Power crisis set to trip Rs 1800 cr off AP

The power situation in Andhra Pradesh is set to worsen in the next three months as the reservoir levels are expected to plummet resulting in lower generation by hydel projects.

As on March 3, major reservoirs in the state were holding 556.23 tmc water, which is about 6 per cent less compared with 592.23 tmc on the same day last year.

Even as things stand thus, industry feels that the one-day a week power holiday enforced by the government would result in the industrial productivity falling 40-48 per cent. This would mean a loss of Rs 1,500-1,800 crore tax revenues to the state exchequer for the three-month period.

Besides, a two-hour power cut during peak hours has been imposed on the domestic front.

Officials estimate power deficit to be over 20 million units. On an average, the demand is about 240 million units. But, according to industry, the deficit could be even 30 million units with provisions for load shedding.

Moreover, even as the demand for power is increasing by the day, the state finds itself in a situation where it cannot buy additional power from other states this year.

This apart, distribution companies (Discoms) are also fund-starved. They have used up the available credit from banks. But more than the money, the officials say the possibility of purchasing power from other states is bleak. Additional power is supplied to states through special corridors after tapping it from southern and north-east-west grids. States wanting to get additional power should reserve these power corridors around January.

According to officials, Tamil Nadu and Karnataka have already reserved the grid space for about 2,000 Mw additional power leaving no scope for Andhra Pradesh to enter into the space.

In case the government buys power, it would have to spend about Rs 14 crore a day to bridge the deficit of 20 million units at the rate of Rs 7 per unit. The unit price last year touched Rs 12 as the demand increased in the peak summer.

The state has been buying power from outside every year. Last year, when elections were being held, the government signed power purchase agreements ahead of time and ensured adequate power was available during summer.

“Andhra Pradesh has been purchasing power from outside for almost years now. Only this year, it did not make any purchase agreements,” according to MV Rajeshwara Rao, secretary general, Federation of Andhra Pradesh Chambers of Commerce and Industry.

Meanwhile, there are indications that the power holiday would be extended by one more day. “With one day power holiday itself, the industrial productivity would be reduced by 40 to 48 per cent for the ensuring three months,” Rao points out.

The state has an installed capacity of 7,587.9 Mw, including 3,883.5 Mw thermal power, 3,703.4 Mw hydel and 2 Mw from wind.

The government recently laid the foundation stone for the 600-Mw Singareni Thermal Power Plant in Adilabad and for the first phase of 700 Mw out of the 2,100 Mw gas-based power project in Karimnagar. Both are expected be operational by July 2013. The state has plans to achieve an additional power generation of 15,945 Mw by taking up 17 new projects in the next five years.