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BW Businessworld

Will There Be Light?

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Can you beat this? Bihar's power generation utilities have been shut down since March! After Jharkhand was carved out of the state in 2000, Bihar was left with just three plants — Barauni (2x110 MW), Muzaffarpur (2x110 MW) and the Koshi Hydel Power Station, but none generates power. The four 110 MW units of Barauni and Muzaffarpur thermal power stations have been shut down for R&M (renovation and modernisation) since March 2012; so has Koshi Hydel after devastating floods in 2008. Smaller power units of 15 and 50 MW have long been retired.

The state had a recorded requirement of 12,384 million units (MU) in 2010-11, while availability was only 10,772 MU. It had the highest power deficit in the eastern region at 13 per cent (it was short of 1,612 MU); peak deficit was at 22.5 per cent.

So, how does Bihar meet its power needs? "Whatever electricity we get is through central allocation; in order to meet the additional requirement, we purchase power from the short- and medium-term market at very expensive rates," says an official with Bihar State Electricity Board (BSEB). "Although we get around 1,600 MW of centrally-allocated power and short-term purchase accounts for 300 MW, any shutdown in the Centre's plants affects the power availability on a high scale," he says.

Power is available from the Centre at around Rs 2.30; in order to meet the shortfall, BSEB has to purchase power from the short-term market at almost double the price at Rs 4.31 per unit.

However, things are set to change. If all goes well, the people of Bihar might soon get some respite from extreme power starvation. A 2x640 MW private thermal power station — Bihar's first private power plant — is coming up in Banka. Being developed by JAS Infrastructure Capital, the plant is due to be commissioned in April 2014. Also, both the Barauni and Muzaffarpur stations are expected to be back on line by March 2013. Bihar also plans to set up hydel projects, which will further ramp up the state's installed capacity.

The state has three more power projects in the pipeline. However, fuel linkages for these projects are yet to be approved, without which operations cannot start. Failure to get adequate coal to fuel the existing thermal plants in the state has also worsened the power situation. In this context, Chief Minister Nitish Kumar recently said that there was a need to develop renewable energy sources in the state.

Bihar is also involved in a legal imbroglio with Jharkhand over the Tenughat power station (2x210 MW) situated in Bokaro. The power station is owned by the Bihar government but since it is located in Jharkhand, the Centre has assigned it to Jharkhand. The matter is still pending in the Supreme Court; earlier, the Patna High Court had ruled in favour of Bihar.

The state has been hard-pressed for power ever since Jharkhand was carved out of the state and a majority of power plants went to Jharkhand. Bihar had an installed capacity of 1,975 MW and was left with only 584 MW after the division, which also dragged down the state's per capita consumption of electricity from 152 units per year to 60 units per year.

(This story was published in Businessworld Issue Dated 23-07-2012)