PUNJAB – Reality check of affordable surplus power
V K Gupta
July 14th, 2014

Reality check of affordable surplus power

The hype of affordable surplus power for all categories of consumers in Punjab is not based on reality . Sufficient but costly power is likely to be made available in Punjab for about 10 months in a year after the commissioning of all the thermal units in private sector .
The over dependence on private sector for power generation in Punjab may lead to tariff hike and monetary gains for private companies but the consumers are not going to get cheaper power .The consumers will have to bear the brunt of fixed capacity charges of three private sector thermal plants in case of forced outage of units.
In Punjab all the three new thermal plants at Goindwal Sahib, Rajpura and TalwandiSabo have come in private sector and no new thermal plant has been set up in state sector. All the three thermal plants can be expected to run at 80% plant load factor as the Punjab Government has got coal linkages for these plants as per their capacity.

It is being pronounced by state politicians and PSPCL that with the addition of 3920 MW powerby private sector the power will be available to all categories of consumers at affordable prices and rather tariff will be reduced with the availability of surplus power. The surplus power will attract more attract capital investment leading to fast industrilisation of state and moreover tube well connections pending for a decade will become a thing of past.
The fall out of this surplus power for about 10 months of year will be forced closure of state run thermal units to pave way for private sector generators. In case of state run units PSPCL is not incurring any expenditure in case of forced outage or backing down of units on less demand due to weather vagries. However, In case private sector units PSPCL will be paying fixed charges of more than Rs. one per unit to these companies for any forced outage of units.
PSPCL has anticipated in its tariff petition that with the surrender of 12994 million units of surplus power of 12994 MU from private sector thermal units the fixed charges to be paid to private companies will be Rs.1706 crore . The burden on consumers on this account is likely to be 44 paise per unit. PSPCL has been forced to go for short term power purchase due to delay in commissioning of these units.
It may not be out of context that despite this good performances of three state run thermal plants in the last decade Punjab Government has approved only one 1320 MW thermal plant in state sector at Mukerian in October 2011 that too after the persistent follow up by state power engineers. This power plant is on papers only the project is yet to take a concrete shape.
The next thermal plant at Mukerian can be expected after four years and by then partial power surplus state may be back to power shortage position with the increase of annual 10% power demand rise. There is urgent need to add generation capacity in state sector so that a balance between state and private sector generation can be maintained.

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