The Hindu Business Line : Call to tap surplus power from captive plants

Meeting shortage
It is estimated that by 2011-12, the total installed captive power plant capacity in the country would be 31,000 MW.
Uniform policies across States would definitely help in tapping more power from the captive power plants.

Our Bureau

Chennai, Dec. 13 The total installed capacity of captive power plants (CPPs) in the country is 24,600 MW and it is growing at almost 7 per cent compounded annually. Surplus power from these plants can be tapped by the grid to tackle the growing power shortage, provided tariffs were attractive and policies were uniform across States.

These points were discussed at a meeting here between industry representatives and the Central Electricity Authority (CEA). At present, tariffs and policies differ between the States because of which those running captive power plants opt to shut them down rather than generate electricity and supply it to the grid.

At the meeting organised by the Confederation of Indian Industry, it was pointed out that various duties and levies — contract demand charges, parallel operation charges and electricity duty — made it unattractive for captive power plants to sell surplus power to the grid. Moreover, the tariff did not match the cost of generating electricity from the captive power plants.

For instance, in Tamil Nadu, the electricity regulatory commission has fixed a band of Rs 2.10 to Rs 3.45 a unit for buying power from captive power plants. Some industry representatives felt that the unscheduled interchange charges — a penalty to be paid by any utility for drawing more power than what it is entitled to at a given time — fixed by the Central Electricity Regulatory Commission will encourage captive power plants to sell surplus power to the grid.

The unscheduled interchange charge is Rs 7.45 a unit at 49.2 Hz, which the central regulator proposes to hike to tackle rampant overdrawing.

Full Recovery

The CEA officials said the captive plants generated 76,846 billion units, a 7.3 per cent compounded annual growth rate. It is estimated that by 2011-12, the total installed captive power plant capacity in the country would be 31,000 MW.

The CEA had conducted a similar exercise two years ago and found that 1,100 MW of surplus captive power capacity was available to be fed into the grid. The total captive power installed capacity then was estimated at 18,740 MW.

It was pointed out at the meeting that these plants operated at a plant load factor of only 40 per cent and if their PLF were increased to 70-80 per cent, an additional 6,000 MW of power would be available for the grid.

Mr V.S. Verma, Member-Planning, CEA, said uniform policies across States would definitely help in tapping more power from the CPPs. He also felt that those running CPPs should not insist on full recovery of costs if they were to sell surplus power to the grid, but settle for payment of variable charges (which will cover fuel costs) and a part of the fixed costs. After all, full recovery would mean that the tariff for consumers would also have to be hiked.

Mr Verma told representatives of wind turbine manufacturers who were present at the meeting that there was no justification for them to charge such high prices for wind turbines, especially when the sector was given various incentives.

He felt that the wind turbine manufacturers were exploiting market conditions, because of which the cost per MW of wind turbine was more than that of a coal-fired plant.