Tamil Nadu factories reel under power cuts

Severe power shortage has hit industrial production in Tamil Nadu. Companies said production could be down as much as 30 per cent. Sectors like textile, leather and salt appear to be among the worst hit. Industry associations Industry associations put the loss in production at around Rs 4,000 crore.

What has miffed them more is the near-normal supply to urban consumers and farmers (it’s election time) and the multinational companies which had been promised uninterrupted power. Most of them do not expect the situation to correct before 2011.

Tamil Nadu has the capacity to produce 10,122 Mw, whereas the demand is 11,622 Mw, which leaves a deficit of 1,500 Mw. During peak hours, it can rise to 1,700 Mw. The shortage has led the state government to implement a 40 per cent cut for industrial units and commercial establishments on the high-tension network and 20 per cent for low-tension connections.

Thus, the Southern India Mills’ Association said that production in Tamil Nadu is down 20 to 30 per cent. Small and medium enterprises at Tiruchi said output has fallen 20 per cent. They have already spent Rs 20-30 crore to buy diesel for their generator sets. A Delhi-based businessman who runs factories in Tamil Nadu said power is cut everyday during peak hours between 6 pm and 10 pm.

“Instead of effecting power cut on existing players, the state government could have thought of buying surplus power which was available at the national grid for Rs 1.80 per unit,” said Loyola Textiles Chairman Manickam Ramaswami. “Industry was ready to pay even Rs 3.30 per unit. By doing so, the Tamil Nadu Electricity Board (TNEB) could have not only addressed the deficit, but also earned around Rs 400 crore.”

With rapid industrial growth and pouring investments, the demand for power has gone up significantly in Tamil Nadu. However, the addition to capacity has been modest and has not kept pace with the growing demand. Though the government has initiated some projects to expand the capacity at its existing thermal power stations, it has clearly not been enough.

Arcot N Veerawamy, the minister for electricity in the Tamil Nadu government, said that the government will withdraw power cuts to the industrial units from May 10. TNEB is likely to add 1,500 Mw through wind energy in May and another 2,000 Mw by June or July.

The state government was planning to buy 500 Mw between January and June 2009. It had even floated tenders, but the response was not encouraging. TNEB received quotes only for 68 Mw, said an official. The government has permitted intra-state sale of excess power by private generators to industrial units directly by forfeiting cross-subsidy surcharge eligible to be collected by them. This is expected to help secure 300 Mw, he added.

TNEB is also exploring the possibility of procuring 100-500 Mw from private players. It is also looking at the possibility of moving small portable units of 5-10 Mw truck-mounted, diesel- or furnace oil-operated plants which can be moved anywhere and can be connected to the nearby stations.