First Published: Thu, Mar 27 2014. 12 30 AM IST
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Karnataka seeks to keep its electricity within its borders

In the run-up to the Lok Sabha election, the Karnataka government has stopped supplying electricity outside the state
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Karnataka seeks to keep its electricity within its borders
The development in Karnataka comes in the backdrop of states, fearful of political backlash, shoring up additional power to avoid outages during the election. Photo: Bloomberg
New Delhi: In the run-up to the Lok Sabha election, the Karnataka government, in an unprecedented move, has stopped supplying electricity outside the state.
This comes in the backdrop of states, fearful of political backlash, shoring up additional power to avoid outages during the election.
In an order on Wednesday, the state government stated: “All the generators in the state of Karnataka shall operate and maintain their generating stations to maximum exportable capacity and shall supply all exportable electricity generated to the state grid for utilization within the state.”
The order also stated that the state was facing a power shortage and that demand for electricity peaks during January to May because of school and college exams and the summer.
The national election will be held in nine phases from 7 April to 12 May. Karnataka, which accounts for 28 of the 543 seats in the Lok Sabha, will vote on 17 April.
The election coincides with the peak Indian summer, but this year sees an additional worry—a looming threat of the El Niño weather pattern that is associated with below-average rainfall.
Peak electricity shortage in the southern region to which Karnataka belongs in fiscal 2013 was 18.5%.
The Karnataka government’s order was issued under Section 11 of the Electricity Act, 2003, with the maximum demand of 9,223 megawatts (MW) reached in February. The state is facing a peak shortage of 500-1,000MW since December.
Section 11 of the Electricity Act states: “The appropriate government may specify that a generating company shall, in extraordinary circumstances, operate and maintain any generating station in accordance with the directions of that government in the public interest.”
Analysts believe that elections are not a good time for the Indian power sector.
“We believe that with elections in the next six months, it will be a difficult phase for companies in this space,” UBS Global Equity Research wrote in a 31 January report.
The Karnataka government’s move follows the Gujarat government’s order wherein state-based firms can’t source electricity from other states and buy more expensive electricity from state-run utilities.
“We view this development as sentimentally negative for the sector. Of the total installed capacity of ~23.5GW (gigawatt) in Gujarat, the state sector accounts 8GW (~34%) of the total installed capacity in the state.,” SBICAP Securities Ltd said in a 21 March statement.
With the level of industrialization higher in the southern states—Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Puducherry and Lakshadweep—there is higher demand for electricity. “The availability of power through energy exchanges is also constrained by corridor congestion,” the Karnataka government’s order stated.
Even as South India has joined the national electricity grid, completing the integration of the entire country into one seamless network for delivering power to consumers, there are transmission constraints. All the five regional grids in the country—northern, southern, eastern, north-eastern and western—are connected to the national grid.
India has an inter-regional electricity transmission capacity of 37,000MW, of which only 17,000MW can be transferred. Investments in transmission and distribution have not kept up with investments made in power generation. While the country has an installed power generation capacity of 237,743MW, daily generation is only about 125,000MW.
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