Crores lost

A joint study by Manufacturers Association for Information Technology and Emerson Network Power (India) had earlier noted that Indian companies lost Rs 43,205 crore in financial year 2008-09 due to high occurrence of power outages, both scheduled and non scheduled. The study said that the amount of such direct losses has more than doubled since 2003 when it amounted to Rs 22,000 crore.

Now a study by power genset maker Wartsila India says Indians are spending around $6.2 billion (Rs.30,000 crore) every year to run their power back-up systems to escape frequent outages.

The erratic power supply in the country has helped the power back-up equipment industry - inverters, batteries and small gensets - grow to the present size of around $20.8 Billion (Rs.100,000 crore).

The real cost of power that Indians pay is far higher than what they think. The diesel used to power gensets is subsidised. Further, the quality of power from those equipment is also poor, according to the company spokesperson.

With the money people have already invested for buying power back-up systems, the country could have set up power plants with a capacity of 25,000 MW. The solution cited by the company is that the government go for rapid capacity build-up, for which resources could be raised by charging a "reliability surcharge" of 50 paise per unit on consumers.

Whether it is outages or power quality, an equally good solution would be for big industrial units to go for their own captive power plants rather than use diesel back-up systems. The options are many for such plants, with renewable energy also showing much promise.

The excess power from such captive plants could be sold to the grid and help bring in revenues.

This would also ease the power demand from the grid. What do you think?

Captive power generation, the answer?

Along with the staggered-holiday system for industrial areas, the Bangalore Electricity Supply Company (Bescom) is thinking of asking the industries to go for captive power generation during peak hours to help tide over the power shortage, which is expected to increase further in the coming months.

The proposals to tackle power shortage also include a time of day metering to charge more for power during peak hours. Staggered holidays, energy efficiency systems, audits, etc are other measures. Regarding use of captive power, it’s a toss up between the Pune model where the industries were compensated by increasing charges on the consumers (who benefited by the industries staying away from the grid at peak hours) and the TN model that exempted the industries from tax on the fuel used.

The interesting point is that the Pune model itself is taking a beating, arising out of increased demand!

Initially mooted by some 30 CII member industries who offered to use captive power plants (CPP) to generate and consume about 80 MW power so that the power shortfall in Pune can be met, the model fell into trouble soon enough due to some conditions. And Pune went into long hours of load-shedding. It was partly solved when Tata Power Trading Company Ltd started securing additional electricity on 'day ahead' basis but soon enough MSEDCL refused to accept power on 'day ahead' basis and insisted on 'firm' power, i.e. power contracted in advance.

The potential for captive generation is around 1500 MW in Bangalore city alone. But obviously, running diesel sets for power will mean more than a tripling of costs for the companies. Not to mention the air pollution. It would make sense to go for captive generation based on renewable resources. In fact, suggestions have been made on how renewables should be made compulsory for industries.

Staggered holidays and staggered work hours is a good idea, as also time of day metering. In fact, in an article published in the Times of India on Oct 10, 2008, Enzen had advocated these measures. (Unfortunately the article is not available online. For more, visit our site http://www.enzenglobal.com/)

Are there other steps we are missing out on? If you have heard of any, do let us know.