3bn units of Power wasted in one year

Supply From Surplus To Deficit Regions Blocked It is the height of paradox for a country where blackouts are more a norm than exception. Over 3 billion units of electricity , or a day’s national consumption, were wasted in 2014-15 as congestion in the transmission highways blocked trading between surplus and deficit regions.

Data from various power exchanges show a higher wastage in 2013-14 at 5.3 billion units, or Delhi’s consumption for roughly 56-60 days.

Inter-region transfer through short-term open access stood at 78.38 billion units during this period. No doubt, such wastage both in terms of actual power fed into the grid but not used and generation capacity that was not `scheduled’ due to grid bottlenecks comes at a cost to the economy in terms of lost opportunities and idling power stations.

But even consumers, especially in deficit southern region, end up paying more as transmission gridlock not only affects volumes traded but also the price of electricity .

Power is traded on bourses through a mechanism called `market splitting’ in industry parlance. In this system, tariff on surplus and deficit regions are adjusted in a way that the power flow equals the network capacity available for trading.As a result, the price in surplus area declines and rises in deficit regions, which either go dark or have to look for costlier alternatives.

The southern region is one of the worst sufferers in this regard. Some industry estimates say network congestion cost the region at least Rs 5,000 crore in the last three years during which time 19 billion units could not flow to it due to congestion. The what it would have been if there was no congestion. Utilities had to buy tap costlier options or shed load. The price differential works out to Rs 2,996 crore. This came from consumers’ pockets.

Industry watchers say the problem lies in the way capaci ty of transmission highways are planned with singular focus on wheeling power under long-term supply agreements.This leaves only marginal capacity for trading, considered an ingredient for real competition and ensuring the government’s promise of 24X7 supply .

Reserving some transmission capacity transmission networks, thus, is cited as need of the hour for growth of a healthy power market. This is important since distribution utilities are unable to forecast demand until very close to the delivery day due to factors such as seasonal variations, unscheduled generation outages, social events, political factors and business cycle etc.