The once-power surplus Gujarat is staring at the prospect of power scarcity in coming days with private power producer companies Adani Power , Tata Power’s Coastal Gujarat Power and Essar Power Gujarat cutting back on the supply to the state’s distribution companies. (Reuters)

The once-power surplus Gujarat is staring at the prospect of power scarcity in coming days with private power producer companies Adani Power, Tata Power’s Coastal Gujarat Power and Essar Power Gujarat cutting back on the supply to the state’s distribution companies. While government claimed that there is no scarcity of power as the peak demand is being met through power purchases from alternative sources, energy experts believe that sourcing power from other sources is not a good idea as it is more expensive and ultimately consumers will have to bear that cost in future. Gujarat Urja Vikas Nigam (GUVNL) officials too believe that the current situation cannot sustain in the long run. The state authority also admitted that it is purchasing higher cost power to meet the daily demand of about 1,500 MW. Speaking to FE, Pankaj Joshi, managing director of GUVNL, said, “As on date, around 2,700 MW capacity from various private producers are withdrawn from service for various reasons like coal shortage, non-availability of water and technical maintenance. To meet with the generation loss, the state is purchasing power from other relatively high cost state generating stations, un-requisitioned power from central sector generating stations and from power exchanges.”

GUVNL has the power purchase agreement (PPA) of 2,000 MW with Adani Power, 1,000 MW with Essar Power Gujarat and 1,805 MW with Tata Power. Currently, Adani has suspended about 1,000 MW and Tata power too is supplying only 50% of the PPA to the GUVNL-manged discoms. It may be recalled that independent power producers restricted supply after prices of imported coal went up which damaged their financial viability. Tata Power and Adani Power moved the Supreme Court with a demand to review the current PPA tariff. In April this year, the SC ruled against these companies.

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Pursuant to the SC judgment on April 11 this year, certain private generators have stated that financial institutions are not extending any support for arranging fuel owing to which they have cut back on supply to GUVNL citing shortage of fuel. The state government is in talk with these companies to resume the supply in full force. Joshi said, “GUVNL is in continuous correspondence with these project developers and is trying to negotiate with them to resume supply of full quantum of power under the PPAs.” Dhirendra Doshi, CEO of Sahajanand Power Management, said, “In such situations, the state has only choice to source required power from open merit order. This will costs much higher than current prices and consumers shall have to pay more for energy.”

-Vimukt Dave