Supply from sugar mills to ease power crisis in UP

The power situation in Uttar Pradesh will improve marginally by October-November this year, thanks to the increasing cogeneration of power by the state sugar mills.

In the 2007-08 sugar season, beginning this October, the state sugar mills are expected to supply nearly 500 megawatts (Mw) of power to the UP Power Corporation Ltd (UPPCL), up by nearly 200 Mw.

"UP has a consumption requirement of 8,000 Mw but the power currently available is only 6,500 Mw. The increase in supply of power from sugar mills is helping but we need more supply," said a senior UPPCL official.

These mills use bagasse (a by-product from the sugar production) for producing power. Since this power is green and non-polluting, mills selling this power are also eligible for carbon credits under the clean development mechanism (CDM) of the Kyoto Protocol.

Sugar as a commodity goes through its cycle of ups and downs, subject to availability. Consequently, the revenue from sugar is not fixed. However, the revenues from cogeneration are stable. Sugar companies are getting 6-9 per cent of their revenues on an average from this cogeneration business.

"We will be selling 30 Mw of power to the state power corporation and our company will be getting 5-6 per cent of its revenues from its cogeneration business," said Sanjay Tapriya, director (finance) of Simbhaoli Sugars.

In total power purchase agreements for 925 MW have been signed by UP sugar mills. The mills are realising Rs 2.98 paise for every unit they sell.