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National grid: Will integration with south help alleviate the region's Power shortage?

The amalgamation of southern states with the national grid from January 1 made India's integrated power grid one of the largest in the world. But that may not prove a panacea for huge shortages in south India.

New Year's Day heralded the arrival of a long-awaited landmark in Indian history - for the first time ever, India's electrical power system is a unified whole. On January 1, the commissioning of a single line - from Raichur in Karnataka to Sholapur in Maharashtra - allowed the government to claim that the southern states have been integrated with the national grid right on schedule. The Indian grid is now truly national and has around 232 GW of installed generation capacity, making it one of the largest in the world.

The integration of the southern grid with the national grid comes at a time when south India continues to suffer a chronic power shortage. The shortage, which has resulted in sharp power cuts for both industry and retail consumers has declined, at least according to official statistics. Between April and November, the southern states faced a power supply deficit of 7.7 Percent, down from over double that a year before.

"There has definitely been an improvement in the power supply situation, at least in Tamil Nadu," says D Balasundaram, a Coimbatore-based entrepreneur, and president of the Tamil Nadu Electricity Consumers Association. During the peak summer months last year, he says, retail consumers in Coimbatore faced 12 hours of power cuts per day. That has now fallen to two hours per day along with a four-hour power cut for industrial consumers between 6 pm and 10 pm.

Balasundaram attributes the improvement partly to an increase in generation capacity in Tamil Nadu as new plants have come online in the state. But another major reason for the improvement in the power deficit in the southern states has been the economic slowdown, which has reduced the demand for power. Demand for power between April and November 2013 in the southern states actually fell 1.7% over the same period in 2012.

In contrast in 2012 there was growth of almost 10% in power demand for that period compared with 2011. Had the same growth in demand remained in 2013 as well, the southern states would have seen an increase in the power deficit, not a fall. "The economic slowdown has led to a weakening in demand without which the power deficit would have been higher," agrees Balasundaram.

So will the integration of the southern grid help alleviate the shortage in demand in the south - a shortage which could well get worse if growth improves? While the south faces a supply crunch, it is states such as Chhattisgarh and Odisha that have seen a surge in generating capacity in recent years, well in excess of their requirements. From the perspective of the power plants in those regions, the integration of the southern grid with the national grid is of critical importance as it opens up a huge potential base of customers. Will that happen?

Balasundaram points to another big factor at play in the coming months - the elections. "All southern states will want to buy more power ahead of the elections," he points out.

THE INTEGRATION

Even before January 1, the southern grid was linked to the national grid but the links were only partial in nature. The commissioning of the Raichur-Sholapur line has resulted, in a technical sense, in the southern states being 'synchronised' with the rest of India. But for several months at least, the integration of the south with the north is likely to be just that - technical.

"There need to be multiple AC interconnections between the two regions," says a retired senior official in the power sector. "Only then will there be a true interconnection between the two regions." The retired official told ET Magazine, that a single line (Raichur-Sholapur) is hardly enough to move power between the two regions.

Beyond the headlines over the creation of one of the "largest  grids in the world", this is pretty much what grid managers feel too. In a meeting held in September last year and chaired by the head of the Central Electricity Authority, an apex body in the sector, officials decided that even with the commissioning of the Raichur-Sholapur line in January, no 'scheduled' energy transfers would be allowed for at least six months.

In other words, a power plant in Chhattisgarh looking to sell to the lucrative markets in the south will not be able to do so. Grid managers will not allow such sales, which are to be moved to customers over the Raichur line, at least till July this year.

Source-On Request