TN plans sops for diesel power generation units

Chennai: The Tamil Nadu Government hopes to compensate industrial units that start using their diesel power generation plants to help it tide over the power shortage in the State.

Addressing the Tamil Nadu Electricity Board power management meeting with industrialists, the Electricity Minister, Mr Arcot N. Veeraswamy, said that the demand for power was increasing by the day, but options to significantly expand power generation capacity over the next one year was limited.

Assuming that wind power generation, which had picked up in the last one week, was available through September and October, the State would face a shortage of power from the year-end, and 2009 could be a ‘testing period’.

Over the last one week, TNEB had been able to maintain continuous power supply only because the wind power generation had picked up and contributed around 1,800 MW. However, the State cannot plan for power supply with wind power, which is not predictable, he said.

The Minister said that as suggested by the representative of South India Mills Association from Coimbatore, the Government is looking at ways to exploit the 3,000 MW of diesel power generation capacity available with industrial units. He would hold a discussion with the industrialists to finalise a compensation package for using the costlier fuel. A unit of power generated using diesel could cost around Rs 12. The State would bear a portion of the cost to ensure that the demand on the grid is brought down.

The State has no other option to boost generation capacity to meet the increasing demand. Power could not be bought from other States because they too were facing a stiff shortage. Power shortage in Maharashtra is about 4,500 MW, Karnataka 3,000 MW, Andhra Pradesh 2,000 MW and in New Delhi about 1,500 MW. Tamil Nadu was better off with five to seven hours of power cut, compared to other States where power is not available for 10-12 hours a day, he said.

The continuous growth in industrial demand in the State meant that the demand was increasing by about 1,000 MW every year. Taking into account the 19 agreements for major industrial investments that have been signed up by the Government, the demand would increase by more than 1,400 MW by 2010-11. The State now has over 9,500 MW of generation capacity and no immediate options for adding to this capacity.

Over the next one year, if the Koodamkulam Nuclear Power Plant goes on stream by 2009 it would mean an additional 468 MW, which would be needed for the new industries, and 178 MW more from an independent power producer expected to start generation in Tuticorin. All other major power projects announced are likely to go on stream only in December 2010 when about 3,000 MW would be added to the existing capacity, he said.

Addressing a press conference, he said he would meet with the industrialists on Monday to arrive at a compensation package for using diesel generating sets to tap over 1,500 MW of power.

To a question on unbundling the TNEB, the Minister said that this was in line with the Electricity Act of 2003. The Centre had declined to extend the deadline to the State Government to unbundle the power utility beyond June this year. So in the first phase, a transmission corporation would be created. However, he said, even if the TNEB was unbundled, there was no question of privatisation of the service and the entities would function under the Chairman TNEB.