In order to give some relief to sugar factories that are running in losses, the state government has increased power tariff of co-generation to Rs 6.59 per unit, the highest in the country.
In order to give some relief to sugar factories that are running in losses, the state government has increased power tariff of co-generation to Rs 6.59 per unit, the highest in the country. With the decision, the factories can now sell their power for more tariff to reduce losses and can also pay fair remuneration price (FRP) of sugarcane to farmers.
“This is to help farmers and the sugar industry which is facing a financial crunch. We have hiked the tariff by 10 per cent that will revive the sugar industry and reduce their losses. The power generated from co- generation is also in demand in the market and the industry can pay FRP to the farmers,” energy minister Chandrashekhar Bavankule said. The sugar factories have not been able to pay FRP to the farmers, as the global market is facing a slump and sugar prices have seen a heavy fall.
The state has signed an agreement with 114 factories for co-generation of 2,000 mw power, of which it gets 1,743 mw. The government used to pay Rs 6.27 per unit for the co-generation in the year 2014-15, which has now increased to Rs 6.59 per unit. The state has also paid Rs 777 crore till November 2015 to purchase co-generation power.
The state energy department officials said that the new co-generation projects for 203 mw of power are also in the offing. “It is also the part of the government’s renewable energy generation. We are exploring other ways of energy generation that are clean and green. Our state is paying the highest tariff to the sugar factories compared to other states. It was also directed by Maharashtra Electricity Regulatory Authority in one of its orders,” the official said.
Interestingly, many sugar factories that are going to benefit are from western Maharashtra where Congress and NCP have their strong roots. The move is said to benefit BJP in the bastion of the opposition. The officials also said that the perception about the party being anti-farmers will change with the decision.
