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Power Hungry The Outages Will Get Worse|
* Indian firms lose 9% output due to power shortage. In China and Malaysia this figure is 2%. Also, power costs 74% more in India than Malaysia and 39% more than in China.
* There's a 20-25% power shortage in Maharashtra, 20% in Uttar Pradesh and 10-15% in Gujarat, Madhya Pradesh and Delhi
* Power generated by captive plants (of over 1 MW) is 20,000 MW. Though this is costlier, industry prefers it as it is at least steady.
* Many power-surplus states are getting into lucrative power trading business. Himachal Pradesh, West Bengal will benefit.
It was just about true for the summer of 1969, when the country faced minor power shortages. But as India edges closer to the end of the first decade of this century, the summers are becoming worse every year. This season the power situation may turn out to be unmanageable with predictions of increasing power cuts. So, if you are a retail consumer, get ready for hot, sweaty and difficult nights. And if you own a factory, be prepared for more expensive power, or lower production.
The industry is looking at ways to get around the problem; captive power is emerging as a solution. "We are looking at several alternatives to improve the power supply," says V. Raghuraman, energy expert with cii. Some states who have access to cheaper energy sources like coal and hydro have drawn up strategies to become power traders, that is, suppliers to deficit states. The Union power ministry has set a most ambitious target of adding 40,000 MW out of a total of 79,000 MW power generation capacity over the next Plan period. The states are expected to add 28,000 MW and the private sector 11,000 MW.
At the current annual generation capacity of 1,30,000 MW, India faces shortages of nearly 9 per cent; the peak load deficit is higher at 10-11 per cent. In some of the developed states, the situation is grim; according to the Central Electricity Authority (CEA), there is a 20-25 per cent peak shortfall in Maharashtra, 20 per cent in Uttar Pradesh, and 10-15 per cent in Gujarat, Madhya Pradesh and Delhi. Maharashtra is the worst-hit, with load-shedding of 7-9 hours a day in small towns and 4-6 hours in cities. In the Vidarbha region, which is reeling under temperatures of 45 degree celsius, consumers took to the streets after load-shedding of over 12 hours a day.
If the trend continues, India's growth may falter. A 2004 World Bank study revealed that Indian manufacturers face 17 significant power outages each month, compared to one in Malaysia and under five in China. While Indian firms lose 9 per cent of output due to breakdowns, the figure in Malaysia and China is just over 2 per cent. Worse, India's power costs are 74 per cent higher than Malaysia, and 39 per cent more than China. "If you can make the power sector more efficient, it will help manufacturing to push down costs," feels Sunil Sinha, senior economist, Crisil. According to Kirit S. Parikh, member, Planning Commission, the Indian plants could "definitely" have been more profitable if they were not faced with erratic power supplies. He adds that "people are finding out ways to tackle lack of quality power".
One of these solutions is captive power. Currently, over 60 per cent of Indian firms own generators compared to less than 30 per cent in China. And the trend is gathering steam in India. CEA admits that the growth in captive power—at 6-7 per cent—has been higher than the 4-5 per cent increase in utility-based generation. In absolute terms, power generated by captive units (of over 1 MW capacity) is 20,000 MW a year with almost 100 per cent utilisation.
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