JSW Energy signed a short-term power purchase agreement with Karnataka State Electricity Board.
DK Shivakumar of the Energy Department at the Government of Karnataka speaking to CNCB-TV18 confirmed the news saying the government has tied up with the company for 600-750 MW of power. Tariffs for this project would be about Rs 3 per unit.
The state has stitched up a short-term pact as it has firmed up power supplies with other partners. Stressing the fact they are well supplied, the minister said that in solar the state is adding 1000 MW this year. "So, we have sufficient power. That is why we didn’t want to take a big risk on this issue (deal with JSW).”
Karnataka, which sources 33 percent from hydel station, is well stocked up for 10-15 years, he said.
In next year, we will have excess power of over 1500 MW, he said.Below is the verbatim transcript of DK Shivakumar's interview to Latha Venkatesh, Sonia Shenoy & Anuj Singhal on CNBC-TV18.
Latha: The power purchase agreement (PPA) apparently was signed between JSW Energy and your state Discom. Is that right? How much of power do you want to buy?
A: We wanted to have a short-term power though we are sufficient, we are managing the issue. We called for a short-term tender for 1,200 mega watt and in about 600-750 mw we have tied up with JSW Energy and we are taking the power.
Sonia: What would the tariffs be for this tie-up?
A: The tariff is about Rs 3.
Latha: Why only short-term. Will you ever think of making it a slightly longer term contract?
A: In Karnataka we have Kudgi, Yermarus and Bellary plant; these three were getting more than 2,500.
In Kudgi, we are getting about 1,200 mw and in Yermarus we will get 1,600 mw in the future and in Bellary we are getting 700 mw.
In solar we are adding about 1,000 mw this year, which will be still sufficient. So do not want to take a very big risk on this issue, so we decided for a short-term though we had a call for a medium-term tender last year but we decided we don't want to bleed, so compared to the other states we are paying very well to all the power suppliers.Anuj: Karnataka is a power deficit state, so what is the plan over the next two or three years in terms of reducing the deficit?
A: The Pravasi Bharatiya Divas held in Bengaluru, Karnataka on January 9. The central government thought that Karnataka is a good destination for industries and other players to be attracted. So, all I want to say is that we have a small deficit; it's not a big issue.
Karnataka's 33 percent of power is dependent on hydel structure, so that's why we have taken a short-term but have planned for the next 15 years in a systematic way and nothing will go wrong. However, in next year we will have excess power of 1,500 mw and that's what we look at.
Sonia: You said that the tariff rates would be, for this particular PPA at about Rs 3.6. Is that the average rate that we are looking at for all the other short-term PPAs and what is the average cost of procurement now?
A: We have tied up with NTPC for Rs 3.33 paise in solar. In Damodar Valley we have Rs 4.50 and in our own Discom we have more than Rs 4.40. In hydel we get power within 50 paise. So the average comes within Rs 4.
Latha: So there is no plan now for any further long-term PPAs because I understand three of your own power plant are going to come on stream?
A: We are looking at investors who are coming forward. If they need very big power, definitely we will plan accordingly and we have been permitting other players also -- even JSW can have - as per the new policy both JSW and Udupi Power can have their expansion. We will allow them for an expansion within the state.
Latha: You will allow expansion but will you buy the power because the big problem with power companies is they are willing to expand provided you give a PPA. Are you open for any longer term PPA anytime soon?
A: The Government of India has come out with a policy but at the same time a lot of people are going for open access; open access is there but still we need proper consumers who can pay us well. We are making a list of who all want to invest in Karnataka. So as per the plans there will be no power cuts, there will be no power shortage and we will supply power to whoever want to invest in Karnataka.
Sonia: Can you give us an update on what is the latest with respect to the Ujwal DISCOM Assurance Yojana (UDAY) scheme. Have there been any decrease in losses of the aggregate technical and commercial (AT&C) and has it improved the efficiency of the State Electricity Board (SEB).
A: In the quarterly report Bangalore Electricity Supply Company Limited (BESCOM) has stood number one in performance.
Latha: Our question was - what is your transmission and distribution (T&D) loss now. What was it a year ago? Is there a loss in T&D or AT&C losses?
A: The loss has been decreased to 0.5 percent compared to the last year and now around Bangalore there were a lot of issues, more than Rs 3,000 crore has been invested only in the transmission sector. However, we have come out with new policy and we are introducing distribution and generation. In every taluka we are having about 20 mw of solar power where power will be generated and distributed at their level.
We are coming out with a new solar policy and in every taluka we are going to distribute solar to minimum 150-200, so that power can be distributed at the same level. We wanted AT&C losses to be reduced and this is our plan of action that we are looking at.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
