Transcript Power - Madhya Pradesh Facilitation Centre for NRI's

Madhya Pradesh: Means Business
Power
1
Overview
Overview
Madhya Pradesh (MP) – State that means business
 MP is the second largest State in the Country stretching over 308,000 sq kms.
 The State is blessed with large mineral resources of coal, diamond, limestone, methane etc.
 MP is among the top 4 states of the Country for industrial investments.
Economic Snapshot
Advantage MP
Madhya Pradesh is emerging as a key growth center for the Country
 Gross state domestic product (GSDP)
USD 23,983.63 Mn**
 Average growth rate
5.5% per annum
 Investor friendly Government policies
 Manufacturing sector
USD 8.5 bn**
(Registered & Unregistered)
 Total electricity generation capacity
6,449.25 MW*
 India’s first greenfield SEZ
Indore SEZ
 Industrial Centers
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Electricity generation capacity at present is 6,449.25 MW and estimated to rise to a surplus in 2008-09
 MP is rich in low grade coal suitable for power generation.
 Potential of hydro-energy generation.
 Installed power capacity (MP’s share)
 Hydel Power Generation: 852.7 MW*
 Thermal Power Generation: 2,147.5 MW*
2
*Ministry of Power (powermin.nic.in)
USD 369**
Madhya Pradesh has one of the upcoming industrial base in India
 The State is centrally located
Power
 Per capita GSDP
**Source: Indiastat.com (as on 23 Feb 2006)
Enabling Infrastructure
MP IS CENTRALLY LOCATED AND WELL
CONNECTED WITH ALL MAJOR CITIES IN INDIA
RAILWAY NETWORK
• The State is well connected with the rest
of India with almost 425 trains passing
through the State on a daily basis. Of
these 175 trains pass through the State
capital Bhopal alone.
• 25 airstrips.**
• Convenient air links from key Indian
cities like Delhi & Mumbai to Bhopal,
Jabalpur,
Gwalior,
Indore
and
Khajuraho.
AIRPORTS
GWALIOR
KHAJURAHO
INDORE
• 5 operational airports.
• Indore airport has the capability of
BHOPAL
handling international cargo.
JABALPUR
• An international airport proposed in
Bhopal.
• The total length of roads spanning MP is
ROAD NETWORK
67,600 kms.**
• National highways of 5,200 kms run
through the State.*
• 18 National highways including trunk
routes of Delhi-Mumbai, Delhi-Chennai,
Delhi-Bangalore, Delhi- Hyderabad.
• The total length of State highways in the
State is 9,885 kms.**
• Convenient linkages to western ports i.e.
Kandla Port, Jawahar Nehru Port Trust.
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*Source: Department of Road Transport & Shipping (morth.nic.in)
**Source: www.destinationmadhyapradesh.com
Madhya Pradesh: A Preferred Investment Destination
31% of the State under forest
cover with a largely unexploited
species
of
rare,
valuable
medicinal- herbal plants
Over 2,000 kms of roads
being
developed
with
Private Partnership (BOT)
India’s
1st
operational
Greenfield SEZ at Indore
Third largest producer
cement in India*
Over 100 agricultural farms with
an area of over 20,000 acres is
available on lease to investor
Favourable
climatic
conditions for cotton
and over 40,000 powerlooms are driving the
textile industry
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*Source: www.mpsidc.org & Brochure: MP Means Business
of
Various blocks available
for power, cement, iron
and steel units
Largest producer of pulses
and oilseeds in the Country
(~75%
of
soyabean
production)
Availability of coal and natural gas
(G.A.I.L pipeline) along with support
from Government to make investment
in Thermal Power Plants lucrative
Offers diverse tourists destinations
catering to various segments of
tourism such as religious (Bhojpur),
eco/ adventure (Panchmari), heritage
(Sanchi, Khajuraho) tourism etc.
Over
18,000
technical
graduates
and
230,000
graduates add to workforce
each year
Over 144 BCM of coal bed
methane reserves available
12 blocks with reserves
totalling 2,585 million tons
of coal has been identified
MP: The Right Place with the Right Environment
Savings in Office Space Rates
Fastest mover* in overall
performance among the
big States in the Country.
DESTINATION MADHYA PRADESH
(A comparison of rates in Central Business Districts)
Mum bai
150
Ahem adabad
Delhi
100
50
Bhopal
Bangalore
0
Fastest mover in agriculture
Indore
Delhi
(740 Kms)
(MPV - 789.5)
Fastest mover in
infrastructure development.
Ranks 2nd in terms of
governance.
Hyderabad
Bangalore
(1400 Kms)
(MPV - 254.52)
Savings in Land Cost
Kolkata
(1350 Kms)
(MPV - 613.19)
Mumbai
(780 Kms)
(MPV - 1000)
Ranks 3rd in terms of law &
order
Pune
Bhopal and Indore have substantial cost
advantages, even when compared to other Tier
III and IV cities.
Ahmedabad
(570 Kms)
(MPV - 220.63)
Pune
(800 Kms)
(MPV - 206.51)
Chennai
Vishakapatnam
100%
80%
Hyderabad
(840 Kms)
(MPV - 257.9)
Chennai
(1430 Kms)
(MPV - 362.84)
Key Markets
Indore
60%
20%
MPV – Market
Potential Value
0%
Jaipur
Greater Noida
Chandigarh
MP is centrally located. The State is at an easy distance from
all the key consumer markets in the Country.
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**Source: India Today (September ‘06 Issue)
Chennai
40%
(Distance From
Bhopal)
Cost of skilled labour is USD
2.4/day vis-a-vis USD 3.5 –
USD 4.0/day in metros
* Fastest mover is the State where the rate of
improvement between 2003 & 2006 was greater
than that between 1991 & 2003
(Estimated Values for Multiproduct SEZs)
Source: (Reference: RK Swamy)
- Distances rounded off
The cost of land is one of the lowest in the Country.
Even central hubs such as Indore and Bhopal fare
well against other cities in terms of low land cost.
Industrial Policy: Catalyst for the Investments
The Government of MP has devised an investor friendly industrial policy,
which is aimed at achieving global competitiveness. The policy emphasizes
on industrial growth in the state through adopting cluster approach,
establishing specialized infrastructure and offering favourable incentives.
• Special package for Mega Projects on project basis by apex level
investment promotion empowered committee headed by the Chief
Minister.
The main thrust of this policy is:
• Industrial investment promotion assistance – 50% to 75% of commercial
tax for 3-10 years
• Establishment of a Madhya Pradesh Trade
Facilitation Corporation which would take
and Investment
decisions about
rationalization of taxes, facilities of mega projects and other related
matters.
• Enacting an Industrial Facilitation Act and to change the rules of
business with a view to make single window system decisive and result
oriented.
• Developing infrastructure for supporting the identified industrial
clusters
• Reviving closed down/ sick industrial units by granting special packages.
SPECIAL INCENTIVES
• Concessional registration charges and stamp duty exemption for
Term Loans.
• Interest subsidy on term loan for 5 – years @ 3% to 5%.
• For thrust sector industries, 25% capital subsidy would be provided
limiting up to a maximum of USD 56,000
• Land on 75% concessive rate for Mega Projects limited to USD 4.4
million.
• Entry tax exemption for 5 years.
• 5 years electricity duty exemption on captive power generation
• 15% capital subsidy to SSI up to USD 33,000 in backward areas
• Infrastructure grant up to USD 0.22 million crore for developing private
sector industrial parks
• Partial reimbursement for Project report, ISO Certification, Patent and
Technology Purchase cost
CLUSTER APPROACH
• Indore – Pharmaceutical, Textile,
Processing, IT, Auto Components
Food
• Bhopal – Engineering, Biotechnology, Herbal,
IT, Food Processing
• Jabalpur – Garment, Mineral, Forest & Herbal,
Food Processing
• Gwalior – Electronics, IT, FMCG, Engineering,
Food Processing
• Rewa – Refractories, Lime Stone, Forest Based
• Sagar – Mineral Processing
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SPECIALIZED INFRASTRUCTURE
• Attractive incentive schemes.
Crystal IT Park
Indore
Food Parks
Mandsaur, Khargone, Chhindwara,
Hoshagabad, Mandla and Bhind
Stone Park
Katni
Herbal Park
Rewa
Granite Park
Chhatarpur
Life Sciences Project
Bhopal
Apparel Park
Indore (SEZ)
Gems & Jewellery Park
Indore
Doing Business Made Easy Through MPAKVN
In a bid to build a competitive environment; industries and their ancillaries would be promoted in clusters based on the availability of raw materials,
skilled labour and market potential. Under this Industrial Policy through Madhya Pradesh Audyogik Kendra Vikas Nigam Ltd (MPAKVNs)
scheme, the State Government, has identified industrial clusters. Many of the industrial giants have their establishments in these areas, however 44% of
Area Developed: 790 Hectares
Area Developed: 273 Hectares
Allotted: 618 Hectares
Allotted: 800 Hectares
Allotted: 125 Hectares
Allotted: 115 Hectares
Units established: 286
Major Groups:HEG, Crompton
Greaves, P&G, Godrej, Lupin, IFB,
Oswal, Nahar
Special Infrastructure: ICD, Food
Park
Units established: 326
Major Groups: JK, Surya Roshini,
Godrej, Grasim, Cadbury, Hotline,
Crompton Greaves
Special Infrastructure: ICD, Food
Park
Units established: 52
Major Groups: Raymond, Hindustan
Petroleum, PBM, Ayur
REWA AKVN
Area Developed: 2,262 Hectares
JABALPUR AKVN
Area Developed: 1,330 Hectares
GWALIOR AKVN
BHOPAL AKVN
developed area is still untapped and open for investment.
Units established: 121
Major Groups: Birla, Jaypee
Special Infrastructure: Integrated
Special Infrastructure: Stone Park,
infrastructure development centres
Food Park
(IIDC)
Area Developed: 2,492 Hectares
Malanpur, Malanpur
Phase II, Banmore,
Chainpura,
Siddhgawan,
Pratappura
INDORE AKVN
Allotted: 1431 Hectares
Units established: 575
Rewa, Waidhan
Major Groups: Tata, Ranbaxy, Eicher,
Total developed
area
7,147
Hectares
Total allotted area
3,089
Hectares
Total units
established
1,360
Growth centres
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Bridgestone, Hindustan Motors, Kinetic,
Mandideep,
Pillukhedi,
Mandideep Phase II
SRF, S Kumars, Gajra, Nicholas Piramal,
Indorama, IPCA, Bhilwara
Special Infrastructure: SEZ, Crystal IT
Park, Food Park, Apparel Park
Pithampur, Kheda,
Dewas, Maksi,
Megh Nagar
Borgaon, Maneri,
Purena
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Source: MPSIDC
Power Industry in Madhya
Pradesh
Sector Profile: Power
Power: Backbone of the Indian Economy
India’s Power Sector: Opportunities Abound
Key Policy Initiatives
M.P.: Power House of India
Location Analysis
Advantage M.P.
M.P.: An Investment Destination
Way Forward
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Power : Backbone of Indian Economy
Energy Generation Bn KWh 2005
Fact Sheet
 India’s power industry is growing faster as compared to most of the other
countries. In the last decade with substantial capacity addition, India has
moved to 5th rank from 8th in terms of generation capacity globally.
 The country has installed generation capacity of 126 GW as on July 2006 ,
and a transmission & distribution network of more than 6.3 million circuit kms
(2004).
 India consumes about 3.7% of the world’s commercial energy and is ranked
5th largest consumer of energy in the world.
Primary Energy Consumption
2500
3rd Largest
Consumer in Terms
of Energy Demand
mtoe
2000
1000
500
 With the targeted GDP growth rate of over 8%, energy demand is expected
to grow at the rate of 5.2% annually. To support this the power supply of
the country needs to be augmented by 10% annually.
 The mismatch in energy demand and supply in the country had resulted in
the increased energy shortage from 27 BU in 1995 to 80 BU in 2005.
by 2012.
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Source: IBEF Report, Ministry of Power (CEA)
3%
Coal
5%
Gas
26%
Oil
Hydro
Nuclear
1%
10%
Renewable
55%
Brazil
South
Korea
Installed Capacity Mix
 Peak demand is expected to increase by 77% to 157,107 MW by 2012.
Also the energy requirement is expected to increase by 274% to 975,222 MU
United
Kingdom
France
Canada
India
Japan
Russian
Federation
0
China
IBEF)
1500
USA
 With India’s booming economy and vibrant industrial scenario, per capita
consumption of power had almost doubled from 350 units in 1998 to over
600 units in 2005 and is further expected to reach 1000 units in 2012. (source:
Germany
 India’s power generation is largely coal dependent with 55% share in the
total capacity mix.
India’s Power Sector - Opportunities Abound
 The Government envisages to provide power to all the households under its ambitious
plan “Electricity for all villages by 2007” and “ Power for all by 2012”. The mission
aims at enhancing the installed capacity upto 200,000 MW by 2012, accompanied by an
increase in transmission and distribution network.
 The investment required in this regard in the sector is estimated to be over USD
Projected Generation Capacity
200000 MW
Opportunities for Private Investors
126838 MW
2006
2012
200 bn. Almost 50% of this amount would be required for generation projects alone. The
scale of investment required in power sector along with the need of advanced technical
Generation
Share Mix
Generation
Share Mix
inputs, has carved out a significant role for private players in power sector.
 Nearly 5000 MW has already been added by the private sector under the 10th five
year plan. It is expected to contribute 11,912 MW during the 11th plan from 2007-12.
 Government has initiated a string of reforms by enactment of Electricity Act, 2003 to
attract foreign and private investment in the power sector. From allowing FDI upto
100% via the automatic route in all the segments (generation, transmission and retail
distribution), to extending tax holiday for mega power projects, the government is keen to
create an investor’s friendly environment.
Given the projected demand scenario coupled with favorable investment policies, the sector
offers huge opportunities for foreign and private players.
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Source: Ministry of Power (CEA)
Capacity Addition Plan Period
Key Policy Initiatives
Policy initiatives by GOI

Key initiatives under the Electricity Act 2003
100% FDI is allowed under the automatic approval route in all

Generation other than for large hydro projects, is de-licensed
segments of the industry i.e generation (based on coal, gas, or

Open access on transmission and distribution networks

Retail competition mandates that by July 2008 all consumers
above 1MW are free to choose their suppliers

For rural power development, generation and distribution is
de-licensed in rural areas

Power trading and market development are recognized
All power projects are extended a tax holiday i.e deduction of 100%

Strong anti-theft and malpractice provisions
of profit of the generation, transmission or distribution company, for

Functional unbundling of the integrated state electricity
boards and setting up of State Electricity Regulatory
Commission made mandatory by states.
hydro), transmission and retail distribution

Under the Mega Power Policy, incentives such as capital import
duty concessions, waiver of local levies to improve cost
attractiveness are extended to large generation projects.

10 consecutive years out of 15 years from commencement.
Other policy initiatives
12

Competitive bidding for awarding projects

Incentives for mega power projects

Relaxation of 40% cap for debt exposure by Indian financial institutions

Inter institution group for speedy financing

Encouragement to FDI in transmission via Joint Venture route and
Independent power Transmission Company Route

National Electricity Policy & National Tariff Policy notified

Initiation of Ultra Mega Projects
MP: The Power House of India
Overview:
 M.P. has nearly 5% of the total installed capacity of India with 6449.25 MW
Installed Capacity of Power in M.P. (M.P.’s share)
as on July 2006 including the Central, State and private sector. The sources of
power generation in the State includes thermal, hydel, wind power, methane
gas etc.
 The State’s share in the installed capacity was about 3000.2 MW in the year
2005-06. Out of which ~72% is thermal power and remaining is hydel power.
 The total energy availability in the State has increased from 26,606 MUs to
29,237 MUs during 2001-02 to 2005-06 at a CAGR of 2.68%, wherein power
purchase of the State has outgrown the own generation of the State.
 The State is witnessing rapid industrialisation which would lead to very high
increase in energy demand in coming years. Further, the installed capacity is
also expected to increase in the coming years, with new projects coming in
the State.
 The State Government has taken necessary policy initiatives to facilitate the
power sector reforms in the State.
The increasing energy shortages and peak deficit indicates a need for rapid
increase in power generation capacity of the State. Further, the new
Government reforms, and presence of necessary resources makes the power
sector very attractive for the private investors to set-up their plants in the
state.
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Source: Annual Report (MPERC)- Tariff petition 2006, Ministry of Power
Energy Shortages & Peak Deficit in M.P.
MP: Power House of India
 Agriculture sector is one of the main energy consumers in the State. The
HT consumers such as railway traction, coal mines, HT industrial and non-
Category-wise Energy Consumption in M.P.
industrial activities etc. together accounted for 6549 MU of sales followed by
domestic consumers in the year 2005-06.
 The State has various organisations (mostly public undertakings) in the areas of
power generation, transmission and distribution. These organisations are
presented in the schematic below.
 The Private sector has a very insignificant presence as of now with their major
*
presence only in non-renewable resources and captive plants. However,
various major companies are contemplating to set-up their units in M.P.
Generation
* HT Consumers include traction, coal mines, industrial, irrigation,
township, residential etc
Transmission
Distribution
PUBLIC SECTOR
POWER PURCHASE
 Madhya Pradesh Power Generation Company Ltd (MPPGCL)
 Madhya Pradesh Power Trading Company Ltd
 Narmada Hydro Development Corporation
PRIVATE SECTOR
 MP Wind Farm, Dewas (wind power)
 Kalani Industries, Indore (wind power)
 Goetze India, Dewas (wind power)
 Som Distilleries, Bhopal (biomass)
 Kalchury Trading Co., Jabalpur (biomass)
 Shri Maheshwar Hydro Power Corporation
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Source: Annual Report (MPERC)- Tariff petition 2006
POWER DISTRIBUTION
Madhya Pradesh Power
 M.P.Poorva Kshetra Vidyut Vitaran Company Ltd.
Transmission Corporation Ltd.
 M.P.Madhya Kshetra Vidyut Vitaran Company Ltd.
 M.P.Pashchim Keshtra Vidyut Vitaran Company Ltd.
Location Analysis
 The State has following power generation units:
MP’s
Share
(MW)
Locations
2272.5
2147.5
3 major plants located in
Satpura, Amarkantak and
Umaria where vast coal
reserves are available.
MPPGCL Hydel
Power Plant
575
575
8-10 plants are located near
Pench, Banas, Gandhi Sagar
and other rivers.
Intrastate
Project
591
322.17
Gandhi Sagar, Ranapratap &
Jawahar
Sagar,
Rajghat,
Pench
Joint Venture
Project
2450
1826.5
NonConventional
Energy Plants
26.7
-
Power Plant
MPPGCL
Thermal Power
Plant
Installed
Capacity
(MW)
Classified Regions in M.P.
Power Generation Stations in M.P.
Indira Sagar & Sardar Sarovar
Small wind power, biomass
based plants are set-up in
Dewas, Indore, Bhopal etc
Energy Sales
No. of
Customers
Growth Drivers in the Region
West Discom (Indore, Ujjain)
7392.59 MkWh
2.40 million
The Discom contributes to highest energy sales in M.P. This is due to
the highly developed and growing industry in and around Indore region.
Further the establishment of SEZ would also contribute to sales.
East Discom (Jabalpur, Rewa,
Sagar)
5548.31 MkWh
1.82 million
Presence of number of cement and cable factories in the region leads
to high energy sales.
Central Discom (Bhopal, Gwalior)
5484 MkWh
2.32 million
The domestic consumption and small scale industries drives the sales
in this region.
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Advantage MP
M.P. Offers following Advantages to Power Industry
Potential to be Energy Hub for Power
Generation
Centrally located and well connected to all the major cities
Accounts for ~ 8% of national coal reserve i.e. 18,205 million tons
Availability of coal bed methane reserves of approximately 144 bn cubic
meters
Large rivers flowing across the State gives ample potential for hydel power
generation
Established Infrastructure
Well connected through roads and railway
Availability of vast contiguous land for setting up big plants
Extensive power distribution and transmission network with about 185
sub-stations
Transmission network of about 19,817.7 Ckt Km
Government Support
Key incentives for private players establishing plant in the state, based on
non-conventional energy resources like wind, bio and solar energy and
mini micro hydel projects
Restructured power sector in accordance with the provisions of the
Electricity Act 2003
MP Electricity Regulatory Commission (MPERC), has laid down the tariff
plan for next 3 years
16
MP: An Investment Destination
With the growing industrialisation in the State along with the Rural Electrification Programme initiated by the
Government, the demand for electricity would increase manifolds in the State.
Industry Drivers in M.P.
Energy Demand Projections in MP
 The demand for energy in the State is estimated to increase by 45%
by the year 2011-12.
 M.P. is likely to face the energy deficit in the next five years and its
energy deficit in 2011-12 is expected to be as high as 10.5% (source:
MPSEB)
 The natural resources available in M.P such as thermal, hydel, wind
power and coal bed methane has the potential to generate 15000 MW
of power in next 5-10 years.
Government Initiatives
 The thermal and hydel power plants set-up in the State will receive
incentives from the Central as well as State Government (mentioned
in prior slide).
 The State Government offers various incentives for organisations
installing power generation unit utilising non-conventional feed
stocks. These incentives include electricity duty exemption, sales tax
benefits, land incentives etc. These investors have the option of using
the power themselves as captive power and selling it to the MPEB @
USD 0.05 per unit (source: MPERC)
 Government also provides incentives for setting-up captive plants in the
State.
17
MP: An Investment Destination
Major private players such as Reliance, Essar and Jaypee Group have acknowledged the potential of M.P. and
have proposed investment plans in the State.
Ultra Mega Project in M.P.
Up-Coming Projects In M.P. (Indicative)
 The central government is setting up Ultra Mega
Power Projects 5 locations in the country.
Thermal Power Projects
Malwa TPS,
Purni, Dist. Khandwa
2X500 MW
Essar Group Project,
Mahan coal field at SidhiSingrauli fields
1000MW
Jaypee Group
Siddhi
1000 MW
Marhikheda hydro project,
extension,
Shivpuri.
1x20 MW
 It is a large project of 4000 MW at a single location
thereby ensuring economies of scale.
Tawa
HEP
Hindustan
Graphite)
Hoshangabad
13.5 MW
 Project would require an investment of about USD
3.3 billion.
Hydel Power Projects
(M/s
Electro
Coal Bed Methane
Reliance Energy
Shahdol
-
 The project is first initiated in MP and is at an
advanced stage of establishment.
 Sasan in M.P., a pithead location based on
domestic coal availability (while other proposed
plants would be imported fuel based) is identified for
setting up this project.
 The project would utilize super critical technology
to ensure higher efficiency and lower CO2
emissions
 The projects would be awarded to developer
through tariff based competitive bidding to
ensure cheaper power.
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MP: Way Forward
With the increasing demand for power in the State and State’s objective to provide power to all by the year 2008, there lies
several opportunities for public-private partnership in the sector.
Opportunities across the value-chain
Power Generation

Power generation plants
based on:
 Coal reserves
 Hydel power
 Biomass
 Coal bed methane
 Wind
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Power
Transmission

The Transmission could be
taken
through
Joint
Venture or Independent
Private
Transmission
Company (ITPC) route.
400
KV
Bina-NagdaDehgam D/C line in
Western Region has been
taken up as a pilot project
by POWERGRID and
would be awarded to
private party soon.
Power Trading &
Distribution

 This activity could be
taken independently or
under joint venture by
private players under
public-private
partnership in the State.
Connecting Further
20
Madhya Pradesh State Electricity Board
www.mp.nic.in/energy/mpseb
Madhya Pradesh Electricity Regulatory Commission
www. www.mperc.org
Madhya Pradesh Power Transmission Corporation Ltd.
www.mptransco.nic.in
Madhya Pradesh Paschim Kshetra Vidyut Vitran Company Ltd.
www.mppkvvcl.nic.in
Madhya Pradesh Madhya Kshetra Vidyut Vitran Company Ltd.
www.mpmkvvcl.nic.in
Madhya Pradesh Poorv Kshetra Vidyut Vitran Company Ltd.
www.mpez-electricity-discom.nic.in/
Madhya Pradesh Urja Vikas Nigam Ltd.
www.mprenewable.org
Madhya Pradesh State Industrial Development Corporation
www.mpsidc.com
Government of Madhya Pradesh
www.mpgovt.nic.in