TN faces power crisis, seeks Centre's allocation

Tamil Nadu, which has claimed to be comfortable in terms of power availability, has faced a marked power crisis over the last few weeks. The power shortfall is estimated at about 700 MW till December 31, and is likely to go up to 1,200 MW during the ensuing summer, according to state electricity minister Arcot N Veerasamy.

There have been complaints aplenty about undeclared power cuts and load-shedding in several parts of the state and the industry has also raised concerns about erratic power supply, which has caused hardship to production units in the state, according to industry sources.

Veerasamy attributed the shortfall to drop in power generation through windmills to the tune of 1,500 MW, non-availability of 500 MW from the central government's utilities, and the supply of 500 MW from the Neyveli Lignite Corporation due to heavy rains disrupting power generation.

While the state government has sought the central government's help to allocate 500 MW from the 'unallocated' share of the central pool till May 2008 to tide over the crisis, the Tamil Nadu Electricity Board (TNEB) has initiated negotiations with Assam and Haryana to procure 300 MW. The state government is expected to finalise the agreements for the same by this month end, Veerasamy said.

The state's present generation capacity is about 7,500 MW and the demand varies between 8,000 MW and 8,500 MW.Over the last ten years, demand has increased by 4,000 MW while capacity addition was just about 531 MW. With investments pouring into the state, the demand for power is going up by 600-700 MW every year, he said.

The state has been able to recover revenues for only 52% of its total capacity while the rest is accounted by free power to agriculturalists as well as transmission losses.

Veerasamy said that industries have been asked to run gensets to overcome the shortage and the state government would consider the industry's plea to exempt furnace oil used in gensets from VAT between January and May 2008. A decision will be taken on this after discussions with the chief minister and finance secretary.

He also said the industry has been promised full supply of power if it wanted to operate at night. Veersamay held a discussion with industrialists on future power shortages and anticipated steps earlier in the day. He added that the present power crisis would not affect investment flows into Tamil Nadu as the power situation was still better compared to competing locations in the country.

AIADMK supremo J Jayalalithaa, a couple of weeks ago, had accused the Tamil Nadu government of 'mismanagement'.

She charged the government with lack of planning and shutting down power stations for maintenance in the face of a power crisis gripping the state. She also said the state government should ensure other means of power generation like wind power would be available only for a few months.

To meet growing demand, TNEB is to augment its power generating capacity over the next 3-5 years. While it proposes to add 2,500 MW of capacity by augmenting installed capacity at its existing power stations over the next five years on an investment of Rs 10,000 crore, several 'merchant power projects' have also been cleared.