A solution to Punjab power crisis
by Virinder Singh

A workable solution to the Punjab power crisis is possible through energy conservation and the execution of power generation projects in the public sector as the global meltdown has affected the private investor badly.

It is heartening to note that of late the management of the Punjab State Electricity Board has decided to implement three major energy conservation projects envisaged during 2006-08. The result of their implemention will be visible within one to three years.

The first project relates to the replacement of all incandescent lamps in Punjab with CFLs through Bachat Lamp Yojna (BLY) in collaboration with the Bureau of Energy Efficiency (BEE), the Government of India nodal agency for energy conservation.

Under this project, CFLs will be provided to consumers at Rs 15 per piece, i.e. at the cost of an incandescent lamp. The implementation of this project will reduce the peak demand by 660 megawatt, save about 1,400 million units worth Rs 560 crore annually.

The second project is to conduct low-cost maintenance on about 1,500 11Kv feeders supplying power to about 27 lakh domestic and commercial consumers in the rural and suburban areas.

Under this project, load balancing — fixation of consumer meters in pillar boxes — maintenance of distribution transformers, improvement of the earthing system by using strip with earthing electrode embedded in Bentonite or thermal plant fly ash and tightening of loose joints nuts and bolts will be undertaken.

This project will reduce the peak demand by 700 megawatt and save 1000- million units worth Rs 400 crore annually, thereby recovering the project cost of Rs 750 crore sanctioned by the REC within two years.

The third project involves the replacement of 11 lakh agricultural pump sets and motors with efficient ones. A pilot project on two agricultural feeders will be implemented in collaboration with BEE and then the project will be implemented across Punjab through ESCO companies.

This is likely to save 1,400 million units worth Rs 560 crore annually recovering the project cost of Rs 1,700 crore in about three years and reduce the peak demand by about 660 megawatt.

Besides, the currently implemented HVDS project for agricultural consumers is likely to save about 2,500 million units worth Rs 1,000 crore annually. In addition, the installation and ensuring working of LT and HT capacitors can save about 1,200 million units annually and implementation of the restructured APDRP schemes launched by the Union Ministry of Power, covering 25 lakh town and city consumers will save about 500 million units annually.

The energy conservation projects, put together, can save 8,000 million units worth Rs 3,200 crore annually, thereby making the PSEB earn a profit of Rs 1,200 crore annually, which can be invested in power generation, transmission and distribution systems of Punjab.

The present plan to add 9,480 megawatt generation capacity in Punjab constitutes 6,480 megawatt power through coal-based thermal plants exclusively in the private sector. The government plans to buy 2,000 megawatt installed capacity through a competitive bidding process at the national level and execute the 500 megawatt extension projects, each at Bathinda and Lehra Mohabbat, departmentally.

The signals for this targeted generation capacity addition in Punjab through the private sector are not positive. The Vedanta group, executing the 1980 megawatt project at Talwandi Sabo, has announced a cut in investment, the 1320 megawatt project at Rajpura settled at a rate of Rs 3.32 per unit is under re-bidding and coal linkages are yet to be finalised for the 2,640 megawatt Gidderbaha project. The 540 megawatt GVK project at Goindwal Sahib has of late been undertaken for execution.

Under an alternative plan to execute generation works in the public sector, the Gidderbaha thermal project, costing Rs 13,200 crore, can be executed through a joint venture of NTPC and the PSEB. Thirty per cent equity of the total cost will have to be borne by Punjab and NTPC equally, the balance 70 per cent will be loan.

NTPC is executing similar joint sector projects in Haryana, Karnataka, Bihar, UP and Tamil Nadu. Punjab will thus need to invest Rs 495 crore annually over four years. This joint venture project can come with 100 per cent certainty within 48 months of the agreement with NTPC.

With all clearances already obtained, the Rajpura thermal project, costing Rs 6,600 crore, can be executed in the state sector by Punjab by investing 20 per cent equity of Rs 1,320 crore spread over four years. Similarly, the 500 megawatt extension projects each at Bathinda and Lehra Mohabbat can be executed departmentally within next 48 months by investing Rs 375 crore annually as equity.

Punjab should press for one 2x2000 megawatt nuclear power plant in the Twelfth Plan through equitable 20 per cent equity participation with the Nuclear Power Corporation of India Ltd. It will take eight years and call for a capital investment of Rs 32,000 crore. Punjab will need to invest Rs 400 crore annually in this project, ensuring 3,000 megawatt nuclear power to the state by 2017.

Thus to execute power generation projects in the public sector, Punjab needs to invest about Rs 1,600 crore annually as equity. Implementation of the energy conservation projects supported by power sector reforms and managerial measures can save about Rs 1,200 crore annually for investment.

Levying 50 paise per unit on agricultural power or a power cess on foodgrains exported out of Punjab can generate Rs 550 crore annually. The electricity duty of Rs 650 crore annually should be pumped in power generation exclusively.

All these put together will leave Rs 2,400 crore annually for investment in the generation, transmission and distribution systems of Punjab after wiping out the present PSEB annual losses of Rs 2,000 crore.

The determination of the state government and the PSEB management to take these measures and execute generation projects in the public sector can lead Punjab from darkness to light.

The writer is a former Engineer-in-Chief of the Punjab State Electricity Board