Financial Daily from THE HINDU group of publications
Monday, Sep 09, 2002
Industry & Economy
Corporate - Trends
High power cost forcing cos to shut down in Karnataka
BANGALORE, Sept. 8
HIGH power costs are forcing more companies in Karnataka to shut down operations leading to contraction in employment opportunities in the State.
According to a survey conducted by the Greater Mysore Chamber of Commerce, the number of high-tension installations in the State has been increasing at an annual rate of 7.05 per cent. However, during the same period, power consumption has actually been increasing only at about 3.25 per cent, according to the survey.
The survey has also brought out certain discrepancies in the figures for increase in HT consumers. This is because the number of installations does not imply that all the 2,865 consumers are actually drawing power. Secondly, the survey shows that if the scheme of Rs 3.25 a unit is offered for certain categories of consumers by the power utility, the actual growth in consumption is only 7.27 per cent. But, the increase in power consumption due to increase in the number of installations was just 3.62 per cent, implying an incremental consumption increase of just 3.65 per cent.
Some of the industries have been making investments in captive generation according to the survey, to meet their peaking and base load requirements. But of the sample size of 33 companies, the average cost of captive power is more than Rs 4 per unit for. The lowest cost for captive generation was by ITC Ltd at Rs 2.10 a unit. The highest power cost incurred for captive generation was by the Hindustan Aeronautics at Rs 8 a unit. The high cost of captive generation is mainly due to the fuel used. Most of the captive users have generators based on high-speed diesel as the fuel.
Some of the installations have opted for captive set to meet the deficit between the contracted demand and the maximum demand. At least 11 of the companies surveyed operate at more than 90 per cent of their contracted demand.
MICO, for instance, has a contracted demand of 65,00 kilovolt amps (kva) whereas the maximum demand is 7,500 kva.
This implies a shortage of power during the peak operating period of the company, leading to reliance on captive generation.
But what prompted some of the companies to resort to captive generation is the low quality of power available from the grid and poor voltages, according to the survey.
The installed capacity of captive generation within the 33 industries surveyed is about 71 mega volt amperes or about 60 mega watts.
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