A few weeks ago, the whole of northern India was engulfed in darkness for two consecutive days, as some power-deficit states overdrew power, triggering a grid failure. Gujarat, in stark contrast, is a power-surplus state that sold 5,105 million units of surplus power to states such as Rajasthan, Haryana, Punjab, Delhi and Maharashtra — at rates varying between Rs 7.70 and Rs 9.52 per unit.
With installed generation capacity of over 18,900 Mw from thermal sources alone, Gujarat is the largest power generating state in the country. And, it aims to add 10,000 Mw in the next five years, to touch the 30,000 Mw generation capacity mark by 2017.
Uninterrupted power supply is one of the major reasons why investors are flocking to Gujarat. However, the scenario was quite different over a decade ago — in early 2000, power shortage was a key concern. Electricity supply for agriculture, industry and domestic consumption posed a major challenge in the context of the need for faster growth.
The turnaround was a result of the state’s power sector reforms, which involved corporatisation and unbundling of the generation, transmission and distribution activities of the state power utility. The reforms helped persuade a large number of private investors to set up power plants in the state.
Early this year, the chief minister, Narendra Modi, had expressed satisfaction over the state’s performance in power generation over the past decade. “In 2001, Gujarat faced a power shortage to the tune of 2,000 Mw. The country, as a whole, continues to face a similar situation even now. But Gujarat has become a power-surplus state with generation of 4,000 Mw of surplus power. And it will generate 7,000 Mw of surplus power by the end of 2012,” Modi had said at a public function in January this year.
According to Central Electricity Authority (CEA) data, as on July 31, 2012, installed thermal power capacity in Gujarat was 18,962 Mw, which includes coal, gas and diesel. Of this, state utilities control 5,481 Mw, while the share of the private sector is 10,648 Mw and Central sector utilities control 2,833 Mw.
“We have surplus power but other states do not have sufficient power to meet their demand, nor do they have money to buy it from others. The situation is so bad that we are closing down our plants because of non-purchase of power by different states,” Saurabh Patel, Gujarat’s minister of state (energy), said at the Business Standard Round Table Conference in Ahmedabad.
Gujarat has surplus power — its total electricity generation in 2010-11 was 71,256 million units (MUs) while consumption was 58,670 MUs. Industry accounted for close to 40 per cent of total electricity consumption, agriculture 22.65 per cent, domestic users 16 per cent, other users 10 per cent and commercial users 7.52 per cent.
The state, with gross state domestic product (GSDP) growth of 10.5 per cent (2010-11), has higher per capita consumption of electricity at 1,486 kilowatt hours or units (2007-08) against the national average of 717 units. By 2010-11 the state’s per capita consumption had increased to 1,512 units.
Conducive policies, good infrastructure and encouragement to corporatisation of the power sector combined to draw many private players into the power business in Gujarat. The Kutch region is slowly emerging as a power hub, with leading private players lining up projects here. Companies such as Tata Power (4,000 Mw), Adani Power Ltd (4,620 Mw) and OPG Power (300 Mw) are setting up generating stations near Mundra. The Adani Group wants to increase capacity from 4,660 Mw in 2012 to 10,000 Mw by the end of 2013.
Videocon Industries (through its subsidiary, Pipavav Energy) is setting up a 1,200 Mw project near Pipavav port that will use imported coal as fuel. Gujarat Power Corporation Ltd is to set up a 1,000 Mw coal-based power plant jointly with Torrent Power at Pipavav, and a gas-based 700 Mw plant at Kovaya in Amreli district in association with GSPC Pipavav Power company Ltd.
Among Gujarat’s other leading thermal power producers are Essar Group’s Essar Power Limited (about 1,200 Mw) and Torrent Power Ltd (around 1,647 Mw).
“By 2017 we expect a big jump and are likely to touch a capacity of 30,000 Mw. The figure one might think is very high, but it is a fact, as most of the power plants have started work. This is going to be the most important strength of Gujarat in the years to come,” said Patel.
As fuel supply issues continue to haunt power companies, especially coal-based units, Gujarat’s focus on renewable energy has brought some relief to companies and consumers. Gujarat was the first state to announce a dedicated Solar Power Policy in January 2009.
The initiative proved successful, as more than 80 companies signed memorandums of understanding (MoUs) for the generation of 968.5 Mw grid-connected power by December 2011. As on June 30, 2012, 689.81 Mw of solar photo-voltaic projects have been commissioned in Gujarat, while 2,934.305 Mw of wind power capacity has been set up along the coast of Saurashtra and Kutch.
The Sardar Sarovar Project on the Narmada river in south Gujarat adds to the state’s renewable energy capacity. The project has an installed hydro-electric capacity of 1,450 Mw. Besides, hydro-electric power capacity has also been set up at Ukai Dam (305 Mw) and Kadana Dam (240 Mw), both in south Gujarat.
Initiatives like solar roof-top generation and canal-top power projects are examples of Gujarat’s innovative ways of encouraging participation from investors and the public in power generation.
The state is now looking to rope in investments worth Rs 65,000 crore towards new capacity addition in the renewable energy sector over the next three to four years. This will include wind energy (4,000 Mw), biomass energy (1,000 Mw) and solar energy (716 Mw). Gujarat, which has remained at the forefront of power generation, appears likely to continue maintaining its numero-uno position among Indian states as the years go by.
