Why is Punjab facing an Electricity crisis?

 Protests can be seen near Punjab CM's house.

The protests aren't related to farm laws, but rather electricity.

What's bothering the electricity department?

Mosquitoes.

Due to the power cuts at night, the mosquitoes bother a lot.

People are distressed due to the power cuts in Punjab.

People have been facing power cuts for 10 hours every day.

The electricity crisis in Punjab has intensified.

Electricity!

The electricity cuts have bothered many in Punjab.

Shingara Singh Mann said that farmers are suffering financially because they need to use diesel generators.

The government promised an 8-hour supply of power, but it has failed to supply the power for even 4 hours.

In fact, villages next to the residence of CM Captain Amarinder Singh are facing power shortages too.

Hence, on 29th June, when Arvind Kejriwal came to Punjab, to kick off AAP's election campaign for state elections scheduled next year,

 he made three promises.

All of them were related to one thing  electricity.

First, he guaranteed a 24X7 electricity supply.

Second, he promised to cancel previous bills.

And third

The AAP-led government will provide 300 free units to every family.

The Congress government in Punjab reacted strongly to Arvind Kejriwal's 3rd promise.

In fact, Minister Charanjit Singh Channi said that the Aam Aadmi Party copied their idea.

Congress leader Navjot Singh Sidhu also used this opportunity to attack the Amarinder Singh-led government.

The electricity crisis is so bad in Punjab that government offices have been asked to run half-day and without ACs.

Households are facing power cuts of up to 14 hours.

And electricity supply for industries was cut for 2 days.

Why is Punjab facing an electricity crisis?

Let's try to understand that in detail.

According to some estimates, the demand for power in Punjab this year has crossed 14,000 MW.

Whereas, the Punjab State Power Corporation Limited

 "a government company that produces and distributes electricity -

has only been able to supply 12,800 MW.

Why is there a gap of 1500 MW?

Let's try to understand that from both supply and demand perspectives.

Let's start with the supply.

Punjab has two government-run thermal power plants and three private plants.

The two government plants are situated in Ropar and Lehra Mohabbat with capacities of 840 MW and 920 MW, respectively.

There was a government plant in Bhatinda too.

But in 2018, the Bathinda plant and two units of the Ropar plant were shut down.

Because as per central guidelines,

thermal power plants older than 25 years were needed to be phased out by the government due to environmental concerns.

The three private thermal plants are situated in Rajpura, Talwandi Sabo, and Goindwal Sahib with a combined capacity of 3,920 MW.

Moreover, the state government can produce 1,300 MW through renewable sources of energy such as hydro, solar and biomass.

Thus, Punjab's total power generation capacity is nearly 7,000 MW.

Finally, Punjab can purchase nearly 7,500 MW of power from the central exchange grid.

Thus, Punjab's total capacity can be 14,500 MW.

But this maximum capacity is lower than what Punjab is currently supplying.

What's the reason for this?

It is due to four reasons.

First, one unit of the government's Ropar power plant isn't functional.

Second, Punjab hasn't been generating enough hydropower due to low water levels in the dams.

Third: Venu Prasad, the chairman of Punjab State Power Corporation Limited or PSPCL,

said that private thermal plants failed to carry out their commitment.

For example, one unit of the Talwandi Sabo power plant isn't functional due to repairs.

The other unit has been damaged and is operating at half its capacity.

A power engineer said that such problems were seen earlier too.

The government can't impose a penalty on private thermal plants in case they fail to supply electricity.

As there exists no such provision in the agreement.

Such provisions exist in the states such as Gujarat and UP.

But they don't exist in the case of Punjab.

Former PSPCL chairman Baldev Singh Sran said that without such provisions,

there is no financial penalty on the private plants

and thus they aren't compelled to carry out the repairs as quickly as possible.

Mr. Sran blames Punjab's Power Purchase Agreements (PPAs) for this.

We 'll discuss this later in the video.

The fourth reason is that it's difficult for the state to purchase electricity from the central exchange grid

because the PSPCL lacks funds.

The government of Punjab owes the PSPCL Rs 5,000 crores in form of farmers electricity subsidies.

This was the perspective of supply.

Let's try to understand the perspective of demand.

In 2019, the maximum demand during peak season in Punjab was nearly 13,500 MW.

Each year, it is expected to increase by 500MW, but it fell due to the lockdown in 2020.

As we know, this year, during the peak of summer, the demand has jumped to more than 14,000 MW.

According to PSPCL, one of the reasons for this jump is the increased usage of ACs as people are working from home.

Earlier we mentioned that the state's power demand increases by about 500 MW every year.

There are many factors responsible for this. One major factor is

Paddy, cultivated by most farmers in Punjab, is one of the most water-demanding crops.

Due to this, the groundwater situation of Punjab has worsened.

The central government studied 138 blocks of Punjab for a report,

and nearly 80% of the blocks were classified as over-exploited.

Ideally, groundwater should be available at a depth of 50 ft to 60 ft.

But in Punjab, the levels have dropped to 150ft to 200ft in most places.

Thus, the farmers need to install deeper tube wells and use stronger motors.

For example, Gurmeet Singh, a farmer, says that in 1977, he drilled a tube well at a depth of 35 ft-40 ft.

But in 2017, he had to spend Rs 1 lakh to drill a tube well to 300 ft.

Mr. Prasad, the chairman of PSPCL, says that

the demand for power has increased because the farmers are installing stronger motors.

So the supply hasn't been able to meet the states increasing demand, leading to the current crisis.

But we were told that Punjab is a power surplus state i.e. its power supply surpasses the demand.

Punjab has surplus power.

Punjab produces more electricity than what it consumes.

Still power cuts are being imposed.

Actually, this statement isn't true.

Vinod Kumar Gupta from the All India Power Engineers Federation says that

Punjab produces more power than it consumes for 8 months of the year.

But during the four months of summer, when the temperature and demand for water in the fields increase,

Punjab has to buy electricity from the central exchange.

This year, the PSPCL has been spending Rs 5 crore a day to buy electricity.

Many of you might be thinking that at least Punjab has surplus power for eight months.

Can't it sell the extra power during those eight months

 and use that money to buy power during the four months of summer?

But thats not the case.

Punjab hasn't been able to do so because the country has enough power plants.

So there isn't much demand for power during those eight months.

Apart from the power cuts, consumers in Punjab have to suffer from high prices too.

AAP leader Raghav Chadda tweeted that, "Punjab's electricity tariffs are the highest in India".

This statement isn't true but the prices are indeed higher.

According to a report by the central government, the price of the first 100 units is the 8th highest in India.

It's due to the same reason why the government cannot penalize the private thermal power plants

 - the Power Purchase Agreements or PPAs.

According to these agreements, the government needs to pay a fixed charge to the private plants

whether or not it purchases any electricity from them.

Consequently, the government pays more than Rs 4,000 crore every year,

the cost of which has to be borne by the consumers.

As a result, during the non-peak season, the government shuts down its power plant

and rather buys electricity from the private plants as it needs to pay the fixed charge anyway.

A PSPCL officer states that the government power plants have run for barely 15 days in the past few months.

The government might save some money during this time but it has to pay the salaries of government employees.

These PPAs were signed by the Akali Dal-BJP government.

A PSPCL official said in an interview that

Punjab is currently paying the price for the inefficiency of IAS officers who didn’t read the PPAs properly.

When the Congress government came to power in 2017, it promised to renegotiate the agreements.

But it hasn't addressed the issue yet.

Now, what are the solutions to this problem?

Arvind Kejriwal talked about paying subsidies.

Can that be the solution? No.

When the state company lacks funds and is making losses, how would it pay subsidies?

Should the government take the private companies to court?

That may not lead to anything as the Supreme Court has favored the companies in the past.

Navjot Singh Sidhu suggested creating new laws that could make the PPAs obsolete.

But its difficult to do so.

The companies might become reluctant to sign agreements with the government

when they know that the government can introduce new legislation, making the agreements obsolete.

The most effective solution is to take legal help and renegotiate the agreements with the companies

as they know that they are being criticized for the existing PPAs.

However, this is a short-term solution.

The only long-term solution for Punjab is to shift from paddy to crops like maize

that require less water and also reduce the electricity demand.

Currently, due to MSP and electricity subsidies, growing paddy is the most lucrative for farmers.

And they cant be blamed for that.

It's the government's duty to provide incentives to the farmers to shift them to other crops.

One solution could be giving cash transfers to the farmers instead of electricity subsidies.

The government is considering doing this.

The subsidies can only be used to pay for electricity, but the cash transfers can be used for anything.

Thus, the farmers can switch from paddy to maize.

This will not only solve Punjab's electricity problems but probably many social and economic problems too.