No fuel for plants,states grope in the dark in year of ‘power for all’

The Bawana power station is not alone. Across the country,a number of brand new projects,all of which formed part of the grandiose 54,000 MW record capacity addition that was added,at least on paper,in the last five years (Eleventh Plan spanning 2007-12),are not generating power for want of fuel — both coal and gas.

In Haryana,the 1,500 MW Indira Gandhi Super Thermal Power Project set up by NTPC Ltd in partnership with Haryana and Delhi,is generating way below capacity as there is little coal. There are others — Lanco’s 1,200 MW Anapara C and Reliance Power’s 1,200 MW Rosa in Uttar Pradesh,along with NTPC’s Kayamkulam project in Kerala,all of which are simply languishing for want of fuel. In fact,NTPC,the country’s largest generator,is barely able to operate about 26,000 MW of its installed capacity of 32,000 MW due to continuing fuel shortages.

But fuel is just one of the problems. The all-pervasive fuel shortage threatens to derail upcoming projects,spooking private developers and investors. Add to this a distribution sector that is haemorrhaging cash,a widening demand-supply gap,a flagging reforms agenda,and missed generation capacity addition targets.

While some states such as Delhi and Punjab,having pushed through tariff hikes,are in a position to tie-up power from the short-term market and offer it to consumers,those such as Uttar Pradesh and Andhra Pradesh,which have continued to drag their feet on increasing consumer tariffs,are now simply not able to buy power from the market to plug the shortages.

“Tariffs are simply not remunerative enough for distribution utilities to buy power from the market. They,instead,prefer shedding load as every unit of power sold only adds to the loss,” an official from Uttar Pradesh said. This is reflected adequately in the fact that despite widespread shortages,the spot power price in the day-ahead market on the two operational power exchanges was hovering around Rs 3 a unit during much of last week. At least six of these states have declared power holidays and another eight have load-shedding plans lined up.

This at a time when industrial consumers,who are hardest hit by the shortages,are relying almost entirely on captive units to generate electricity at upwards of Rs 10 a unit. Little surprise then that industrial units,especially from states struggling with supply shortages,such as Punjab and Tamil Nadu,are increasingly turning to the bourses to buy spot power.

The widespread shortages in different states,captured by The Indian Express in reports from across the country,shows that electricity continues to be in short-supply,the record capacity addition claimed in the last five years notwithstanding. The biggest irony of it all is that 2012 was designated as the government’s ‘power for all’ target year. The goal,though,clearly remains a distant pipe dream.