NTPC Ltd, challenging the conventional Gadgil formula for power allocation, has asked the ministry of power to increase the allocation of power to home states from the company's power plants.
As per the Gadgil formula for allocation of power from thermal stations, the home state gets 10 per cent as preferential allocation, 15 per cent is kept unallocated at the disposal of Government of India, and the balance 75 per cent is allocated to all beneficiary states, including home states on the basis of their energy consumption.
NTPC has approached the ministry for allocation of the entire 15 per cent power at the company's discretion from future projects to the home state, in addition to the allocation of the home state as per the existing Gadgil method. The additional 15 per cent power will remain allocated to the home state till such time it has peak demand shortage.
The Gadgil system has been in practice since the inception of Central PSUs. However, according to NTPC, few developments have taken place which call for a review of the method, particularly in regard to allocation to the home state. In the past few years demand for electricity has increased substantially and with the implementation of RGGVY, it is likely to rise further. States are demanding higher allocation of power from central sectors. Even in states where power shortages are not significant they are still insisting for higher allocation to meet future demand.
R.S. Sharma, Chairman and Managing Director, NTPC, informed the ministry that states which had coal reserves were demanding higher allocation and other benefits from prospective project developers. The demands of states varied from higher allocation of power, power at variable charge and sharing of profit for local area development, he noted. States were unwilling to commit land, water and other statutory clearances for setting up power projects in the event of not fulfilling above demands, resulting in delay in getting greenfield projects from states, Sharma added.
Higher power allocation to home states is necessary to motivate the states for allocation of greenfield projects and secure their cooperation in land acquisition, water linkage and other statutory clearances. Even the projects being developed under UMPP have higher allocation of power than home states, ranging from 37.5 per cent (Sasan) to 47.5 per cent (Mundra) and 40 per cent in case of Krishnapatnam. In the fast changing scenario, sticking to the Gadgil formula has become an obstacle for getting new sites, Sharma explained.
NTPC officials told Projectmonitor that as per the government's existing allocation method, allocation of firm power to home states was less than 30 per cent. To meet the aspirations of the states and enable NTPC to add faster capacity, it was felt that 40-45 per cent allocation be given to them till peak demand shortage. This would adequately compensate the home states for any impact on environment and R&R issues.
Source : www.projectsmonitor.com
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