CHENNAI: As the summer heat soars, the power purchase cost of the loss-making state power utility, Tangedco, for four months (February to May) has hit a record high of Rs 4,600 crore. This is almost twice as that of the Rs 2,400 crore spent for buying power during the same period last year.
In anticipation of the spike in demand, the Tamil Nadu Generation and Distribution Corporation (Tangedco) has already signed power-purchase agreements with private players to procure about 4,500 MWs over three months (March-May). In addition to this, the state discom may also purchase from power exchanges whenever needed. The average cost of power in exchanges currently stands at Rs 10 per unit.
A senior Tangedco official told TNIE, “Last year’s highest power consumption was 423 million units recorded on April 20, 2023. This year, it reached 441 MUs on April 5. We anticipate the consumption to increase in the coming days.” Another official added, “While the state’s daily need has been nearly 400 MUs since March this year, Tangedco has been able to generate only 90MUs per day, just about 20% of the demand.
Rest of the power has been sourced from other entities and central government’s power units. Considering the election process and people’s welfare, it is impossible to avoid this expenditure.” According to Tangedco’s balance sheet accessed by TNIE, the power utility’s earnings went up from Rs 62,799 crore in 2021-22 to Rs 82,399 crore in 2022-23. However, the cost of purchasing power also climbed steeply from Rs 39,365.23 crore to Rs 50,990.78 crore for the period. Projections indicate that the cost could hit Rs 65,000 crore in 2023-24. Besides, Tangedco is also burdened with Rs 13,450 crore interest payments every year. As of March 31, 2023, its liability was Rs 1,53,485 crore.
E Natarajan, state general secretary of Bharathiya Electricity Engineers Association, said, “An increase in plant load factor (PLF is a measure of a power plant’s output compared to its maximum output) of thermal plants could have mitigated the financial strain.”
‘Why work for power projects getting delayed?’
“Presently, PLF of Mettur, North Chennai, and Thoothukudi thermal power plants hover between 50% and 60%, indicating the potential scope for improvement,” he said. He also accused the Tangedco of showing interest in procuring power from private players.
“Why did the power utility not take steps to modernise the existing thermal power plants to increase PLF for better output, what is the reason for the delay in completing power projects, including Udangudi and Ennore?” If they had completed these projects, it would have been possible to avoid such huge spike in expenditure for buying power, he said.