Transcript コンサルティング事業ビジョン

Challenges for IPP Promotion
in the Indian Power Sector
February 14, 2008
Japan-India Public Private Partnership Forum 2008
Kunio HATTORI
General Manager,
International Business Department
CHUBU Electric Power Co., Inc.
C o n t e n t s
Ⅰ．Expanding the relationship between India
and Japan
Ⅱ. Cooperation in the Indian Power Sector
between India and Japan
Ⅲ． Business model for the Power Sector
Ⅳ． Possibility of IPP business in India
2
Ⅰ．Expanding the relationship between India and Japan
 Joint statement by Japanese government and Indian
government
(Aug 22.2007-At the official visit of Prime Minister Abe)
 Commence immediate negotiation for the conclusion of an
EPA (Economic Partnership Agreement)
 Development of infrastructure and Promotion of
Manufacturing, Trade and Investment (Promoting the
participation of Japanese companies in the Indian power
sector)
 Human Resource Development to promote Manufacturing
 India is the top country to receive Japan’s ODA loan.
 Japanese auto companies have rapid expansion
programs to establish large auto factories in India.
3
Ⅱ．Cooperation in the Indian Power Sector between India and Japan
 Cooperation in large power infrastructure
development while sustaining economic growth
◆ To support improvement of energy efficiency in
the Indian Power Sector
◆ To support environmental issue solutions (air
pollution/ global warming)
4
Ⅱ．Cooperation in the Indian Power Sector between India and Japan
Recent ODA Projects (1)
BAKRESWAR Thermal Power Plant
1. Project Outline
 Project Site: Bakreswar in West Bengal (260km northwest from
Kolkata),
West Bengal Power Development Corporation Limited (WBPDCL).
3 x 210 MW units (Unit No.1, 2 & 3) - in operation
2 x 210 MW (Unit No.4 & 5)
- under implementation.
Consulted by J-Power and financed by Japanese ODA loans.
2. Current Situation
 COD: Unit.1) Nov. 2000 / Unit.2) Apr.2001 / Unit.3) Oct.2001 /
Unit.4) July.2007/ Unit.5) Oct. 2007
3. Main Equipment
 Boiler Type
:
Manufacture:
 Turbine Type
:
Manufacture:
Tangential Coal Fired Natural Circulation
BHEL Co., Ltd.
Multi Cylinder Horizontal Tandem Compound
Fuji Electric Co., Ltd.
5
Ⅱ．Cooperation in the Indian Power Sector between India and Japan
Recent ODA Projects (2)
PULURIA Hydro Pumped Storage Power Plant
1. Project Outline
 Project Site: Puluria in West Bengal (50 km from Jamshedpur)
Owned by WBSEB.
More efficient operations of the electric power system.
Primary power source (over 90 percent) is coal-fired.
Low load-following capacity, while supplying electricity during
evening peak hours.
Funded by Japanese government ODA initiatives.
It will deliver a maximum power of 900 MW with 4*225MW units.
2.Current Situation (Commissioning)
 Unit 1) Jan. 2008/ Unit 2) Nov.2007/
Unit 3) Aug.2007/ Unit 4) July. 2007
3. Main Equipment & Civil Construction
 Civil Contractor:
Taisei Co., Ltd.
 Main Equipment (Turbine) Type
: Francis
Manufacture: Toshiba Co., Ltd.
6
Ⅲ．Business model for the Power Sector
The following Business Models can be studied more
in order to activate the investments in India
◆ Coal fired Power
◆ Hydro Power
◆ Biomass Power
etc...
7
Ⅲ．Business model for the Power Sector
Coal fired Power
 Advanced technologies for the development and operation of
highly efficient Power Stations, while reducing the
environmental impact.
- High efficiency generation technology (Ultra Super Critical)
- DeSOx technology
- DeNOx technology
- Dust removal technology
◆ Know-how of business efficiency provided by Japanese
private power companies
◆ PPP scheme is available in the areas such as fuel
transportation and transmission
8
Ⅲ．Business model for the Power Sector
Coal fired Power
Public Partnership
financed by ODA
Transmission
Energy Supplier
Fuel
Fuel Transportation
- Port
- Road
IPP
company
Electricity
State electric
company
Support
Public partnership
State government
Japanese
sponsor(s)
・Tariff intensive
・Tax exemption
- Mandatory purchase of generated
electricity
9
Ⅲ．Business model for the Power Sector
Coal fired Power
Ultra Super Critical Coal Fired Power Plant of CHUBU
(Hekinan Power Station in Japan)
10
Ⅲ．Business model for the Power Sector
Hydro
Power
◆ India has abundant hydropower potential and is accelerating
its development for energy security in the country.
◆ The potential varies from small-mini scale to large scale with
or without large reservoirs.
◆ Public sector can contribute to constructing multi-purpose
dams, roads (high-ways) and transmission lines financed by
an ODA scheme.
◆ Not only a single company but also multiple Japanese
companies as a group may contribute to large scale
hydropower projects.
◆ India is the top country to provide CDM to developed countries
as a host country of CDM. CDM can be applied for small and
mini scale hydro schemes.
11
Ⅲ．Business model for the Power Sector
Hydro
Power
Public Partnership
financed by ODA
Transmission
Water, agriculture sector
IPP
company
Road sector
Multi purpose dam
Electricity
State electric
company
Support
Road (highway)
Public partnership
CDM
Small-mini scale
Japanese
sponsor(s)
State government
・Tariff intensive
・Tax exemption
- Mandatory purchase of generated
electricity
12
Ⅲ．Business model for the Power Sector
Biomass Power
 Bagasse, Rice husk, Wood Chip, Jatropha are abundant non
fossil fuels in India.
◆ Using the non fossil fuels above, large scale development of
biomass power projects (10MW～) in India are expected.
◆ Development of biomass power project is beneficial to both
India and Japan.
◆ Since India heavily depends on fossil fuels, biomass power
projects directly and efficiently contributes to the reduction
of carbon dioxide emission. Japan needs emission trading to
achieve the target goal of emission reduction set by the Kyoto
Protocol. (6% reduction compared with emission level in
1990).
◆ India is the top country to provide CDM to developed
countries as a host country of CDM.
◆ More than 50 projects in India were approved as CDM project
by the UN.
13
Ⅲ．Business model for the Power Sector
Biomass Power
Agriculture Sector
Fuel
IPP
company
Biomass fuel collection
and supply
Electricity
State electric
company
Support
CDM
Japanese sponsor
Public partnership
State government
・Tariff intensive
・Tax exemption
- Mandatory purchase of generated
electricity
14
Ⅲ．Business model for the Power Sector
Biomass Power
Example of CHUBU’s project
Rice husk fired power project in Thailand
 Generates electric power from rice husk
Started operation in December 2005
 State-owned EGAT purchases the electricity
 Chubu takes 34.4% share
 Our subsidiary handles its operation and maintenance
 Installed Capacity
 Completion
20MW
December 2005
15
Ⅲ．Business model for the Power Sector
Biomass Power
Pichit Power Station of CHUBU
Power Plant
Storage of rice husk
16
Ⅳ．Possibility of IPP Business in India
IPP track record in Asia by Japanese companies
Number of Projects
14
13
12
10
8
6
6
4
4
2
4
3
3
2
1
0
India
C hina
Indonesia
K orea
Philippines Thailand
Taiw an
V ietnam
(This data might not cover all of the IPP projects)
17
Ⅳ．Possibility of IPP Business in India
IPP track record in Asia by Japanese companies
Generating Capacity
(MW)
5,000
4,386
4,500
4,643
4,010
4,000
3,500
3,000
2,630
2,500
2,185
2,000
1,500
1,000
500
330
388
150
0
India
C hina
Indonesia
K orea
P hilippines T hailand
T aiw an
V ietnam
(This data might not cover all of the IPP projects)
18
Ⅳ．Possibility of IPP Business in India
Japanese utilities and trading houses have accelerated
the investment in IPP business in Asia
 Suitable conditions for the investment (Example of Thailand)
 Healthy financial performance of EGAT(Electricity
Generating Authority of Thailand) as the offtaker
 Government Support
 Dollar-linked tariff system
20 companies participated in the IPP bid in 2007
19
Ⅳ．Possibility of IPP Business in India
General concerns for the investment in India
 Data has not shown improvement of the financial
performance of the State Electricity Companies.
 In the event of PPA default by the State Electricity Company,
foreign power developers have less power to resume tariff
recovery mechanisms than local IPP developers have.
 Tariff is linked only with Rupee, not Dollar.
If these offtaker risks, policy risks and exchange rate risks
are overcome, India could also be a big target for IPP
Business by foreign investors
20
Ⅳ．Business model for the Power Sector
 Win-Win relationship between Local IPP developers
and foreign investors
- Suitable role sharing
- Technological improvements to world standards
- Utilization of Environmentally-friendly Japanese
energy technology
21
Thank you very much
for your kind attention.