P H Rana

CORPORATE STRATEGY FOR ENERGY INTENSIVE INDUSTRIES

EVOLUATION OF POWER INDUSTRIES ¾ In earlier days, due to low priority, Generation Plants were privately owned. ¾ System of Licensee ¾ For better reliability in the postindependence period, power industry was nationalized.

CURRENT STATE OF AFFAIRS ¾ Due to various reasons, cost of power generation, except in hydro, is very high. ¾ Energy intensive industry find it difficult. ¾ Monopolistic status cause of inefficiency and high cost. ¾ For competition, Reforms are being undertaken in the power sector. ¾ Central Sector has enacted Electricity Act 2003. ¾ Electricity Act 2003 provides new options to the industries.

ENERGY INTENSIVE INDUSTRIES CAN ADOPT ONE OF THE FOLLOWING OPTIONS : ¾ ¾ ¾ ¾ ¾ ¾ ¾

Captive Power Plant Outsourced Captives Open Access in Distribution Better Managed Distribution Companies Control over, time of operation Non Conventional Source of Energy Energy Conservation.

1. Captive Power Plant ¾ ¾ ¾ ¾ ¾

Captive Power Plant can be set up by any person. Can be set up by Co-operative Society or Association of persons. Opens new opportunity for structuring Captive Generating Plants. CPP can be provided with open access transmission facility. Charges to be decided by GERC / CERC.

2.

Outsourced Captives :

¾ ¾ ¾

Required expertise for operating CPP is missing. O&M can be outsourced. Possible to get CPP on lease.

3. Open Access in Distribution ¾ Open access in Distribution upto 5 MW. ¾ Connected load consumer will be free to choose the supplier. ¾ Connected load beyond 5 MW - can avail open access. ¾ No obligation to buy power from local discom. ¾ Regulatory mechanism is yet to be formulated. ¾ Without investment, benefit can be availed.

4. Better Managed Distribution Companies : ¾ ¾ ¾

Brisk pace of reform is underway Will improve quality and reliability With competition, tariff expected to come down.

5. Control over, time of Operation : ¾ Industries can increase the drawal during night to obtain substantial benefit in the tariff.

6. Non Conventional Source of Energy : ¾ ¾ ¾

¾ ¾

Act provides big thrust on non-conventional sources of energy. Increasing consciousness on pollution caused by fossil fuel. Encourage energy intensive industries the large incentive source being given by State & Central Govt. in the form of benefit, subsidies etc. They can wheel the power to their plant. Also easy carbon credits, which could be traded in future.

7. Energy Conservation : ¾ Focus on Energy Audit ¾ Adoption of new Industry – Plant design.

CONCLUSION : There is no ready made solution.