It may be a scorching summer in tandem with the aggravation of an acute water scarcity but power consumption in Tamil Nadu has not hit the peaks witnessed last year, according to official sources.

Last year, the peak demand was about 15,400 MW and usually a 7-8 per cent increase is anticipated yearly. But this year it peaked at about 15,000 MW and is now ranging at about 13,000 MW, according to data provided by the utility, the public sector Tangedco (Tamil Nadu Generation and Distribution Corporation).

It has on hand a generation capacity of about 18,100 MW from multiple sources. With the season well into summer, the power situation is bound to further improve with the wind energy season commencing from May 15, adding about 3,000 MW to the generation. This generally peaks around 4,000 – 5,000 MW.

The primary reason for the dip in demand is attributed to the agriculture sector, which is hit by drought. Official estimates peg the loss of demand at about 600-700 MW. Industry demand is growing after the power shortage ended and the restriction and control measures were lifted in June 2015, according to official sources.

Power consumption by the industry grew at about 7 – 8 per cent in 2016-17 from about 4-5 per cent in the previous year.On benefits from UDAY, the central scheme for financial revival of discoms, the official said, the utility is just into the first month of participating in the scheme. The State government has taken over its accumulated debt of ₹ 22,000 crore in March with the average cost pegged at 11.5-12 per cent.

Tangedco would soon be coming out with a ₹7,605 crore bond bearing 8.5 per cent in the next one month, according to the official.

Operational efficiency is also better with the gap between the Average Revenue Realised and the Average Cost of Supply also closing steadily for the utility. Last year it was ₹ 0.44 and will drop further in the current year. It could even out in 2018-19 enabling Tangedco achieve operational breakeven, the official said.Drop in cost of power driven by coal prices, focus on low cost electricity are among the reasons for the costs coming down, the officials said.The cost of power is down across the board with even short term tenders at an average of about ₹ 3.20. It had opted to source this last in February – May. Even the Independent Power Producers supplying doing peak hours are at less than ₹ 3.50 sa unit which is less than the average cost of purchase.

Tangedco has also initiated work on the Ennore Thermal Power Station Replacement (TPP 660MW) power project planned at Tiruvottiyur in North Chennai. With the nearly 45 year old 450 MW thermal plant decommissioned as of March 2017, this new project is envisaged as a replacement which will be a modern supercritical unit. The project cost is pegged at ₹ 4,800 crore.In addition work on the Ennore SEZ power project of 2 x 660 MW and Ennore Thermal expansion of 660 MW are also on.