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States in north India are in the grip of a severe electricity shortage. Angry residents are thronging the streets in protests against the scheduled as well as unscheduled power cuts that last up to 12 hours in Jammu and Kashmir, Punjab, Uttar Pradesh and Bihar. The onset of a scorching summer, coal shortage and financially bleeding power distribution companies, or discoms, are being touted as the reasons behind the plight of these states.
Fresh generation and deficit data from the Central Electricity Authority (CEA) corroborate the crisis. In north India, there are power plants with a capacity of 56,600 Mw - roughly a fifth of India's total current monitored power capacity of 214,000 Mw. Power generation in all the regions registered growth between April and May, with the only exception being the North. Here, the plants generated 45,702 billion units (BUs) during the period, 23 BUs less than in the same period in 2013. This is in contrast to the 16 per cent growth in generation in the West, 9 per cent in South and 8 per cent in the East. It isn't surprising then that peak power deficit in the North jumped to 7.4 per cent in April (data for May is currently not available) against 5.1 per cent in the same months last year. In comparison, the national deficit went down from 7.4 per cent in April 2013 to 5.4 per cent in April this year.
Continued power cuts have now started threatening industries, particularly micro, small and medium enterprises. The electricity crisis has already led to a cut of 30 per cent in industrial production in the region in April and May. This figure is likely to move up to 45 per cent if scheduled power cuts are continued for another month, according to an estimate by industrial chamber Assocham. A look at the power situation in Uttar Pradesh and Punjab highlights the need of immediate reforms in the sector.
In Uttar Pradesh, urban areas are experiencing scheduled power cuts of up to 13 hours and rural households up to eight hours. In the current heat wave, daily power demand routinely breaches the 13,500 Mw mark against total availability of 11,000 Mw. Besides, overheating of transformers often causes power supply breakdowns in major cities during peak hours on a daily basis. The power crisis has added to the long list of troubles for Chief Minister Akhilesh Yadav who is currently fending off allegations of bad governance being the cause of the numerous crimes against women in the state.
While power consumption in the state is growing 10-15 per cent every year, capacity addition has not been able to keep pace. Also, the bad shape of transmission and distribution systems is resulting in massive line losses. Rampant power theft, pilferage and under recoveries, which bleed the discoms are adding to the problem. State power utility Uttar Pradesh Power Corporation (UPPCL) has accumulated losses of Rs 25,000 crore.
The ministry, with Piyush Goyal at the helm, also said that the coal stock position in the state's power plants was comfortable. "Coal supply to the 600-Mw Anpara-C plant from Coal India's Northern Coalfields is more than 90 per cent which is as per linkage. Anpara-C is not generating because of non-procurement of imported coal by the state generating company," the ministry asserted. It also suggested the state had multiple options to choose from: procure 377 Mw from National Thermal Power Corporation's Jhajjar plant like it did during the election season from May 3 to 15, access power from exchanges, improve its internal generation from 4,500 Mw to over 10,000 Mw or buy power from other power-surplus states in the region.
The state government maintains that while Anpara-C is procuring imported coal, Coal India has not been able to provide coal from its Khadia mine for the past 20 days. Also, the gas-based plants are not operating at full capacity due to inadequate gas availability, and the absence of a transmission network precludes the state sourcing power from other regions. UPPCL Managing Director A P Mishra told Business Standard that the reason behind the yawning demand-supply gap was the sudden rise in temperatures this year. "The deficit is not too high, but since the demand is very high due to a rise in temperatures, the supply has not been able to keep pace," he claims.
Soaring temperatures during May pushed demand through the roof. With the official machinery busy in elections, the state was ill-prepared to deal with the situation. All attempts to buy spot market power were foiled because of the lack of transmission capacity and the utility's worsening finances. The discoms suffer a fund-crunch despite last year's 30 per cent jump in retail tariffs that itself came on the back of a 10 per cent rise in 2009. The state utility has asked for a 20 per cent hike in tariff for the current year. The Annual Revenue Requirement has been accepted by the UP Electricity Regulatory Commission, and a new tariff is likely to be effective by October.
The situation is the same in Bihar, with long power cuts and water scarcity. Bhagalpur's deputy mayor, Preeti Shekhar, recently said the city was not getting power for more than five hours a day for the past fortnight.
In Punjab, a combination of coal shortage and delays in fresh capacity addition have added to the problems of the state utility, the Punjab State Power Corporation (PSPCL), which has been grappling with severe losses arising from subsidised power supply for the farm sector. The situation is likely to worsen in the coming paddy sowing season starting on June 10 amid talk of a weak monsoon. The performance of PSPCL's three main thermal plants - at Lehra Mohabbat, Bathinda and Rupnagar - was reduced by almost half in the two months of April and May due to coal shortage. Panem Coal Mines, which supplies fuel to the thermal plants, stopped supplies on April 10 over a demand for higher price and is now providing only two rakes against the required six. Panem wants a hike of Rs 100 per tonne of coal apart from Rs 6 crore daily as railway freight. PSPCL is seeking legal opinion on this.
Meanwhile, the coal shortage had led to the non-operation of seven of the 14 units in the three state-owned power plants, forcing PSPCL to purchase power from the spot market at around Rs 4 per unit in order to avoid load-shedding. While power cuts usually occur during the paddy season when peak demand nears 10,000 Mw, the state has already seen outages this year even with demand at 5,000 Mw.
It is now learnt that PSPCL has petitioned the state power regulator for the purchase of 5,057 BUs at a cost of Rs 2,000 crore to meet the demand between May and September. The utility has admitted in the petition that the thermal plants are unable to run to full capacity owing to the coal shortage and the burden of Rs 700 crore would be passed on to consumers through a tariff hike. However, a senior official says, "The power requirement of 1,500 lakh units in the state is being met through generation at our own plants, our share from central projects and through short term power purchase. The shortage is due to 900 Mw of capacity being closed for maintenance and coal shortage."
Among the northern states, Jammu & Kashmir seems to be the worst affected. The state suffered a 20 per cent deficit in April alone - four times the national deficit. Last week, the people staged massive protests across several areas in Jammu and blocked roads against power cuts that last for three days. Residents, helped by political activists, have demanded uninterrupted power supply and shouted slogans against Chief Minister Omar Abdullah and the state power development department.
Virendra Singh Rawat and Vijay C Roy contributed to this report
