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Karnataka power producers can sell surplus outside

While state's loss-making discoms lack the money to buy surplus power, generating units complain of late payment and demand shortfall despite the mandate to run at full capacity

Shreya Jai  |  New Delhi 

Can Rajasthan show the way on power reforms?

Faced with a supply surplus, the Karnataka Electricity Regulatory Commission (KERC) has ended the earlier rule from the state government that power producers must generate at 100 per cent capacity and supply all this within the state.

Tamil Nadu, said sector officials, would issue a similar order soon. This is subsequent to the southern grid facing technical snags and outages from a mismatch between demand and supply, with lack of inter-state transmission capacity.

While Karnataka’s loss-making power distribution companies (discoms) lack the money to buy surplus power, generating units complain of late payment and demand shortfall despite the mandate to run at 100 per cent capacity.

The Karnataka government had issued the earlier order, to operate at full capacity and send nothing outside the state, in September 2015 under Section 11 of the Electricity Act. That has led to the present situation, of a “serious threat to grid security and public interest”, said the KERC order dated Monday.

The daily state demand has reduced to 20 million units from the earlier 50 mn units. Peak demand, earlier 9,500 Mw, was 7,200-8,600 Mw from the first week of May.

Karnataka has total generation capacity of nearly 17,000 Mw, of which thermal power is 8,000 Mw, hydro is 3,600 Mw and renewable energy is 4,800 Mw. Sugar and other industrial units also sell their surplus captive power to the state grid.

The accumulated loss for Karnataka discoms as of the provisional financial accounts for 2014-15 was Rs 2,561 crore.

Generators may now apply for a no-objection certificate from KERC to sell their surplus outside the state, said an official.

Business Standard had reported earlier this month that the southern grid faced demand shortfall and over-supply, with not enough inter-state transmission capacity.

Total demand in the southern region is 34,000 Mw. The HVDC line from Jaipur in Rajasthan to Gajuwaka, near Vizag, which supplies 500 Mw, has tripped five times in the past month, said an official. “As the line trips, so power transfer capacity is reduced, while demand keeps going up. The high temperatures also lead to tripping,” said a power market executive.

Experts said with states freeing their generation capacity, the spot market in the south could see an uptick.

“These states, rather than sourcing costly long-term power, could choose spot power at a market-determined price as needed,” said one.

First Published: Wed, June 01 2016. 00:34 IST
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