Take long-term measures to end state's power crisis

Poor monsoon in Karnataka this year has been accompanied by long power cuts across the state. Over the past month, Bengaluru and its neighbouring areas have experienced a serious power crisis. Although inadequate hydro generation is the main reason for this year’s shortage, the state has persistently experienced deficits in supply over the past decade.

The Centre for Study of Science, Technology and Policy (CSTEP) estimates that even with capacity addition plans in the pipeline to meet demand projected by the Central Electricity Authority, Karnataka will still face an annual peak shortfall of 1,400 to 2,400 MW over the next five years. The trend of deficits is likely to continue, unless a longer-term view is taken by examining underlying reasons for it and implementing suitable measures.

Why are there continued shortages in Karnataka? Between 2007 and 2015, the highest energy shortfall recorded was 14 per cent of the demand while for peak demand - the highest demand expected during the year - the shortfall hovered between 14 and 19 per cent. Although supply has increased, it has not kept pace with the increasing demand due to many reasons.

On the generation side, state thermal plants have been operating at low Plant Load Factors (PLFs) of 60–68 per cent in recent years, as compared to about 80 per cent for Central thermal plants. The PLF is the ratio between actual energy generated by the plant and its maximum capacity. In the past, state thermal plants have achieved a maximum PLF of 89 per cent. The recent decline may be due to shift from using washed coal to raw coal, frequent equipment failures and non-availability of coal supply.

On the transmission and distribution side, supply is not metered for all categories of consumers. This has increased consumption from unauthorised irrigation pump sets and thefts. It makes it difficult to estimate true losses in the network and trace unrecovered payments. The aggregate technical and commercial losses in Karnataka were estimated to be about 22 per cent in 2014.  Utilities are unable to fully recover the cost of service, further deteriorating quality of supply and thus getting caught in a vicious cycle.

The renewable energy (RE) capacity has been slow to contribute significantly to power generation. A high wind and solar capacity of 14,170 MW has been commissioned by the state nodal agency (SNA) to meet its envisioned targets.

However, a large portion of this capacity has not been commissioned and the SNA has started cancelling projects. Finally, potential for reducing demand through measures such as use of energy-efficient appliances and irrigation pumps is not adequately realised.

What can be done to improve the situation? Some supply-side measures can be taken. Improvement in the state thermal plants’ performance by up to 85 per cent can annually generate nearly 5,000 Million Units (MUs) more from the existing capacity. This can be achieved by assessing benefits of using washed coal and re-negotiating fuel supply contracts accordingly. The need for refurbishment of plants can be estimated by benchmarking their performance with plants of similar vintage elsewhere in the country.

In the southern region, there is an opportunity to contract supply from thermal plants that are currently stranded due to lack of fuel supply. Plants that are lying idle during peak time can be brought under long-term contracts by offering peak-tariffs and ensuring coal supply for them.

Banked power

In 2014, Karnataka was among the top five states that exported electricity through bilateral transactions and power exchanges. On the other hand, it has been increasingly purchasing short-term power to meet deficits now. At an average cost of Rs 5.25 per unit, the expenditure on short term power was Rs 3,000 crore last year.

The exported units can instead be mutually banked with other states as per their need. They can, in return, supply the banked power back to Karnataka during high peak demand. Recent experience of Tata Power in Delhi has shown that such an arrangement can result in savings up to Rs 200 crore annually. The RE plants which stand cancelled or not commissioned can be re-allocated on an expedited basis.

There are some transmission and distribution measures which can be taken. If technical losses alone are brought down to 12 per cent from the current level of 19, resultant energy savings would be around 4,200 MUs annually. The Karnataka Electricity Regulatory Commission has directed utilities to reduce losses by adopting measures such as high voltage distribution system and auditing energy consumption at the feeder and distribution transformer levels. These measures can be taken up on a test basis by initially focusing on regions with the highest losses.

The state has initiated separation of agricultural feeders from other rural feeders to accurately account for agricultural consumption. This should be extended to all districts, and its impact on energy consumption measured.

As regards demand-side measures, energy demand can be reduced by up to 3,000 MUs by 2020 through improved energy efficiency in lighting, appliances, and agricultural pumping. In the residential sector, uptake of efficient appliances can be encouraged through low interest loans and rebates.

The state regulator recently released a draft Demand Side Management Regulation which proposes the setting up of a State Energy Conservation Fund to be collected through an additional ‘energy efficiency charge’. This will be levied from all consumers except agricultural and residential.

This fund can be matched by an equivalent capital subsidy from the state through a budgetary provision and used by the utilities for better load management and energy conservation. These measures, if implemented in a time-bound manner, can definitely ensure that the promised quality of power is supplied to all consumers in the state.

(The writer is a Senior Research Analyst at the Centre for Study of Science, Technology and Policy, Bengaluru)