Groping in the dark


The power sector is plagued by inability to add to hydel generation, losses in operations and high price of energy sourced from power exchanges

With the monsoon playing truant year after year, the State appears destined to live with a power crisis looming perennially over it. If the State has not plunged into darkness these past few years, it is only because of the prudent power purchase decisions taken by the Kerala State Electricity Board (KSEB), the State power utility, from time to time, keeping in view the inability of the State to meet its power requirements on its own and the need to provide uninterrupted and quality power to homes, institutions and industries.

The State could generate only 6,500 million units (MU) of power against the projected demand of 24,000 MU during the current financial year. The deficit of 1,230 MU, left by a relatively weak southwest monsoon till September, has only deepened the crisis this year. The hydroelectric power stations could generate power to meet only 17% of the State’s total demand. The remaining 83% has been and continues to be sourced from all available sources. This year, in particular, it has been a veritable gamble with the southwest monsoon for the KSEB, the hydel reservoirs recording alarmingly poor inflow. Things have looked up a bit in the currently on final phase, but that is only small consolation given the big picture marked by the near impossibility to add to the State’s hydel power generation capacity, mounting losses in operations and soaring cost for energy sourced from power exchanges.

Purchase scenario

The situation is confounded by the KSEB’s difficult financial situation. It has a yawning revenue gap pegged at around ₹8,000 crore. While there are those who attribute this to the KSEB’s failure to file its annual statement before the Kerala State Electricity Regulatory Commission (KSERC) for the period between 2012 and 2015, the fact remains that the KSEB has been functioning on a tight budget. Some months ago, the Centre had offered to supply power at low rates to the State, but the State chose not to lift the power, inviting criticism from the Centre. Sources in the KSEB say the offer had come at a time when the cost per unit was substantially low all around. By then, the KSEB had, besides finalising its plans to lift 10,500 MU from the Central pool, inked pacts with with seven different power producers for future purchases.

With new policy initiatives bringing in major players in the power production scene, the dynamics of purchase and consumption has also undergone a massive change in the past few years. While households and business establishments are entirely dependent on the KSEB for their power requirements, the bulk consumers have many power producers to opt from and with whom they could strike deals for purchases. As many as 25 bulk consumers, including Hindustan Newsprint Ltd. (HNL), Apollo Tyres, OEN Connectors, English India Clays, among others, have opted for open access to diverse power producers. Railways do not have explicit provisions for open access and, as a result, it continues to be a client of the KSEB. The HNL management has sought one month’s time to pay up its tariff arrears to the KSEB so that it could move to the open access system.

Alternative energy

“When the private exchanges offer power at cheaper rates, the bulk consumers would go in search of better deals, but once the rates soar, they come back to the Board for subsidised power. The Board is dependent on price margins earned from such consumers to supply power at affordable rates to domestic consumers. However, quite often, the mercurial behaviour of the bulk consumers end up in losses to the Board. Given no other option, the Board will have to raise the domestic tariff, adding to the burden of the commoners,” a top board official said.

In order to overcome the heavy dependence on hydroelectric units, the Board had explored renewable energy options, mainly the solar route. But, so far, this has not yielded the desired results owing to a variety of reasons. The Board had plans to set up a solar park on 1,050 acres of land in Kasaragod with a target to generate 200 MW. The park now generates 50 MW, but local resistance against setting up such a vast tract of land for the solar park has put a question mark over the initiative. Although 20 acres of land had been identified near the existing park, there seems little possibility of the park being put to its full capacity or the additional land being used for installing additional solar panels.

Moreover, while solar power plants in other parts of the country offer power at ₹3.50 a unit, the Solar Energy Corporation of India that has tied up with the Board for the project is insistent that it would vend power only at ₹4.95 a unit. The dispute is dragging on and could well drag the entire project down with it. The roof-top solar panel project that was sought to be implemented under the supervision of the Agency for Non-Conventional Energy and Rural Technology (ANERT) has also not taken off in a big way owing to complexities involved in the Electrical Inspectorate endorsing the safety of the units and the KSEB fixing and overseeing the meters. The absence of credible solar panel providers and variations in power generation from such units are also being cited as some of the impediments in tapping this option. Wind energy is seen to be subject to seasonal fluctuations and hence not a stable source, which implies that the State government and the KSEB might well be running out of options as they seek to meet the rising demand for quality power.

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Printable version | Jan 27, 2020 9:03:36 PM |

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