An elementary error by the Central Electricity Authority or CEA — the apex planning body in the power sector — in monthly peak demand calculations is translating into an overestimation of the country’s peak demand position, something fundamental to the process of extrapolating overall demand and planning generation capacity for the future.
In October 2014 for instance, the CEA’s estimate for peak demand met was higher by nearly 2,500 MW as comparison to the corresponding estimate of grid manager POSOCO — all because the CEA has been resorting to calculating the all-India peak demand by summing up daily peaks met in the country’s five different regions on different dates during the month of October, instead of collating the highest demand met across all regions on a single day.
As a result, while the all-India peak demand met in October 2014 was 1,36,516 MW (on October 6), which POSOCO correctly arrived at it by adding the regional peak demands met of each of the five regions on that day —44,619 MW in the northern region, 42,370 MW in the western region, 31,120 MW in the southern region, 16,285 in the eastern region and 2,122 in the north eastern region — the CEA’s approach of adding up the regional peak demand on different days has resulted in a higher estimate of 1,39,005 MW for the same month.
This, according to data on the CEA website, is being consistently being done across months.
A senior CEA official said the process of aggregating the regional demand peaks has been followed through the years. He did not offer a comment on the variation with respect with the POSOCO peak demand estimates.
Apart from the issue of peak demand estimates, flaws have also emerged in the government’s power demand projections, which based its estimates on an unduly optimistic assumption of over 10 per cent GDP growth during the last five years and the corresponding estimate of a surge in electricity demand in these years.
With actual GDP growth grinding down to nearly half the estimate in the last three years, the projection made by power planners in the 18th Electric Power Survey (EPS) of an all-India peak load growth (compounded annual growth rate or CAGR) — of 9.58 per cent for 2009-10 to 2016-17 — is beginning to manifest itself in terms of commissioned capacities idling on account of lack of electricity being requisitioned by distribution utilities.
As against the assumption of a 9.58 per cent growth in peak electricity load from 2009-10 to 2013-14, the actual growth was merely 3.5 per cent.
In hindsight, the assumption of nearly 10 per cent growth in peak demand clearly appears over-optimistic considering that the actual all India CAGR for peak load in the preceding years — from 2003-04 to 2009-10 — was just 3.7 per cent.
This is reflected in the fact that sellers lining up include those who set up hydro power projects, the generation from which is used to bridge peaking shortages.