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Mr Manikam Ramaswami

Our Bureau

Chennai, Oct. 12 The State Government should give the Tamil Nadu Electricity Board the financial assistance it needs to exploit the captive power generation capacity available with industrial units to address the power shortage, according to Mr Manikam Ramaswami, Chairman, Confederation of Indian Industry (Tamil Nadu State Council).

The electricity board needs Rs 1,500 crore to enable it to compensate the industry for using the high cost power from the diesel-powered captive generation sets, according to Mr Ramaswami.

The compensation would be just a fraction of the huge incentives that the State Government is giving to attract new investments by large industries and multinational players. In the last five years the micro, small and medium sector has invested Rs 50,000 crore into the State, mostly in the Southern Districts and rural areas. But the power shortage is crippling the industries, which are functioning at half their capacities, he said.

The State Government is matching the incentives with new investments that are being made by large players. While this is a welcome move it should also consider the plight of existing industries that need to be nurtured. The Government should expedite the funding to TNEB, which would help the industries to get captive units online and alleviate the shortage, he said.

Last month the State Government had explored the option of financial assistance to support the use of high cost power by the industries. It estimates that about 3,000 MW captive power capacity is available with the industry and a part of it could be brought into use to tackle the shortage. But the power from the diesel generation sets would cost more than Rs 12 a unit, nearly three times what the industries pay for grid power. The State appears to have put the issue on the back burner because of the expense involved.

Last week, it instructed industries to stop drawing power from the State grid during peak demand period in the evenings.

Mr Ramaswami said the industries’ concern is that the power shortage is not a transient problem, but something that is going to plague the State for the next few years till some of the large power projects start generating power. However, with the demand bound to grow in the industrial and domestic segment the shortage could become chronic. The industry finds it worrisome that the State Government does not appear to be showing the speed needed to address the critical issue. CII suggests that the Tamil Nadu Government should opt for two or more ultra mega power projects through international competitive bidding and expedite the proposal.

The State needs to put in place a medium term strategy to tide over the shortage or “the textile and engineering units would close down for sure”, Mr Ramaswami said.

The State Government’s move in refunding the sales tax on diesel purchased for fuelling captive power plants is a welcome move, he said.

More Stories on : Power | Industry Associations | Tamil Nadu

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