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Fund crunch leading to outages, says CEA

Fund crunch leading to outages, says CEA
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First Published: Mon, Jul 20 2009. 09 48 PM IST
Updated: Mon, Jul 20 2009. 09 48 PM IST
New Delhi: India’s power crisis stems partly from the poor financial condition of state electricity boards, or SEBs, which are the primary distributors of electricity in the country, says a senior official at the apex power-sector planning body. That’s an assessment at least one SEB director contests.
SEBs have been unable to replace or even repair sub-standard distribution equipment such as transformers for lack of finances, according to the official at the Central Electricity Authority (CEA). “Substandard equipment contributes 5 percentage points of the 30% distribution losses in the country. SEBs do not have money, because of which they do not even have a maintenance or repair budget,” said the official, who didn’t want to be named. “SEB losses are in the range of around Rs29,000 crore annually. The maximum losses are in Bihar, Tamil Nadu, Uttar Pradesh and Madhya Pradesh,” the official added.
India has a 12% shortage of power during the peak hours between 5pm and 11pm, but experts say this number could be higher. Shortages arising from limited generation capacity and growing power theft have been identified as key infrastructure bottlenecks in a country that has an installed capacity to generate 147,000 MW of power.
There are around 3.5 million transformers in operation at the distribution level in the country. In addition, the country will need around 1.8 million new transformers in the 11th Plan period (2007-12).
At least one state official contested the CEA official’s assessment. “I don’t agree with this view because there has been no specific survey for measuring losses. There should have been a sample survey defining the normative and actual loss for the transformers,” said S.K. Agarwal, director, finance, Uttar Pradesh Power Corp. Ltd. “In Uttar Pradesh, we are buying 40,000 energy efficient transformers and we plan to replace the old infrastructure. Transformer repairs cost 40% of the cost of a new transformer,” he added. Uttar Pradesh has 700,000 transformers and the state runs up Rs1,300 crore per annum in commercial losses.
One of the government’s most ambitious energy schemes aimed at upgrading the distribution system, minimizing transmission and distribution losses, improving metering and assigning responsibility for realization of user charges—the Accelerated Power Development and Reforms Programme (APDRP)—is way behind schedule. APDRP wasn’t able to bring down the losses to 15% by the end of 2007, as originally targeted in 2000-01.
Although India ranks sixth in the world in terms of power generation, it still faces a shortage because one-third of the power generated is lost due to theft and pilferage. “This is already a concern in the mind of policy makers. The restructured APDRP addresses this concern. In addition to APDRP, if distribution franchises are given to the private sector, losses will come down,” Madanagopal R., an equity research analyst at Mumbai-based Centrum Broking Pvt. Ltd, said.
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First Published: Mon, Jul 20 2009. 09 48 PM IST