TN lines up Rs 40,000 cr to overcome power crunch

Faced with a severe power deficit of 3,000 Mw, Tamil Nadu is planning to add 2,000 Mw capacity every year over the next three years, with a total outlay of Rs 40,000 crore for generation, transmission and distribution.

Currently, the TN Electricity Board is spending around Rs 1,200-1,500 crore every month on buying 1,000 Mw from the open market to meet the growing demand from its large industrial base that includes auto units, IT, SEZs and diversified manufacturing plants.

Industry insiders say the problem is the Board's inability to cut transmission and distribution losses on one hand and rising demand driven by higher standards of living, on the other. According to TNEB estimates, the demand for electricity is 11,000 Mw at peak hours every day, whereas the production is only 8,000 Mw.

Apart from production shortfall, frequent strikes at Neyveli Lignite Corporation (NLC), a public-sector company and a major supplier of power to the state, is adding to the state's power woes.

However, the state government and the TNEB management are confident that the issue would be resolved by 2011-12, especially on the distribution and transmission front. According to a TNEB estimate, the Aggregate Technical and Commercial (AT&C) losses are currently around 18-19 per cent.

C P Singh, chairman, TNEB, told Business Standard that in 2010-11, 600 Mw of power would be added and another 900 Mw was likely to be added if the Kudankulam project goes on stream by December. Similarly in 2011-12, another 2,000 Mw will be added.

"Over the next three years, we will add 2,000 Mw every year," said Singh, adding that while the demand was expected to increase by 8-9 per cent and the supply would be expanded by 11-12 per cent.