Power demand-supply gap to widen in coming months
| Date :06-Sep-2022 |
Staff Reporter
The availability of power to meet the surge in demand in post-pandemic period continues to be a challenge. As per the projection of Maharashtra State Electricity Distribution Company Limited (MSEDCL), the peak demand-supply gap is likely to widen in coming months. Hence, it has sought approval of Maharashtra Electricity Regulatory Commission (MERC) for procurement of round-the-clock (RTC) power to bridge the gap. Now, MERC has approved MSEDCL’s petition in this regard but for procurement of RTC power upto 1,000 MW only.
MSEDCL had filed a petition for approval and adoption of tariff determined through transparent bidding process for procurement of short-term power for October 2022, and March to May 2023, and also for approval for increase in ceiling rate for short-term power purchase at higher cost than the ceiling rate approved by MERC. During the process of hearing, MSEDCL submitted to MERC its projections regarding the peak demand-supply position.
As per that submission of MSEDCL, in 2017-18, the peak demand was 19,533 MW as against which the power availability was 19,699 MW. Thus, the supply was one per cent surplus. In 2018-19, the position changed, and demand as well as supply both were at 20,745 MW. The next year, availability increased to 23,492 MW as against demand of 21,570 MW. Thus, the availability was nine per cent surplus. According to officials in the know of things, the supply figure was in surplus largely due to drop in demand due to onset of COVID-19 pandemic especially in the months of February and March 2020.
In 2020-21, demand was 22,554 MW and supply was 22,796 MW, that is, supply was one per cent above the demand. The pandemic was still around. In 2021-22, however, the situation changed. In what came to be known as post-pandemic scenario, the demand surged to 24,400 MW, as against which generation availability from contracted generating sources was only 22,438 MW, which created a shortfall of 8 per cent (1,962 MW) in meeting the demand. Similar scenario was observed in April and May 2022, wherein peak demand was around 25,144 MW and generation availability from contracted generating sources was around 22,600 MW, creating a shortfall of around 2,500 MW. In MSEDCL’s own admission, in April 2022, the shortfall was 10 per cent, which was ‘the maximum in last five years’.
Now, for the current year 2022-23, MSEDCL has projected the shortfall to increase by 10 per cent, with demand rising further to 25,144 MW but supply rising to only 22,632 MW. The major factors attributed to increase in demand and decrease in generation availability are -- rise in temperature, post-COVID increase in activity, and nation-wide coal shortage. Besides, said an official of MSEDCL on condition of anonymity, there has been not much of an augmentation in power generation capacity in Maharashtra. The entire reliance is being placed on solar and renewable energy to meet the increase in demand, he added.
After going through MSEDCL’s submissions, MERC has approved short-term RTC power procurement for October 2022, and March to May 2023, upto 1,000 MW only. As per the approval, MSEDCL shall procure 100 MW power in October 2022, 300 MW in March 2023, 400 MW each in April and May 2023.
While granting this approval, MERC observed, “Considering the data submitted by MSEDCL (including the sales projection, approved loss trajectory, and the generation availability) and the consequent development of scheduling of 1,060 MW power from CGPL and JSW has been started recently, there is no requirement of Short-Term Power Purchase. However, the Commission is also aware of the various factors that could affect the generation availability especially in respect of MSPGCL, and hence, as an abundant precaution to avoid any shortfall in the demand-supply, the Commission is of the opinion that the quantum of power received through the bids under the first tender process (ET-100) would be sufficient to meet MSEDCL’s demand at this point of time provided MSEDCL addresses the concerns stated above. Any subsequent shortfall can be met through power exchange or real time market.”
After considering the procurement of above power, if MSEDCL still anticipates shortfall in supply for meeting the demand in the months of March, April, and May 2023, MSEDCL may undertake fresh bidding process and approach MERC for adoption of tariff, if such tariff is not below the ceiling tariff.