Blamed by the Centre for the two successive days of blackout, state governments Wednesday decided not to buy electricity from outside their states at all, sending the price of electricity crashing to zero even at evening peak hours.
Later in the evening some of the states came back to the unscheduled interchange market (where they buy directly from generating companies instead of through power exchanges) but volumes were minimal.
However, evidence coming in from different agencies shows that overdrawal of states alone may not have been responsible for India’s worst ever blackout — that neglect by the Centre may have been as much to blame.
The grid frequency was a healthy 50-plus Hertz at the time of the second blackout on Monday. But two things had happened over an unusually hot summer in northern India to precipitate the crisis.
While the states had refused to reinstate ‘under frequency relays (essentially a sort of fuse)’ to island themselves if frequency fell or rose beyond a limit, central power utilities like Power Grid Corporation of India had cut its budget for maintenance of grids repeatedly, to keep tariffs low for consumers.
Since all elements in the cost of a unit of power have to be borne by consumers and the UPA government baulked at raising the tariffs, all players in the game cut their costs accordingly.
As of now, the cost of operations and management of the national grid cannot be more than 1.5 per cent of the total tariff for every unit of electricity consumed — an absurdly low figure, said a former chairman of a central power utility. Explaining the impact of no relays, Shakti Sinha, Chairman and MD of Delhi Transco, said it was like driving without brakes. Explaining the collapse, he said: “No state demanded more but all arrived at the market at the same time.”
Power Ministry officials acknowledged that the inability of the PGCIL-run load despatch centre to monitor fluctuation in demand was a huge shock. “It happened on a busy day. What were they doing?” an officer said.
Experts like Navroze Dubash, senior fellow at the Centre for Policy Research, said the two mega blackouts and the crash of electricity prices the next day reflected short-term crisis management issues but the larger issues that remain were the continuous losses being made by the distribution companies and the consequent non-viability of the sector.