Beyond The Grid Failures

Northern Grid Failure on Monday, 30th July 2012, was big news. It became bigger next day, on Tuesday, when almost half of India went dark for over two hours with the failure of Northern, Eastern and North Eastern grids. Grid failures are rare & serious matter requiring grave introspection, detailed analysis and firm decisions to avoid recurrence. It was easy to describe reasons for these two grid failures, simply because there are a whole lot of factors, which due to lack lustre performance of power sector, were being neglected and forced analysts to classify these as Tragedy Waiting to Happen and a reminder that we are Living on the Edge.

Over drawl of Power by a few states, Supply Demand mismatch, installed generating capacity, poor health of SEBs, Outdated regulatory mechanisms, Technical and Commercial losses, Fuel supply and Transmission system are some of the reasons being attributed for these failures by Power Sector Experts. They have literally blamed the entire chain in power system, not one or two doable things for these failures. Power Sector is a victim of Policies & lack of will to take Decisions.
Traditionally Power Generation in our country had been with SEBs barring about 40,000 MW with a highly efficient NTPC. Only recently Private Sector started taking interest and boosted capacity addition in 11th plan. For 12th plan they will be adding almost 40% of proposed 76,000MW.
Presently India has installed capacity of 200,000MW compared to China’s 800,000MW. We have track record of poor project implementation, over protection of domestic vendors with stringent import regulations, misplaced environment policies, ever changing regulations for land acquisition and a PSU not competent to supply guaranteed fuel. Adding to these woes, Banks & financial institutions have started looking at Power Generation as risky investment. With all these it is going to be a tough catching up game and decades before we are able to fill the Demand Supply gap.
In a recent study international rating agency Moody has described higher than usual losses in T&D due to poor infrastructure and losses related to fraud & corruption by consumers who do not pay for the electricity they consume. It is estimated that 30% power is lost to theft and inefficiency in state distribution networks. It amounts to about 60,000MW, the load three affected grids were carrying on Tuesday afternoon when the 2nd failure happened. Post privatisation, power theft has been dealt by BSES and Tata’s in Delhi effectively by using cables to transmit power right up to consumers door steps, literally making it impossible for them to use jumpers and simultaneously imposing heavy penalty or even summary disconnection if found involved in power theft.
Our SEBs can’t take these costly but effective initiatives for want of funds. Their financial health is in dire state owing to low tariffs, increased fuel prices, non receipt/ delayed receipts from consumers. In Bihar receivables take up to 600 days i.e. almost 2 years after consuming electricity payment is made to SEB. Electricity is being sold at heavily subsidised rates to agriculture sector, which in most Northern states is the biggest consumer. And it takes long time to get subsidy from the government. It is because of the paucity of funds that SEB are not able to spend on badly needed maintenance of the local distribution system and generating plants in their state.
In India there are a large number of power plants which are old, inefficient and generating below average electricity but still being counted in 200,000MW installed capacity. This is also one of the reasons in shortfall in generation. By planned Renovation & Modernisation a new life can be infused in them providing a quick and low cost solution to bridge the demand supply gap.
Over drawl is turning out to be an easy way out for SEBs to meet their power requirements. Each Board has been allocated a quota and ideally shouldn’t exceed the limits prescribed. But it is being regularly violated with impunity as Boards find it cheaper to pay over drawl fines which are way below the prevailing market rate of Power to be sourced from Private Developers. Moreover penalty is a deferred payment unlike purchases from Power Exchange where immediate payments by transfer of funds are required. Until the over drawl fine is hiked to make it comparable with power purchase, Boards will keep violating the limits assigned regularly resulting in eventuality of grid failures during low frequency.
CERC has to be made more powerful. Their orders should have the same authority as that of a Court decree. They should raise the penalty for over drawl from present paltry Rs 1 Lakh to manifold for each violation and compounded for repeat violations. Keeping a watch on erring states should not be arduous as it is well known that Haryana, UP, Rajasthan, Punjab and J&K are the inveterate defaulters. If over drawl, which appears to be the cause for present collapse, can be checked, we shall be spared another grid failure of this magnitude in future.


About the author:

Mr Pravin Bhasin is Power Sector professional with over 40 years expereince in BHEL, L&T, Thermax & Reliance Infra.He has been associated with Thermal power projects both gas based & Coal based; small & large in India & abroad.Now he provides consultancy services on Power Sector.

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Mechanical engineer with experience in Power Plant maintenance , operation and auditing for ISI marked products. MBA in Power Management from National Power Training Institute, Faridabad. Working as Consultant for Bridge to India Pvt. Ltd. Expertise in: 1) Power sector regulations 2) Financial Modelling 3) Project Development solar PV plants 4) Strategic consulting 5) Report writing

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