Power Paradox | J&K spends Rs 9250 Cr on power import in 2023-24

Srinagar, June 6: Despite having immense hydropower potential, Jammu and Kashmir continues to grapple with a severe power crisis, forcing the union territory to purchase a staggering amount of electricity from outside sources, draining its exchequer.

In the fiscal year 2023-24, the J&K government spent a whopping Rs 9,250 crore on power purchases to meet the electricity demand, according to official figures accessed by Greater Kashmir. "The Jammu and Kashmir Power Corporation Limited (JKPCL) purchased 20,950.58 million units worth Rs 9,256.62 crore (tentative) during the period from April 2023 to March 2024, which were supplied to the Jammu Power Distribution Corporation Limited (JPDCL) and Kashmir Power Distribution Corporation Limited (KPDCL)."

According to power department officials, the concerning factor is that J&K's local power generation has remained more or less static, while the demand for electricity from outside generation companies (gencos) has increased, leading to a massive drain of capital resources.

Figures reveal that from the fiscal year 2012-13 to 2023-24, J&K has spent an estimated staggering Rs 75,000 crore on power purchases from external sources.

In the fiscal year 2022-23, the government spent over Rs 8,500 crore on purchasing electricity from outside. The expenditure for power purchases stood at Rs 8,197 crore for 16,207 million units in 2021-22, Rs 7,047 crore for 14,362 million units in 2020-21, and Rs 6,987 crore for 13,345 million units in 2019-20. The trend continued with power purchases amounting to Rs 6,561 crore in 2018-19, Rs 4,844 crore in 2017-18, Rs 4,752 crore in 2016-17, Rs 4,803 crore in 2015-16, Rs 4,719 crore in 2014-15, Rs 3,959 crore in 2013-14, and Rs 3,382 crore in 2012-13.

The persistent power crisis in J&K has been attributed to a substantial gap between the revenue generated by the power department and the funds required for power purchases. According to officials, the government has to pay in advance for power purchases as per the Power Purchase Agreements (PPAs) with various generation companies, including Central and J&K Gencos. Failure to do so could lead to power disruptions.

The official further stated, "In case of shortage, we buy power at an exorbitant rate as well. As compared to consumption (20,400 million units) in the last financial year, we are anticipating a 10 percent increase this year, which will be over 22,000 million units."

To address the power crisis, the J&K government has set a target to double the hydropower generation capacity in the next few years from the existing capacity of 3,500 MW. In this direction, five mega hydropower projects – Ratle (824 MW), Kirthai-II (930 MW), Sawalakote (1,856 MW), Dulhasti-Stage II (258 MW), and Uri-I Stage-II (240 MW) – with a total capacity of 4,134 MW have been taken up for execution in collaboration with NHPC. The likely investment in these projects is Rs 34,882 crore, and upon completion, they are expected to make J&K power surplus.

Despite these efforts, the J&K government will spend nearly 6 percent of its annual budget for 2024-25 on power purchases, even as several hydropower projects in the UT remain untapped.