Power deficit soars despite the economic slowdown

Written by P Raghavan | Updated: Sep 10 2008, 04:00am hrs
The growing power deficit threatens to worsen, even as the economy is on a downswing. This does not augur well for the government in an election year, especially with some of the countrys most productive regions facing a power crunch. What makes these developments worse is that the rapid deterioration in the power sector in recent years stands out in sharp contrast to the early years of the decade, when the rising power deficits were largely held in check.

Energy shortages, which hovered at 40,000 million units (mu) until the middle of the decade, shot up to 73,336 mu in 2007-08 and is expected to be 70,616 mu in 2008-09. In percentage terms, this means that the energy shortage has gone up from 7.3% in 2004-05 to 9.9% in 2007-08 and is expected to go down marginally to 8.8% in the current year.

However, the supply situation during peak hours will continue to deteriorate. Peak power shortages which went up from 10,254 mw in 2004-05 to 18,073 mw in 2008-09, is estimated to go up to 21,701 mw in 2008-09, which means more than a doubling of peak-level shortages over the last five years. In relative terms, peak shortages have accelerated from 12.3% in 2004-05 to 16.6% in 2007-08 and further to 18.1% in 2008-09.

The energy deficit has widened steadily despite growing capacities. Capacity addition has gone up from 3,939 mw in 2004-05 to close to 8,000 mw in 2007-08, with both central and state governments contributing to the growth. However, capacity addition in the private sector remains constrained despite the efforts to boost investment. The only consolation is the reduction in transmission & distribution losses from 31.25% in 2004-05 to 26.91% in 2007-08.

The geographical spread provides some insights into the reasons for the growing scarcity of power. The rapidly growing western region faced the severest shortages, which, at 15.8%, is more than five times the 3.2% in the southern region. States most affected by shortages in the western region include Gujarat and Maharashtra, both rapidly industrialising states that consume significant power, where the energy shortage touched 16.2% and 18.3%, respectively.

The scenario in peak hours were significantly worse, with the shortfall in the western region as a whole at 23.2%, and that in Gujarat and Maharashtra above 26%. However, some southern states like Karnataka and Tamil Nadu suffered shortages of around 15% in 2007-08.

The energy deficit in poor and medium income states like Bihar and Jammu & Kashmir was equally worse. While Bihar had an energy shortage of 13.3% in 2007-08, that in Jammu & Kashmir was as high as 29%. And during peak hours, shortages in Bihar touched 34% while in Jammu & Kashmir it dipped to 26.2%, the latter trends being perhaps due to the absence on any significant industrial activity during peak hours.

Mounting supply shortages in the current year have impacted both agriculture and industry. States like Madhya Pradesh has restricted supply of power to agriculture to five hours a day in the case of three-phase supply, and to less than ten hours in the case of single-phase supply. The scenario was worse for industry, with more than a dozen states enforcing cutbacks and load shedding. While states like Kerala enforced 25% power cuts on high-tension users, Gujarat has told industries to stagger their weekly off days and recess timings.

The slowdown in the economy has not led to any easing in the situation. Most recent estimates show that the energy deficit has gone up to 10.4% in the first four months of the current fiscal, while the peak deficit has hit 14.6%. The energy deficit of 11.4% in June was much higher than the 1.2% shortage projected for the month by the Central Electricity Authority (CEA).

In the case of peak demand also, the shortage went up to 15.7% in June, against the estimate of 12.9% for the month. This does not bode well for the prospects in the coming months, especially since the CEA has projected that energy shortages will rise to 14.5% by March, while peak shortages will soar to 21%. All bad tidings when the country is gearing up for elections.