Maharashtra Chief inister Prithviraj Chavan's announcement that state will be load-shedding free from January 2013 comes with a rider. The state can no longer afford to be over-dependent on power purchases from the Maharashtra State Power Generation Company Limited (MahaGenco), NTPC and Ratnagiri Gas and Power Pvt Ltd (RGPPL), but will have to buy even more power from private producers, power exchanges and traders at competitive rates.
Besides, Chavan has hinted that loss-making regions, those having distribution losses of more than 50 per cent, would have to pay more to avoid load shedding. At the same time, consumers by and large will have to share fuel adjustment cost, as the state-run Maharashtra State Electricity Distribution Company (MahaVitaran) is not in a position to bear the additional power purchase costs.
"As of now, the state is meeting 12,500 MW of demand against the total requirement of 13,000 MW. The load shedding is carried out especially in the high loss making areas. Demand for power is growing at 8 per cent annually. At present, MahaViataran draws power from RGPPL (erstwhile Dabhol project) at Rs 5.81 per unit, from MahaGenco's new units above Rs 4 per unit and NTPC's new units Rs 4.15 per unit. However, in the market the round the clock power is available between Rs 3.80 and Rs 4.05 per unit," a MahaVitaran official told Business Standard.
The official informed that Maharashtra used to meet 95 per cent of its power requirement from MahaGenco and NTPC seven years ago, but it has now come down to 60-65 per cent. Currently, nearly 40 per cent power is drawn from private producers thanks to the huge capacity added by them over the past few years.
The MahaVitaran official said that currently, the state has about 700-900 MW of surplus power during 6 pm and 6 am. "Therefore, MahaVitaran has made a plea with the state regulator to provide the excess power to industries during night with a rebate of Rs 2.50 per unit from the present level of Re 1 per unit," he added. According to the official, MahaVitaran has floated a tender for the purchase of 300 MW during day-time between November 21, 2012 and January 31, 2013.
Jayant Deo, former member of Maharashtra Electricity Regulatory Commission, said that the state needs to do power purchases at increasingly competitive rates. "The competition has set in the power sector due to power exchanges. This fact needs to be noted by states like Maharashtra. By not accepting this fact, the state is not following merit order purchases and continues to draw expensive power from state units even though cheaper power is available on the power exchanges and with private generators. If Maharashtra really wants to get rid of load-shedding, the state must embrace competition directly for 1 MW and above consumers and also buy power as required from private generators and power exchanges at competitive rates."
According to power sector analyst D Radhakrishna, for power distribution companies to buy cheaper power, power procurement should be done on a long-term and mid-term basis, instead of resorting to short-term power.
"However, today we have some power generating units operating on captive mining and long-term coal linkages and these power plants can be roped in for selling cheaper power as cost of coal to them is Rs700 for 4500 GCV (gross calorific value) as against imported coal and coal purchased from open market costing Rs 3,500 per tonne for the same quality of coal," he added .