Power project developers in Chhattisgarh fear lower profits because of a lack of adequate transmission network that limits their ability to sell surplus electricity out of the state.
Besides state utilities, private power producers such as KSK Energy, Jindal Steel & Power, RKM Powergen and Bhaskar Group are commissioning new projects in Chhattisgarh which will more than double the state's electricity generation capacity in the next couple of years from close to 9,500 mw now. Transmission network in the state, however, is not expanding at the same pace.
"We will soon face a situation where evacuating electricity out of the state will be a challenge as the state commissions more generation capacities," said Shivraj Singh, chairman of state-owned Chhattisgarh State Power Holding Company. "Today, state utilities are selling 400 mw of power to other states and this will ramp up to 900 mw soon. There will be challenges as private producers too add generation capacities."
According to him, Power Grid Corporation was to provide grid connectivity to power projects based in the state. "I am not sure about the status of transmission network projects initiated by Power Grid Corporation. Power producers will not be able to attract good tariff in the absence of adequate evacuation capacities," he said.
By March 2014, Chhattisgarh will add 3,200 mw, which will increase the state's total generation capacity to more than 12,500 mw, but the capacity of transmission networks in the state by then will be just about 9,000 mw. It is projected to have 21,500 mw of generation capacity by March 2015. The lack of adequate transmission network is already hurting the state's ability to sell power on the spot market to outside consumers. According to power-trading platform Indian Energy Exchange, Chhattisgarh witnessed power price going down to Rs 2.30 a unit in November from Rs 2.41 in October.
Commenting on the progress of transmission network, a top Power Grid Corporation official, requesting anonymity, said the company will be able to commission projects if it gets timely environmental clearances and land-usage permission. "We are not responsible for factors beyond our control."
The official said the company's projects in the state are "more or less" progressing as per schedule.
Jindal Steel & Power, which operates the country's first mega power project in the private sector near Raigarh in Chhattisgarh, is already facing limitations in selling power to other states. It is in the process of ramping up its generation capacity from 1,000 mw to 3,400 mw.
"There are new power-transmission lines under construction, which shall provide additional capacity of around 8,500 mw progressively by June 2015. It means Chhattisgarh will have transmission capacity of 16,500-17,500 mw against installed capacity of 21,500 mw in next two years," said a top executive at one of the private sector power producers in the state.
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