POWER GENERATION AND TRANSMISSION IN INDIA

INTRODUCTION

The Indian Power Sector has witnessed a strong all round revival in the last five years with growth rate

averaging at about 6 percent per year. Power was solely generated and distributed by the Government

of India through its various Public Sector Undertakings (PSUs) up to 1991. Major PSUs involved in the

generation of electricity include National Thermal Power Corporation (NTPC), National Hydroelectric

Power Corporation (NHPC) and Nuclear Power Corporation of India (NPCI).

With the advent of liberalization policies instituted by the then Finance Minister, Dr. Manmohan Singh

under the Government headed by P.V, Narasimha Rao, Foreign Direct Investment was allowed in the

Power Sector. This did not show much difference initially. However, in the last five years, a number of

companies have entered the market and are installing and operating power plants in various locations

all over the country. Presently, the trend in the Indian market sector is merchant power plants, which

operate with 25% of output guaranteed purchase by the Government, and the remaining 75% at market

determined price. This is accomplished through tie-ups with power trading companies.

Transmission and distribution of the generated power, however, is still retained under Government

control. This is accomplished through the various State Electricity Boards and the PowerGrid

Corporation of India. The State Electricity Boards are involved in the intra-state distribution of

electricity. The PowerGrid Corporation of India is responsible for the inter-state transmission of

electricity and the development of national grid.

Budget 2009-10

The Government of India has recognized the vase, unfulfilled demand for power in the country and has

given it a top priority in the Budget Allocation. The allocation under Accelerated Power Development

and Reform Program (APDRP) has increased by 160% to Rs.2,080 crore in B.E. 2009-10 over last year,

B.E. 2008-09.

SCENARIO OF POWER SECTOR IN INDIA

POWER GENERATION

In March 2009, the installed power generation capacity of India stood at 147,000 MW. The country's

annual power production has increased from about 190 billion kWH in 1986 to more than 680 billion

kWH in 2006.

TECHNOLOGY INVOLVED

A thermal power station is a power plant in which the prime mover is steam driven. Water is heated,

turns into steam and spins a steam turbine which drives an electrical generator. After it passes through

the turbine, the steam is condensed in a condenser and recycled to where it was heated. The greatest

variation in the design of thermal power stations is due to the different fuel sources.

Figure 1 : Diagram of a Power Plant

1. Cooling tower 10. Steam Control valve 19. Superheater

2. Cooling water pump 11. High pressure steam turbine 20. Forced draught (draft) fan

3. transmission line (3-phase) 12. Deaerator 21. Reheater

4. Step-up transformer (3-phase) 13. Feedwater heater 22. Combustion air intake

5. Electrical generator (3-phase) 14. Coal conveyor 23. Economiser

6. Low pressure steam turbine 15. Coal hopper 24. Air preheater

7. Condensate pump 16. Coal pulverizer 25. Precipitator

8. Surface condenser 17. Boiler steam drum 26. Induced draught (draft) fan

9. Intermediate pressure steam turbine

18. Bottom ash hopper 27. Flue gas stack

POWER GENERATION CAPACITY OF INDIA

Grand Total Installed Capacity is 147,402.81 MW.

Figure 2 : Break Up of Power Generation in India

Hydro Power

India was one of the pioneering states in establishing hydro-electric power plants, The power plant at

Darjeeling and Shimsa (Shivanasamudra) was established in 1898 and 1902 respectively and is one of

the first in Asia. The installed capacity as of 2008 was approximately 36647.76. The public sector has a

predominant share of 97% in this sector.

The NHPC (National Hydroelectric Power Corporation) was set up in 1975 as a fully integrated Public

Sector Unit for hydroelectric power in India that would take care of all aspects pertaining to planning,

organizing, and promoting hydroelectric power in India. Recently, the National Hydroelectric Power

Corporation has also grown to enfold dimensions such as geothermal energy, wind energy, and tidal

energy within its perimeters to such as extent that the company now has an authorized capital of Rs.

150,000 million and an investment base of approximately Rs. 250,000 million.

Figure 3 : Hydel Power Generation from 1998 to 2009

Nuclear Power

Nuclear power is the fourth-largest source of electricity in India after thermal, hydro and renewable

sources of electricity. As of 2008, India has 17 nuclear power plants in operation generating 4,120 MW

(2.9% of total installed base) while 6 other are under construction and are expected to generate an

additional 3,160 MW.

The Nuclear Power Corporation of India Limited (NPCIL) is a government-owned corporation in India.

One of the public sector undertakings, it is wholly owned by the Union Government and is sole body

responsible for constructing and operating India's commercial nuclear power plants to generate nuclear

power for electricity. It is the only power utility company in India which uses nuclear fuel sources. All

nuclear power plants operated by the company are certified for ISO-14001 (Environment Management

System).

Figure 4 : Location of Major Nuclear Power Plants in India

Thermal Power

Current installed capacity of Thermal Power is 93,392.64 MW which is 63.3% of total installed capacity.

• Current installed base of Coal Based Thermal Power is 77,458.88 MW which comes to 53.3% of total installed base. • Current installed base of Gas Based Thermal Power is 14,734.01 MW which is 10.5% of total installed base. • Current installed base of Oil Based Thermal Power is 1,199.75 MW which is 0.9% of total installed base. The state of Maharashtra is the largest producer of thermal power in the country.

Figure 5 : Location of Thermal Power Plants in India

Renewable Power

Current installed base of Renewable energy is 13,242.41 MW which is 7.7% of total installed base with

the southern state of Tamil Nadu contributing nearly a third of it (4379.64 MW) largely through wind

power. As of 2008, India's installed wind power generation capacity stood at 9,655 MW.

FUEL RESERVES:

From the above statistics it is clear that India is still vastly dependent on its non-renewable energy

sources (mainly coal, since we have no oil or natural gas reserves) for its power generation

requirements. At this rate, the fuel reserves will deplete very soon, as India does not have extensive

fossil fuel deposits.

Figure 6 : Fuel Import Dependency Projection – 2001 to 2030

TRANSMISSION OF GENERATED POWER

Transmission of electricity is defined as bulk transfer of power over a long distance at high voltage,

generally of 132kV and above. In India bulk transmission has increased from 3,708ckm in 1950 to more

than 265,000ckm today. The transmission of power is handled entirely handled by Public Sector Units

namely the State Electricity Boards and the PowerGrid Corporation of India. This organization is

responsible for the inter-regional power transfer capacity of National Grid, which has been enhanced to

about 17,000 MW in FY 2007-08.

The entire country has been divided into five regions for transmission systems, namely, Northern

Region, North Eastern Region, Eastern Region, Southern Region and Western Region. The

Interconnected transmission system within each region is also called the regional grid.

While the predominant technology for electricity transmission and distribution has been Alternating

Current (AC) technology, High Voltage Direct Current (HVDC) technology has also been used for

interconnection of all regional grids across the country and for bulk transmission of power over long

distances.

DISTRIBUTION NETWORK

The total installed generating capacity in the country is over 135,000MW. Apart from an extensive

transmission system network at 500kV HVDC, 400kV, 220kV, 132kV and 66kV which has developed to

transmit the power from generating station to the grid substations, a vast network of sub transmission

in distribution system has also come up for utilization of the power by the ultimate consumers.

However, due to lack of adequate investment on T&D works, the T&D losses have been consistently on

higher side, and reached to the level of 32.86% in the year 2000-01.The reduction of these losses was

essential to bring economic viability to the State Utilities. As the T&D loss was not able to capture all the

losses in the net work, concept of Aggregate Technical and Commercial (AT&C) loss was introduced.

AT&C loss captures technical as well as commercial losses in the network and is a true indicator of total

losses in the system.

High technical losses in the system are primarily due to inadequate investments over the years for

system improvement works, which has resulted in unplanned extensions of the distribution lines,

overloading of the system elements like transformers and conductors, and lack of adequate reactive

power support.

The commercial losses are mainly due to low metering efficiency, theft & pilferages. This may be

eliminated by improving metering efficiency, proper energy accounting & auditing and improved billing

& collection efficiency. Fixing of accountability of the personnel / feeder managers may help

considerably in reduction of AT&C loss.

With the initiative of the Government of India and of the States, the Accelerated Power Development &

Reform Program (APDRP) was launched in 2001, for the strengthening of Sub – Transmission and

Distribution network and reduction in AT&C losses. Under APDRP, PowerGrid is acting as Advisor-cum-

Consultant (AcC) to lend its managerial and technical expertise for improvement of distribution system

in 177 distribution circles/ towns/ schemes spread over 18 States costing about Rs. 6,626 Crore.

The main objective of the program was to bring Aggregate Technical & Commercial (AT&C) losses below

15% in five years in urban and in high-density areas. The program, along with other initiatives of the

Government of India and of the States, has led to reduction in the overall AT&C loss from 38.86% in

2001-02 to 34.54% in 2005-06. The commercial loss of the State Power Utilities reduced significantly

during this period from Rs. 29,331 Crore to Rs. 19,546 Crore. The loss as percentage of turnover was

reduced from 33% in 2000-01 to 16.60% in 2005-06. The APDRP program aims at reducing AT&C loss to

15%.

Figure 6 : Transmission Grid Map of India (400kV and above)

DEMAND FOR POWER

India is the world's 6th largest energy consumer, accounting for 3.4% of global energy consumption.

Due to India's economic rise, the demand for energy has grown at an average of 3.6% per annum over

the past 30 years. In March 2009, the per capita power consumption stood at 612 kWH. The total

demand for electricity in India is expected to cross 950,000 MW by 2030.

RURAL ELECTRIFICATION

Jharkhand, Bihar, Uttar Pradesh, Orissa, Uttaranchal, Madhya Pradesh etc are some of the states where

significant number (more than 10%) of villages are yet to be electrified.

• Number of Villages (1991 Census) - 593,732 • Villages Electrified (30 May 2006) - 488,173 • Village level Electrification % - 82.2%

PowerGrid has been assigned the job for execution of rural electrification in 68 districts covering 87,300

Villages at an estimated cost of about Rs. 9,400 Crore. Cumulatively till March 2008, PowerGrid has

established infrastructure for electrification of 22,082 villages including 3 lakh BPL (Below Poverty Line)

connections under rural electrification program.

PRICING

At present (2009), the price per unit of electricity in India is about Rs. 4 for domestic consumers, and Rs.

9 for the commercial supply. The reason for the large difference between the two tariff slabs is that the

onus of the subsidies for domestic and agricultural power is placed on the commercial and industrial

consumers.

SUBSIDIES OFFERED BY GOVERNMENT

Several State Governments in India provide electricity at subsidized rates or even free to some sections.

This includes for use in agriculture and for consumption by backward classes. The subsidies are mainly as

cross-subsidization, with the other users such as industries and private consumers paying the deficit

caused by the subsidized charges collected. Such measures have resulted in many of the State Electricity

Boards becoming financially weak.

FUTURE OF POWER SECTOR IN INDIA

Objectives

• Sufficient power to achieve GDP growth rate of 8% • Reliable power • Quality power • Optimum power cost • Commercial viability of power industry • Power for all

Strategies

• Power Generation Strategy with focus on low cost generation, optimization of capacity utilization, controlling the input cost, optimization of fuel mix, Technology upgradation and utilization of Non Conventional energy sources.

• Transmission Strategy with focus on development of National Grid including Interstate connections, Technology upgradation & optimization of transmission cost.

• Distribution strategy to achieve Distribution Reforms with focus on System upgradation, loss reduction, theft control, consumer service orientation, quality power supply commercialization, decentralized distributed generation and supply for rural areas.

• Regulation Strategy aimed at protecting Consumer interests and making the sector commercially viable.

• Financing Strategy to generate resources for required growth of the power sector. • Conservation Strategy to optimise the utilization of electricity with focus on Demand Side

management, Load management and Technology upgradation to provide energy efficient equipment / gadgets.

• Communication Strategy for political consensus with media support to enhance the genera; public awareness.

Government Initiatives

The Government of India has an ambitious mission of POWER FOR ALL BY 2012. This mission

would require that our installed generation capacity should be at least 200,000 MW by 2012

from the present level of 144,564.97 MW. Power requirement will double by 2020 to

400,000MW.

The Indian government has set an ambitious target to add approximately 78,000 MW of

installed generation capacity by 2012.

In July 2009, India unveiled a $19 billion plan to produce 20,000 MW of solar power by 2020.

India has committed massive amount of funds for the construction of various nuclear reactors

which would generate at least 30,000 MW.

Multi Commodity Exchange has sought permission to offer electricity future markets.

ANALYSIS OF INDIAN POWER SECTOR

Demand – Supply Analysis

According to statistics published in May 2009, the difference between demand and supply is a shortage

of power of about 20,000MW, which is a deficit of about 10% in normal time and 14% at peak load. This

leads to destabilization of the national grid, which can be avoided by “load shedding” or rolling black-

outs i.e. cutting off the electric current for fixed duration on certain lines when the demand becomes

greater than the supply. Such interruptions in power supply result in lower performance of industries,

leading to a slowdown in industrial growth.

Position of Indian Power Industry vis-à-vis to other Developing Countries

The power industry in India is still mostly controlled by PSUs in the Government sector. The bureaucratic

policies produce only a mediocre level of operational efficiency. The existing Government policies are

not conducive for power companies to run on financially efficient terms. This is because large subsidies

are granted to domestic and agriculture sector consumers. Because of these subsidies, the State

Electricity Boards are financially sick. They are unable to build sufficient generation capacity to meet

demand. This leads to further increase in deficit.

The private sector in the power industry is subject to a lot of licensing boards – Pollution Control Board

clearance, Environmental clearance, difficulties in land acquisition etc. Due to these obstacles, the

growth of private power sector is slow when compared to its peer countries.

Availability of good quality fuel is a major hurdle faced by Indian power companies. Coal is the major

fuel for these plants. However, mining is still retained under the Public Sector. The coal is supplied

mostly by Coal India, a PSU whose production capacity is not commensurate to the demand. Also, timely

delivery is not ensured, leading to severe fuel shortages. The quality of coal in India is not very good

either, with around 40% of ash content and a low calorific value. All these factors pose severe problems

with respect to the fuel availability in India. As a result, private companies resort to depending on

imported coal for assured fuel availability, and are subject to international market price fluctuations.

This leads to a very high cost of generation of power. Other countries, on the other hand, have

privatized mining which leads to reduced and efficient fuel acquisition.

Lastly, India has very limited oil and natural gas reserves which are highly insufficient to meet demand.

So only coal-fired power plants are a viable and economical solution to the power demand in India. This

results in further issues like pollution and ash disposal, which are not present with oil fuelled power

plants.

Outlook of Indian Power Industry’s Transmission and Distribution

As the number of players in power generation increase, there will be a vast demand for transmission

and substation infrastructure. Large investments are required to upgrade and extend the existing powr

network, which cannot be accomplished solely by the Government. As a result, there is a high likelihood

of privatization or at least liberalization of power transmission sector too.

Transmission losses tend to be on the higher side in distribution of power, with about 32.86% in 2000-

01. This has to be reduced by adopting high technology equipment. The reduction of these losses is

essential to bring economic viability to the State Utilities.

Power theft is a major problem faced by the power transmission and distribution entities in India. This

may be eliminated by improving metering efficiency, proper energy accounting & auditing and improved

billing & collection efficiency.

Scenario of the Power Industry at State Level

All the State Electricity Boards are dependent on Government support for their day-to-day running.

Because of subsidized power schemes implemented by Government, the SEBs are unable to function

profitably. So they are unable to build new generation facilities to meet the demand. Hence industrial

growth is affected due to non-availability of power. Due to vast subsidization of domestic and

agricultural power, the onus is placed on commercial power consumers like industry. This leads to

slowdown of industrial growth.

Challenges Being Faced By Power Industry

The main challenge faced by the power industry is the high cost of power production. This is due to the

non-availability of fuel, partly caused by inefficient control of mining facilities. Inefficient functioning of

SEBs leads to inefficient supply-demand management.

Opportunities Existing in the Power Industry

The forces driving the market are the vast unfulfilled demand for power in the country owing to the

meteorical rise in industrial growth and consumer market as well as ongoing liberalization of market

which enables entry of more producers.

Imported fuel is becoming a viable option when stable and long time fuel linkages are made with

countries like Indonesia, South Africa, Russia, Australia where good-quality coal is abundantly available.

Dependence on open market fuel will lead to rise in cost of power generation.

Privatization of coal mining is another opportunity that can be implemented so that power producers

can economically produce fuel for power generation purposes.

CONCLUSION

The liberalization, privatization and globalization policy implemented in 1991 is solely responsible for

the revival and exponential rise of the Power Sector in India. The Government has emphasized the

importance of adequate power resources in maintaining the targeted GDP growth of 7% through the

recession. This is reflected in the Budget 2009-10, which has increased the allocation under Accelerated

Power Development and Reform Program (APDRP) by 160% over the previous year. The measures

planned by the Government as part of its POWER FOR ALL BY 2012 scheme, if implemented properly,

will enable explosive growth in all levels of the industrial sector.

All these factors indicate that the Power Sector of India is firmly set on its track to become one of the

“Sunrise Sectors” of future India.

REFERENCES

http://www.mapsofindia.com/maps/india/thermalpowerplants.htm

http://en.wikipedia.org/wiki/Economic_liberalisation_in_India

http://en.wikipedia.org/wiki/Electricity_sector_in_India

http://en.wikipedia.org/wiki/Nuclear_power_in_india

http://en.wikipedia.org/wiki/Nuclear_Power_Corporation_of_India

http://www.powergridindia.com/

http:// www.cea.nic.in/

http://www.livemint.com/2009/05/05005836/India-has-12-power-shortage.html

http:// www.cergindia.com/