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Punjab resorted to power purchase instead of capacity addition—H S Bedi

Tuesday August 2, 2011

Patiala

The tragedy of power sector in Punjab is that state is depending heavily on power purchase to tide over the power crisis year after year and has not added any capacity during this period, H S Bedi President of PSEB Engineers Association said in an interview..

Bedi said that Punjab purchased 86336 million units of power in last six years worth Rs. 28489 crore and did not invest a penny in new power projects. All the thermal projects envisaged in this period have been handed over to private parties. Association has been demanding that at least some projects must be executed in state sector but our efforts has not been successful so for.

Bedi alleged that due to the policy lapse of successive state governments resulting from failure to plan for capacity addition in a planned and systematic manner, PSEB had to meet its growing energy requirement by resorting to extra short term power purchase at exorbitant rates leading to financial crunch, which was then taken as the ground for not adding capacity to meet future energy requirements.

The state government after giving approval to 500 MW Lehra-Mohabbat stages II pant in 2003-04, took a policy decision to procure power to bridge demand-supply gap rather than adding new generation capacity. As a consequence, the dependence on power purchase increased from 31.05 % of availability in 2005-06 to 37.85% in 2006-07 and further to 41.48% in 2007-08. The power purchase bill also increased from just Rs. 2405 Cr. in 2005-06 to Rs. 6020 Cr. in 2007-08.

Beda further elaborated that the most disturbing trend during this period was increasing dependence on short term power purchase through traders which is the costliest component of power purchase. The short term power purchase bill increased from Rs. 542 crore in 2005-06 to Rs. 2285 crore in 2007-08 an increase of four times in just 2 years. The average rate also jumped from Rs. 3.24 per unit to Rs. 7.12 per unit in just 3 years.

Precious funds which could have been utilized for setting up new generation capacity were instead utilized to buy high cost power from the market which resulted in putting PSEB into a debt trap.

The last thermal project executed in state sector was Lehra-Mohabbat Stage II which was commissioned in 2008.During the last ten years restricted maximum demand increased from 5013 to over 8400 MW. The unrestricted demand projected by CEA by the end of 11th plan is 10000 MW. Even in private sector no capacity addition is expected in Punjab in next one and half year.