Profitable discoms power Gujarat ahead

December 30, 2011
2 mins read

At a time when most parts of the country are facing power shortages and debt-laden state electricity boards and distribution companies (discoms) are seeking another bailout from the Centre, power sector entities in Gujarat are a study in contrast.
All of Gujarat’s four state-owned discoms – Uttar Gujarat Vij Company, Madhya Gujarat Vij Company, Dakshin Gujarat Vij Company and Paschim Gujarat Vij Company -are making profits. Its lone transmission entity GETCO is well in the black and Gujarat Urja Vikas Nigam (GUVNL), the holding company that is in the business of bulk purchase and sale of power, is profitable too. Not just that, the state has pocketed a profit of a cool R436 crore this fiscal by selling its surplus power to other states.

Gujarat was among the first states in the country to unbundle its state electricity board (SEB), in 2005, in conformity with the Electricity Act, 2003.

Gujarat’s performance in the power sector would look even more remarkable considering that the combined losses of SEBs and discoms in the country have touched a staggering R1.5 lakh crore.

Speaking to FE, state industries and power minister Saurabh Patel said Gujarat has sold a total of 4,366 million units of power worth R1,656 crore to power-strapped states since April this year. “We are charging the standard R1 per unit as our margin, which works out to R436-crore profit from this,” he said.

Ironically, while cities, towns and villages in most other states are facing unrelenting power outages, in Gujarat, an estimated 7.75 million units of electricity are being wasted every day for lack of purchasers or users.

According to Patel, “Our plants are going for backing down daily once our own needs are met.” Backing down is a situation where the plant is deliberately slowed down when there is no demand for power. The Narendra Modi government is providing 24-hour uninterrupted power supply for agricultural purposes.

GUVNL posted a profit after tax of R533 crore last fiscal. In 2005, the year that saw the unbundling of the SEB, Gujarat’s losses from power sector was R737 crore.

Commenting on the ongoing power crisis plaguing the nation, Patel maintained it had a lot to do with bad planning. “We have done advance planning and have adequate coal supplies to see us through for a long time,” he said.

Industry watchers said that one of the reasons why Gujarat is placed comfortably on the power front is because the state is not relying exclusively on thermal power. The state has a healthy mix of power from various sources, including 2,400MW generated by wind farms, 40MW from solar power, 547 MW from hydro power and 728MW from gas-based power. Thermal (coal) power capacity in the public sector is 3,720MW.

In the private sector, Torrent accounts for another 500MW of thermal power, Gujarat Power and Energy Corporation 655 MW of gas-based power and Gujarat State Energy Generation Company 158 MW of gas-based power. In addition, Gujarat gets another 3,000MW from the central pool. Given the scenario, it is not surprising that of the total 60 million population of Gujarat, 11.4 million have power connections.


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