Power shortage has reached an unprecedented high in Orissa, which was promoting itself as an ‘energy surplus’ state till last year, as hydro power generation has plunged to never before low. This report dissects the realities and finds out that probably some other motives are working behind the hydro-power management than shortage of water.
Power Plunge
.jpg)
Indeed, hydro-power production in the state has come to an abysmal low. Orissa Hydro Power Corporation (OHPC), the state government undertaking in-charge of hydro power production, produced an average 99.3 Mega Watt on March 1, 2010. This is only one-sixth of the average hydro power produced on April 1 in past five years, from year 2005 to 2009. The government has resorted to strategic water blockade for hydro-power generation soon after the monsoon. In this post-monsoon to pre-summer season - November 2009 to February 2010 - the OHPC produced only 770.73 Million Units (MU) of energy from its hydro-power generating units. This is a mere 40 percent of the OHPC’s average generation in the same period over the past six years, 2003-04 to 2008-09. This level of energy production will surely lead a lay man to believe that it has been one of the worst years as far as rainfall is concerned. But facts tell differently. Year 2002-03 was one of the worst drought years in the recent memory. We had far better rainfall this year than year 2002. Still, this year’s post-monsoon season hydro-production has been lower than the 2002-03 season.
On a ‘High’, But they say ‘Dry’!
While very low hydro power production this year is a fact, a look at the reservoir levels and the manner in which they have been managed in the past few months lays bare the gross inappropriateness in putting the blame on low water level in reservoirs. Government’s attempt to blame ‘low water level in reservoirs’ for low hydro power production resulting in inadequate availability is nothing short of an abject strategy to continue with a entirely false statement to make people believe that falsity as true. Starkly opposite to what the government wants us to believe, almost all of Orissa’s major power producing reservoirs are teeming with higher level than previous years (See table: Definitely… Water level is not worse). With March we entered the summer months. On the first day of March this year, all the major reservoirs had higher water level than what they had on the same day last year. Hirakud, one of the largest reservoirs of Asia, was at 618.73 feet level against last year level of 612.47 feet. Indravati, the largest hydropower producing reservoir of the state, had a level of 635.6 meter against last year’s 632.61 meter. Rengali, Orissa’s second largest reservoir, was at 118.94 meter level on March 1, 2010 against 116.02 meter level that it had on the same day in year 2009. Only Kolab reservoir had a slightly lower water level than what it had on the same day last year. In fact, the water levels maintained by these reservoirs on the 1st March were higher than not just their last year’s level, they surpassed their past five year’s average level too by quite a big margin (See Chart: On a High). In the last five years, excluding this year, Hirakud reservoir had maintained an average water level of 616.63 feet against this year’s level of 618.73 feet. Similarly, Rengali this year was at 390.12 meter level against last five year’s average 383.82 meter. The catchment area of Indravati reservoir received less rainfall this year. But still, Indravati reservoir maintained a higher water level this year than its average level of last five years. Only Balimela reservoir maintained a slightly lower level than its average level in past years.
A systematic neglect to stymie hydro-power?
So, why does the government continue to blame ‘low level in the reservoirs’ for the present mess in the energy sector? After all, almost all reservoirs of the state are maintaining a healthy level and definitely a higher level than most of last few years. Answer to this question might just be a speculation, but we have enough indications to presume that it is a well thought out plan by the government to gradually neglect the hydro-power sector. While hydro-power production in monsoon months have somewhat increased, non-monsoon production is on a constant decline. Even with capacity additions and modernisation of its units, annual hydro power production has drastically nosedived (See Chart: Towards Dead Head). In 2009 it produced slightly higher than half of what OHPC had produced the year before.
Hence, something else is driving the government’s decision to prune hydro-power than low water level in reservoirs. It says that ‘providing irrigation to the agriculture sector is the first priority’ and thus hydro-power production has been reduced. While such an excuse definitely pleases the masses, the problem is that the excuse is based on very loose footing. Irrigated areas from the reservoirs have not increased, and the reservoirs hold a higher level than past years. Hence, agriculture sector did not require more than what they were normally requiring.
What is the reason then that the government is so desperate to close the gates for hydro-power production? There are many possible reasons. The first is that almost nobody cares about the water level of the reservoirs and hydro-energy production. They can be easily led to a false belief that water level is very low and hence hydro-power production potential has reduced a lot. Water saved through such falsity can be then diverted towards others uses. Government is now under serious pressure from both pro and anti industrial lobby on water diversion issue. The anti-diversion lobby alleges that government is diverting water at the cost of agriculture and by blatantly violating the State Water Policy of 2007. The pro-industrial lobby, on the other hand, rues that government is not doing enough to provide them enough water quickly. Government has already burnt its fingers in Hirakud as irrigation got severely affected after heavy industries started using water from it. The ensuing farmer’s movement is still alive. The movement has put strong brakes on government’s industrial overdrive plan. Thus the government now does not wish to be fooled the second time. It has found a convenient scapegoat in hydro-power production.
The second reason is probably a result of succumbing to private power producer’s lobby. Many large steel, iron and aluminum plants are coming up with their own Captive Generation Plants (CGPs). Besides, many coal based thermal power plants are coming up. They will bargain the most remunerative price for their energy in a situation of shortage and gain handsome profits. Reducing hydro power production may have been a definite ploy to create a shortage condition.
The third reason may have been an attempt to artificially raise production rate of hydropower energy. Besides being one of the cleanest sources of energy, hydro-power is the cheapest sources of power that the transmission company Grid Corporation of Orissa (Gridco) procures. The Orissa Electricity Regulatory Commission (OERC) has fixed Gridco’s purchase price from the CGPs at the range of 3.10 to 4.05 Rupees per unit. The purchase cost from Orissa Power Generation Corporation (OPGC) comes at 1.94 Rupees per unit. From outside state sources like Farakka, Kahalgaon, TSTPS etc., the Gridco’s purchase rate ranges between 1.69 to 2.28 Rupees per unit. Even the states renewable energy sources cost 2.64 Rupees per unit. In contrast, the Gridco proposed to pay only 51.77 Paise to OHPC in the year 2009-10.
OHPC’s energy rate is primarily governed by its design capacity. Design capacity is the total production capacity of its unit(s) in a year. Total cost – including fixed, variable and depreciation costs - of the power producing units is divided by the design capacity to arrive at per unit production cost. Thus, if the design capacity is higher the per unit cost of energy produced will be lower as OHPC’s total production cost almost stays stable, irrespective of the units it produces. Based on the design energy of the OHPC units, the Gridco had planned to purchase 6184.44 MU of energy from OHPC for the year 2009-10. Now, that plan has gone haywire as OHPC is producing almost nothing. OHPC produced only 4,530.8 MU, including its share from Machhkund, in the 2009 calendar year. Up to March 15 of the present financial year 2009-10 (April 2009 to March 2010), OHPC produced only 4,176.7 MU including its share from Machhkund. In the remaining fortnight of the financial year, it can at best produce another 150 MU. Thus, the total hydro power production in the financial year 2009-10 will be somewhere around 4,300 MU mark. The Gridco was quite conservative in expecting 6,184.44 MU from OHPC. Ironically, the OERC in one of its order made on March 20, 2009 pertaining to case number 62/2008 had rapped the Gridco for such low estimation from OHPC. The order stated, “The availability of power from state hydro stations would be around 7,680 MU in FY 2009-10 as against the Gridco proposal of 6,184 MU.” Hence, OHPC will be producing only 56 percent what the OERC had expected from it (See chart – Fooled by the Fall).
Such low production by the OHPC is affecting itself, the Gridco and ultimately the consumers. The OHPC is losing because its sell price is fixed at the beginning of the year. As its establishment and other variable cost remains almost same, low power production hits its finance badly. Now the OHPC is vigorously pleading before the OERC to reduce its design capacity and increase per unit selling cost. While OHPC is pleading, Gridco is bleeding with losses. Gridco was aiming to buy about 31.5 percent of total procurement required for the state from the state’s hydropower units. For this 31.5 percent power it would have paid only 11.1 percent of its total power purchase budget. Now that Gridco will not get those many units, it has not only lost on the cheapest source of energy, it is now breathlessly scouting for alternative sources to maintain a bare minimum standard supply. And the alternative sources are waiting to cash in from such desperation. Last year, the Gridco was forced to buy energy at more than 8 Rupees per unit from such sources during the summer crisis period. It may be worse this year. No surprise that the Gridco is now staring at a loss of over 1,650 Crores in 2009-10 financial year. The ultimate loser will be the consumers as the burden of the additional cost will inevitably fall upon them very soon. The OERC has already started the process to reevaluate the design energy capacities and price structure. Higher price and even longer hours of power cut is going to be the order now.
Avoidable Fiasco
Not long ago, Orissa government was thumping its chest for being a ‘energy surplus state’ and ‘energy capital’ of the country. It is now one of the most energy deficient states of the country. But the status of the reservoirs and the manner in which hydro-power has been produced suggests that the energy fiasco was avoidable. There was no reason to push the panic button and hydro-power production could have been normal. But the ultimate question is, did the government really panic or is it is a clever ploy to allow more profits for the private power producers and private distribution companies at the cost of general public?
-----------------------------------------------------
*The author is a farmer and a social researcher active in the development sector of Orissa. He may be contacted at: bimalpandia@gmail.com
No comments:
Post a Comment