Kolkata: The West Bengal government is reviewing plans—drawn up last summer—to invest more than Rs14,000 crore to add 3,550MW to its state-run power generation capacity.
The decision is based on concerns that regulators are clamping down on the price the state can sell the power at to other energy-deficient states.
West Bengal and its neighbour Orissa, which generate more power than they use, sell the excess to states such as Maharahrashtra, Punjab and the capital New Delhi, at as much as Rs6 per unit. Within West Bengal, the average cost of supply is much lower at Rs3.14 per unit.
India’s northern states have been battling an energy shortage for years, leading to large outtages during summer, the peak consumption period.
In November, however, the Appellate Tribunal for Electricity ordered the Grid Corporation of Orissa (Gridco) to cap the trading margin at the cost of generation and four paise per unit. Gridco has appealed against the order in the Supreme Court, but the tribunal’s ruling has sparked concerns that a series of such clampdowns will cap the profits of the sellers.
“We are reviewing our investment plans,” the West Bengal power secretary Sunil Mitra told Mint. The investment will require the state utilites to raise nearly Rs10,000 crore as debt (on a 70:30 debt to equity ratio). Servicing this debt will become difficult if the commercial consideration is not viable, Mitra added.
In 2005-06 the West Bengal State Electricity Board (WBSEB) earned a revenue of Rs1,000 crore by selling 3,000 million units outside the state. In the current financial year, the board expects to post similar earnings from export of just 2,500 million units. This was made possible by the higher price fetched from the inter-state trade. “The rise in demand within the state curtailed the amount we could trade,” Mitra said.
The state power department has also been stymied by the major expansion and investment plans of other power utilities, which will put a squeeze on available transmission lines of the power grid.
Damodar Valley Corporation is adding 6,000MW to its capacity and the Nuclear Power Corporation has also selected a site in the state for a 10,000MW power plant.
“Currently, the transmission capacity to feed into the national grid is only 1,100MW,” Mitra said. West Bengal’s state utilities will be adding 1,570MW of thermal power and 900MW of hydel power by the close of the current financial year. The three state-run utilities, WBSEB, West Bengal Power Development Corporation and Durgapur Projects Ltd, currently have generating capacity for 166MW of hydel power and 3,301MW of thermal power.