How much does that amount to? Not much really. Less than 27 per cent of the total available generation capacity actually flows in as revenue. Yet the government does not seem to realise that large scale capacity addition is not as important as properly utilising the capacity that the country has.

An analysis conducted by Professor Michael E Porter (the renowned management guru) and Professor Pankaj Ghemawat of Harvard Business School almost half a decade ago, hammers in the point. According to the study, India uses barely 30 per cent of its actual capacity. Around 16 per cent of the generation capacity is lost in unplanned repairs. Lack of logistical support in ensuring timely availability of coal and other requirements causes another 15 per cent to be lost. Around 1,000 MW is not used because the state's electricity authorities have not managed their power consumption patterns effectively enough. A whopping 21-23 per cent is allowed to slip away through transmission and distribution losses.

Absence of controls
The low utilisation levels of the SEBs' power plants, which till recently ran at below 50 per cent PLF, have been responsible for considerable losses. Utilisation of these plants has been on the increase lately with the SEBs recording 61 per cent in 1997-98.

But this too compares very badly even with other public sector power utilities like the National Thermal Power Corporation (NTPC), which records consistent PLF of over 70 per cent.

Major losses also occur during the transmission and distribution (T&D) of electricity. Internationally a T&D loss of around 10 per cent is considered normal. In fact, the T&D loss in developed countries is as low as 5 per cent, with Poland being the only country recording a T&D loss of 14 per cent. Against this backdrop, one can't say much about the average T&D loss of over 22 per cent in India.

Even this figure has to be taken with a pinch of salt. In the absence of adequate metering arrangements, this official figure has an implicit element of inaccuracy. Most of the agricultural consumption is not metered and it becomes very convenient to manipulate agricultural consumption as T&D losses or the other way around - T&D losses shown as agricultural consumption in order to receive higher subsidies.

The latter, most power analysts suspect, is the state of affairs. This is because once a restructuring program is aimed at, the reported T&D losses suddenly shoot up. Consider Andhra Pradesh when it reported a abnormally sharp increase in T&D losses of 32 per cent in 1996-97 against 19 per cent in 1995-96. That was the time it was seeking assistance from the World Bank. Orissa, which until recently reported 22 per cent T&D losses. Post reforms, the T&D losses reported are closer to 46 per cent.

Theft accounts for 35-38 per cent of the T&D losses, and the culprit is the obsolete transmission system. Nevertheless, countries like China and Vietnam, which have the same vintage technology, manage to restrict T&D losses to just 10 per cent and 7 per cent.

Not only do the T&D losses contribute towards creating a shortage of energy, they also end up making the residual power that much more costly as it must then pay for the generation of the power which has been lost. The revenue loss was estimated way back in 1994 at Rs 1,400 crore for the period between 1990-93.

This figure, however, is extremely conservative. Firstly the cost of power supply has gone up significantly since 1994 and secondly this figure has been computed after writing away 15 per cent of the power generated as 'acceptable technical loss" when the actual technical loss in the country is only 8-9 per cent. In most other countries technical loss is half this figure.

Hope ahead
Several states are planning to unbundle their SEBs in line with Orissa. But, the mindset is towards privatisation of generation and distribution. None of the states is expecting to privatise transmission, considered a natural monopoly. There are talks of inviting private investments on competitive bidding or as joint venture partners for incremental transmission capacities. The first to be opened up would be the Rs 2,000 crore Tala transmission project, connecting the Tala hydro plant in Bhutan with north India.

The importance of an efficient inter-regional transmission network can be gauged from two studies done by the Central Electricity Authority (CEA) and the World Bank According to the CEA, inter-regional links can substitute about 10,000 MW of power generation capacity by the end of the tenth plan. The World Bank observes that such links will reduce unserved energy demand by 50 per cent.