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FEB 22 2017

Tangedco under pressure to buy power from private producers

  • Economic Times, ET Bureau / Hyderabad
  • Created: Wed 22nd FEB 2017

Independent power producers (IPPs) in Tamil Nadu are pressurising the government to instruct Tangedco to evacuate power generated by them at Rs 5.50 per unit, which is much higher than the cost of electricity in power exchanges.

Tangedco officials told TOI that IPPs were putting pressure through various ‘sources’ to evacuate power from them. But Tangedco has to go by the merit order released by TNERC on evacuating power, which says it has to utilize its potential fully before purchasing power from other sources. The utility also has to prefer cheapest sources to fulfil its needs.

There is also pressure on the discom to import coal. The corporation has stopped import of coal to cut down costs and a section that was hugely benefitted from coal imports in the past is up against the corporation.

“The total capacity of all IPPs within the state is around 4000MW. Most of them use coal as fuel. The maximum capacity per unit is 600MW. Power from these companies will be evacuated only when the demand exceeds 14000MW. Only during summer the demand crosses 15,000 MW,” a senior Tangedco official told TOI.

As per the merit order issued by the TNERC, power at lower cost will come from Tangedco’s own units as it gets coal from Coal India Limited. “The cost at which we generate power comes to Rs 3. We will have to evacuate the entire capacity from our units and then look at other sources. Similarly, the cost is pretty cheap when we buy form Central units. Wind power between May and September costs less than Rs 4 per unit and nuclear power is available at Rs 4.50 per unit,” said the official.

“We have invested several crores to set up our thermal units and we cannot keep the units in limbo. We are not pressurising Tangedco, but we are only asking Tangedco to evacuate power generated by us,” said MD of an IPP. Tangedco sources said the utility was all set to break even this year because of not purchasing power from IPPs.

Except for the total outstanding debt, the Tangedco’s financials have been looking better in the last few years. “After a record loss of Rs 13,985.03 crore in 2013-14, the loss came down to Rs 5,000 crore in 2015-16. This year we have saved Rs 2,000 crore owing to stopping coal import,” the official said.


TOTAL Tamil Nadu Tamil Nadu Generation and Distribution Corporation Ltd Independent Power Producers Coal Wind Coal India Limited Wind Power Nuclear Power United States Import Power exchanges Tamil Nadu Electricity Regulatory Commission Power Electricity India

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