Cane crisis can trip power output

The shortage of sugarcane in Karnataka during the current sugar season (October 2008-September 2009) has had a negative impact on co-generation as sugar mills are unlikely to meet their target of producing the power committed to the state government due to shortage of bagasse in addition to a massive drop in sugar production, molasses and ethanol.

During the present season, mills in the state are likely to crush around 14 million tonnes of cane, a drop of close to 50 per cent when compared to the last season.

As many as 24 of the 33 sugar mills in the state which have co-generation capacity have committed to the supply of close to 350 Mw of power to the state grid for meeting the shortage of power till May this year, according to industry sources.

However, according to the current indications, despite securing a healthy price for their power, of Rs 6.50 per unit (some mills were paid only Rs 2.80 per unit till last year), these co-generation sugar mills are unlikely to meet their supply commitments.

Half of these co-generation mills are equipped to produce power only from bagasse and the rest have the capacity to produce power from any other raw material like bio-mass and coal too. Mills that are purely dependent on bagasse for power generation are likely to suffer huge losses during the present year due to a severe shortage of cane, the sources said.

Some of the mills with capacity for using multiple fuels including coal, such as Shamanur Sugars, Prabhulingeshwar, Godavari Sugars, Sri Renuka, Bannari Amman, Chamundi Sugars and NSL Sugars will continue to produce power even without bagasse. GMR Industries, which recently commissioned its sugar mill in North Karnataka, has also gone in for the latest technology to produce power from any raw material, sources said.

It is estimated that one tonne bagasse produces 2.2 tonnes of steam, while an equivalent amount of coal produces 5 tonnes of steam. Some of the mills in the state have installed high capacity boilers to produce power from coal.

The shortage of bagasse may lead to the production of around 200 Mw of power as against the initial estimate of close to 300 Mw, industry sources said. Presently, one tonne of bagasse costs Rs 2,500 per tonne and is likely to cost more in the days to come.

Of the 50 mills operational this year, 28 mills have already shut their crushing operations due to a shortage of sugarcane towards the end of February and according to South Indian Sugar Mills Association another 15 mills will wind up their operations by end of March.

The situation is equally bad for mills with distilleries as they are unlikely to get adequate quantities of molasses for value addition. The ethanol production is likely to witness a drop as well.

source: BS