After selling power worth Rs 14 crore to Punjab State Power Corporation Limited (PSPCL) from its 15 MW power cogeneration plant during the cane crushing season this year, the Bhogpur sugar mill is settling for an income of Rs 80 lakh, 7.35 per cent of the total income to be generated during the ‘off season’ operation of the power plant. Several officials of both the mill and Sugarfed Punjab have raised eyebrows over the small share of income during the off-season running of the plant.

To generate income from the power plant during the off-season instead of leaving it idle, authorities of the Bhogpur mill, the state’s first cooperative sugar mill, have entered into a contract with a Khanna-based private party to generate power. The mill only will get 7.35 per cent of the total income generated from the plant, while the remaining 92.65 per cent will go to the private party.

The cane crushing season in the state starts by November-end and ends by mid-April. The mill then remains closed till the third week of November.

This old mill, which first started in 1955 and has completed 66 crushing seasons, has been improved. Apart from being able to crush nearly three times the cane per day, it also now generates 15 MW of power after the cogeneration plant was installed. This was the first season (2021-22) when the upgraded plant was fully functional and it has exported  8.5 MW of power to PSPCL after meeting the in-house demand of power of 5 MW during the cane crushing season.

According to the contract, the operator (private company) and the owner (mill) shall share the total revenue received from PSPCL from the sale of power in the ratio of 92.65% : 7.35%. The amount of the revenue share shall be subject to the minimum guaranteed annual revenue amount of Rs 80 lakh to the mill, the contract states.

Paramjit Singh Sooch, the former Board member of Bhogpur Sugar Mill and a cane expert, played a major role in the mill’s new upgrades. He said that the mill cannot be settled at such a small profit share when the annual depreciation of the machinery is 17 per cent. He also said that to get more profit, the private operator may run the plant on paddy straw, which will be harmful to the plant and may hamper power generation during the crushing season.  Mill officials had the same concerns, saying that the unavailability of Begasse during the off-season may lead to the use of other biofuels like paddy straw that may damage parts of the power plant. The mill’s General Manager Arun Arora, while talking to The Indian Express, said that the contract has been signed on the directions of the government by following a proper tendering process.

“As for running of the plant on other biofuels during the off-season, the operator shall be responsible for the installation of additional external equipment needed to process paddy straw and other biofuels. The operator shall be responsible for the Operation and Maintenance (O&M) of its power plant,” said the GM, adding that the upgrades will be made on a trial basis.

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Anju Agnihotri Chaba ... read more