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Poll-bound Gujarat selling less power outside the state since January

Sudheer Pal Singh/New Delhi 09 Dec 12 | 12:20 AM

Congress President Sonia Gandhi’s remark that Narendra Modi-led Gujarat has been selling electricity outside the state, thereby depriving its consumers of power, may be a half-truth.

While the state has carried out massive power sales in the open market in 2012, it has been an aggressive buyer of power, too. In fact, the overall balance of Gujarat’s power trade, which was heavily tilted towards sales in January, has gradually turned in favour of power purchase over the past few months.

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According to the latest data from the Central Electricity Regulatory Commission (CERC), Gujarat’s net power trade stood at minus 815 million units (MUs) in January. The figure is the difference between the power sold (1,006 MUs) and purchased (191 MUs) by the state in January. The net power trade was negative in February (630), March (550), May (466), August (50) and in September (28).

The trend towards increasing power purchase to woo voters is typical of a poll-bound state.

Indian states carry out power transactions in the short-term market in three ways – through power exchanges, bilateral trade (involving power traders or distribution companies) and unscheduled interchange (either drawing more power from the grid than permitted or drawing less).

Short-term transactions mean contracts of less than one year period, for electricity transacted through any of these three means. Perennially power deficit states such as Uttar Pradesh, Punjab and Jharkhand tend to buy more than sell, particularly in pre-election months.

Gujarat is among the few low-deficit states in India. And yet, its power purchase from the open market, including power exchanges and bilateral contracts, shows a constant rise from 117 MUs in January to 428 MUs in April, and further to 551 MUs in September. Price of short-term power at the power exchanges has remained constant around Rs 3 per unit during the period.

Between January and September 2012, Gujarat’s deficit hovered between 0.3 per cent and 2.3 per cent, significantly lower than the national average of 10 per cent. Power demand in the state varied between 9,000 MW and 12,000 Mw during the same period. While the low deficit should ideally translate into little or no power purchase, Gujarat seems to have bucked the trend owing to upcoming elections.

Month-wise volume of short-term electricity transactions by Gujarat in 2012                             (in million units)
  Through bilateral Through power exchanges Through UI Total Net
Sale Purchase Net Sale Purchase Net Underdrawal Overdrawal Net
January 596.5 39.4 -557.1 246.6 78.6 -168.0 164.2 73.4 -90.8 -815.0
February 356.7 36.9 -319.0 170.6 155.4 -15.1 313.2 18.0 -295.2 -630.2
March 505.1 62.0 -443.0 96.6 206.4 109.8 244.2 27.1 -217.0 -550.0
April 121.4 181.8 60.4 120.6 247.8 127.2 235.7 61.9 -173.7 13.9
May 476.6 204.6 -272.0 160.9 328.4 167.5 372.5 10.4 -362.0 -466.0
July 698.8 312.2 -386.6 95.9 352.1 256.2 392.0 32.9 -359.0 -489.4
August 720.8 313.9 -406.9 55.3 312.4 257.0 81.0 180.1 99.0 -50.7
September 455.7 210.9 -244.8 103.9 341.9 238.0 63.4 42.2 -21.1 -28.0
Source: CERC UI: Unscheduled Interchange, (-) indicates sale and (+) indicates purchase

High power purchase due to the election factor is further confirmed by the fact that Gujarat’s agricultural sector is not rabi dominated, leading to lower agricultural load in the post-June months.

Experts attribute Gujarat’s low power deficit to improved performance by the state’s generation utilities -- Gujarat State Electricity Corporation Ltd (GSECL) and Gujarat Power Corporation Ltd (GPCL) – apart from innovative distribution management.

“The state utilities have added significant capacities in the past few years. Also, separation of agricultural feeders (transmission lines) has helped better meet agricultural load," said Shubhranshu Patnaik, senior director, Deloitte Touche Tohmatsu.

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