The Hindu : New Delhi News : Rain saves discoms from financial crisis

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Tuesday, Jul 01, 2008
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New Delhi

Rain saves discoms from financial crisis

Smriti Kak Ramachandran

Saved more than Rs.200 cr. due to decline in energy consumption
Savings has helped power department from seeking immediate loan

NEW DELHI: The Capital’s cash-strapped power distribution companies have the recent rains to thank for in saving them from being pushed into a deeper financial crisis. With both power consumption and the energy demand taking a downswing in May – considered one of the year’s hottest months — the discoms were spared having to spend on arranging expensive power for the period.

The unexpected rain during May helped bring down the temperature and power consumption and thereby made it easier for the discoms to save more than Rs.200 crore.

According to experts in the power sector, the months of April, May and June “were profitable” for the power distribution companies because they did not have to purchase expensive power to meet the city’s growing demands.

“The anticipated increase in consumption is between 3 to 5 per cent annually. This year we saw a deviation in this pattern. We had a 6.70 per cent decline in a percentage of energy supplied in April, May and June this year compared with last year,” said a Power Department official.

He said the figures cumulated by the department, point out that the energy consumption in these three months was about 417 million units less than the corresponding period in the previous year.

“When the energy consumption sagged, the demand could be met without having to purchase expensive power. As per our estimates the discoms have been able to save Rs.200 crore and more merely by not having to making expensive purchases,” the official said.

According to the department, the unexpected savings on account of the rains have even eliminated the need to seek an immediate loan from the recently set up Power Stabilisation Fund.

“The market rate for short-term purchase of electricity varies from Rs.7.50 to Rs.8.50 per unit; on the other hand long-term purchase agreements can go up to Rs.2.50 per unit. So effectively the discoms, having been saved from purchasing expensive short-term power, have managed to save Rs.5 per unit. Our conservative estimates say they have managed to save more than Rs.200 crore,” an official said. The fiscal benefits accruing to the discoms apart, the rains also helped in reducing carbon dioxide emissions. “Each unit of electricity produced at coal/gas based plants emits about one kg of carbon dioxide. With the demand and the generation being scaled down during these three months, the release of carbon dioxide into the atmosphere too was curbed to a great extent,” the official pointed out.

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