Power woes remain a drag for industry

Power deficit has been one of the biggest hindrances for Uttar Pradesh (UP) in achieving rapid industrialisation. Successive governments, especially over the past decade, have tried to overcome this hurdles through policy interventions and public-private partnerships (PPPs).

The government has estimated a total investment of about Rs 1,10,000 crore by 2016-17 in the energy sector - this is to come from the sector, private companies and joint ventures - to address the power generation, transmission and distribution issues.

Of the total investment, Rs 65,000 crore will be for power generation, in projects either proposed or underway. The state is aiming to boost power availability from all sources to over 20,000 Mw by 2016-17 from 10,000 Mw at present.

Transmission projects have a share of Rs 22,500 crore in the investment - much of that will go setting up new sub-stations for increasing capacity. Power distribution projects will get a about Rs 9,100 crore, while rural electrification projects will receive an investment purse of Rs 12,500 crore.

Apart from low availability of power, UP is grappling with high aggregate technical and commercial (AT&C) losses, of about 42 per cent. The state aims to bring this down to five per cent by 2017. AT&C losses are the sum of technical loss, commercial loss and shortage due to non-realisation of total billed amount. It includes power theft and losses during transmission and distribution of power.

The government is working on providing 22-hour power supply to district headquarters and 16-hour to rural areas.

In December last year, Chief Minister Akhilesh Yadav had inaugurated 200 power sub-stations, built for almost Rs 1,200 crore.

Last year, the CM met Union Power and Coal Minister Piyush Goyal in New Delhi and sought Rs 15,000 crore for various energy projects. This included Rs 7,000 crore under the Deen Dayal Upadhyaya Gram Jyoti Yojana to provide separate feeders for agriculture.

Besides, Yadav demanded Rs 2,000 crore for installation of power meters in rural areas and an additional Rs 6,000 crore for extension of the urban power distribution network under the integrated power development scheme.

The state has been consistently demanding adequate coal linkage to operational and proposed thermal power plants, so that these could work at optimum capacity. In the past few months, UP has alleged that coal supply has been below the allocated capacity to the Anpara, Obra, Harduaganj, Parichha and Panki thermal plants.

The state has also sought new coal blocks against cancelled one (Chandipada), so that adequate coal could be supplied to the Harduaganj (1x660 Mw), Panki (1x660 Mw), Meja (2x660 Mw), Stage-II Jawaharpur (2x660 Mw) and Obra-C (2x660 Mw) power generation units.

Yadav had told Goyal UP was facing serious challenges in meeting coal demand due to non-approval of linkages for MoU (memorandum of understanding) -based power generation plants. As a result, the developer companies were not able to honour their financial liabilities and projects were facing inordinate delays.

The non-availability of coal linkage was also hurting investor sentiment and adversely affecting the state's economy, the state had told the Centre.

Meanwhile, the CM has already directed officials for speedy completion of three thermal power plants, totalling almost 5,000 Mw. These include the Lalitpur (3x660=1,980 Mw), Bara (3x660=1,980 Mw) and Anpara D (2x500 Mw) projects.

While the Lalitpur and Bara (Allahabad) projects are coming up in the private sector and being developed respectively by Bajaj Hindusthan and Jaypee Associates, Anpara D (Sonebhadra) is being developed by state utility UP Rajya Vidyut Utpadan Nigam.

UP is mandated to get 100 per cent energy generated by the Lalitpur project, while it will get 1,782 Mw of the power produced at Bara.

The state has been grappling with a wide gap in demand and supply of power - a deficit of around 3,000 Mw during summers. With an annual incremental rise in energy demand, the availability has not been able to keep pace which has resulted in power cuts.

UP Power Corporation Ltd (UPPCL) gets power from state-owned thermal and hydroelectric plants, central and private-sector plants, procurement from energy exchanges, solar power, and bilateral agreements among states.

The total installed capacity in UP - in both the public and private sectors - stands at about 8,250 Mw.

As power theft and pilferage is rampant in the state, UPPCL is saddled with accumulated losses of Rs 25,000 crore. In recent months, it has been undertaking a massive drive against power theft. Over a million new connections have been given across UP under these drives.

According to a recent Assocham report, the total installed power capacity in UP has improved significantly - by 43.4 per cent over a year ago in 2012, and 12.4 per cent annually in 2013.

The study said the state's power sector attracted 102 investment projects in generation and distribution, worth Rs 2,18,000 crore, as of 2013-14. This accounted for 4.4 per cent of India's power sector investments. However, the primary concern was that almost 68 per cent of the state's power sector outstanding investments were under implementation, the report said.