Economic slowdown may ease power situation
Rakesh Lohumi
Tribune News Service

Shimla, September 29
The real impact of economic slowdown in the state has started showing in the declining growth of power consumption, which is falling far short of the projections, particularly, in the industrial sector.

The state electricity board had projected an annual growth of over 25 per cent but the actual growth in the last financial year, when the global meltdown hit the economy, has been as low as 8.5 per cent. There was a sudden surge in demand for power in the industrial sector following the grant of central package of incentives, leading to sharp increase in power consumption from 2005-06 onwards. The state electricity board, which was forced to make additional purchases of power to meet the demand in the lean winter months, can breathe easy for now as the demand is likely to remain sluggish for quite sometime.

The total consumption of electricity within the state shot up from 2925 million units in 2004-05 to 3568 units in 2005-06 and to 4300 million units in 2006-07, registering a growth of over 20 per cent. The industrial consumption increased from 1979 million units to 3100 million units over the period with an annual growth of 30 per cent. However, in 2008-09 the total consumption in the state was only 5460 million units, a modest increase of 432 million units over the previous year. The growth was almost one-third of the projections and exactly half of the previous year’s growth of 17 per cent.

The industrial consumption increased by just 285 million units to 3385 million units in 2008-09 as against 600 units in the previous year. The growth rate was 9.2 per cent, down from 18 per cent. Apart from economic slowdown the uncertainty over the extension of industrial package which is expiring on March 31, 2010, has held back investors.

However, the softening of demand for power will be a blessing in disguise for the state electricity board which had to procure much more power from outside the state to meet the peak winter demand which had swelled from 140 lakh per day to 195 million units over a period of three years. The state faces acute shortfall during winter as demand goes up and generation at various hydroelectric projects declines due to reduction in discharge of various rivers and streams. The generation from board’s own projects has been below normal this year as lack of snow during the last winter and deficient rains during recent monsoon has caused significant decline in discharge.