Long power cuts loom as supply lags behind demand

HYDERABAD: The unabated increase in power consumption in the state, which touched a new high of 9,362 MW on Wednesday, is giving jitters to the power utilities. They apprehend that if the consumption does not come down in the next one week, power cuts for over two hours may be inevitable across the state.
For the present, the power utilities have been able to meet the demand up to 9,019 MW leaving a shortage of 343 MW which is being met by overdrawal from the unutilised power available with the central pool and outside purchase at an average cost of Rs 10 per unit and also by stepping up generation from naphtha and diesel.The total hydel generation has drastically come down as inflows into Srisailam reservoir have stopped. The state has an installed capacity of 3,706 MW but the total hydel generation on Wednesday was only 2,213 MW. The maximum demand for power is said to be from the agriculture sector as rabi operations have begun particularly in the upland areas of Telangana. The power sector can get some relief only if the gas-based power plants in the state get enough supply from KG Basin.
But power experts feel that the real reason for the problems being faced by the state is due to the wrong policies of the Centre which has forced the state governments to import coal at a higher price and also permitted the gas-producing companies to charge $ 4.2 per million British thermal unit (MBTU) plus taxes and transportation.
At this rate, the per unit cost of generation of power for the present would be around Rs 5 per unit which is double of hydel or thermal power. The per unit generation cost from traditional sources by APGenco is Rs 1.76 per unit, the experts say. The estimated additional burden on power from gas would be to the tune of Rs 2000 crore on the exchequer.
What causes concern, the experts say is that the Reliance has stated that it may hike the price of gas after five years which could be even double the present agreed cost.
Secondly, availability of gas is also questionable since the Government of India in its gas utilisation policy said that the first preference would be for the fertilizer industry, then to LPG and last preference would be for power sector.
But the officials claim that even if the per unit generation cost would be around Rs 5 per unit, it would be much less than what the state was paying for outside purchases or naphtha-based power which would cost from Rs 9-11 per unit.