Cabinet approves purchase of additional power to meet surging demand

Mumbai: The state cabinet on Friday cleared the decks for the state power distribution utility to the procure 760 MW of power to augment the short term supply

Mumbai: The state cabinet on Friday cleared the decks for the state power distribution utility to the procure 760 MW of power to augment the short term supply. Maharashtra is facing a shortfall of up to 1,000 MW in electricity supply due to a spike in demand and low generation owing to a shortage of coal.

On Friday, the peak power demand touched 28,700 MW and is expected to reach 30,000 MW by June. (Abhinav Saha/Hindustan Times)

The state cabinet authorised the Maharashtra State Electricity Distribution Company Limited (MSEDCL) to sign short-term power purchase agreements (PPAs) to avoid load shedding. “The cabinet has allowed the MSEDCL to decide on these PPAs,” a senior state government official told HT.

This, the official added, will clear the way for the state-owned electricity distribution utility to sign a short term PPA with the Coastal Gujarat Power Limited (CGPL Mundra) project for purchasing 760 MW of power.

The power demand in Maharashtra has soared due to rising heat, resumption of economic activity after the easing of Covid-19 curbs, and growing demand from agricultural consumers.

However, the coal stocks at the coal-based thermal power plants operated by the Maharashtra State Power Generation Company Limited (MahaGenco) have plunged to critical levels due to supply bottlenecks. For instance, the 1,980 MW Koradi plant has stock for just 1.9 days, while Parli (750 MW) has inventories to last just 1.65 days.

In peak conditions, Maharashtra is facing a shortfall of around 1,000 MW. Though the Maharashtra State Power Generation Company (MahaGenco) uses the 1,960 MW Koyna hydroelectric project to meet the peak demand, its use is constrained due to a lack of water availability. It also gets power from central sector utilities.

On Friday, the peak power demand touched 28,700 MW and is expected to reach 30,000 MW by June. This is 8.2 percent higher than the demand last year.

The MahaGenco has a 13,902 MW capacity, including 9,750 MW in coal-based thermal power, 2,580 MW in hydro power, 672 MW gas and 207 MW in solar energy.

“In 2007, the state cabinet signed a PPA with a power plant for 760 MW. However, the power producer wanted a higher rate as the project is powered by coal imported from Indonesia (the prices of imported coal are also rising) and hence, we wanted to revise these tariffs,” said energy minister Nitin Raut. The PPA will be in place till 15 June, by when the situation is expected to ease due to the onset of the monsoon.

The official from the state energy department said that the tariffs for MSEDCL would work out to a range of around ₹5.1 to ₹5.60 per unit. “This is cheaper than the around ₹12 per unit that is charged in the open market (by merchant power producers)… the 760 MW should be enough for us to tide over the demand,” explained Raut.