WB discom joins NTPC to ensure 500 Mw power export, India to earn over $350 million annually
Amid concerns over widening current account deficit, India soon will have an addition to its export basket. Come October, India will become an exporter of power to Bangladesh, courtesy, NTPC and West Bengal State Electricity Distribution Company Limited (WBSEDCL), the power discom of the state.
With West Bengal turning power-surplus, partially due to lack of industrial demand, it will be selling 250 MW of power to neighbouring Bangladesh via Power Trade Corporation (PTC).
This will be part of total 500 Mw power export to Bangladesh as state-owned power major NTPC has already committed 250 Mw power supply to Bangladesh.
“We have entered into an agreement with PTC, through which we will be selling 250 MW power to Bangladesh for three years. This will hopefully start in October,” Malay De, principal secretary of the state power department told Business Standard.
Banking on this surplus-power with West Bengal, for the first time that India will be exporting power on such a scale, earlier the country has sold power to Nepal and Bhutan, which has been around 20 to 30 Mw.
According to industry experts, the total export will translate into supply of 4000 million units of power to the neighbouring country. “In Bangladeh the price of power per unit is about 7 Taka (BDT). Taking this as a standard and given the exchange rate, the power export could fetch over $ 350 million for India annually,” an official close to the development said.
The export will on the basis of a Memorandum of Understanding (MoU) signed between the two countries in 2010, during Bangladesh Prime Minister Sheikh Hasina’s New Delhi visit. According to that India will be exporting 500 Mw of power to its neighbour.
Apart from West Bengal’s contribution, another 250 Mw will be supplied by NTPC directly. NTPC Vidyut Vyapar Nigam (NVVN), a subsidiary of NTPC and the nodal agency for supply of power to Bangladesh had signed an agreement with Bangladesh Power Development Board (BPDB) for supply of power for 25 years.
There was also a proposal to export 500 Mw of power to Pakistan, however, according to recent reports in Pakisat media, India has backtracked from the offer in wake of recent tension at the Line of Control .
The supply of power to Bangladesh will be through electrical grid interconnection between the two countries as works to set up substations with HVDC (high voltage direct current) link had started soon after Indo-Bangladesh MoU in 2010. The substations on both sides of the border – at Murshidabad’s Nabagram in India and at Bheramara in Bangladesh are expected to be ready for operation by September-end.
The power discom of the West Bengal, WBSEDCL, has about a 10% surplus, which has been on the rise. In the last one year about 30,000 million units entered its system and it sold about 3,000 million units. It was so far, either banking the surplus power or selling it to the domestic market through power exchanges.
Although the state showcases this as an achievement, officials suggest, industrial demand, which accounts for 40% of total power consumption in Bengal, has not gone up in the last one year as it was expected, contributing to surplus power.
“While the power demand for domestic consumers grew by 19 per cent in 2012-13 , demand from the industrial sector grew by a mere 4% in the last fiscal,” an official said. In the previous two fiscal, power consumption by industrial sector in state had registered an average growth of 10 to 12% per year.