TN to get power from captive diesel gensets

Chennai: The Tamil Nadu Government told representatives of industry that the State’s electricity board could ask the owners of captive diesel gensets to run their units and the board could buy the high-cost power from them in order to meet the power shortage.

But industry would have to chip in and bear a part of the additional cost.

At the end of today’s meeting between the Government, Tamil Nadu Electricity Board and representatives of industry the industry said that it would come back to the Government with a proposal, possibly by Thursday.

Sources in the industry said that the Electricity Minister, Mr Arcot N Veerasamy, told the meeting categorically that the Government would not be in a position to foot the bill of the high-cost power – estimated between Rs 3,000 crore and Rs 4,000 crore – all by itself.

It is estimated that the diesel gensets lying with industrial units in the State could produce about 1,000 MW, but the cost of the electricity would work out to around Rs 11.50 a unit, thanks to the high cost of diesel.

The electricity board sells power at Rs 4.50 a unit to industry. The question before today’s meeting between the Government and industry was: who will foot this gap of Rs 7 a unit, if the board purchased the captive power at Rs 11.50 a unit.

Pointing out that the cost of power in Tamil Nadu is relatively much higher, industry representatives felt that the Government ought to be as concerned about the viability of the existing units in the State as attracting fresh investments. “We told them that Rs 4,000-crore would be but a small price to pay to keep up Tamil Nadu’s image as an investment-friendly State,” a source who was in the meeting, said.

But Mr Veeraswamy would have none of it. He was categorical in that industry would have to share the burden.

Sources in the industry have pointed out that Tamil Nadu is among the very few States where burden of free power to agriculture is borne by the electricity board, and not by the State Government.

If the Rs 4,000-odd-crore subsidy was borne by the Government, rather than by the board, the board would have the wherewithal to buy power from captive sources.

As the State’s industry has been reeling under the impact of a severe power shortage about 1,000 MW at peak times, according to some estimates there have been several meetings, at various levels, between the government and industry. Today’s meeting was one of them.

However, sources said that the mood was more collaborative. There are many points of consensus, such as for example, the shortage is only temporary, which would last no more than a couple of years.

Also agreed upon is the need of and sense in tapping the captive capacity, which would lie idle unless the generators are at least paid the costs. The industry is also not too averse to sharing the burden—getting the power is more important.

But the lingering sore point is that the Government has funds to pay for its various “social welfare schemes” such as rice at Re 1 a kg and free colour television”, but flinches when it came to helping industry.

One source pointed out that apart from the cost of the TV sets, the free TV scheme has resulted in increasing power consumption by about 600 MW.