Falling power demand signals to industrial ebb

Discom sold 824.675 million units (mu) to the industrial units in Aug-Sep versus 893.78 mu sold in the same period last year

In a sign of weakening industrial activity in the state, electricity consumption by the industrial sector has dropped as many user industries battle for raw material to stay in operation.

The sale of power to the extra-high-tension (EHT) industries by the distribution company (discom) North-Eastern Electricity Supply Company of Odisha (Nesco) has slipped by about seven per cent during April-September compared to the same period last year.

The discom sold 824.675 million units (mu) to the industrial units during this time span compared to 893.78 mu sold in the corresponding period of the previous fiscal. Similarly, in the high tension (HT) bracket the consumption has dropped from 241.653 mu to 224.083 mu.
Nesco deals with the supply and distribution of electricity in the north eastern region of Odisha including the industrially thriving districts of Balasore, Jajpur, Keonjhar and Bhadrak etc.

"The main reason behind the decline in power consumption is closure of mines. The industries such as ferro-alloys units, sponge iron factories in the key industrial districts like Sambalpur, Sundergarh, Balasore, Jajpur have cut down their power drawal as they struggle to stay in operation due to non availability of raw materials. Similarly many companies are shifting their plants to the neighboring Jharkhand and Chhattisgarh for viability,” said AK Bohra, Chief Executive Officer of Reliance Infrastructure which owns three distribution companies-Nesco, Southco and Wesco in the state.

However, the power consumption by the industries under the supply area of Western Electricity Supply Company of Odisha (Wesco), the discom operating in the industrialised districts of Sundergarh ,Jharsuguda, Sambalpur has increased. The power use has increased by 16.6 percent to 842 mu during the first six months of the fiscal from corresponding figure of 722 mu last year.

Wesco attributes this rise to the closure of captive power plants of two major consumers, Rourkela Steel Plant in Sundergarh district and Aditya Birla group owned Hindalco unit at Hirakud in Sambalpur district in May and August respectively. In the HT bracket, Wesco sold about 612 mu compared 604 mu it sold during April-September, 2011.

Things would have been same as the case with Wesco if RSP and Hindalco would not have drawn power from the state grid because of closure of their CPPs, Bohra added.

The steel industries in Odisha are going through tough times as iron ore supplies to these units has dried up following allegations of mining scam and subsequent investigations by Justice MB Shah Commission into illegal mining cases.

“Most of the steel manufacturing companies are facing closure due to non-availability of adequate raw materials”, said PL Kandoi, president, All Odisha Steel Federation (AOSF). The organization has been demanding re-opening of the closed mines to address the raw material scarcity.

After the mines department's clampdown to curb irregularities in mining activities, only 120 of a total of 600 mining leases in the state are currently operational.

While 249 mines have been suspended on account of lack of statutory clearances, 140 others have been temporarily discontinued.