The foundry industry in the State fears many small and medium-sized units may have to shut down, if a new rule on electricity consumption, relating to discharge of harmonics, is implemented.
Harmonics are generated by any load that draws power disproportionate to the voltage applied and affects the stability of the grid. Power regulators prescribe the standard up to which it would be allowed, beyond which penalties are levied.
Multiple challenges
“The foundry industry is already facing an unprecedented slowdown and challenges on many fronts. We are trying to understand the implications of a new notification related to harmonics. The new norm will mean a change in equipment. For instance, a medium-scale industry may have to invest ₹2 crore for changing the equipment, which is impossible,” said Sanjay Shroff, president, Institute of Indian Foundry Men.
“Earlier, the norm was applicable to High Tension industries connected to over 33 kV. The Central Electricity Authority has now amended the rule and made it applicable to industries connected to 11 kV and above,” he said.
Mr. Shroff pointed out that monitoring meters would be installed by the Electricity Department and strict penalties would be imposed for deviations from the prescribed standards.
“The norms are likely to be implemented from February 2020 and it will hit the industry massively. The government should discuss with the industry and understand the situation before implementing them. The industry is planning to make a representation to the Union Power Minister on the issue and is also looking at legal options,” he said.
There are 700 foundries in Tamil Nadu, with the major cluster in Coimbatore, mainly servicing the automobile and pump valves industry. The capacity in the State is around 1.7-1.8 million tonnes, with a revenue of about ₹12,000 - 13,000 crore, which roughly translates into $1.5 billion.
“At a time when investments are not happening, a knee-jerk policy with a limited time frame will further dent investor confidence and sentiments,” Mr. Shroff said.
