Consumers paying for congestion in power supply network

IEX calculations reveal Rs 2,996 crore paid as additional cost to source power

The congestion in the power network of the country, owing to demand-supply mismanagement, has cost both consumers and utilities dear. In past three years, power consumers across the country paid Rs 2,996 crore as additional cost to source power due to lack of network. Also, congestion has accumulated in five regional grids, to around 80 per cent of the supply time, hurting electricity availability and revenues.

A calculation done by the Indian Energy Exchange (IEX), one of the largest power trading platforms, reveals the state power distribution companies (discoms) could not source cheaper available power as there was no robust transmission network to evacuate it, thereby loading the consumer with costlier alternatives.

“Transmission constraints are primarily concentrated for power flow around the west-east-north belt. As a result of congestion, there is restricted power flow to the southern and northern regions,” said the note. The total cost of congestion, it goes on to calculate, to the state utilities in Southern region have been to the tune of Rs 4,858 crore. Total cost of congestion is sum of the costly power that a utility sourced in place of unavailable cheaper power and the price it paid to the grid for the bottlenecks in supply.Transmission constraints across WR-NR and ER-NR bottled up surplus of about 75 million units, said the report. 

The expected transmission network by the end of the 12th Plan period (2017) should be 3,60,000 circuit kilometres (Ckm) though the current status is 37,140 Ckm. Around 113 Gw of generation capacity is likely to be added in the remaining period of the 12th Plan and about 100 Gw during the 13th Plan. According to the latest data, in 2014-15, 3.1 billion units of electricity were lost on power trading platforms due to transmission congestion.

In a recent report on power supply congestion, the Central Electricity Regulatory Commission (CERC) said in view of large generation capacity additions during last few years, “the transfer capability of transmission system has indeed emerged as a constraint”.

While several coal-based power projects came up in mineral-rich states in the east there was no corresponding increase in transmission capacity, leading to power wastage. The southern states' refusal to be a part of the national grid, citing self-reliance on renewable energy, has added to the problem. 

The western region is stuck with overcapacity, but the southern states, which are grappling with supply shortages, are unable to use that power because they do not have the transmission capacity. Similarly, the power plants in east & central India await a transmission network to reach out to power deficit states in the north.

DO A POWER OF GOOD

In FY 2014-15

• East-South corridor was congested 85% of the time
• West-South corridor was congested 87% of the time
• West-North corridor was congested 49% of the time during the year

Power shocker

• Rs 2,996 crore: Additional cost paid by consumers to source power due to lack of network in the past three years
• Rs 4,858 crore: Total cost of congestion to the state utilities in southern region

Source: IEX and POSOCO