Gujarat’s Energy Demand Dilemma: Load-Shedding Or Buy Power From Private Firms

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Gujarat’s Energy Demand Dilemma: Load-Shedding Or Buy Power From Private Firms

| Updated: February 16, 2024 13:19

When the budget was presented recently, the Energy Minister of Gujarat, Kanubhai Desai, said that power consumption per person in the state was double than that of the national average.

The assertion seemed a bit far-fetched but it wasn’t. It’s hard to contest the state’s growing energy needs. Yesterday, Desai informed the Assembly that the Gujarat government purchased electricity worth Rs 40,634 crore from different power generation firms in the last two years.

Answering Congress MLAs, he said that Rs 20,898 crore was paid to 804 firms, the bulk of it for renewable energy projects two years ago, while Rs 19,736 crore was spent in 2023 to 919 firms to acquire electricity.

Congress MLA Shailesh Parmar took Desai head-on, asking why private firms were preferred over state-run energy generation companies.

“The total installed capacity of the state government’s power plants is 9,347 MW while the total installed capacity of three private entities – Adani, Essar and Tata – is 5,361 MW. Despite our capacity being more, we prefer private firms,” Parmar asked.

But Desai countered him, saying that the share of Adani Power and Tata Power was merely 6% and 7%, respectively in the Gujarat government’s entire energy purchase basket.

He added the state government always ensured that electricity purchased from the private sector remained on the lower side.

“We buy electricity as per the merit order system set by the Central government. Merit is decided as per the cost of producing electricity. We buy from those whose energy cost is less, and that’s why theyare on top of merit order. We don’t give any preference to anyone,” Desai was quoted as saying by The Economic Times.

Also, he pointed out that coal-based thermal power plants of these companies were more cost effective in comparison to the old state government’s plants. “Gujarat’s energy demand has reached 24,000 megawatt today while our own plants are capable of producing only 5,000 megawatt. That is the reason we have to buy power from private firms. Otherwise, we have to impose load shedding,” he said.

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