Power deficit up in June

The growth in demand for power coupled with the lag in capacity addition has led to a worsening power deficit in June, according to the data released by the Central Electricity Authority (CEA), an apex power planning and advisory of the central government.

Peak power deficit, a measure of the shortfall in electricity when the demand was at the highest level, for the month went up to 12.9 per cent as against 11.1 per cent in the corresponding month last year. Average deficit, the mean of deficit for the entire month, was up to 8.4 per cent as compared with 6.3 per cent in April 2007. 
 

POWER DEFICIT UP
	June		May
	peak  deficit	average  deficit	peak  deficit	average  deficit
2008	12.9	8.4	12.9	8.7
2007	11.1	6.3	12.3	8.0
(Source: CEA website)

"The yearly increasing power deficit is mainly attributed to the increasing demand in power," said a senior official from the Central Electricity Regulatory Commission (CERC). 
 

TRENDS IN IIP (% YOY) VIS-A-VIS POWER
	Dec07	Jan08	Feb08	Mar08	April08	May08	May07
Power	3.8	3.7	9.8	3.7	1.4	2.0	9.4
General	8.0	6.2	9.5	3.9	6.2	3.8	10.6
(Source: Citigroup global markets report)

Total peak power demand for the month was recorded at 103,636 Mw, which was 4,259 Mw higher than the power demand of 99,377 Mw in the corresponding month last year.

However, experts believe the worsening power deficit is also an indicator of the declining performance of the infrastructure sector over the past few months.

"The growth of the energy sector has dropped due to rise in the cost of raw materials, borrowings and increased interest rates," said an expert with a leading accounting and advising firm, adding that a slowdown in infrastructure always produces adverse affect on the industrial growth.

Power, along with five other major sectors "" cement, steel, coal, crude oil and petroleum products "" contributes to the country's infrastructure. Growth of these six sectors account for more than a quarter in the index of industrial production (IIP).

The latest data of the IIP, of which power carries a weight of about 10.17 per cent, suggests that the power sector has grown at a rate of 1.7 per cent in the past two months as compared with about 9 per cent in the same period last year.

The worsening power deficit has come at a time when the government has set a capacity addition target of 78,577 Mw in the eleventh plan period (2007-2012), out of which 11,061 Mw is to be added in the current year.