The Tamil Nadu government shells out more money, per unit, to buy electricity from a handful of private power companies than even the amount it spends on power purchase from renewable energy projects.
Privately generated power in the State is so expensive that it costs 20 per cent more than solar power and three times more than wind energy. In most other States, renewable tend to be the most expensive in the energy basket and also get the highest subsidy.
Most of Tamil Nadu's private power plants, on the other hand, are fuelled by diesel, furnace oil and naphtha. They are neither clean nor cheap. And most importantly, the companies have earned over Rs.36,000 crore from the State's power utility in the last 10 years.
Despite their massive revenues, they've received little scrutiny. However, with a hike in power tariffs seeming imminent, that seems to be changing. In the public hearings held across the State in October, this was a question that was often raised: Why should consumers fund TANGEDCO's high-cost power purchases?
Several participants in the hearings also alleged that consumers are being made to pay for the juicy power supply contracts that have been awarded to politically well-connected firms.
“They [TANGEDCO] are showing the demand shortfall and using it to buy power from these companies at extraordinary rates,” says M.G. Devasahayam, a former head of the Haryana Electricity Board.
With private companies, which use liquid fuel, citing input cost as the reason for high prices, Mr. Devasahayam says: “It's as if the entire State is being powered by expensive diesel generator sets. This is unsustainable.”
Tamil Nadu's descent into chronic power shortage has also remarkably dovetailed with a spike in the price of privately generated power. Since 2008, when the State first witnessed rolling blackouts, the cost has gone up by 40 per cent.
“ We have no choice,” said a senior TANGEDCO official. “When uninterrupted power supply is the demand, how can we not buy?”
Mr.Devasahayam says buying power, whatever be the cost, is not solution. “Bring in renewable energy as the mainstay. Go for distributed and decentralised generation. Take as many villages as possible out of the grid,” he says.
