CHANDIGARH: The Punjab Government’s scheme providing up to 300 free units of electricity a month to domestic consumers has contributed to a sharp rise of more than 40 per cent in domestic electricity demand since its introduction, according to sources. The state’s peak power demand crossed 17,400 MW during the paddy season, while Punjab faced a power shortage of around 800 MW to 1,000 MW.
Power demand is projected to touch 19,466 MW within the next two years, and the state’s contracted capacity, even with power-banking arrangements, may not be sufficient to meet the projected requirement, sources said.
According to a communication sent to the state government by the All India Power Engineers Association, Punjab State Power Corporation Limited (PSPCL) recorded a peak demand of 17,452 MW this year during the paddy season. The state faced a power shortage of around 800 MW to 1,000 MW during the period.
The association attributed part of the increase in demand to the more than 40 per cent rise in domestic load since the AAP-led government introduced the scheme providing up to 300 free units of electricity a month.
According to power engineers, a major constraint is Punjab’s ability to draw additional electricity from the Northern Grid. The quantum of power that can be drawn is restricted by the Northern Regional Load Despatch Centre (NRLDC), depending on the adequacy of the transmission system within the state.
The association has also pointed to Punjab’s failure to add significant generation capacity over the past decade, which has widened the gap between demand and generation and raised concerns over the state’s ability to meet its power requirements in the coming years, sources said.
The association further stated that continued postponement of capacity additions was likely to leave Punjab increasingly dependent on power purchases from the market. Such purchases can be particularly expensive during periods of high demand, when electricity prices on exchanges tend to rise.
According to an assessment by the Central Electricity Authority (CEA), Punjab’s power demand is projected to touch 19,466 MW within the next two years. The CEA has also pointed out that the state’s contracted capacity, even with power-banking arrangements, may not be sufficient to meet the projected requirement.
The association said that in 2016, peak demand stood at around 11,000 MW, compared with 17,452 MW now — an increase of more than 6,000 MW in a decade.
The mismatch has forced PSPCL to depend on purchased power, particularly during evening peak hours when solar generation declines. While solar power is available during the day, electricity becomes more expensive after sunset as demand remains high.
From around 6,580 MW in 2016, Punjab’s thermal generation capacity has now fallen to about 5,680 MW. The 460 MW Bathinda thermal plant was shut down in 2018. The Ropar thermal plant’s output fell from 1,260 MW to 840 MW after two units were retired that year.
The Lehra Mohabbat and Goindwal Sahib thermal plants have capacities of 920 MW and 540 MW, respectively. In 2024, PSPCL acquired the Goindwal Sahib plant from the financially distressed GVK Group for about Rs 1,080 crore.
The total capacity of state-run power plants is around 2,300 MW, much lower than the state’s growing demand. As a result, the government has had to depend on two private power plants — Nabha Power’s 1,400 MW Rajpura plant and Talwandi Sabo Power’s 1,980 MW plant.
The proposal for two 800 MW units at Ropar has already been approved by the PSPCL Board of Directors. However, a decision on whether the new units should be developed in the state or private sector has reportedly delayed further action, sources said.
Sources in the state power corporation said the subsidy bill for domestic, agricultural and industrial consumers was expected to be at least Rs 22,250 crore, while the amount provided for in the budget was projected at less than Rs 15,200 crore.
As the government is responsible for paying the subsidy, PSPCL has suffered a loss of more than Rs 5,000 crore, while the government has had to make up the shortfall. Another Rs 2,400 crore is reportedly due from government departments that have defaulted on their electricity bills.
The subsidy requirement for 2025-26 was around Rs 19,657 crore.
