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New Delhi, June 18 Diesel is clearly the fuel of choice for running captive power units among the small and medium scale industries, despite the cost implications. In just the National Capital Region (NCR), the 40,000-odd industrial units cumulatively consume around 3,500 lakh litres of diesel annually for running DG sets to meet their production targets, according to industry chamber Assocham study. This translates into nearly Rs 1,400 crore of annual expenditure by firms on diesel for running captive plants in just the NCR alone.

The NCR belt on an average suffers either power cuts or erratic supplies for 8-10 hours a day, forcing units to install on an average between four-six generator sets in each industrial location, the report said. Expenditure on diesel, pegged at around Rs 675.84 crore per annum has been witnessed in NCR’s small units (numbering around 31,286 units), followed by medium and large industrial units, which spend Rs 386.24 crore and Rs 341.75 crore on diesel respectively per annum. The NCR has approximately 4,600 and 2,374 medium and large industrial units, according to Assocham estimates.

Besides the industrial units, the NCR region has around 160 shopping malls, over 3,400 shops in small markets, 260 hospitals and 460 medium and large institutions, all of which fall back on diesel generators for either continuous or standby operations.

Across the country, this is pretty much the trend, as industrial units step up captive power generation, besides increasingly widespread usage of diesel generator sets at infrastructure project worksites and big retail chains and malls switching to DG sets for back up power generation. With peak power shortages climbing to its highest levels in over a decade to touch 17.1 per cent due to a big spurt in demand, even as capacity addition has been falling way short of target, the industry has been resorting to a step up in captive power generation to plug the shortfall. Of the cumulative captive power capacity in the country of 22,335 MW, comprising sets of 1 MW and above, nearly 40 per cent is estimated to be based on diesel, most of them being small-sized sets of up to 10 MW each, according to Government estimates.

But the real growth in diesel consumption is estimated to be in the captive units of below 1 MW in capacity, besides those being used by group housing societies, as power cuts have become the norm across most States. A proliferation of infrastructure projects across the country, including highway upgradation, airport modernisation, mass rapid transit system and realty projects has also increased the demand for DG sets at project sites. Besides, SEZs, IT centres, malls have also accounted for a proliferation in standby capacity, government officials said.

A recent survey by the World Bank has found that manufacturers in India, on an average, face nearly 17 significant power outages per month, as against only one per month in Malaysia and four in China. Nine per cent of the total of output is lost due to power breakdown, compared with 2.6 per cent in Malaysia and 2 per cent in China. Standby diesel generators have been proliferating as manufacturing growth has been on the rise while power generation continues to falter.

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