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Heavy demand for power foreseen; Parliament okays private transmission

Power Minister P R Kumaramangalam has visualised a quantum jump in the annual peak demand of power within the next 13 years and said the demand is likely to go upto 176,000 mega watts by 2011-12.

At present, the power system has a peak demand of 62,000 MW and an installed capacity of 86,000 MW. In order to increase in load, about 150,000 MW incremental generation capacity is required to be set up in the next 15 years. The minister gave the information to the parliamentary consultative committee in New Delhi.

The minister elaborated on the potential sites where large projects could be set up. These include hydel projects mostly in the North-East, Himachal Pradesh and Kashmir, mega size thermal projects in Orissa, Bihar and Madhya Pradesh and coastal projects in Andhra Pradesh, Tamil Nadu, Kerala and Gujarat where fuel can be supplied conveniently.

Kumaramangalam said on account of paucity of funds, enough redundancy has not been built in the transmission system to cater to the transmissiion needs under a different scenario. As a thumb rule, the investment on transmission and distribution should be equal to the investment in generation and distribution projects. This ration is only 1:0.46 at present, the minister said.

Therefore, there is need for setting in place an adequate transmission system in a planned manner.

Further, the existing transmission bottlenecks should be removed by creating adequate redundancy, setting up evacuation and transmission systems for new power projects to enable transfer of power across the country with reliability, judicious use of right-of-way and to maintain environment balance, and the formation of a strong integrated national grid.

The minister said PowerGrid has been entrusted the task of the grid operator and has been made responsibile for building the national grid.

The Ninth Plan fund requirement for PowerGrid is of the order of around Rs 180 billion. With the limited fund availability from the international market, there is need to obtain private sector participation in the construction and maintenance of transmission lines.

A legal framework is being established to give transmission an identity independent of generation and distributiion. This would also facilitate private sector participation in transmission projects.

He said transmission and distribution losses in the country are far above the transmission and distribution losses in developed countries and in most of the developing countries these losses are mainly on account of inadequate investment in sub-transmission and distribution and lack of maintenance.

There is a need for state governments and electricity boards to take concrete administrative steps to check the theft and pilferage of energy, which has been made a cognisable offence under the Indian Electricity Act, 1910.

The minister requested members to impress upon state governments to make plans to curb the theft and pilferage of energy and for the installation of meters in a phased manner so that losses could be minimised.

In a related development, the Electricity Laws (Amendment) Bill 1998, which seeks to provide smooth transmission of power, allow private investments in power transmission and create a power grid at the national level, was passed by the Rajya Sabha on Tuesday by a voice vote.

The Bill has already been passed by the Lok Sabha.

The power minister piloted the Bill in the Upper House. He said the Bill would allow use of investible resources in the sector by a monopoly utility each at the state and national levels. The licences could be granted only on the recommendation of these utilities and the private sector would be allowed licences to operate in a particular sector and allow the power flow on the facility for use by the utilities for some cost. The bill substantially restricted the concept of privatisation, he maintained.

He said the government would encourage the state electricity boards wherever they were efficient and allowing the private sector would be the second option. The power transmission had to be a mix of both sectors because the experience had shown that either of them alone could not be a panacea for the ills faced by the country.

Kumaramangalam said most of the hydel power sources of the country were located in Himalayan and North-Eastern states and the utilisation sources were dispersed all over the country. Had the country taken up the hydel projects as envisaged in the First Five Year plan, there would have been no slippage the country was now experiencing. Similarly it would be better to produce power at the coal base and flow it to the utility points rather than transporting the coal through rail or road.

He dismissed the allegations of members that a developed country like France had disallowed privatisation in transmission.

The power generation, transmission and distribution in that country was under a public sector company Electricite de France which was a highly modern and professionally run monolith. They were also involved in power generation at the Bhadravati power project in India. The government would welcome any Indian state electricity boards to take up such activities abroad.

He said the power system would not disintegrate as some members seem to fear, but on the other hand would help the country to create a national grid through greater coordination during the next ten years. Ten states had already notified the Bill in their respective states.

The Bill would allow greater amount of transparency in fixing the tariff and the common man was entitled to know the amount of money paid for the services like wheeling and transmission activities.

The power minister said the private transmission facility would certainly be more expensive. But the government did not have the kind of money that was needed. To build up a national grid with budgetary support would take quite a long time, he said.

Earlier, Opposition members criticised the government for pressing the bill despite many flaws in it.

Intiating discussion on the bill in the Rajya Sabha, V Virumbi (Dravida Munnetra Kazhagam) fully justified power subsidy and said many clauses of the Bill were faulty. The government, he said, was not clear on these clauses.

He also urged the government to seek co-operation with Nepal to generate more power by setting up several hydel projects. Nepal has tremendous hydel power potential, he added.

Similarly, he said, the government did not know how to bridge the gap between demand and the production.

R Marabandu (All India Anna Dravida Munnetra Kazhagam) also questioned several clauses of the Bill.

Vayalar Ravi (Congress) said there was no urgency to come with power ordinance. He said that amendments made in the bill were also questionable.

Jalaluddin Ansari (Communist Party of India) took a strong exception to allowing private investments in the transmission. The generation, transmission and distribution of power was the responsibility of the state and it should not run away from its duties. The government, he said, should have learnt from the Orissa experiment which had recognised the generation and transmission and distribution as different activities which did not help the costs.

Ved Prakash Goel (Bharatiya Janata Party) said the country should be ready with a system where purchase of power from different countries like Pakistan and Bangladesh was distinct possibility.

Urmilaben Patel (Congress) said transmission and distribution were a neglected area in power sector and care should be taken to see that they accorded primacy to generation. There was scope for reforming the power discipline in each state and that should be tried out. Opposing privatising in the power sector, she said, wherever there was privatisation, the costs had gone up.

UNI