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Thursday, April 13, 2017

From darkness to light - How Telangana turned power surplus in just three years

From a power-deficit State in June 2014, when it came into being, Telangana has managed to tide over the crisis situation by augmenting capacity and bridging the gap with purchases. It is now gearing up to meet peak demand of up to 10,000 MW during the ensuing summer months.
From a deficit of 2,000 MW in 2014, Telangana is on course to becoming a power-surplus State like Chhattisgarh and Andhra Pradesh. This transformation would not have been possible but for enhanced generation, efficient distribution and demand side management.
When the State was formed, the total installed capacity was 6,574 MW and power shortage was at 2000 MW. In the last 33 months, the State added 4,190 MW. Significantly, by next year, 4130 MW of additional power will be available.
D Prabhakar Rao, Chairman and Managing Director of TS Transco, told BusinessLine, “This transformation would not have been possible but for the support of Chief Minister K Chandrasekhar Rao, timely decisions and teamwork in the sector.”
“There will be no problem for supply during summer as we have capacity to meet demand of up to 10,000 MW. Already demand is gradually coming down from the rabi crop in the agriculture sector. The demand is likely to slip to a little over 8,000 MW,” Rao explained.
Purchase constraints
In 2014, even if the State wanted to augment power purchase, the transmission corridors were fully booked and there was no facility to procure power from power -surplus regions. Factoring the constraints, a high tension power line from Wardha in Chhattisgarh up to Maheshwaram via Dichpalli, in Telangana was proposed.
PowerGrid completed the line ahead of schedule. This enabled Telangana to procure power from any part of the country. However, it has already contracted to buy 2,000 MW from the power-surplus Chhattisgarh.
The State electricity regulator has fixed the power purchase price at ₹3.90 per unit, which includes ₹2.70 as fixed cost and ₹1.20 per unit as variable cost. This price works out cheaper than the average cost of supply of power in the State at ₹4.51 a unit in 2016-17 and projected cost of ₹4.45 per unit in 2017-18.
During 2013-14, in the unified State of Andhra Pradesh, industrial consumers faced power holidays of up to three days in a week and no supply during peak hours. Domestic consumers faced up to six hours of power cuts and the farm sector had erratic supplies as against promise of seven hours per day.
Since the State’s formation, there is no power cut on any section of consumers. The industry gets round-the-clock supply and the agriculture sector too gets nine hours of power in two spells. The latter is aided by the addition of solar power capacity. Efforts are on to double the generation capacity of solar power, from about 1800 MW now. Telangana is projected to have installed capacity of about 3,800 MW of solar power by June 2018 as PPAs have already been inked with the developers.
Open access
In the last couple of years, the demand side issues too have changed. These have enabled the State utilities meet the energy requirement. The open access offered to industrial consumers enabled them to purchase power from other merchant power sources and from the spot exchanges. The cost of power procured too is lower than what the State now offers for industries. As against ₹5 a unit and above, the spot exchange supply sometimes works out to as low as ₹3 a unit.
Devendra Surana, FICCI Chairman in Telangana, said, “The power sector has improved dramatically in the State due to changes brought about by the Centre and good management by the State. In addition, while the open access offers a channel for industries, the State needs to look at the cross subsidy part.”
As per the perspective plan, in the next three years, the State expects the capacity to be about 16,306 MW. The additional capacity will come from 800 MW at KTPS, 1080 MW at Bhadradri, 4000 MW from NTPC, 800 MW more from Singareni Collieries, 4000 MW from Yadadri, 800 MW from central generating stations and 1000-2000 MW from Chhattisgarh. In addition, the State expects to add about 3800 MW from solar power and 90 MW from hydel power, all seeking to ensure that the demand-supply gap is well addressed and State becomes surplus.

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