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Tuesday, 2 September 2008

Penalty fails to curb power overdrawal (What will be the solution? )

Anil Sasi

New Delhi, Sept 1 Amid a surge in short-term power costs triggered by acute shortages, State Electricity Boards (SEBs) are increasingly opting to overdraw from the grid and shell out the Rs 10 per unit maximum penalty, instead of sourcing power from more expensive liquid fuel stations.

While this trend is pushing the grid to the brink of a collapse, with frequency dipping way past the danger mark on numerous occasions over the past couple of days, rampant overdrawal by States comes even as nearly 3,000 MW of naphtha and diesel-based capacities lie idle across the country.

Flagged by outages in a key thermal power station, besides lower hydro generation in the southern region and a continuing dip in nuclear generation, the cost of short-term power has shot up well into double digits across regions over the last couple of days.

“With the the maximum penalty for overdrawing from the grid during low frequency conditionscapped at Rs 10 per unit by the regulator, most States prefer to overdraw from the grid and pay the penalty to buying electricity from liquid-fuel stations, which could cost between Rs 12-14 per unit,” an official involved in the exercise said.

Meeting convened

As a result of rampant overdrawing by States, grid frequency on Sunday dipped to nearly 48.5 and again stayed below 49 hertz several times on Monday, forcing the Power Ministry to convene a meeting here to take stock of the situation. With short-term power shortages spiralling out of control, at the Indian Energy Exchange (IEX) — the only functional power bourse — the difference between supply and demand was nearly 1,500 MW on Sunday, officials said. For Tuesday, power tariffs are pegged at over Rs 10 per unit for four of the 24 hourly blocks contracted on the IEX, and between Rs 9-10 for a majority of the other blocks.

The trigger for the sudden shortage over the last couple of days has been the outages at NTPC’s Talcher thermal station in Orissa, which supplies power to southern states, due to less coal.

Source : ET

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