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Power Scenario in Tamil Nadu: A Comparative Analysis

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©2011 Athena Infonomics India Pvt.Ltd.

Power Sector in Tamil Nadu:

A Comparative Analysis

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Power Scenario in Tamil Nadu: A Comparative Analysis

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©2011 Athena Infonomics India Pvt.Ltd.

CONTENTS

CHAPTER I – INTRODUCTION 3

CHAPTER II - POWER SECTOR CHARACTERISTICS –  

STATE WISE COMPARISON 5

2.1 - REQUIREMENT VERSUS AVAILABILITY OF POWER 5

2.2 - SOURCES OF POWER SUPPLY 7

2.3 - TRANSMISSION AND DISTRIBUTION 11

2.4 - TARIFF REGIMES 15

CHAPTER III – TAMIL NADU POWER OUTLOOK 2015-16 19

3.1 - DEMAND FOR POWER 19

3.2 - SUPPLY OF POWER 21

3.3 - DEMAND SUPPLY GAP 24

CHAPTER III - CONCLUSION 25

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Power Scenario in Tamil Nadu: A Comparative Analysis

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FIGURES AND TABLES

Fig 2.1 - Requirement vs. Availability of Power (2003-04) 5

Fig 2.2 - Estimated Requirement vs. Availability of Power (2010-11) 6

Fig 2.3 - Power Deficits in Tamil Nadu (2003-03 to 2010-11) 7

Fig 2.4 - Source of Power 8

Fig 2.5 –Growth in Installed Capacity (2007-08 to 2010-11) 9

Fig 2.6 - Sector Wise Installed Capacity in Tamil Nadu - 2007-08 vs 2010-11 10

Fig 2.7 - T&D Network Length vs. Density 11

Fig 2.8 - T&D Losses -2009-10 11

Fig 2.9 - AT&C Losses- 2007-08 12

Fig 2.10 - T&D Losses of SEBs 13

Fig 2.11 - Cost vs. Revenue 17

Fig 2.12 - Consumption and Expected Revenue 17

Fig 2.13 - Per Unit Cost vs. Revenue (Sector-wise) 18

Fig 3.1 – Power Consumption in Tamil Nadu 19

Fig 3.2 – Sector-Wise Projected Energy Demand 20

Fig 3.3 – Sector-Wise Power Consumption 21

Fig 3.4 – Power Plants to be Commissioned by 2015-16 22

Fig 3.5 – Availability of Power through Capacity Additions 22

Fig 3.6 – Sources of Supply 23

Fig 3.7 – Demand Supply Scenario 24

Table 2.1 - Installed Capacity in MW (2007-08 and 2010-11) 9

Table 2.2 - Estimated Average Rate of Electricity as on 31st March 2009 15

Table 4.1 - Capacity Additions by the end of the 12th Plan 25

Table 4.2 - T&D and AT&C Losses – Targets Fixed by TNERC 26

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Power Scenario in Tamil Nadu: A Comparative Analysis

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Chapter I

Introduction

Availability of power is one of the biggest inputs necessary for the sustained growth of any

economy. This becomes even more important for a state like Tamil Nadu, which is one of the

most industrialized and urbanized states in India.

Over the last few years, Tamil Nadu has been facing massive power deficits. According to the

CEA, the state was expected to have a power deficit of around 18% in 2010-11. As a result, the

state is now facing huge power cuts. On an average, 3-4 hours of power cuts are being

experienced by consumers in the state. The impact of this power shortage is being felt mainly by

the industries, leading to a loss in efficiency and production.

Objective of the Paper 

Given this situation, this paper attempts to look at the reasons for the growing power deficits in

Tamil Nadu. In particular, the objectives of this paper are twofold:

  To analyse the current power situation in Tamil Nadu and identify areas in which Tamil

 Nadu can improve. It does this by comparing Tamil Nadu’s power sector with that of 

other industrialized states and identifying the key areas of difference between them. and

supply till 2015-16. The states selected for comparison are Maharashtra, Gujarat,

Rajasthan, West Bengal and Andhra Pradesh.

  To analyse the future power scenario in the state and estimate the power deficit/surplus in

2015-16. It does this by projecting trends in consumption of power and examining

capacity additions in the state for the next five years.

 Description of the Paper 

The rest of the paper is structured as follows: Chapter two compares characteristics of Tamil

 Nadu’s power sector with other states. It analyses requirement and availability of power in each

state, the source of power, the efficiency and coverage of the transmission and distribution

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Power Scenario in Tamil Nadu: A Comparative Analysis

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systems and tariff regimes. Having looked at the present status of Tamil Nadu’s power sector,

Chapter three presents the future outlook for power in the state. It analyses demand and supply

for power in the state for the next five years. Chapter four summarizes the key findings and

concludes.

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Power Scenario in Tamil Nadu: A Comparative Analysis

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Chapter II

Power Sector Characteristics – State Wise

ComparisonThis chapter analyses the power sector in Tamil Nadu over the last few years and compares it

with select states. The analysis is done under four main headings:

  Requirement versus availability of power 

  Sources of power supply

  Transmission and distribution system

  Tariff regimes

2.1. Requirement versus Availability of Power

The first step is to analyse the requirement and availability of power in the different states and

identify the extent of power deficits.

Fig 2.1 and 2.2 demonstrates how the gap between requirement and availability of power in

Tamil Nadu has altered significantly in comparison with other industrialized states between

2003-04 and 2010-11. Fig 2.1

0

20000

40000

60000

80000

100000

120000

Tamil Nadu Andhra

Pradesh

Maharashtra Gujarat Rajasthan West Bengal

   M   U

Requirement vs. Availability of Power (2003-04)

Requirement Availability

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Fig 2.2

Source: CEA

As mentioned in the introduction, in 2010-11, Tamil Nadu is expected to have a deficit of around

18%, which was the highest among all the States considered. Maharashtra and Andhra Pradesh

are also expected to have a high deficit of 11% followed by Gujarat with an 8% deficit.

Rajasthan and West Bengal on the contrary are expected to perform well with Rajasthan

displaying a perfect balance and West Bengal having a large surplus of 16%.

Comparing this with the situation in 2003-04, it can be seen that the status of deficits in most of 

the states was the same, except in Tamil Nadu and Andhra Pradesh. Tamil Nadu, in particular,

only had a deficit of around 1% in 2003-04. This deficit has been increasing rapidly, especially

in the last five years as can be seen from Fig 2.3 below:

0

20,000

40,000

60,000

80,000

1,00,000

1,20,000

Tamil Nadu Andhra

Pradesh

Maharashtra Gujarat Rajasthan West Bengal

   M   U

Estimated Requirement vs. Availability of Power (2010-11)

Requirement Availability

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Power Scenario in Tamil Nadu: A Comparative Analysis

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6.0

1.4 0.6 0.61.7 2.8

7.8

6.2

18.4

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11*

   P   e   r   c   e   n   t   a   g   e   %

Year

Power Deficits in Tamil Nadu (2003-03 to 2010-11)

 

Fig 2.3 

The reason for the huge deficits in Tamil Nadu is due to the lack of power availability.

Anticipating a huge increase in demand, driven by economic growth, states such as Maharashtra,

Gujarat and Andhra Pradesh put in added efforts to increase the availability of power. This was

done both by increasing own capacity and by encouraging private investment in power generation. On the contrary, such a long term vision to increase availability of power was absent

in Tamil Nadu. This is analysed in detail in the following section.

2.2. Sources of Power Supply

This section looks at the sources of power supply for the various states and examines capacity

additions in these states over the last three years.

There are five main sources of power in a state  –  own generation, central allocation, power 

 purchased from IPPs, short term power from the exchange and other sources (including wind

mills). The sources of power for the various states under study are given in the figure 2.4 below:

*Expected Source: CEA

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Power Scenario in Tamil Nadu: A Comparative Analysis

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Fig 2.4

Source: Tariff Orders

As can be seen from the above graph, among all the states, Tamil Nadu is the most dependent on

outside sources. Own generation of the Tamil Nadu Electricity Board is among the lowest of all

the states considered.

A large portion of power supply in the State (around 30%) is allocated to it from Central

Generating Stations (CGSs). Another significant portion of power (15%) comes from other 

sources, which includes wind power generation. Dependence on wind power generation, which

is highly seasonal in nature, is another reason for the massive power deficits in Tamil Nadu.

Further, with 6% of its power coming from the power exchanges, Tamil Nadu has the highest

dependence on short term power sources among the states considered.

Thus as mentioned before, the reason for the low generation by the state sector is the absence of 

investments by the state in stable internal sources. This can be seen from the following table

which shows capacity additions in the states over the past three years:

0%

20%

40%

60%

80%

100%

Gujarat Rajasthan West Bengal Tamil Nadu Andhra

Pradesh

Maharashtra

   P   e   r   c   e   n   t   a   g   e

Source of Power

Own Center IPPs Short Term PP Others

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Power Scenario in Tamil Nadu: A Comparative Analysis

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Table 2.1 

Installed Capacity in MW (2007-08 and 2010-11)

Installed Capacity 2007-08 Installed Capacity 2010-11 %

Change

State Private Centre Total State Private Centre Total

Tamil Nadu 5604.8 4488.3 2991.6 13084.7 5700.95 6294.8 2778.31 14774.06 12.9

Andhra

Pradesh

7090.3 1927.4 2530.5 11548.2 8478.86 3445.96 2591.66 14516.48 25.7

Maharashtra 10438.6 3614.7 4208.2 18261.5 11109.57 5713.15 5452.12 22274.84 22.0

Gujarat 5721.4 2459.2 2125.3 10305.9 6151.9 7028.84 2612.48 15793.22 53.2

Rajasthan 3788.1 457 1695.8 5940.9 5077.01 1402.2 2048.55 8527.76 43.5

West Bengal 3517.6 1081.6 938.7 5537.9 6012.46 1358.67 774.26 8145.39 47.1

Source: CEA

Fig 2.5

Installed capacity in Tamil Nadu increased from around 13,000 MW at the end of the 10th

plan to

around 14,700 MW in 2010-11, representing an increase of around 12%. As shown in the graph

this represents the least capacity addition among all the states in this period. Other power deficit

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Tamil Nadu Andhra

Pradesh

Maharashtra Gujarat Rajasthan West Bengal

12.9

25.7 22.0

53.243.5 47.1

   P   e   r   c   e   n   t   a   g   e   G   r   o   w   t    h

Source: CEA

Growth in Installed Capacity (2007-08 to 2010-11)

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Power Scenario in Tamil Nadu: A Comparative Analysis

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2.3. Transmission and Distribution

Having analysed the problems in availability of power in different states and sources of power 

supply, this section looks at the transmission and distribution (T&D) systems of the various

states. Comparison of the T&D systems is done based on the following parameters  – Density of 

the transmission and distribution lines, T&D losses and Aggregate Technical and Commercial

(AT&C) losses. These parameters are presented below in tables and graphs:

Fig 2.7

 

Fig 2.8

 

Source: Planning Commission, CEA, Athena Infonomics

0.00

1.00

2.00

3.00

4.00

5.00

6.00

0

100000

200000

300000

400000

500000

600000

700000800000

900000

Rajasthan Gujarat Maharashtra Andhra

Pradesh

Tamil Nadu West Bengal

Km Ckt.km/sqkm

T&D Network Length vs. Density

Ctk.Km Density (Ckt.km/sqkm)

18

24 23

30

18

24

0

5

10

15

20

25

30

35

Andhra Pradesh Gujarat Maharashtra Rajasthan Tamil Nadu West Bengal

   P   e   r   c   e   n   t   a   g   e   %

T&D Losses -2009-10

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Power Scenario in Tamil Nadu: A Comparative Analysis

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0 5 10 15 20 25 30 35 40

Rajasthan

Gujarat

Maharashtra

Andhra Pradesh

Tamil Nadu

West Bengal

Percentage

AT&C Losses- 2007-08

 

Fig 2.9

Source: Planning Commission, CEA

Among all the states, Tamil Nadu scores the highest with respect to all three parameters. Its

transmission and distribution line density of 5.35 Ctk.Km/sqKm is much higher than the other 

states. In fact only since 2008, Tamil Nadu has further added 1509 Ctk. Km of High Tension

Lines to its T&D network.

Tamil Nadu also has relatively low T&D and AT&C losses of 18% and 19.5% respectively.

Even though these values are relatively low, they have remained at these levels for the past ten

years. The absence of improvement in the T&D and AT&C losses is an area of criticism. This is

evident from the following graph which shows the movement of T&D losses in the different

states since 2002-03. Tamil Nadu is the only state which has not reduced its T&D losses and

improved the system over the years.

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Power Scenario in Tamil Nadu: A Comparative Analysis

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Agriculture 10HP (2000 KWh/

Month)

0 147 21.88 55 90 74.55

Small Industry 10KW (1500

KWh/ Month)

458.85 379.78 415.4 438.62 348.42 421.28

Medium Industry 50KW

(7500KWh/ Month)

486.57 470.78 414.33 468.36 583.56 459.68

Large Industry 1000KW 60%L.F.

(438000 KWh/month)

452.11 470.81 380.3 495 519.62 463.83

Heavy Industry 10000KW

60%L.F. (4380000 KWh/ Month)

462.61 470.81 418.6 534.7 519.62 463.83

Heavy Industry (33KV) 20000KW

60%L.F. (8760000 KWh/ Month)

452.11 447.14 407.68 534.5 - 460.65

Railway Traction 12500KW

(25000000 KWh/ Month)

526.47 453.79 410.03 549.12 465.3 451

Source: CEA

A quick perusal of the above table reveals that the tariffs charged to the domestic and agriculture

categories are much lower than in the other states. The agriculture category is in fact charged

only a fixed charge and carries a zero energy charge. However, the charges levied on the

commercial and industrial category of consumers are as high or even more than the other states.

This is clearly indicative of a distorted cross-subsidy regime, where industries are made to bear a

dual cost consisting of both the cost of subsidizing the agricultural and residential communities

and the cost incurred to cushion TNEB’s inefficiencies. 

The next step is to examine the revenue gap per unit of power sold as a result of the above tariff 

structure. The following figure compares the average cost per unit of electricity sold with the

expected per unit revenue in Tamil Nadu, Maharashtra and Gujarat:

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Power Scenario in Tamil Nadu: A Comparative Analysis

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Fig 2.11

 

Source: Tariff Orders

The above analysis shows that the per unit revenue gap is much higher for Tamil Nadu ascompared to the other states. Tamil Nadu faces a revenue gap of Rs. 1.50 as compared to Rs.

0.70 and Rs. 0.40 for Maharashtra and Gujarat respectively.

A further analysis of the tariff structure of Tamil Nadu is presented in the graphs below. These

figures compare the consumption of power by each category with their contribution to revenue

and show the extent of cross subsidy in Tamil Nadu:

Fig 2.12

4.93 5.01 4.66

3.43

4.28 4.22

0.00

2.00

4.00

6.00

Tamil Nadu Maharashtra Gujarat

Rs

Cost vs Revenue

Cost per Unit Expected Revenue per Unit

36.0

28.6

19.2

0.2

12.3

3.8

50.6

19.8

1.3 0.2

23.9

4.2

0.0

10.0

20.0

30.0

40.0

50.0

60.0

Industry Domestic Agriculture Traction Commercial Others

   P

   e   r   c   e   n   t   a   g   e   %

Consumption and Expected Revenue

Consumption (%) Expected Revenue (%)

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Power Scenario in Tamil Nadu: A Comparative Analysis

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Fig 2.13

 

Source: Tariff Orders

It can be observed that while the domestic and agriculture categories consume around 50% of the

 power, they contribute only to around 20% of the revenues. The industrial and commercial

sectors contribute much more to revenues than they consume.

The extent of subsidy given to the agriculture and domestic sectors can be seen from figure 2.13.

While per unit revenue from industrial consumers is almost equal to the cost, the revenue from

the commercial sector is much more than the cost. This indicates that it is mainly the commercialsector that cross subsidies the consumption of domestic and agriculture consumers.

0.24

6.64

2.37

4.83

3.79

4.81

0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00

Agriculture

Commercial

Domestic

Industry

Others

Traction

Rs/Unit

Per Unit Cost vs Revenue (Sector-wise)

Per Unit Cost

Average Unit

Cost of Supply

= Rs 4.90

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Chapter III

Tamil Nadu Power Outlook – 2015-16

The previous chapter presented the current status of the power sector in Tamil Nadu as compared

with other select states. It was shown that Tamil Nadu had among the highest power deficits,

owing mainly to low own generation of TNEB and high dependence on wind power generation.

This chapter looks at the future power situation in Tamil Nadu. It forecasts demand and supply

for power till 2015-16 and estimates the demand-supply gap.

3.1. Demand for Power

Figures 3.1 and 3.2 show projected power demand in Tamil Nadu till 2015-16. Sector-wise

demand projections are also shown:

Fig 3.1

Source: Athena Infonomics, TNEB Tariff Order 2010, CEA

39240 4128644516

4993452953 53065

5669862082

6630471240

7581681122

86796

6075065610

71527

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

100000

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

MU

Power Consumption in Tamil Nadu (MU)

Athena Projections TNEB Projections

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Power Scenario in Tamil Nadu: A Comparative Analysis

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Fig 3.2

Source: Athena Infonomics

*Demand is calculated at the consumer level (end use) and does not include T&D losses

The demand forecasts presented above were calculated using a regression analysis, where

sectoral power consumption was forecasted based on the movement of relevant variables such as

number of consumers, Gross State Domestic Product (GSDP), etc. Fig 3.1 also shows a

comparison of these figures with TNEB’s own demand projections for the years 2010-11, 2011-

12 and 2012-13. As can be seen, the two values were found to be almost the same.

Demand for power is expected to steadily increase over the next five years. However, thesectoral composition of demand is expected to remain almost the same, as depicted in Fig 3.3

 below:

62082

66304

71240

7581681122 86796

-3000

7000

17000

27000

37000

47000

57000

67000

77000

87000

0

5000

10000

15000

20000

25000

30000

35000

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

MU

Sector-Wise Projected Energy DemandDomestic Commercial Industry Traction

Agriculture Public Utility Others Total

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Power Scenario in Tamil Nadu: A Comparative Analysis

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Domestic

25%

Commercial

14%

Industry

36%

Traction1%

Agriculture

20%Public Utility

1%

Others

3%

Sector -Wise PowerConsumption (2015-16)

 

Fig 3.3

Source: Athena Infonomics

3.2. Supply of Power

Supply of power in Tamil Nadu for the next five years has been forecasted in this section by

analyzing the likely capacity additions in the Central, State and Private sectors.

Total capacity that will be added in the state from 2011-12 to 2015-16 is 7310 MW, out of which1860 MW will come from the state sector, 4250 MW from the central sector and 1200 MW from

the private sector. The plants coming up in the state in the next five years are shown in Fig 3.4.

The total amount of power that will be made available to Tamil Nadu through these capacity

additions is also presented below (Fig 3.5):

Domestic

24%

Commercial

12%

Industry

40%

Traction1%

Agriculture

20%

Public Utility

2%

Others

1%

Sector-Wise Power Consumption(2010-11)

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Power Scenario in Tamil Nadu: A Comparative Analysis

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Fig 3.4 

Source: CEA, TNEB Tariff Order 2010

Fig 3.5 

Source: CEA, TNEB Tariff Order 2010

0

200

400

600

800

1000

1200

1400

2011-12 2011-12 2011-12 2011-12 2011-12 2011-12 2012-13 2012-14 2013-14

BHAWANI

BARRAGE(UNIT

II, III) TNEB

VALLUR

(ENNORE) JV

NTPC

NEYVELI - II LIG

NLC

METTUR EXT

(UNIT I) TNEB

NORTH

CHENNAI EXT

(UNITI, II)TNEB

KUDANKULAM

(UNIT I) NPC

VALLUR (UNIT

III)

NTPC

TUTICORIN TPS

(UNIT I, II)

NLC

COASTAL

ENERGEN TPP,

TUTICORINCOASTAL

ENERGEN PVT

LTD

MW Power Plants to be Commissioned by 2015-16

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Private 1791

Central Outside State 1093

TNEB 6384 2770

Central Within State 1147 4059

Existing Supply 65248 65462 88478 91248 93039 93039

30000

40000

50000

60000

70000

80000

90000

100000

MU

Availability of Power Through Capacity Addition

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Power Scenario in Tamil Nadu: A Comparative Analysis

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0

20000

40000

60000

80000

100000

2010-11 2011-12 2012-13

MUSources of Supply

TNEB Central Wind IPP Biomass Captive

As is shown, most plants are to be commissioned by 2011-12, implying that power availability

will show a huge increase in that year. This is in line with the objective of the Government of 

Tamil Nadu to achieve self sufficiency in the power sector by 2012.

The total power made available through capacity additions in the year 2011-12 is expected to be

11,536 MU out of which 6384 MU is generated from TNEB’s own capacity additions, while

4059 MU is allocated from capacity additions of Central Generating Stations (CGSs) within the

state. Further, a capacity of 1093 MU will be allocated from CGSs outside the state (namely,

 NTPC’s Simhadri power plant in Andhra Pradesh and Kaiga APS in Karnataka).

In 2012-13, an additional 2770 MU of power is expected to be made available due to further 

capacity additions by NTPC in the state. Fig 3.5 also shows an increase in existing capacity from

65420 MU to 88478 MU. This increase is mainly due to higher generation through increased

utilization of the plants commissioned in the previous year.

In 2013-14, only one plant is likely to be commissioned. This is the 1200 MW thermal power 

 plant, Coastal Energen, Tuticourin. Of this, it has been assumed that 25% will be allocated to

Tamil Nadu, resulting in an addition of 1791 MU to the power supply.

 No further plants are expected to be commissioned for the remainder of the 12th

plan period (till

2016-17). Hence, it is assumed that the existing capacity will remain constant after 2013-14.

In spite of these capacity additions, Tamil Nadu is still highly dependent on wind power 

generation. As shown in the graph below, around 15% of power availability is still expected to

 be supplied by this sector, which as mentioned before, is highly seasonal and unpredictable.

Fig 3.6

Source: TNEB Tariff Order 

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3.3. Demand – Supply Gap

The demand and supply projections presented in the previous sections have been compared in

Fig 3.7 in order to estimate power deficits/surplus in the state in the next five year:

Fig 3.7

Source: Athena Infonomics, TNEB Tariff Order 2010, CEA

*Inclusive of an 18% T&D loss

The above figure shows a deficit of around 13% in the year 2010-11, which is lower than the

18% deficit estimated by the CEA. As is expected, supply of power increases after 2011-12 and

levels off after 2013-14. Due to the capacity additions in 2011-12, the state is expected to

 become power surplus in 2012-13. However, as can be seen from the figure, the lack of capacity

additions after 2013-14, again lead to power deficits. In 2015-16, it is estimated that Tamil Nadu

will have a power deficit of around 11%.

66395

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40000

50000

60000

70000

80000

90000

100000

110000

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

MU

Demand Supply Scenario

Supply Demand*

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Chapter IV

Conclusion

The analysis presented in this paper shows that TNEB is among the best State Electricity Boards

in India with respect to management of the power sector. This is evident from the low T&D and

AT&C losses in the State. However, the main problems faced by the state were found to be as

follows:

  Lack of capacity additions and overdependence on wind generation

  Lack of efforts to improve T&D systems beyond their current state

  Low pricing of electricity consumption for agriculture and domestic categories

Capacity Additions

Likely additions to Tamil Nadu’s installed capacity were examined in Chapter 3. This is

compared with capacity additions in the other states in Table 4.1 given below:

Table 4.1

Capacity Additions by the end of the 12th

Plan

State Private Centre Total

Tamil Nadu 1860 1200 4250 7310

Andhra Pradesh 2750 5200 1710 9660

Maharashtra 4230 2970 500 7700

Gujarat 1692 7260 0 8952

Rajasthan 1860 810 700 3370

West Bengal 0 250 3362 3612

Source: CEA

The above table shows that total capacity additions in Tamil Nadu in the next five years are

lower than most other states. It was seen in Chapter 3 that most of these additions are expected to

take place in 2011-12, leading to a situation of power surplus in the state for the next two years.

However, no capacity additions are expected to be commissioned after 2013, leading again to

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 power deficits in the state. Further, it has also been noted that the state will remain to be highly

dependent on wind generation.

There is a need to improve this situation. Alternative energy sources such as tidal power,

 biomass, solar power, photovoltaic installations etc., need to be actively pursued and

implemented in the state to meet to the growing demand and alleviate the short supply scenario.

Investments in conventional sources of energy must also be strengthened.

 Efforts to Improve T&D systems

As was shown in the earlier section, although Tamil Nadu has one of the lowest T&D and AT&C

losses in the country, these have remained the same over the years. In the latest Tariff order, the

Tamil Nadu Electricity Regulatory Commission (TNERC) has set out targets for the reduction of 

 both T&D and AT&C losses to be achieved by 2011-12 (Table 3.2).

Serious steps to achieve these targets must be taken to prevent the power scene in Tamil Nadu

from further deteriorating.

Table 4.2

T&D and AT&C Losses – Targets Fixed by TNERC

2009-10 2010-11 2011-12

AT&C Losses 18.9 18.5 18.1

T&D Losses 18 17.6 17.2

Source: Tariff Order 

Tariff Regime 

A perusal of TNEB’s tariff order for 2010 reveals that the tariff structure for 2010-11 has not

changed much. Electricity consumption by the agriculture and domestic categories continue to be

 priced low.

Again, there is a need to make tariffs more competitive. Another option is to adopt a Zero Load

Shedding Model, such as in Maharashtra. Under this model, consumers are given the option to

 pay a higher tariff, called a reliability charge, to avoid facing power cuts.

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