ItÔÇÖs problem of plenty on power front in Punjab

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PSPCL has officially confirmed the apprehensions that state sector plants are on forced shut down to pave way for private sector generation

By Yogindra Mohan: Punjab is a power surplus state but the generation from state run thermal plants is going from bad to worse with the passage of each year due to lop sided policy of the state government. The surplus power has become a headache for Punjab as it is neither able to consume power within the state or sell power to others as cheap power is available from other sources.

Now the Punjab State Power Corporation Limited (PSPCL) has officially confirmed the apprehensions that state sector plants are on forced shut down to pave way for private sector generation. All the three thermal plants of Punjab State Power Corporation Limited (PSPCL) will remain under shut down during winter season starting from October 1 this year. Even in next financial year 2017-18 the state sector thermal plants will be running only one unit except during paddy season.

At present two thermal plants at Rajpura, Talwandi Sabo in private sector are running and state sector plants are on forced outage. The position is going to worsen when Goindwal Sahib thermal plant starts generation when the company arranges coal either through e-auction or from other sources.

Punjab power generation policy was announced in June, 2010 to facilitate accelerated addition of power generation capacity to meet the anticipated increasing electricity demand on higher industrial growth rate and to supply cheap affordable power. The Punjab government allowed the setting up of five thermal plants in private sector without giving a thought how to use the power in future. Two power generators including NTPC backed out later and did not set up plants in the state otherwise PSPCL would have gone bankrupt by now.

Punjab was too eager to gain political profits when it approved setting up of thermal plants with the help of private companies. Now this has boomeranged as power demand anticipated has not come for want of industrial growth. Power purchase agreements were signed by PSPCL at the private developersÔÇÖ terms and conditions with a ÔÇ£deemed generation clauseÔÇØ that forces PSPCL to pay for the power it may not need. Under such circumstances special audit is required to safeguard the public interest.

The Punjab government followed MoU route instead of competitive bidding and signed power purchase agreements with private parties. Even Punjab is purchasing power on day-ahead basis as cheap power is available in the grid.

Punjab is neither able to consume 30 per cent surplus power within the state or sell it outside as cheaper power is available during lean period through exchange as such it must devise other ways and means to make best use of surplus power.

The tariff relief given to the industry this year is not sufficient to increase power consumption drastically in the state. It may happen after few years when industrial growth in state picks up and achieves growth rate equivalent to national level. There is a need to enhance domestic consumption of power as the paying capacity of people of Punjab has increased .There is a need to change the existing slabs.

The 168 MW Shahpur Kandi Project was designed to be commissioned along with Ranjit Sagar Dam so that the Ranjit Sagar Dam project can operate in peak generation mode and the water so released in peaking mode can be stored and controlled in the Shahpur Kandi barrage. While allowing the peaking operation of Ranjit Sagar, the additional advantage of project is that power generation of about 168 MW will accrue in addition. But the government was more interested in private sector projects than state sector projects.

The viability of building three to four units of 800 to 1,000 MW super critical units at Ropar to meet the next decade requirements by phasing out existing units is a must. For a supercritical thermal plant Ropar is ideal location, which has adequate land and water supply.

Punjab opted for UDAY scheme, the third financial bailout package for the PSPCL. The scheme is technically possible but politically challenging. The ruling party in Punjab has agreed to the terms and conditions of the scheme now, but this might be difficult to implement in the absence of political will. For a political party, votes are more important than reforms and the state government may still shy away from rewriting the contract on power supply and tariffs.

As per agreement the PSPCL is supposed to increase power supply in areas that report reduction in technical and commercial losses and undertake name and shame campaign to control power theft. Punjab is a power surplus state and will not be able to differentiate between different consumers.

The AT&C losses in the state are already around 18 5 and further reduction of AT&C losses requires political will especially in the border areas where power theft is rampant.

Theoretically such agreements will put a check on populist measures such as free power as the cost will eventually come back to the taxpayer with interest. But in case of Punjab free power to agriculture sector has been the most populist vote catching agenda of all political parties.

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