Transcript Ultra Mega Power Projects

DEVELOPMENT OF
ULTRA MEGA POWER PROJECTS
A MAJOR INITIATIVE UNDER
POWER SECTOR REFORM
Presented By:
Shyam Wadhera
Chairman
Sasan Power Ltd &
Coastal Gujarat Power Ltd.
Director (Projects)
Power Finance Corporation Ltd.
22nd January 2007
POWER INFRASTRUCTURE IN INDIA
(As on Oct, 2006)
Total Generation Capacity
1,27,673 MW
Comprising of : Hydro 33,600 MW (26%) Nuclear
3,900 MW (3%)
Thermal 83,982 MW# (66%) Renewables 6,191 MW (5%)
# (Coal 69,198 MW, Gas 13,582 MW and Oil 1202MW)
Private
Sector
12%
(15,431 MW)
Central
Sector
33%
(41,673 MW)
State
Sector
55%
(70,569 MW)
In addition to above captive generation capacity of appx. 41,000 MW.
GROWTH OF POWER SECTOR IN INDIA
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
to
42.0
56.0
-
Rural Households Coverage
(%)
31.0
43.8*
-
Households
Access
Electricity (%)
*To electrify these rural households ( 78 mn) in next five years, Rajiv Gandhi
Gramin Vidyutikaran Yojana has been launched.
PER CAPITA CONSUMPTION OF ELECTRICITY
IN INDIA
(kwh/ year)
Growth pattern over years
606
592
606
408
238
15.6
34.8
1950
1960
83.5
1970
130.5
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
CHALLENGES AND P0LICY RESPONSES







Eliminating Shortages- Peaking 11.2%, Energy 7.1%.
 Adding 1,00,000 MW capacity by 2012.
 Stepping up Public Investments.
 Nurturing Private Sector- Present share 11%.
 Electricity Act –2003 and National Electricity Policy.
Rural Electrification- 56% Rural households yet to be electrified
Financial Viability- SEB losses though reducing , yet very high.
Improving quality of supply.
Completion of electrification in next five years- Rajiv Gandhi Gramin
Vidyutikaran Yojana launched.
Total Village Electrification by 2010.
Distribution Reforms : Reduction in Aggregate Technical and
Commercial (AT&C) losses.
VISION FOR POWER SECTOR

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.
ELECTRICITY ACT 2003
– Salient Features
•
•
•
•
•
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 for captive generation including group captive.
• trading recognised as an independent activity.
• open access in transmission already in place.
Open access to consumers above 1 MW within five years from Jan 2004
(date of enforcement of amendment to Electricity Act).
Multiple licenses in distribution.
ELECTRICITY ACT 2003
- Implementation

Most of the Rules (required to be framed by Central Govt.) notified.

Open Access in transmission notified by CERC : Jan, 2004

Guidelines for determining tariff through competitive bidding notified:
Jan 2005

National Electricity Policy announced: Feb, 2005

Regional Power Committees for all the 5 regions established: May 2005

Appellate Tribunal for Electricity : Operational July, 2005.

Electricity/Tariff Policy notified : Jan 2006

Guidelines for private investment in transmission: April 2006

Several SERCs have initiated action for open access in Distribution.
LAUNCHING OF ULTRA MEGA POWER
PROJECTS
The Govt. Of India is committed to add 100,000MW by 2012 to
meet its mission of Power to All. This requires significant
capacity addition during remaining period of 10th Plan & entire
11th Plan, which may not be possible from the ongoing and
new generation projects already identified. As such there is
need to develop large capacity generation projects at the
national level to meet the requirement of number of states.
The Ultra Mega Projects are proposed to be taken up under
the competitive bidding guidelines and will enable
establishment of large capacity through private investments.
AGENCIES INVOLVED

Ministry of Power
Policy Interventions
Inter-Ministerial co-ordination
State Government support
Central Electricity Authority
Site selection
Resolution of Technical Issues
Power Finance Corporation Ltd.
Nodal agency for setting up Shell Companies (SPVs) for each
project.
Managing the bid process.









DEVELOPMENT OF ULTAR MEGA POWER
PROJECTS THROUGH COMPETITIVE BIDDING
CONCEPT
 Setting up of large projects of 4000 MW at a single location: ensuring
economies of scale
 Award of projects to developer through tariff based competitive bidding :
ensuring cheaper power
 Utilisation of super critical technology: ensuring higher efficiency and lower
CO2 emissions
APPROACH
 Guidelines for determination of tariff through bidding process were issued
on 19th January, 2005 under Section 63 of the Electricity Act, 2003. These
provide for procurement of power by Distribution Licensees through
competitive bidding
 Separate SPVs for each project to undertake project development
activities including bid process management on behalf of procurers
Contd…..
DEVELOPMENT OF ULTAR MEGA POWER
PROJECTS THROUGH COMPETITIVE BIDDING
TECHNICAL FEATURES
 Utilisation of higher efficiency super critical technology with unit size of
800 MW
 Station capacity of about 4000 MW (5x800 MW)
 Flexibility re: unit size to be permitted, subject to meeting thermal
efficiency requirements
FINANCIAL ASPECT
 For achieving financial closure, past experience highlights critical
importance for Government intervention to:
 secure reliable fuel supply.
 obtain environmental clearances.
 land acquisition and resolution of R&R issues.
 co-ordination with states & bulk power purchasers.
ROLE OF MINISTRY OF POWER
Ministry of Power to be facilitator for co-ordination
with concerned Ministries/ agencies and State
Govts. for ensuring:
 Coal block allotment for pithead projects
 Environment/ forest clearances
 Facilitate acquisition of land
 Required support from State Govt. & its agencies
ROLE OF SHELL COMPANIES (SPVs)






To acquire land for the project and coal mine taking
contribution from procurers against land cost
Allocation of coal blocks for pit-head projects.
Allocation of water by the State Govt. for pit-head locations
To get approval for use of sea water from Maritime Board/
other Govt. Agencies for coastal locations
Statutory clearances from MoEF/ Civil Aviation/ Defence
etc.
To obtain various approvals from the central government
and state government as are required to be obtained for
the project and coal mines
…contd
ROLE OF SHELL COMPANIES (SPVs)

Shell Companies to take action for (contd.):
Appointment of Consultants to undertake studies/ surveys and
preparation of bankable project report
Appointment of Consultants for International Competitive Bidding
(ICB), document preparation & evaluation
Appointment of Rating Agencies for Green Field Project Rating




Tie up for off-take/ sale of power to distribution utilities.

To finalise RfQ/ RfP documents in consultation with states/
bidders
To carry out RfQ/ RfP process and award of project
Shell Company will be transferred to the successful bidder
for execution of project.


BIDDING PROCESS

Notice inviting Expression of Interest(EoI)

Two stage bidding process
Request For Qualification (RFQ) containing qualifying criteria
Request For Proposals (RFP) from the qualified bidders
High Level Committee consisting of
Member(Thermal) CEA, Director (Projects) PFC and Representatives
of FIs (MD SBI, MD IDFC and MD IDBI) for selection of Consultants
and Qualifying/ shortlisting Bidders
Evaluation Committee consisting of






Chairperson/ CEO of the Bank/ FI, Chairperson CEA, CMD PFC &
Representative of the power purchasers for final selection of
developer
PAYMENT SECURITY MECHANISM
As Condition in PPA :

Letter of credit (LC) by distribution utilities

Escrow on the receivables of distribution utilities
In the event of default by any procurer :

Other procurers have the first right to buy power share for which
payment default has occurred.

In case of unwillingness of other procurers to buy default power, the
same can be sold in the All India market through prevailing open
access in transmission either directly or through traders.

If any further power share is still unsold, direct supply to HT
consumers as per provisions of the Electricity Act 2003 to be
accepted upfront
(7 Purchasing States in Sasan and 5 in Mundra have initialed
PPA on 9/10/06 and confirmed power allocation / PSM)
WAY AHEAD FOR
ULTRA MEGA POWER PROJECTS
Looking at the Success of two initially identified Ultra
Mega Thermal Power Projects, one at Sasan in M.P.
(Pithead) and other at Mundra in Gujarat (coastal), it
has been proved that it is possible to overcome the
hindrances being faced by large generation projects in
getting the clearances and awarding them on tariff
based competitive bidding. The present model adopted
by PFC can be repeated by power procurers which in
turn would add additional generation capacity to the
Nation at most competitive tariff in minimum time.
In addition to above Ministry of Power is also taking
steps for bringing up large Hydro Projects and large
size Transmission Projects on the fast track similar to
Ultra Mega Power Projects(Thermal).
THANK YOU