‘The electricity crisis will continue for now; Center seeks to increase blend of imported coal to 20%

Dinesh Waghmare, Principal Secretary of Maharashtra’s Department of Energy, talks about the energy crisis facing the state, steps being taken to ensure an uninterrupted supply of coal and how the state is preparing to isolate its electrical networks from cyberattacks:

Due to the shortage of coal, there is an electricity crisis in the state. Can you briefly describe the problems you encountered?

In the past month, demand for electricity has increased several-fold compared to last year during the same period when demand was 21,000 megawatts. Now we manage 28,000 megawatts. This is mainly due to the surge in commercial and industrial activities. Post-Covid activities have multiplied. The other reason is that due to the heat wave, the demand (for electricity) has increased. Simultaneously, there were also a lot of problems in our power generation capacity. Thus, most of our energy comes from thermal sources. As far as thermal energy sources are concerned, the shortage of coal has been our main concern.

How serious is the coal crisis in Maharashtra?

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The situation of the coal crisis will accompany us for a long time. This is not a temporary situation. So we have to deal with this for a long time. We hope that within four to five months this will be resolved. We have initiated certain measures with regard to it. First, we will mix imported coal with domestic coal. Last year we had no mix. This year we started with a four percent mix. We asked the Indian government to allow the 10% blend. The Center is planning to increase the blend of imported coal to 20% and an official notification in this regard is expected soon. We have had discussions with the Centre. We requested an additional 10% coal import. The total coal requirement of MSEB, which is the state power utility and mainly Maharashtra’s major power supplier, stands at 32 lakh metric tons per year. We have already placed orders for 22 lakh metric tons. Another 12 lakh metric ton is under tender. Last year, regardless of the amount offered by the Government of India, we removed all the coal. This year, we removed 15% of the coal allocated by the Centre. In imported coal, the higher calorific value is much better than domestic coal. Household coal has an ash content of 33%. In imported coal, the ash content is only 4-5%.

National coal needs will be less if we mix it with imported coal.

What will be the financial implications of importing coal? Will it be passed on to consumers?

Yes, imported coal is expensive. Currently, we are getting domestic coal at Rs 3,000 to 3,200 per metric ton. The cost of imported coal is Rs 11,000 per metric ton. That’s a huge jump in prices. Overall electricity prices will increase.

Does this mean that we will have an increase in electricity bills? And what will be the quantum of increase?

Certainly, if we import coal and we don’t want load shedding and electricity shortages, the tariffs will have to increase. The rough estimate is that electricity bills will increase by 40-50 paise per unit if the blend of imported coal is increased to 20%. There are different factors, including different coal suppliers, distance from country of origin, distance from thermal power station, from port. But roughly it will be 40-50 paise.

As the government urges power companies to tell people to save power due to increased demand, IPL matches are taking place in various cities in Maharashtra and huge amounts of power are needed for this . Are they called to save energy?

We have an energy conservation plan and our nodal agency for energy conservation awareness is Maharashtra Energy Development Agency (MEDA). They do this through various social media activities, print media, and other mediums. We need to put more emphasis on energy conservation. Of course, these events are very popular and you can’t just stop them because of the business implications. Probably, distribution utilities can offer some kind of restrictions on the consumption of large amounts of electricity on such types of events.

Many cyber security experts believe that there will be cyber attacks on power grids using malware. Is there a plan on how to deal with such a situation?

We have prepared a cybersecurity plan. Previously, we didn’t do cyber audit, but now we do cyber audit every six months. We named Ernst & Young as our cybersecurity expert. They did regular checks. Apart from this, there is a separate Indian government team and a separate agency for network and transmission lines. They have specified various parameters and you must comply with them. Next, we identified the critical information infrastructure. We have submitted our critical infrastructure plan to the National Critical Infrastructure Center, which is based at IIT-Mumbai. Once the plan is approved by the Indian government, these infrastructures will be treated as essential and then any attempt to attack them will be considered an offense and therefore action can be taken.

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Is there a significant increase in electricity theft post Covid 19 in the state?

The electrical threat has been a problem mainly in rural areas and especially among agricultural consumers. In some of the feeders there was a loss of up to 60%. If you look at the average technical and commercial losses, they are 17-18%, so whatever the deviation is electricity theft. And particularly in Marathwada, there was a huge theft of electricity. The solution is to separate the feeders and put them on solar power and you will get economical and cheap energy for agricultural consumers. There is also an ongoing discussion to create a separate society for agricultural consumers. Let’s say from now on, you get a subsidy from the Maharashtra government of 0.2 to 0.4 per unit. If you install a solar power plant, which will produce power roughly between 2.3 and 2.4, it will balance out. If you include the subsidy component, that subsidy that the distribution company will receive, that way it will balance out. Basically, if you match your loan, all the power will be free. With solar power and feeder separation, the theft will disappear.

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