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Power deficit peaks in the South of India

According to reports, exposing chinks in the latest turnaround of the power sector’s performance at the national level, southern states are seeing the power scenario touch worrisome levels. The region failed to meet up to 17 per cent of its peak power demand of 36,000 megawatt (Mw) in January. This was the highest monthly deficit in the south in recent times.

By contrast, the western region registered a deficit of 5.8 per cent, eastern region 5.4 per cent and the North faced a shortfall of 10 per cent during the month. The supply crunch led to load-shedding of 4,000 Mw in Andhra Pradesh, 3,327 Mw in Tamil Nadu and 2,500 Mw in Karnataka in January.

The crisis is primarily the result of the ongoing slump in fresh capacity addition, a historic dip in hydro reservoir levels feeding southern stations, decline in gas supply from Reliance Industries’ KG-D6 block and coal crunch for thermal stations. With all the three fuel sources – coal, gas and hydro – blocked and local protests having spoiled the commissioning of the Kudankulam nuclear power plant, the energy lifeline of the region has been snapped.

“We are faced with an unprecedented situation in the south. Something of this nature and extent has never occurred before,” a top official from the Central Electricity Authority (CEA) told Business Standard, requesting anonymity. “A similar situation in any other region would have been salvaged by importing power from surplus states in other regions. Currently, we have surplus in central and eastern states, but it cannot be exported to south due to a lack of transmission corridor.”

Unlike the four other regional grids, which are well-connected, the southern grid is connected to the eastern and western regions through asynchronous links, severely limiting the power transfer capacity. The transfer capacity between the western and the southern regions stands at 1,520 Mw against 4,220 Mw between the western and northern regions and 4,390 Mw between the western and eastern regions. For integrating the southern grid, the power ministry is now executing a Rs 2,000-crore project to build two 765 Kilovolt transmission lines, connecting Raichur in Karnataka with Solapur in Maharashtra. The integration, however, will have to wait until February 2014.

The southern region’s power capacity grew by a dismal 3.2 per cent to 54,454 Mw between April and January this financial year. This compares with 7.1 per cent growth registered by western states and 6.2 per cent growth in the northern region. “All the big power projects scheduled for commissioning this year in the south have been delayed. This includes the 2,000-Mw Kudankulam plant, 1,200-Mw North Chennai plant and the 1,500-Mw Vellore plant,” the CEA official said.

Hydro reservoir data from the Central Water Commission shows that current storage in the Krishna River basin, which feeds southern reservoirs and is the largest basin in India, is a mere 6.8 billion cubic metres (BCM) – 22 per cent of its capacity of 31 BCM. It is 31 per cent less than the average of the last 10 years.

Andhra Pradesh
The state is facing its worst-ever power crisis owing to a fall in natural gas production in the K-G basin and low hydro reservoir levels. While the state has 16,000 Mw of installed capacity, it is able to supply only 11,000 Mw during peak hours, even after purchasing an additional 1,600 Mw from outside.

With power supply to industries restricted to 60 per cent of the demand, the growth of industrial output fell to 0.73 per cent in 2012-13 from 7.71 per cent in the previous year. Power utilities diverted power to maintain a seven-hour supply to the politically-sensitive farm sector, which consumes 40 per cent of the total supply, eroding the revenue base of utilities.

The situation forced the utilities to increase rates in the last couple of years. A record rates hike has been proposed for 2013-14 for the industrial sector and the situation is gradually improving now. “The seven-hour supply to the farm sector is being maintained. We have got 900 Mw in additional purchases through various sources, including the power generated using RLNG (re-gasified liquefied natural gas) and naphtha,” Hiralal Samaria, chairman and managing director of APTransco said.

Reduced output from gas-based stations has acted as a major blow. The private generators have an existing capacity of 2,495 Mw, but are able to generate only 820 Mw from natural gas supplied from Oil and Natural Gas Corp wells and naphtha. Also, the 3,000 Mw gas-based capacity added last year has remained idle.

On the hydel front, Andhra Pradesh has a total installed capacity of 3,829 Mw of which only 530 Mw is being generated in the morning and 1,280 Mw in the evening peak hours. Water level in the Nagarjuna Sagar reservoir has come down from 20 per cent of capacity last year to a mere one per cent now. Similarly, the Somasila reservoir’s storage has come down to seven per cent of capacity from 61 per cent last year.

State-owned power generator Karnataka Power Corp Ltd has not commissioned any mega project this year. Also, among the large sized existing projects, Lanco’s Udupi Power Corp Ltd is supplying only 750 Mw against its capacity of 1,200 Mw to the state grid due to coal shortage. On the hydro front, the Krishnarajasagara dam, which had water storage of 41 per cent of capacity last year, has now been dried up completely. Current storage in another reservoir, Kabini, is zero per cent of its capacity. Further, adding to the problem, the state’s allocation of 1,836 Mw power from the central quota has been curtailed by 436 Mw.

As against the committed schedule of 24 hours supply in Bangalore city, the state government is supplying power for around 22 hours. In rural areas, it is supplying for only three hours. The state has tied up 1,280 Mw power through power purchase agreements, sourcing 500 Mw each from Gujarat and Chhattisgarh, 200 Mw from Jindal Power and 80 Mw from BMM Ispat Ltd.

Tamil Nadu
The state is facing a daily power shortage of 4,000 Mw over a demand of 12,000 Mw. The prime reason for the power crunch is the absence of any major capacity addition in the recent past. The bad financial health of state distribution companies, with a combined debt of Rs 45,000 crore in 2011, has squeezed the utilities’ ability to invest in new capacities. Additionally, the seasonal nature of wind power, which accounts for 12 per cent of the total power production, has acted as a dampener.

“In the current situation, even if there is power surplus, there is no transmission line available to transmit it. So far, there was only one transmission line available for the four southern states. Work for another line is in the progress now, though it should have been done almost 20 years back,” Natham R Viswanathan, minister of electricity for Tamil Nadu had said last November.

The state is currently suffering from a severe power cut, ranging from two to 15 hours daily. In Chennai, where major foreign industries are set up, the power cut is of two hours, while it goes up from eight to 15 hours in other parts, including industrial hubs like Coimbatore.

The situation, however, is set to improve. The state government has approved a financial restructuring plan to address the adverse financial position of Tamilnadu Generation and Distribution Corp Ltd (Tangedco). According to state finance minister O Pannerselvam, half of the Rs 12,211 crore of short-term liabilities of Tangedco will be taken over by the state government. Further, the cash loss will also be part-financed by the state, beginning next year.

The State government has said power projects worth Rs 21,000 crore will be taken up to address future power demand. With some additional supply from the Kundankulam plant, the state is expected to come out of power shortage in 2013, according to officials.

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