State goes all out to sell excess power, but finds no buyers

Aman Sood

Tribune News Service

Patiala, August 29

In a desperate effort to sell excess power, the state government has made an offer to all power utilities across the country.

In the offer, it says that is willing to “dedicate power from two private thermal plants” recently established in Punjab “with an aim to sell its surplus power” for which it is paying fixed charges to these plants without consuming their power.

But not even a single utility in the country has come forward to buy that power. Hence, the state is unable to sell the 2,520 megawatts available with it.

Highly placed officials within the Punjab State Power Corporation Limited (PSPCL) confirmed to The Tribune that Secretary (Power), Punjab, recently wrote to many states to sell and “sign a long-term contract for selling power from two of its private thermal plants”.

“The letter mentions that the state power utility was willing to enter into a long-term agreement to sell roughly 2,500 MW — 540 MW (2x270 MW) from GVK Thermal power project near Goindwal Sahib and 1,980 MW (3x660 MW) from Talwandi Sabo Power Limited (TSPL),” they said.

KD Chaudhri, chairman-cum-managing director, PSPCL, said that before this offer, the state utility tried as many as 19 tenders offering power at Rs 3.90 per unit, “but no buyer came forward”.

“The average rate of power in the open market is around Rs 3 while power generated in Punjab costs us roughly around Rs 3.60. We even floated an expression of interest, but there was no response,” he said.

Senior officials confirmed that as per agreements already signed by the state government, they would have to pay fixed charges of Rs 1,510 crore to TSPL while GVK will get 413.75 crore “even if Punjab does not utilise their power”.

Punjab bought power at Rs 3.01 per unit earlier this year while power from its own plants was available for Rs 3.60.

A senior official looking after power management at PSPCL confirmed that Punjab requires 5,000 to 7,000 MW per month during the non-paddy season and it met a demand of 11,400 MW this paddy season.

“The excess power available over and above this requirement should ideally be sold to cut cost for other consumers in Punjab, but the problem is that there is no buyer,” he said.

“We became power surplus. But instead of power rates going down, these are escalating for consumers, especially domestic,” said a senior official.

Interestingly, the majority of the state-owned thermal plants are shut due to low demand and unions within PSPCL claim that the state utility is planning to shut production permanently in state-owned plants.

However, senior officials confirm that units from these plants are shut only when demand is low or “there is paucity of coal”. At present, demand is very low and further declining.