According to reports, even before Chief Minister Jayalalithaa assumed charge, she rightly identified power shortage as a top priority area of the administration. In her early interactions with the press, she emphasised that her government would make all endeavours to turn Tamil Nadu into a power-surplus State from the present power-deficit situation now.
The new government’s seriousness in the power sector was evident in the address delivered by Governor Surjit Singh Barnala to the Assembly on June 3 and in the budget speech of Finance Minister O. Paneerselvam on August 4.
It is not merely power shortage but also the financial health of the State power utility – Tamil Nadu Generation and Distribution Corporation (TANGEDCO) – which has been an area of deep concern to Ms. Jayalalithaa. In her memorandum submitted to Prime Minister Manmohan Singh in June, she highlighted how precarious the finances of the TANGEDCO were.
Reforms in the energy sector, a long-term strategy for the planning and execution of power generation projects and separation of distribution feeders form part of the contours of the government’s broad thinking. A pro-active approach to the promotion of renewable energy, especially solar energy, is another important element of the new administration’s plans. As a mater of policy, the government will encourage private sector and joint venture investments to augment power generation. The government, which is taking steps to increase the resources of TANGEDCO as a short-term measure, is working out a long-term strategy for complete financial revamping to restore the financial health of the Corporation, says the budget document.
At the TANGEDCO, a special cell has been formed to monitor the execution of ongoing generation projects. Three major projects, of which two are being implemented by the power utility, are expected to be commissioned by March-end. One 600 MW thermal power unit at Mettur and another such unit at North Chennai are being put up by the State power utility, while one 500 MW unit at Vallur is a joint venture project of the NTPC and the TANGEDCO.
On improving the finances of the TANGEDCO, the government has provided ways and means advance and share capital contribution in the form of short-term measures. It is contemplating debt swapping in the case of high cost loans. The government has fixed the ceiling of Rs. 4.5 per unit for the average cost of power purchase on a temporary basis.
The optimal utilisation of wind energy is an integral part of the overall strategy of the government. In the last 100 days, 178 MW of wind mills has been installed. The government has made it clear to the TANGEDCO and Tamil Nadu Transmission Corporation (TANTRANSCO) to create adequate infrastructure for transmission of wind power.
Given this backdrop, the proposal of laying an exclusive inter-State corridor for wind power transmission assumes significance. It is estimated to cost Rs. 3,800 crore and Tamil Nadu is awaiting Central assistance in this regard.
Solar energy has become the mantra of the new administration. The construction of 60,000 solar-powered houses of 300 sq. ft is annually one of the flagship projects of the government. The installation of 20,000 street lights with solar power in villages is another major initiative of the government.
Over and above, a new policy on renewable energy is being formulated. This will facilitate providing further impetus to this sector. As a senior official puts it, the government will see to it that there is a qualitative improvement in every aspect of the power sector in future.