The Hindu Business Line : Maharashtra to be power surplus by 2010

Notwithstanding the efforts being made by the Maharashtra Government, the State, considered to be India’s financial capital, continues to reel under power shortage.

Being a key component of the infrastructure needed to boost any economy, power shortage has been spreading ripples of concern in corporate and business circles in the State. Estimated to be reeling under a power shortage of at least 4,000 MW, planners feel that the State, in the long run, will have to substantially augment supply to the burgeoning industries in Maharashtra.

The Maharashtra State Electricity Board (MSEB) had recently said that augmentation of power would require an investment of over Rs 55,000 crore by 2009-10. This includes Rs 5,198 crore for generation, Rs 2,899 crore for transmission and Rs. 7,332 crore for distribution, apart from an estimated Rs 40,000 crore as additional investment for zero load shedding on all these three fronts.

For, going by the present generation and distribution capacities, Maharashtra may have to face a deficit of almost 8,000 MW by 2009-10, if there is no capacity addition.

Says Mr Nayan Patel, President of the Indian Merchants Chamber (IMC): “To make matters worse, a steep hike in tariff rates has recently been mooted. For industry, which is in the midst of restructuring and which is striving to cut costs, the move is a serious cause for concern.”

The State Government is aware of this shortcoming and has drawn up plans to make Maharashtra a power surplus State by 2010. Says Mr. V.K. Jairath, Secretary (Industries): “We intend to generate an additional 12,500 MW by 2010 both through government and private projects.” He said an investment in the region of $ 27 billion is expected to pour into the State’s power sector by 2014, including $ 12 billion for generation.

Power, doubtless, is considered the ‘infrastructure or infrastructure’ and the most critical ingredient for economic development. Maharashtra unfortunately has seen a steady deterioration in this segment, with no significant addition to the installed capacity and major fast track projects getting either stalled or delayed. Further, the demand-supply mismatch arising out of insufficient augmentation of capacity, the high T & D losses and debilitating thefts have resulted in the State having to resort to heavy load shedding, which in certain places is so bad that these regions have had to go without electricity for hours together.

At present, the State’s power requirement is met from MSEB, as also from the Central Government power projects, Tata Electricity Company, Reliance Energy and Maharashtra Energy Development Agency (MEDA). The State Government, under the National Electricity Act 2003, has transferred the property, interests, rights, liabilities, obligations and personnel of MSEB to four companies — Maharashtra State Power Generation Co Ltd (Mahagenco), Maharashtra State Power Transmission Co Ltd, Maharashtra State Power Distribution Co Ltd and MSEB Holding Co Ltd.

According to the Ministry of Power reports, Maharashtra has an installed capacity of about 13,000 MW and 3,278 MW capacity of hydro power, the highest in the entire Western region. As compared to this, Gujarat has 8,360 MW, Madhya Pradesh 3,604 MW, with the combined installed capacity in the western region, including Chhattisgarh and Goa being 27,279 MW.

Analysing the power consumption pattern, it shows that the industrial sector in the State is the largest consumer of electricity (about 40 per cent), followed by the domestic sector (23.2 per cent) and agri-sector (about 19 per cent—the three together accounts for over 80 per cent of the total consumption in the State.

The capacity addition in the State has been steadily falling from 1999-2000. A report prepared by the IMC points out that the capacity addition was of the order of 774 MW in 1999-2000, which fell to 420 MW in 2000-01, 163 MW in 2001-02, two MW in 2003-04, 91.72 MW in 2004-05 and 564 MW in 2005-06.

Correspondingly, the shortage has increased over the years. From 18.66 per cent in 1999-2000, the shortage in power availability increased to 19.81 per cent in 2002-03 and 23.08 per cent in 2005-06.

Load factor

The IMC report also pointed out that during 2004-05, the average plant availability factor (AVF) of thermal power stations of MSEB was 85.57 per cent and that of Tata Electric Company was 94 per cent. The plant load factor (PLF) of MSEB was 76.62 per cent and that of TEC was 81.6 per cent during that year, as against the average PLF in India was 75.9 per cent. The AVF is influenced by many factors like the quality of coal, quality of maintenance and age of plant, while the PLF hinges on the quality of load management.

Tracing the genesis of the power problem facing the State, the IMC report said the installed capacity increased annually at the compound rate of 10.6 per cent during the first decade (1961-71), while during the decade 1995-2005 it only increased at the compound rate of 4.6 per cent, less than half the rate in the first decade.

This is in contrast with other States like Gujarat, which had gone in for significant capacity additions. In fact, thermal power capacity remained unchanged at 8075 MW between 2000-01 and 2005-06, while other competing States had built-up capacities.

Financial position

After 2000, the State’s ability to augment capacity was seriously marred by the weakening financial condition of the electricity board, primarily owing to factors like free power to agriculture, rising T&D losses and collection inefficiencies.

According to the IMC report, Maharashtra’s power woes got aggravated because of the over-withdrawal of power by the northern states and serious mis-management in the power grid system. It may be recalled that late last year, the synchronisation between Muzzafarpur and Gorakhpur had led to the diversion of substantial power from the State’s network—in January this year too, the State faced a similar problem.

However, it is not that the State Government has not taken measures to ease the power crisis. Mahagenco has proposed to increase the capacity by 2,800 MW by 2009-10. Also, the company has signed a MoU with eight private companies for a total capacity addition of 12,500 MW.

Ultra mega projects

In addition to these, the Government of India has proposed ultra mega power projects at coal put-heads and at coastal locations — in the tentative allocation from such project, Maharashtra is expected to receive a total of 3,800 MW, out of which 800 MW will be from the Mundra project in Gujarat, 2,000 MW from Ratnagiri and 1,000 MW from coastal Karnataka.

On the demand side management, schemes such as Akshay Prakash Yojana, voluntary load reduction scheme in small cities, single phase supply in villages and introduction of capacitors on agricultural pumps.

IMC feels that the State Government should further tighten its T&D losses, which is at present pegged at 35 per cent, while the Government of India has stipulated that such losses should not be more than 16 per cent in any state. It is pertinent to mention here that every one per cent reduction in T&D losses is equivalent to additional revenues of about Rs. 120 crore.

New sources

Planners have also sought to focus on non-conventional energy sources. In this context, IMC has proposed a hybrid power solution, windel power. “Given the length of Maharashtra’s 720 km long coastline, the strong Southwestern monsoon winds and the presence of the Sahyadri range alongside the coast, the wind energy potential of the State is quite high,” it feels.

Energy audits, captive power generation, liaison with the Centre for maintenance of satisfactory grid frequency, innovative technologies for efficient utilisation of energy resources, optimal use of gas finds and integrated energy plan are some of the other suggestions made by power planners for the State.

“The State urgently needs to devise strategies that will lead to zero load shedding by 2009-10. Special type approaches and unconventional decisions are required,” the IMC feels.