Crisis short-circuits power sector trading

Written by Sanjay Jog | Mumbai | Updated: Dec 24 2008, 05:46am hrs
The power sector is the latest victim of financial crisis and climate change. Purchase and sale of power across the country has changed dramatically. Ample power is available during night at Rs 2 per unit as tariff, while in day it costs Rs 9 per unit, much higher than the night rate.

Ironically, during the day there is not enough power available to meet the demand while at night there are very few takers. Also, due to fog in South India, which is experiencing it under the unusual circumstances largely due to climate change, there is a problem of congestion of transmission lines affecting the power scenario.

Power ministry sources told FE, The situation is quite unique when the peak shortages are at 14% while energy shortfall is at 8%. Due to the current financial crisis there has been a slowdown in power generation. In case of captive power units of manufacturing and other units, there is a problem of open access as many states are reluctant to provide it. This is causing a serious problem of power transmission when required during the day time. Besides, there are practically no transactions during night between 1 am and 5 am despite the availability of ample power.

This changed scenario has also affected trading at the Indian Energy Exchange (IEX) and Power Exchange India (PEX), as both the transactions witness low volumes.

States like Maharashtra are suffering from severe power shortage of 4,500 mw. Despite Maharashtras efforts to draw power from the available sources, it has not been able to find suitable suppliers, especially during the day time.

Sources in the ministry have admitted that the capacity addition is the sole answer to overcome this problem. Power minister Sushilkumar Shinde on Tuesday said in the Rajya Sabha that the government has started monitoring the ongoing power generation projects to meet the 11th-Plan target of creating over 78,500 mw additional capacity.

The ministry has take slew of measures such as rigorous monitoring of capacity addition, development of transmission network and ensuring availability of funds for the ongoing projects to help developers achieve targets.

Further, the ministry has also ensured addition of new inter-regional transmission capacities through development of national grid to commensurate with the capacity addition target. The ministry aims to have an inter regional transmission capacity (national grid) of 37,000 mw by 2012.