The Hindu : Tamil Nadu News : To set up captive plants or buy power…that’s the question

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Monday, Dec 15, 2008
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Tamil Nadu

Tamil Nadu

To set up captive plants or buy power…that’s the question

M. Soundariya Preetha

COIMBATORE: The Coimbatore industry, hit by 40 per cent demand and energy cut coupled with peak hour restrictions, is turning back to some of its old proposals to solve the problem.

The establishment of a coal-based captive power plant is one such proposal, which was originally mooted one and a half years ago. The industry is also contemplating purchase of power from other States or from private producers in the State. It is the high cost of power (Rs. 4.20 per unit) that made the Southern India Mills’ Association (SIMA) to formulate a proposal of setting up a 1,000 MW coal-fired captive power plant in two phases. Subsequently, when the State government issued letters of facilitation for the implementation of 10 merchant power plants, the association thought of tying up with promoters of these plants rather than establishing its own plant. However, as the international cost of coal shot up, this proposal was not pursued. Now, with the power availability itself becoming a problem, the SIMA is taking a re-look at some of these proposals However, the association chairman, K.V. Srinivasan, points out that commissioning a captive power plant would take at least three years and the per tonne cost of coal now is Rs.3,800 to Rs.4,000, pushing up the generation cost to Rs.5.60 a unit.

“We are still open to the idea of tying up with individual power producers.” The units are also looking at buying power under the open access facility. Some of the mills have individually tied up with private power producers to meet their demand. They are paying Rs.7.50 per unit. The association has written to the power utilities in Assam, Chattisgarh, Delhi and Himachal Pradesh too as these States have excess power. It has also written to power trading agencies such as Tata Power and NTPC Vidyut Vyapar Nigam, a subsidiary of NTPC. And, though the initiative is a brainchild of the Association, when it fructifies, any high tension (HT) consumer in the State can be a buyer.

The main problem that the units face while buying power under the open access system is the cost. The total tariff that they pay includes the distribution and transmission charges, cross subsidy surcharge, additional surcharge and wheeling charges. The State should request the Centre to amend the Electricity Act 2003, enabling small and medium scale units to buy power less than one MW under the open access system. It should also encourage captive power plant projects, he adds.

Meanwhile, the foundries and engineering units here are looking at buying power from other States.

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