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2012: Indian factories lacked power to shift gears

 
In 2012, India promptly stepped in to bail out its cash-starved electric utilities, responsible for triggering a blackout that cut power to more than half the country’s population on July 31. But can India resolve its electricity demand-supply mismatch?

The demand for electricity in Asia's No.3 economy is rising continuously.    

Demand in October was 84,094 MU but only 76,440 MU could be supplied, the new power minister Jyotiraditya Scindia informed parliament in November.

‘The peaking shortage would prevail in all the regions, varying from 3.2 percent in the western region to 26.3 percent in the southern region,’ IANS reported.

In southern India, factories and homes in the Andhra Pradesh and Tamil Nadu states are the worst hit.

Electricity demand has gone up 20 percent this year in Andhra Pradesh (AP, but generation fails to meet the state’s requirement. AP suffers a shortage of 40 million units of electricity every day. While Hyderabad faces two-hour power cuts a day, far-flung areas suffer six to ten hour blackouts.

AP has ordered industrial units, that use up to 74HP of power, to shut operations between 6pm and 10pm; and wants factories to consumer under 23,000 units a month “This is good because 70 percent of all factories in the state operate a morning shift and very small units do not consumer more than 23,000 units in a month,” J.Nageswara Rao, secretary, Federation of Andhra Pradesh Small Industries Associations (FAPSSIA) told SupportBiz in October.

Factories that need more than 74 HP to run operations have been ordered to consume only 60 percent of the power allocated to them. For instance, Rao’s firm Padmavathy Poly Packages has a 130HP line. The entire production line cannot operate on a given day because the first section of production requires about 60 HP, and he cannot draw more than 78HP in a day.

Factories that need 200HP or more to function can operate only for 18 days in a month. Rao said. 

Failure to comply attracts heavy penalties across industry categories, Rao said. “Industrial units in the state are losing business. But there is no short term solution to the problem. Things could improve in the coming years if projects such as solar power generation, and the north-south electricity gird connectivity are aggressively pursued,” Rao said.  

Small industrial units in Tamil Nadu, troubled by the state's 3,500 MW electricity deficit, are mulling relocating to Gujarat, which provides a better ecosystem for smaller units to thrive, industrialist D.Gandhikumar, who runs Gandhikumar Foundry in Coimbatore, told SupportBiz in October.   

Foundries; garment units; manufacturers of pumps and motors are all eyeing Gujarat, Gandhikumar said. “Our relocation plans are still on the drawing board. We are collecting data,” he said.

Gandhikumar’s industry needs returned scrap, pig iron, coke and reliable electricity supply to flourish and all this is available in Rajkot. “Rajkot already has some three to four coke manufacturing facilities. One could also use imported coke, brought in from Gujarat’s ports,” he said.

10-15 micro units shut shop every day in Coimbator, J. James, Coimbatore district president, Tamil Nadu Association of Cottage and Micro Enterprises told SupporBiz in November.

Something is better than nothing. Which is why small industrial units in North Karnataka’s Bijapur district, suffering up to four hours of unscheduled electricity outages on the week days, demanded that electricity supply companies draw up a timetable for power cuts.

Electricity supply companies in Karnataka are not able to manage the show. Unscheduled power cuts, totaling three to four hours a day in Bijapur, are a big blow to small industrial units, especially those involved in the processing of food, S.S.Biradar, President, Bijapur District Small Scale Industries Association told SupportBiz in October.

India has the “latest technologies in place to prevent such happenings,” Vishal Gakhar, director general, Indian Electrical and Electronics Manufacturers’ Association (IEEMA) told SupportBiz, in August, in response to an email query regarding the July 31 blackout.

“For example, there are under and over frequency relays which are supposed to automatically operate and prevent such occurrences. However these are under the control of (the) respective state (electric) utilities and are sometimes bypassed to meet the state power demand leading to overdraw, and consequently, sometimes, grid collapse,” Gakhar said.

There is no short term solution to India’s power problems, L.Krishnan, vice president, Indian Machine Tools Manufacturers’ Association (IMTMA) told SupporBiz in August.

“The country has not invested in adequate capacity creation, in generation, in distribution. The power sector is plagued by subsidies today. The demand-supply gap extends from around 12 percent in some states to large double digit figures in other states. When one state draws more than it usually does from the grid, the entire region has to suffer,” Krishnan said.

The government needs to look at reforms in the power sector. If not, the country will just end up tackling a situation till it tides over it, Krishnan said.