substantial improvement in the power position today compared to 2012 - the crisis year, when the state, except the capital, suffered long hours of scheduled and unscheduled power cuts, still there are severe constraints. The conference summarised these; Excerpts:

•    Power supply situation has improved significantly with the energy deficit reducing from 17.5 per cent in FY 2013 to 5.9 per cent in FY 2014. Thermal power capacity is expected to expand by 8000 MW during the 12th plan, 2012-17.

•    The conference suggested a long term power procurement plan, securing access to fuel sources over the long term and creating adequate transmission corridors. The last one is of special significance. The state suffered serious disabilities due to transmission constraint within the state, within the region and inter-region. Even today the state suffers from its inability to utilise fully the wind power and solar power created with great imagination. Bami pointed to the delay further compounded by the inability to utilise effectively the Sholapur-Raichur 765 KV line recently commissioned by Power Grid Corporation to transfer power from the north-eastern grid to southern region.

•    The ambitious Vision 2023 document that envisages economic growth of 11 per cent per annum very much depends upon the rapid expansion and utilisation of the energy sector.  In this, the targets of 20,000 MW of thermal power and 10 MMTPA of LNG capacity and a gas grid assume importance. In both these, planning and execution sights are tardy.

•    Though the state is the first to opt for the financial re-structuring plan of its electricity utility, the progress does not seem to be adequate. The regular revision of tariff to cover costs, the bridging of gap between average cost of supply and average revenue realised, timely audit of accounts are not progressing to the desired extent. The tariff revision being a sensitive issue with political parties in total opposition to any revision, TANGEDCO has been finding it extremely difficult to ensure full recovery of costs or to make good the shortfall by budgetary support – the finances of the state are in themselves not in great shape. The state immersed fully in a subsidy culture with agriculture enjoying free supply of power for 25 years and gross under-recovery from domestic consumers, faces stiff resistance for any tariff revision. Already tariff levels are pretty high.

•    Sadly, despite the state creating handsome capacity for wind power of close to 8000 MW, lags in transmission system, a fair policy of payments for power purchased and transmission bottlenecks lead to  gross under-utilisation of the handsome capacity created. Even in regard to solar power, though the state was among the earliest to announce a policy, it has not delineated the details to perfection. The result is a poor growth in solar capacity.

As in the previous two years the Power Minister listed to inaugurate the conference was a no show.  Sadly, there was no participation by the state’s power utility or the power administrators.


Author :
Reported On :
Sector :
Shoulder :
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.
Read more
Economist Communications Ltd is committed to ensuring that your privacy is protected.
Read more
You agree that your use of this Website and the purchase of the magazine will be governed by these terms and conditions.
Read more
S-15, Industrial Estate,
Chennai - 600 032.
PHONE: +91 44 22501236