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Power shock: Generation by private players dips 17% in Gujarat

Power supply falls to 42,518 MUs in 2017-18 from 51,024 MUs in 2016-17

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Symptomatic of the turbulent times private power producers are facing in the country, electricity generation in the state by private companies declined by one-sixth in financial year 2017-18, the second straight year in was lower, official data shows.

Power generation by private sector units in Gujarat in 2017-18 was 42,518 Million Units (MUs), a decline of 16.67% from 51,024 MUs in the previous year, state government data shows.

This was the second straight year, and also only the second time in more than a decade, that power generation by private players declined in the state. Their cumulative power generation was 53,219 MUs in 2015-16, i.e. 4% higher than the year after that.

Power sector in Gujarat is dominated by large corporates such as Tata, Adani, Essar and Torrent. The share of these companies and other smaller private players in power generation was 50% for the past several years, but this fell to 38% in 2017-18.

"The decline in electricity generation by private players was because private power producers were not supplying to their full capacity," Gujarat Urja Vikas Nigam Limited (GUVNL) managing director Pankaj Joshi, told DNA.

Adani and Essar were among the private players that had stopped power supply to the state utility for several months citing under-recovery due to higher input costs on account of increase in imported coal prices. Essar stopped supply of 1,000 MW from December 15, while Adani discontinued 2,000 MW from January 20. Adani, however, restarted supply of 2,000 MW last month, while Essar's Salaya plant has been declared NPA. said an official.

Energy supplied by state government's power generation entity Gujarat State Energy Corporation Limited (GSECL), which had been on a decline in the past few years, went up 45% during the last year. From 16,254 MUs in 2016-17, GSECL's output grew to 23,683 MUs. "This was because of higher utilisation of GSECL's capacity to meet electricity demand in view of lower supply by private players," Joshi said.


A senior official said that GSECL's plants do not qualify to supply power as per the merit order, due to higher cost. "However, since the availability of private power was low, GSECL stepped in. Moreover, availability of its plants was also higher than the previous year," he said.

Some of the private producers are facing strong headwinds, made worse by a shortage of coal and gas, but officials say that lower generation by them is a passing phase. All of them have long-term power purchase agreements with GUVNL, and are likely to maintain their domination of the power sector.

The government data shows that in spite of top private producers shutting down their plants for many months, overall power generation in the state rose 6% to 1,10,739 MUs in 2017-18 from 1,04,285 MUs in the year before that. Supply of electricity by central sector units grew by over 19% from 27,500 MUs in 2016-17 to 32,776 MUs in 2017-18. Wind power generation grew 25% to 9,636 MUs, and that of solar units 18% to 2,048 MUs.

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