Transcript Document

Presentation
on
Indian Power Sector
1
Government of India
June, 2006
Installed Capacity of Power
Generating Capacity
Hydro
Thermal
Coal
Gas
Nuclear
Renewables
TOTAL
Private
Sector
11%
(13,420 MW)
(May , 2006)
32,335 MW (26%)
82,507 MW (66%)
68,643 MW
12,663 MW
3,850 MW (3%)
6,158 MW (5%)
1,24,850 MW
Central
Sector
32%
(40,448 MW)
State
Sector
57%
(70,982 MW)
In addition captive generation capacity of appx. 41,000 MW.
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Growth of Power Sector
Census Results
1990-91
2000-01
2004-05
PLF (%)
57.1
69.0
74.8
Energy Shortage (%)
7.9
7.8
7.3
Peaking Shortage (%)
16.7
12.3
11.7
Households Access to
Electricity (%)
42.0
56.0
-
Rural Households
Coverage (%)
31.0
43.8*
-
To Electrify these Rural Households ( 78 million) in next five years, Rajiv
Gandhi Gramin Vidyutikaran yojana has been launched.
3
Per Capita Consumption of Electricity in
India (kWh/year)
592
606
408
238
131
84
16
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1950
1960
1970
1980
1990
2001
2004
2005
In 1950 Electricity consumption per capita was 15 kwh
In 2012 it is projected at 1000 kwh.
Brazil
:
2070
China
:
1200
Thailand
:
2000
Malaysia
:
3000
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Growth Projections (9%)
2005
2012
2017
2022
2027
Per capita consumption
(kWh)
606
1000
1300
1900
2800
Generation Capacity
(GW)
118
216
333
512
790
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Challenges and Policy Responses
Eliminating Shortages- Peaking 11.7%, Energy 7.3%.
•Stepping up Public Investments.
- Adding 1,00,000 MW capacity by 2012.
• Nurturing Private Sector- Present share 11%.
- Electricity Act –2003 and National Electricity Policy.
Rural Electrification- 56% Rural households yet to electrified.
Completion of electrification in next five years.
Financial Viability- SEB losses though reducing , yet very high.
•Distribution Reforms : Reduction in Aggregate Technical
and Commercial (AT&C) losses;
Improving quality of supply.
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Improving Investment Climate
 At present 40,000 MW generation capacity is already under
execution. Investment of USD 43 Billion committed.
 Public sector investments have been stepped up ; will need
to be supplemented through private investments.
 100 % FDI in all segments of
Power Sector has been
allowed.
 Recently Power Trading also covered for 100% FDI.
 Level playing field for both domestic and International
Investors.
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Electricity Act 2003
The Act creates a liberal and transparent framework for
Power Development.
It facilitates investment by creating competitive
environment
and reforming distribution segment of
power industry.
Entry Barriers removed/reduced
•Delicensed generation.
•Freedom to captive generation including group captive.
•Recognizing trading as an independent activity.
•Open access in transmission already in place.
 Open access to consumers above 1 MW within five years
commencing from 27th Jan 2004 (date of enforcement of
amendment to Electricity Act).
 Multiple licenses in distribution.
 Regulatory Commissions- to develop market to fix tariff.
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Implementation of the Electricity Act
•
Most of the Rules (required to be framed by Central Govt.)
notified.
•
National Electricity Policy announced: Feb, 2005
•
Electricity Appellate Tribunal : Operational July, 2005.
•
Guidelines for determining tariff through competitive bidding
notified:Jan 2005
•
Regional Power Committees for all the 5 regions established:
May 2005
•
Electricity/Tariff policy notified : Jan 2006
•
CERC has notified open access in transmission: Jan, 2004
•
Guidelines for private investment in transmission: April 2006
•
Several SERCs have initiated action on open access in
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Distribution.
National Electricity Policy
By year 2012 :
 Per capita availability 1000 units.
 Installed capacity over 200,000 MW.
 Spinning reserves 5% .
Minimum lifeline consumption of one unit per household
per day.
 Inter-regional transmission capacity 37,000 MW.
 Energy efficiency/ conservation savings about 15%.
 Quality and reliable power supply.
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Tariff Policy
 Tariff of all Generation and Transmission Projects in Private
Sector through Competitive route- Public sector to complete
transition in five years.
 Reduction of cross subsidy to (+)(-) 20% in next five years.
 Emphasis on facilitating Open Access in Distribution; clear
formulation on cross subsidy surcharge.
 Transmission Tariff framework sensitive to distance and
direction.
 Strict Implementation of Performance Standards.
 Agriculture Tariff to leverage sustainable use of Ground Water
Resources.
 Time bound introduction of MYT.
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Meeting the Demand
Peak
demand estimation :
•
End of XI plan (2012) - 157 GW.
•
End of XII plan (2017) - 213 GW.
For
next 30 years , capacity will need to be doubled every 10
years.
Full
Development of Hydro potential .
•
All Hydro is Renewable irrespective of size.
•
50,000 MW Hydro Initiative launched.
•
73 projects with capacity of 33,000 MW taken up for
DPR preparation.

100,000 MW Thermal Initiative launched.
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Contd..
Capacity Addition During X Plan
(2002-2007)
Utility
NonConventional
Energy
Sources
Sub Total
Captive
Grand
Total
Already
Commissioned
14342
4650
18992
2350
21342
Likely in
2006-07
19682*
1367
21049
2000
23049
Grand Total
34024*
6017
40041
4350
44391
*Out of this about 3300 MW are being attempted under the best efforts scenario and
in case of their slippage they are expected to be commissioned by the end of
Qtr- I, 2007-08.
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Capacity Addition Programme During XI
Plan (2007-2012)
(MW)
Fuel- Mix
Thermal
Hydro
Nuclear
Total
Central
Sector
21,000
State
Sector
11,000
Private
Sector
12,000
Total
10,000
5,000
-
44,000
15,000
3,000
34,000
16,000
12,000
3,000
62,000

May be revised to 67,000 MW, depending on the
availability of Gas/ LNG in required quantities and right
prices.

In addition, 5000 MW through Non- Conventional Energy
Sources.

Captive capacity not included.
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Investment Requirements During XI Plan
(2007-2012)

USD 50 Billion for Generation.

Another USD 50 Billion for Transmission, Distribution
and Rural Electrification.

Total USD 100 Billion.
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•
New Benchmarks in Setting
Power Units
Coal Based
– The Average lead time for the 500 MW unit reduced from 49
months to 38 months.
– The Average lead time for the 210/250 MW units reduced form
32 months to 28 months.
– NTPC emerged as Globally competitive player as cost of
generation is among the lowest
• Gas Based
– Average lead time for gas based project has come down from
24 months to 20 months.
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Private Participation- Generation
 Encouraging response of investors
 Financial closure of 4400 MW projects– investment of
about USD 3.6 Billion.
 Financial closures for 2200 MW is at advanced stage of
finalisation.
 Additional about 10,000 MW appraised. Fuel supply
availability critical for financial closure.
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Ultra Mega Power Projects – A Major
Investment Initiative
 Section 63 of the Electricity Act, 2003, envisages procurement
of power by distribution licensees through competitive
bidding.
 Tariff so arrived is to be accepted by Regulatory Commission.
 National Electricity Policy provides for “ Competition aimed
at consumer benefits” – Competition to determine the price as
apposed to cost plus exercise.
 Electricity Tariff Policy stipulates competitive procurement of
future power requirements by Distribution Licensees.
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Contd..
Ultra Mega Power Projects contd..
 Will facilitate setting up of large sized projects of 4000 MW
each reaping economies of scale and quick capacity addition
leading to cheaper power.
 Utilization of latest highly efficient super critical technology.
 IPP experience highlights critical importance for Government
intervention to
• secure reliable fuel supply,
• obtain environmental clearances
• co-ordination with states & bulk power purchasers, for
achieving financial closure.
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The Shell Company Concept (SPV)
 Shell company to work independently to reach a stage where
major tie-ups, statutory clearances and linkages are in place.
 PFC nominated as the nodal agency for setting up shell
companies.
 Each company headed by a Chief Executive.
 Selection of developer through a Tariff based ICB.
 Shell companies will be then transferred to the successful
bidders for execution.
 With a number of concerns addressed by Shell company,
risk factors minimised.
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Role of Shell Company
 SPVs to take actions for :
• Preparation of project report.
• Land acquisition.
• Allocation of fuel linkages/coal blocks.
• Allocation of water by the state Govt.
• Appointment of consultants for Environment Impact
Analysis (EIA) & Project Report.
• Appointment of consultants for International Competitive
Bidding (ICB) document preparation & evaluation of bids.
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Contd.
Role of Shell Company contd..
 Various approvals and statutory clearances.
 Off-take/sale of power – section 63 of Electricity Act, 2003
provision.
 Power Evacuation/ (Transmission) System.
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Role of Ministry of Power
 To be a facilitator.
 Co-ordination
with
concerned
Ministry/
Agencies
for
ensuring:
• Coal Block Allotment/ Coal Linkage
• Environment/ Forest clearances
• Required support from State Govt. Agencies
• Financial Institutions towards financial closure.
• To facilitate PPA and proper payment security
mechanism - with State Govt./ State utilities
• Monitoring the progress of shell companies w.r.t.
predetermined timelines.
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Present Status
 Seven Projects have been identified:
1. Sasan Power Limited (M.P.) - Coal pit head
2. Akaltara Power Limited (C.G.) - Coal pit head
3. Coastal Gujarat Power Limited (Mundra)
4. Coastal Karnataka Power Limited (Tadri)
5. Coastal Maharashtra Power Limited (Girye)
6. Coastal A.P. (Krishnapatnam)
7. Orissa- Coal pit head
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Contd.
Present Status contd..
 EOI advertised for projects at Sasan, Mundra, Tadri and
Girye.
 Pre- Bid Conference held on 21.02.2006 at New Delhi and
17.4.2006 at Mumbai.
 RFQ invited for Sasan and Mundra Projects
 Federation of Indian Chamber of Commerce and industry
(FICCI) selected Industry Partner.
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Payment Security Mechanism
 As condition in PPA.
 Letter of credit (LC) by distribution licensee.
 Escrow Account claims of receivables of distribution utility.
 Finally in the unlikely event of default direct supply to HT
consumers as per provision of the Electricity Act, 2003.
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Important Milestones For Selection
Process
Project
E.O.I.
Issue of
RfQ
Issue of
RfP
Submission Selection of
of RfP
Successful
Bidder
1. Sasan- Pit head
31.01.06
31.03.06
15.06.06
15.11.06
31.12.06
2. Mundra Coastal
01.02.06
31.03.06
15.06.06
15.11.06
31.12.06
3. Krishnapatnam – Coastal
31.07.06
15.10.06
15.03.07
30.04.07
4. Orissa- Pit head
31.07.06
15.10.06
15.03.07
30.04.07
5. Girye - Coastal
15.11.06
15.01.07
15.06.07
31.07.07
Milestones in respect of Akaltara and Tadri would be finalised after availability of key inputs
State Govts.
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Investment Opportunities
 Investment opportunities for about USD 3.0 Billion in each
project.
 Long term Bond market and take out financing for better tariff
is being proposed.
 The sectoral capping and the group exposure capping for the
purpose of debt financing, expected to be revisited and properly
enhanced exclusively for these Ultra Mega Projects.
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Contd.
Augmentation of National Grid

Intra – Regional expansion of transmission capacity is
linked to generation projects.

Inter- Regional connectivity has been planned with
hybrid systems, consisting of HVDC, Ultra- High Voltage
AC (765 kV) & Extra High Voltage AC (400 kV) lines.

Present Inter- Regional transfer capacity is 9,500 MW,
being enhanced to 17,000 MW by 2007.

37,000 MW by 2012.
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Private Participation in Transmission
 The Act provides:
• Dedicated transmission line can be set up by generating
company or captive plant owner without any license
• For granting license for inter – State or intra- State
transmission,
the
Regulator
shall
consider
recommendation of CTU/STU. However, such
recommendation is not binding on the Regulator.
 Policy frame work developed for facilitating
Participation through Empowered Committee.
Private
 Advance Project formulation to speed up projects through this
route.
 Project developers to be selected on the basis of competitive
bidding for tariff.
 Guidelines for competitive tariff determination notified.
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Payment of Bills by State Utilities to CPSUs

Since 2003-04, the realisation of dues by CPSUs
improved to about 100% of current billing.
• 2001-02
76%
• 2002-03
95%
• 2003-04
Almost 100%
• 2004-05
Almost 100%
• 2005-06
Almost 100%

Full payment to all private companies.

Agreement on Securitisation of dues of CPSUs
were
finalised in 2002-03. States have issued bonds.

No NPA to PFC.
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Commercial Losses of State Utilities as %
of Turnover (Without Subsidy)
45
40
41.29
37.17
33.00
35
30
28.32
25
17.60
20
15
14.69
10
5
0
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
Years
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Revenue Gap (Cents/ kWh)
Difference between Average Cost of Supply (ACS) and Average
Revenue Realised (ARR)
1.8
1.6
1.4
1.61
1.55
1.47
1.30
1.2
0.97
1
0.86
0.8
0.6
0.4
0.2
0
1998-99
1999-00
2000-01
2001-02
2002-03
2003-04
Years
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Tariff Rationalisation and Improved
Collection Efficiency
Average Revenue Realised (ARR) (Cents/ kWh)
4.7
4.6
4.57
4.45
4.5
4.4
4.3
4.2
4.11
4.1
4.0
3.9
3.8
2001-02
2002-03
Years
2003-04
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Rural electricity infrastructure initiative
In five years……
 Electrify all villages and habitations.
 Provide access to electricity to all households.
 Give Electricity Connection to Below Poverty
Line (BPL) families free of charge.
And also to cater to the requirements of household
needs, Agricultural infrastructure, Agro based
industries, commerce & Social Services – Health,
Education
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Rural Electrification
Features
 The scheme covers the entire country.
 Provides 905 grant and 10% loan from the
central Government.
 USD 3.6 Billion outlay for the entire scheme.
 USD 1.1 Billion provided the current Tenth
Five Year Plan.
 Emphasis
on
generation &
decentralized
distributed
 Decentralised management by Franchisees, Cooperatives, Panchayats etc.
36
Clean Development Mechanism (CDM)
Projects
 India emerging as one of the largest potential source of
Certified Emission Reductions (CER).
 Designated National Authority fully functional.
 The Host Country Approval (HCA) was accorded to 297
projects in Energy sector under CDM.
 63 projects have been registered – creating 9 million plus
CERs.
 Focus areas in Energy sector :
• R&M of old plants.
• Conversion of LT to HT lines.
• Supercritical Thermal Power Projects.
• Hydro Projects.
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Concerns
Issues
Status
Effective Competition
National Electricity Policy NEP 2005, Competitive bidding guidelines
2005
Electricity Tariff Policy ETP 2006
Pvt. Participation in transmission 2006
Ultra Mega Power Initiative 2005
Open access
ETP 2006 – time limit 5 years
CERC guidelines 2005
SERCs 2005-06
Market determination
generation price
Electricity Act 2003 Sec 63
ETP 2006 time limit 5 years
Policy for sharing
infrastructure & fuel
resources in a particular
state
M/o Power as facilitator & coordinator
Ultra Mega Power initiative
States advised accordingly for similar capacities
Dispute resolution
Appellate Tribunal 2005
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THANK YOU
http://powermin.gov.in
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