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SIMA demands workable model for captive power generation
Jul '08
Dr.K.V.Srinivasan, Chairman, The Southern India Mills' Association, has welcomed the Notifications issued by the Tamil Nadu Electricity Board on 23rd July 2008 and 24th July 2008 inviting tenders for procurement of short term power from captive power plants and co-generators within Tamil nadu.

Dr.Srinivasan, has informed that the new approach of TNEB might help the Board to bridge the gap in the supply demand of power in the State only to a marginal extent. However, he has pointed out that the above proposal would not work in the textile industry since almost all the mills though many are having over 1 MW captive power generation capacity do not have facilities to convert 440 Volts into 11 KV and export to the grid.

The TNEB is currently facing around 1000 MW shortage of power during peak hours. This problem would aggravate during summer and going to continue at least for another 3 or 4 years till various private merchant power plants, State power plants and allotment from national grid are made available.

SIMA Chief has pointed that TNEB has to necessarily come out with a workable model which might be a unique one in the country considering the need to sustain the survival of the industry in the State, prevent job loss to millions of people, save thousands of crores of revenue loss to the Government, etc.

Dr.Srinivasan has informed that the textile industry alone have over 1000 MW HSD oil gensets and 150 MW furnace oil gensets. He added that all the industries put together, the captive power generation capacity available in the State would be more than 3500 MW. He has further said that the State could easily manage the power shortage problem till 2011 if the Government comes out with a workable model.

SIMA has been insisting TNEB to reimburse the additional variable cost for operating the captive power plants (furnace oil and HSD oil and others) for captive consumption. If the loss in notional income by way of VAT and the loss due to technical and distribution are taken into account, the actual amount to be reimbursed by providing the necessary budget by the State Government might be around Rs.500 to Rs.700 crores to bridge the gap in the supply and demand of power in State.

Dr.Srinivasan has pointed out that when the TNEB is paying Rs.7 to Rs.15 per unit for power purchased from the independent power plants under MoU route, he has emphasised that the Government should not hesitate to meet the variable cost incurred by the industrial units for captive consumption of power generated using HSD / furnace oil gensets.

SIMA Chairman reiterated that the Hon'ble Electricity Minister and the Finance Secretary had already assured to favourably consider this proposal and permit captive consumption at the meeting held on 18th July 2008. Therefore, he has appealed to the Hon'ble Chief Minister to immediately take a decision on the matter since the industry is already losing production upto 40% incurring heavy cash losses leaving lakhs of people jobless.

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