Vikas Gupta, Mba (Et),Upes
-
Upload
vikasgupta27 -
Category
Documents
-
view
224 -
download
0
Transcript of Vikas Gupta, Mba (Et),Upes
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
1/60
POWER SECTOR SNAPSHOT Page 1
POWER SECTOR SNAPSHOT
BY: - VIKAS GUPTA
M.B.A. ET
Roll No. 39
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
2/60
POWER SECTOR SNAPSHOT Page 2
TABLE OF CONTENT
S.NO. Topic Page No.1 Executive Summary 3-9
2 Introduction 10-12
3 Generation 13-19
4 Transmission 20-27
5 Distribution 27-34
6 Rural Electrification 35-37
7 Power business:-Incentives 37-388 Generation 37-39
9 Transmission 39-40
10 Distribution 40-42
11 Power Companies in India 44
12 Power Trading 45-46
13International Scenario in
Power Trading47-50
14Indian Power Trading
Scenario50-58
15 Conclusion 59
16 List of Abbreviations 60
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
3/60
POWER SECTOR SNAPSHOT Page 3
EXECUTIVE SUMMARY
POWER SECTOR SCENARIO DEVELOPMENT AND IMPROVEMENT
Power is a critical infrastructure for economic development and for improving the
quality of life. The achievement of increasing installed power capacity from 1362 MW to
over 100,000 MW since independence and electrification of more than 500,000 villages
is impressive in absolute terms.
However, it is a matter of concern that the annual per capita consumption of India, at
about 700 kWh is among the lowest in the world. Further, people in a large number of
villages have no access to electricity. The end users of electricity like households,
farmers, commercial establishments, industries are confronted with frequent powercuts, both scheduled and unscheduled. Power cuts, erratic voltage and low or high
supply frequency have added to the power woes of the consumer. These problems
emanate from:
inadequate power generation capacity; lack of optimum utilisation of the existing generation capacity; inadequate inter-regional transmission links; inadequate and ageing sub-transmission & distribution network leading to
power cuts and local failures/faults;
large scale theft and skewed tariff structure;
slow pace of rural electrification; Inefficient use of electricity by the end consumer; lack of grid discipline
Power is a concurrent subject under the Constitution. The States have the greater share
of generation and transmission assets and almost the entire distribution under their
control. They would need to play a very proactive role in effecting institutional and
result oriented changes. Many strategies outlined in the document are inter-linked and
are mutually supportive in terms of addressing the problems. However they have been
classified subject-wise for the purpose of this document.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
4/60
POWER SECTOR SNAPSHOT Page 4
GENERATION
Addition and creation of generation capacity to remove shortages
CURRENT INSTALLED CAPACITY (As on 30-04-10)
The large coal reserves in the country provide a ready and economical resource and
ensure energy security. Hence, coal has been identified as the mainstay fuel for power
generation till 2012. Emphasis has been laid on setting up large pit head stations to
avoid high costs associated with transportation of high ash bearing Indian coal and
overstraining the already stretched rail network.
Tentative Capacity Addition Plan during 11th
Plan
(Figures in MW)
Hydroelectricity is clean energy and its generation is not linked to issues concerning fuel
supply, especially the price volatility of imported fuels. It enhances our energy security
and is ideal for meeting peak demand. Less than one fourth of the vast hydel potential
of 1,50,000 MW has been tapped so far. Compared to the high utilisation of hydro
All
India
Thermal Thermal Thermal Thermal Nuclear Hydro Other Total
Coal Gas Diesel Total
MW 84448.38 17055.85 1199.75 102703.98 4560.00 36863.40 15521.11 159648.49
%age 52.9 10.7 0.8 64.3 2.9 23.1 9.7 100.0
Sector/Fuel Total
Hydro 17,189
Thermal 46,114
Coal/Lignite 44,000
Gas/LNG 2,114
Nuclear 3,160Total 66,463
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
5/60
POWER SECTOR SNAPSHOT Page 5
potential in countries like Norway (58%), Canada (41%) and Brazil (31%), the utilisation
of only 17% of its hydel potential by India is extremely low. In fact, the share of hydro
generation in India has gradually declined during the past 25 years.
Consequently, thermal generation, which should generally be used for base load
operation, is also being used to meet peaking requirements. As against the desirablehydro share of 40 per cent, the current share is only about 25 per cent in India.
It is estimated that for building over 1,00,000 MW of additional power capacity and
associated transmission & distribution infrastructure, nearly Rs. 8,00,000 crores of
investments would be needed in the next decade. The investors have been wary of the
sector due to lack of confidence in getting returns on their investments. The payment
security measures taken till now have not yielded desired results. There is little doubt
that resource generation within the sector through prompt and efficient collection of
appropriate user charges from all the electricity consumers is the only long-term
solution to attract investments in the sector. The sector has to be made financially
strong from within in order to attract investments from outside. Pending fructification
of the long term measures in this regard, the Ministry has taken steps to set up an
alternate payment security mechanism for the investors as an interim resource
mobilisation strategy.
There have been major slippages in meeting targets of capacity addition during the VIII
and IX Five-Year Plans. Only 53.77 per cent of the capacity addition target was achieved
during the VIII Plan. During the IX Plan, too, only about half of the target of 40,245 MW
is likely to be achieved. To avoid such slippages in the X and XI Plans, a comprehensive
project monitoring and control system has been put in place. Special emphasis has been
laid on monitoring of projects at pre-implementation stage. A Power ProjectsMonitoring
Committee has been set up. Special Secretary (Power) has been taking weekly reviews
to monitor the progress of power projects to be identified for commissioning up to
2012. To ensure greater success in capacity addition, the central power generating
companies under Ministry of Power are being asked to add 43 per cent of the total
required capacity as against a contribution of 23 per cent during the IX Plan.
In view of the fact that addition of new capacity takes relatively longer time, strategies
have also been formulated to augment power supply in short/medium run. These are:
Increased generation through Renovation and Modernisation (R&M) of oldstations.
Utilisation of the surplus capacity of the captive power plants into the grid Demand Side Management (DSM) to flatten the demand curves (introducing
time of day tariffs and metering).
Introduction of a new system of matching time and load profiles for differentzones in the country.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
6/60
POWER SECTOR SNAPSHOT Page 6
Energy Conservation (The Ministry is piloting the Energy Conservation Bill, which,when enacted, will provide necessary legal framework for promoting
conservation and efficiency).
Evacuation of power from the power surplus eastern region.
Transmission
Inadequate investments in transmission & distribution infrastructure have resulted in
power evacuation constraints from the generating stations. The problem has been
severe in the eastern region. Concentration of coal reserves and hydel sources in a few
geographic pockets calls for an effective inter-regional network to transmit the
electricity generated in fuel rich regions to other regions. Accordingly, a perspectiveplan has been developed to build 30,000 MW inter-regional transmission capability by
2012. The formation of a national grid will improve reliability, quality and economics of
power supply. Ultimately, national grid is the solution to the problem of inter-regional
imbalances.
However, in view of idling of surplus power capacity in eastern region, immediate steps
to facilitate transfer of power from eastern region are being undertaken. Pursuant to
the enactment of legislation in 1998, permitting private investment in transmission,
detailed guidelines have been issued for attracting private investment in transmission
projects. Due to mismatch in generation and demand, there is a tendency among stateutilities to overdraw from the grid. This coupled with inadequate capacitors, results in
low frequency and low voltages in the grid and the cascading effect could lead to
collapse of the entire regional grid. Any failure of this proportion leads to colossal
economic losses. To maintain grid discipline, measures have been identified for strict
enforcement of the Grid Code formulated by the CERC. The failure of the Northern Grid
on January 2, 2001 had effectively derailed normal activities besides causing losses
amounting to several hundred crores.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
7/60
POWER SECTOR SNAPSHOT Page 7
Distribution Reforms - The Core of Sector Reforms
The toughest roadblock stalling power sector development has been the poor financial
health of the SEBs, which, in turn, is mainly due to poor performance on the distribution
front. Out of total energy generated, only 55% is billed and only 41% is realised. The gap
between average revenue realisation and average cost of supply has been constantly
increasing. During the year 2000-2001, the average cost of supply was 304
Paisa per unit and average revenue per unit was 212 paisa per unit i.e. there was a gap
of 92 paisa for every unit of power supplied. All this has caused erosion in the volume of
internal resources generation by the SEBs.
The annual losses of SEBs have reached a level of about Rs. 26,000 crores. Consequently
they are unable to make full payments to CPSUs for purchase of power and coal. This
has resulted in accumulation of outstanding of more than Rs. 40,000 Crores by the SEBs.
The growth and performance of Central Power
Sector Utilities (CPSUs) are also adversely affected by this. Poor creditworthiness of SEBs
has effectively blocked investments by private sector despite the enabling andencouraging framework laid down by the
Centre.
The major factors responsible for financial sickness of SEBs are:
l Skewed tariff structure leading to unsustainable cross subsidies l Huge T&D losses, largely due to outright theft and unmetered supply. It has
been estimated that theft alone causes loss of about Rs. 20,000 crores annually
Lack of accountability in distributionPower sector development cannot accelerate until the above issues are addressed with
full commitment at all levels. Accordingly, distribution reforms have been identified as
the key area for putting the sector on the right track. The strategies identified by
Ministry of Power in this direction include:
Development of district level distribution improvement plans/projects for alldistricts. The Ministry/CEA will help the States in capacity building measures in
areas related to technical and commercial activities as well as planning and
deployment of personnel. Assistance would also be provided to SEBs to improve
their accounting practices.
Setting up of district level Energy Committees for monitoring and resourceplanning.
Development of 60 distribution circles as Centres of Excellence for distributionreform. The funds for the project would be provided by the Centre under the
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
8/60
POWER SECTOR SNAPSHOT Page 8
Accelerated Power Development Programme (APDP). These Centres would act
as models for replication in other districts.
Hundred per cent metering and effective Management Information System (MIS)for monitoring at feeder level, backed up by detailed energy audit to bring
accountability into the system at all levels.
Taking high voltage lines up to the load centre to prevent theft of power andreduce technical losses.
Signing of MOUs with States for undertaking distribution reforms in a timebound manner and linking the support of Government of India to achievement
of predetermined milestones. (Sixteen states have signed the MOUs so far).
Privatisation / corporatisation of distribution Tariff rationalisation by SERCs (16States have set up SERCs and 9 have issued tariff orders).
Electrification of Villages and Households
The pace of rural electrification in the VIII and IX Plans has declined. Nearly 80,000
villages are yet to be electrified. Only 31 per cent rural and 45 per cent urban
households have been covered so far. It is planned to cover all non-electrified
households by the year 2012. In order to accelerate rural electrification, it has been
proposed to treat rural electrification as a Basic Minimum Service in the Prime
Ministers Gramodaya Yojana. The Ministry is also taking a number of other specificmeasures including strengthening of the rural distribution network under the
Accelerated Power Development Programme (APDP). The objective of the Ministry is to
complete electrification of 62,000 villages by 2007, that is within the next 6 years and
18,000 remote villages (through renewable sources) by 2012. Decentralised generation
and distribution through district level Energy Committees have been envisaged to
contribute in this endeavour. All households are to be covered by 2012.
Providing affordable powerWith increasing prices of fuels and cost of installations, the cost of power generation has
significantly increased. While attending to the task of doubling the countrys generation
capacity by 2012, high priority is to be given to reduce the cost of power to enable
different segments of population and the economy to effectively utilise power as an
input. In order to recommend strategies to reduce the cost of power, an
Inter-Disciplinary Group of Experts was constituted. The Group has submitted its Report.
The implementation of a number of strategies outlined in the Report would help in cost
reduction efforts and provide affordable power to the consumer.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
9/60
POWER SECTOR SNAPSHOT Page 9
Benchmarking in project costs, adoption of best practices, and choosing least cost
options in capacity addition are going to be promoted. Competitive bidding will be
adopted as a transparent and cost reducing approach. Already the Ministry has ensured
that its PSUs post all their tenders on web-sites. Some State power utilities have also
done so.
Sustainable power developmentConcerns relating to pollution and the disposal of the large amount of ash from coal
based power stations, which are the mainstay of Indias power generation, are being
addressed through strategies to promote environmentally sustainable power
development. The useful recommendations of the Fly Ash Mission of TIFAC are to be
implemented. The Ministry is taking steps for making the use of fly ash mandatory for
road and bridge construction, as well as for construction of Government buildings. Fiscal
incentives to supplement the market mechanism for taking up production and
promotion of fly ash products are also envisaged.
All Central utilities have been advised to adopt ISO 14001 standards. Afforestation is
being given major emphasis and a Special Purpose Vehicle (SPV) is being set up for
afforestation. Introduction of super critical technology and clean coal technologies is
also planned to generate power with maximum efficiency and minimal pollution. The
Ministry is taking environmental initiatives in keeping with the global developments and
mechanisms. Thus, the Ministry is striking a fine balance between the power
development imperatives and the emerging concerns for the environment.
Upgrading technical efficiency and skill levels, and re-orientationTo make the power sector truly efficient and competitive in the changing scenario, steps
have already been taken to impart greater thrust to research and development, training
of the human resources in the power sector and adoption of progressive management
practices and tools, (including IT). Personnel are also being educated about their
changed roles in the power reform scenario.
Emphasis on commercialisation of the sector is also being imparted. A Standing
Committee on Research and Development has been constituted to draw up a
Perspective Research and Development Plan to ensure optimum utilisation of the
infrastructure and provide a standing forum for R&D activities in the power sector.
Another Committee has been set up to formulate a National Training Policy for PowerSector and to develop a national level action plan for training of the power
professionals to align their skills and mindset to the changing requirements. Integration
of training facilities available in the sector is also planned to optimise their utilisation.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
10/60
POWER SECTOR SNAPSHOT Page 10
INTRODUCTION
Accelerating economic growth and achieving higher standards of living depend upon the
availability of adequate and reliable power at an affordable price. Unlike other
commodities, electricity cannot be stored for future use. In other words, its generation
and consumption have to be simultaneous and instantaneous. It is noteworthy that
within a fraction of a second of clicking the power switch, the consumer puts into
motion an intricate transaction involving a power generation company (like NTPC), a
power transmission company (like POWERGRID), and a bulk power purchaser and retail
distributor (like DVB). The unique features of power as a commodity or service make the
dynamics of its supply and demand difficult to manage. Installing power generation,
transmission and distribution capacity is a complex, time consuming and expensive
process. Power is among the most capital-intensive infrastructure sectors.
Power has been placed in the list of concurrent subjects under the Indian Constitution
with the Centre and the States both having jurisdiction. After independence, the StateElectricity Boards (SEBs)/State Electricity Departments were the sole utilities (except a
few licensees in private sector) responsible for generation, transmission and distribution
of electricity. To supplement the efforts of States in bridging the yawning gap between
demand and supply of power, it was decided, in mid seventies, to set up generating
stations and associated high/ extra high voltage transmission lines in the Central Sector.
Today, States control about 60 per cent of the countrys generation capacity, 70 per
cent of the transmission network, and almost 100 per cent of the distribution system.
Problems confronting the sector
The achievement of increasing installed power capacity from 1362 MW to over 100,000
MW since independence and electrification of more than 500,000 villages is impressive.
However, it is a matter of concern that the annual per capita consumption, at about 350
kWh is among the lowest in the world. Still many households in a large number of
villages have no access to electricity. The end users of electricity like households,
farmers, commercial establishments, industries etc. are confronted with frequent power
cuts, both scheduled and unscheduled. Power cuts, erratic voltage levels and wide
fluctuations in the frequency of supply have added to the power woes of the
consumer. The consumers are resorting to captive power supply arrangements of
various types ranging from 300 Mega Watts (industry) to 250 Watts (households).
Almost every shop in an urban market place has a generator set. Most establishments
have battery operated inverters and diesel generation sets. Most urban households
have voltage stabilizers for different appliances.
In fact the money spent by the domestic consumer on these standby power supply (DG
sets / Inverters) and power conditioning (stabilisers) arrangements could be among the
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
11/60
POWER SECTOR SNAPSHOT Page 11
highest in the world. The same money could be more gainfully invested through
corporate investments in power generation, transmission and distribution with assured
returns on investments.
The major reasons for inadequate, erratic and unreliable power supply are:
Inadequate power generation capacity; Lack of optimum utilisation of the existing generation capacity; Inadequate inter-regional transmission links; Inadequate and ageing sub-transmission & distribution network leading to
power cuts and local failures/faults;
Large scale theft and skewed tariff structure; Slow pace of rural electrification; Inefficient use of electricity by the end consumer.
Strengths and opportunities in the sector
Abundant coal reserves (enough to last at least 200 years). Vast hydroelectric potential (150,000 MW). Large pool of highly skilled technical personnel. Impressive power development in absolute terms (comparable in size to those of
Germany and UK).
Expertise in integrated and coordinated planning (CEA and PlanningCommission).
Emergence of strong and globally comparable central utilities (NTPC,POWERGRID,).
Wide outreach of state utilities. Enabling framework for private investors.
Well laid out mechanisms for dispute resolution. Political consensus on reforms. Potentially, one of the largest power markets in the world
Objectives
To provide Power on Demand by 2012. To make the sector commercially sound and self sustaining. To provide reliable and quality power at an economic price. To achieve environmentally sustainable power development. To promote general awareness to achieve consensus on the need for reforms.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
12/60
POWER SECTOR SNAPSHOT Page 12
Strategies
The strategies to realise above objectives have been evolved after a comprehensive,
integrated and realistic assessment of the strengths of the sector and of the challenges
confronting it.
The process has led to a range of mutually interdependent and complementary
strategies to counter the challenges and exploit the strengths/opportunities. The
strategies integrate the supply side imperatives with demand side management, short
and medium term measures with long-term action plans, operational measures with
institutional and structural changes.
The laid down objectives can be realised only if the plan is effectively implemented by
all stake-holders in the power sector. Power is a concurrent subject under the
Constitution.
The States, have the greater share of generation and transmission assets and almost the
entire distribution under their control. They would need to play a very proactive role in
effecting institutional and result oriented changes. Many strategies outlined in the
document are inter-linked and are mutually supportive in terms of addressing the
problems.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
13/60
POWER SECTOR SNAPSHOT Page 13
GENERATION
Today, most of the regions in the country are plagued with power shortages leading to
erratic and unreliable supply. The problem becomes acute during peak hours and thus
necessitates planned load shedding by many utilities to maintain the grid in a healthy
state. The all India average shortages during 2001-2002 were 7.8 per cent in terms of
energy and 13 per cent in terms of peak load. There were considerable regional, local,
rural-urban and seasonal variations. The region wise shortages during the year are
depicted in the bar diagram. Based on the projections of demand made in the 16th
Electric Power Survey, additional generation capacity of over 1,00,000 MW needs to be
added to ensure Power on Demand by2012. This amounts to nearly doubling the
existing capacity of about 1,00,000 MW. In other words, the achievements of more than
five decades need to be replicated in the next decade. Apart from massive resource
mobilisation, the task of identifying a basket of techno-economically viable and
environmentally sustainable projects in itself is a daunting challenge. The major
strategies to augment the generation capability to the required level are:
Planning of targets for each sector.
A capacity addition of 46,185 MW has been fixed for X Five Year Plan and balance 60,
885 MW in XI Plan. Central Utilities under Ministry of power are targeted to add 43
percent of required capacity (against 23% in IX plan).
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
14/60
POWER SECTOR SNAPSHOT Page 14
The large coal reserves in the country provide a ready and economic resource, which
ensures energy security. Hence, coal would continue to be the mainstay fuel for power
generation till 2012. Emphasis has been laid on setting up large pit head stations to
avoid high costs associated with transportation of high ash bearing Indian coal and
overstraining the already stretched rail network. To reduce the environmental impact
and increase efficiency, the strategies adopted by the Ministry include introduction oflarge sized units (660 MW) employing the state-of-the-art super critical technology .
Further, in view of their shorter gestation period, higher thermal efficiency and
environmental benefits, few combined cycle power projects have been identified.
Coastal locations have been given preference for such plants in order to minimise cost.
Resource Planning
It is estimated that for building over 1,00,000 MW of additional power capacity and
associated transmission & distribution infrastructure, nearly Rs. 8,00,000 crores of
investments would be needed in the next decade.The problem of non-availability of escrow capacity with most State utilities has been
holding up the financial closure of most private sector projects. There is little doubt that
resource generation within the sector through collection of appropriate user charges
from all the electricity consumers is the only long term solution to attract investments in
the sector. The sector has to be made financially strong from within in order to attract
investments from outside. In view of the current policy against giving counter
guarantees and pending fructification of reforms measures, the Ministry has taken steps
to set up alternate payment security mechanism for the investors as an interim resource
mobilisation strategy. The mechanism has been evolved in consultation with leading
financial institutions like IDBI, ICICI, SBI Caps etc. on the basis of a memorandum ofagreement/ understanding to be signed with the reforming States wherein the States
agree on milestone based package of reforms like restructuring of SEBs, setting up of
SERCs, reduction in T&D losses, 100% metering, improvement in PLF, energy audit etc.
This would bring about improvement in revenue collection and financial health of the
SEBs and enable them to provide escrow before the commercial operation date of the
power project. In fact, 16 states have already entered into such MOUs. A system of
monitoring the performance in the Ministry has been introduced.
A Committee of Experts has been constituted to identify the sources of funds including
Government funding, multi-lateral and bilateral assistance, institutional financing,
market borrowings, internal resources, private investment etc; and\ suggestinstitutional policy and other measures required for such massive resource mobilisation.
An action plan to expedite financial closure of private sector projects is on the anvil. The
policy framework has also been liberalised to encourage domestic/Foreign Direct
Investment in power sector. The measures taken in this regard include allowing Foreign
Direct Investments in generation, transmission, distribution and power trading on the
automatic route without any monetary ceiling.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
15/60
POWER SECTOR SNAPSHOT Page 15
Comprehensive monitoring of project implementation
Against targeted capacity addition plan of 30, 538 MW in VIII Five-Year Plan, actual
capacity addition was only 16423 MW (54%). Similarly, in IX Plan, against the target of
40,245 MW, only about 20,420 MW (51%) is likely to fructify. Thus, there have been
major slippages in both Plans. In order to ensure that such slippages are not repeated in
future, the Ministry has reviewed the project monitoring mechanism of the major
Central Power Sector Undertakings. It emerged from the review that most of the CPSUs
are having a three tier monitoring system to monitor the progress of projects under
implementation the three tiers are; a milestone oriented detailed scheduling at working
level (Level III), detailed package wise scheduling at the Project Manager level (Level II)
and an overall Master Control Network scheduling at top level The monitoring at
oganisational level is supplemented by a comprehensive and periodic review by CEA and
Ministry of Power (Level 0). With the help of NIC, the progress of ongoing projects is
reported on the Wide Area Network (WAN) integrating the Ministry of Power, theCentral Electricity Authority and all CPSUs. Thus the project monitoring of ongoing
projects is comprehensive and the problem of slippages of these projects is unlikely.
The review of the system revealed that monitoring mechanism of the projects at pre-
implementation stage was not as vigorous as it was for projects already under
implementation (or ongoing projects). The Ministry of Power has now strengthened the
monitoring systems for such projects. This would enable monitoring and follow up from
feasibility to ordering stage. A Power Projects Monitoring Committee has been set up.
Special Secretary (Power) has been taking weekly reviews to monitor the progress of
power projects to be identified for commissioning up to 2012. Efforts are also underway
to have an institutional arrangement to expedite interstate inputs for early clearance of
projects.
Integrated Action Plan for power development including Nuclear and Non
Conventional Energy Sources
India is endowed with vast energy resources, both conventional and non-conventional.
Meeting the additional capacity demand of over 1,00,000 MW requires taking
advantage of all economically viable sources of energy in an optimum manner within
the energy mix. Till now there has been a pre-dominance of coal based thermal power
plants in Indias power sector. The present nuclear capacity is 2900 MW which accounts
for only 2.9% of the installed capacity. Similarly the total installed capacity based on
nonconventional energy sources is only about 1700 MW consisting of 1269 MW wind,
257 MW biomass and 217 MW small hydro power. This constitutes less than 2% of tota
installed capacity in the country.
In the new millennium, environment compulsions on one hand and the need to achieve
energy security on the other demand thrust on development of nuclear power and
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
16/60
POWER SECTOR SNAPSHOT Page 16
power from nonconventional resources. The Vision 2020 of the Department of Atomic
Energy envisages a cumulative installed capacity of 20,000 MW by the year 2020.
Similarly, the Ministry of Non-Conventional Energy Sources has recently announced a
National Renewable Energy Policy. The policy envisages capacity addition of 10,000 MW
during the time-frame 2002- 2012. Hydro projects up to 25 MW have already been
designated to this Ministry for speedier development. To ensure integrateddevelopment, a Coordination Committee for Power has been constituted for close
coordination amongst the concerned Ministries to deliberate on issues pertaining to
generation programmes, evacuation schemes, operational issues and grid related
problems. Secretary (Power) chairs the Committee, with Secretary (Department of
Atomic Energy), Secretary (Non-Conventional Energy Sources) Principal Adviser, Energy
(Planning Commission) and Chairman(Central Electricity Authority) as members.
SHORT TERM MEASURES
Since the gestation period for building fresh capacity is large, short term measures havebeen identified for quick increase in generation. These are:
Supply of surplus captive power to the grid
The captive power capacity in the country is estimated at about 20,000 MW. One of the
options available to increase generation in the short term is to enable surplus captive
power capacity to flow into the Grid. Accordingly, the States have been requested to
evolve a comprehensive captive power generation policy with facilities for purchase of
power and wheeling of surplus power from captive generating plants. In this regard a
draft Captive Power Policy prepared by CEA (in consultation with States) has been
forwarded to all the States/Union Territories in July, 2001. The suggested captive policy
guidelines are:
Liberal permission may be accorded for setting up of hydro or cogenerationcaptive plants in the States.
Captive power plants may be allowed if State/SEB or successor entities areunable to supply required power supply. Such a captive power plant can be
considered for the uninterrupted power supply to the industry even if the State
is surplus in power.
Units in Special Economic Zone (SEZs) and industries/ entities may be liberallyallowed to set up captive power plants.
The captive power plant based on coal/ liquid fuel/ gas as a fuel may bepermitted to build 200% of the requirement of industry (if the State is deficit in
power) and sell the surplus power to SEB..
Third party sale is also permissible with the approval of SEB.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
17/60
POWER SECTOR SNAPSHOT Page 17
Improved generation through Renovation & Modernisation (R&M)
Though the average growth in capacity addition during the last decade has been around
4.4 per cent, the growth of electricity generation during the same period has been
around 7.0 per cent. This has been achieved through steady improvement in the
average All India Plant Load Factor (PLF) from 53.8 per cent in 1990-91 to 69 per cent in2000- 01.
CEA has identified that 170 thermal units, with installed capacity of 11,000 MW and 35
Hydel units with installed capacity of 3000 MW need renovation and modernisation.
Uprating their performance/ life extension are cost effective methods of capacity
creation (Rs. 1 crore per MW for Thermal and Rs. 60-70 lakhs per MW for Hydro as
compared to Rs. 4 to 5 crores per MW for new green field power projects). State-wise
R&M action plan is being formulated. Annual additional generation benefit of about 90
billion units (20% of existing annual generation) is expected through R&M measures.
Under the Accelerated Power Development Programme (APDP) funds would be
provided for Renovation and Modernisation schemes.
Improved PLF through other short term measures
CEA has been asked to prepare an action plan for improvement in the Plant Load Factor
and identifying generating plants having PLF less than 75%.
Capacity creation through Energy Conservation & Demand Side Management.
There has been over emphasis on the supply side management in the power sector so
far in India. There is an estimated potential of 20, 000 MW through energy efficiency
and Demand Side Management (DSM). In order to minimize the overall requirement
and cost of power, energy conservation & DSM have been accorded high priority.
It was resolved, in the Chief Ministers / Power Ministers Conference on 3rd March 2001,
to implement an effective programme in the field of DSM through:
Energy efficient bulbs, tube lights and agricultural pump sets Time of the day metering and differential tariff for peak and off peak hours Suitable mass awareness and extension efforts. The Ministry is promoting
introduction of time-of-the day tariff, which will induce industries to shift
production from peak to off peak period.
The potential benefits to be derived by promoting end-use efficiency are:(i) Possibility of availability of nearly 15,000 MW through end-use energy efficiency.
(ii) Saving potential of 30-35% each in industry and agriculture by retrofitting with
efficient equipment / pump sets.
(iii) Saving potential of 25-30% in commercial / Government establishments and
residential houses.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
18/60
POWER SECTOR SNAPSHOT Page 18
OTHER PERFORMANCE IMPROVEMENT INITATIVES
Energy efficiency/conservation measures encourage consumers to use energy more
efficiently, which will result in reduced energy consumption thereby reducing cost and
increasing productivity. Load Management will help in shifting electricity load from peak
to off peak period.
Enactment of an enabling legislation on energy conservation giving the Central and
State Governments statutory powers for promoting and enforcing a regime of energy
conservation in the country is being promoted. The scope of the proposed Energy
Conservation Bill includes all forms of energy viz. coal, oil, nuclear, renewable sourcesetc. For implementing the provisions of the proposed Bill, a Bureau of Energy Efficiency
is to be set up. The Bill is pending in the Parliament for enactment. The salient features
of the Bill are:
Setting up of energy conservation standards for any equipment or applianceconsuming, generating, transmitting or supplying energy. Certain industries,
establishments and users of energy to be notified as designated consumers
keeping in view the intensity and quantity of energy consumed. Mandatory
energy audit for all designated consumers, as and when required by the
designated authority.
Promotion of mass awareness at both the Central and the State levels for energyconservation, consumer education and guidance.
Government to take steps to encourage preferential use of energy efficientequipment and appliances.
Constitution of an Energy Conservation Fund at the Centre and the States forutilizing any grant or loans made available for promoting energy conservation.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
19/60
POWER SECTOR SNAPSHOT Page 19
Time zones planning
The Ministry has decided to set up a Committee to go into the issue of matching time
and load profiles so as to help manage the demand (specially peak demand) across
different regions in accordance with the identified timings of high and low demands in
different parts of the country.
Higher performance targets in the MOUs with the Central Power Sector Utilities
(CPSUs)
The Ministry is planning to make the CPSUs further improve their performance on all the
parameters. One of the steps envisaged in this regard is to make the MOU targets in
terms of generation, efficiency, productivity and capacity addition etc. progressively
higher. With a view to achieving excellent ratings, the CPSUs will strive harder and this
will result in gains to the sector.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
20/60
POWER SECTOR SNAPSHOT Page 20
TRANSMISSION
The investments in and growth of Transmission, sub- Transmission and Distribution
Systems have not matched the increase in generating capacity. Consequently, there are
constraints of power evacuation from generating stations. The problem is severe in the
eastern region, where surplus capacity is idling due to lack of absorption network and
evacuation facilities. The power sector development demands a thrust on Transmission
sector and the following blueprint is envisaged for this sector.
Formation of National Grid
Before the beginning of the planning era in 1951, the electricity supply industry in the
country consisted of generating stations supplying power to loads in their immediate
vicinity. With a view to promote reliability of power supply and achieving operating
economies, interconnections of individual systems was done leading first to the
formation of State grids. The uneven geographical distribution of exploitable energyresources (coal and hydro potential in the country) necessitated large scale
transportation of coal across the State boundaries. A decision was taken in the early
sixties to create regional electricity grids as basic units for power planning and
operations of the electric power system. In the seventies, the regional grids were in
position and advantages of sharing generating capacity between the States, and the
inter-connected operation were being obtained. In the eighties, with the commissioning
of the Regional power stations by Central sector Generating Companies (NTPC, NHPC)
and construction of EHV transmission lines by them transcending state boundaries, the
development of regional grids was further accelerated.
This has necessitated the formation of a National Power Grid to fulfill the following
objectives:
Enable transfer of power from power surplus regions to deficit regions. Enable optimal development and utilisation of coal and hydro resources, in the
overall interest of the nation.
Improve economy, reliability and quality of power supply.Towards the objective of formation of National Grid, a number of inter-regional
schemes have been planned for phased development. The brief status including inter-
regional links under operation, approved schemes and future programme is presented
ahead:
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
21/60
POWER SECTOR SNAPSHOT Page 21
With the help of the above links, transfer of power among the regions, especially from
the power surplus Eastern Region
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
22/60
POWER SECTOR SNAPSHOT Page 22
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
23/60
POWER SECTOR SNAPSHOT Page 23
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
24/60
POWER SECTOR SNAPSHOT Page 24
Future Programme
Looking into the future demand and availability of generation resources, a Perspective
Transmission Plan has been drawn up indicating the major inter-regional transmission
highways to be developed by 2011-12. This will ultimately lead to the formation of a
strong National Grid. These highways are proposed to be established in phases matchingwith the requirement of inter-regional power transfer.
As per the envisaged programme, cumulative capacity of the inter-regional links will be
enhanced as shown in the graph.
Evacuation of surplus power from Eastern Region
Eastern Region at present is having substantial energy surplus, as load growth has not
been commensurate with the generation capacity addition, leading to non-utilisation of
available capacities. The total installed capacity in the Eastern Region is of the order of
15,000 MW(out of which NTPC contributes 3900 MW) whereas the peak load is around6500- 7500 MW and off-peak load is 4000-4500 MW.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
25/60
POWER SECTOR SNAPSHOT Page 25
While the formation of National Grid is an ultimate solution to remove inter-regional
imbalances, the following schemes have been completed on priority basis to facilitate
power transfer from surplus Eastern Region to other deficit Regions,
220 kV 3rd Ckt Korba-Budhipadar connecting ER & WR Jeypore-Gazuwaka HVDC Bipole between ER & SR 220 kV S/c Balimela-Upper Sileru between ER & SR 400 kV D/c Bongaigoan-Malda between ER & NER 220 kV D/c Birpara-Salakati between ER & NER 220 kV S/c Dehri-Mughalsarai between NR & ER 400 kV Sasaram-Sarnath-Allahabad line between NR & ER
With the above concerted efforts, energy exchange from Eastern Region has increased
to the tune of about 6,790 MUs in 2000-2001 as against 5500 MUs in 1999-2000,
registering a growth of more than 23%. However total transfer of only 1100 MW is
possible currently.
Inter-regional links to increase the transfer to 4400 MW in short run involving an
investments of Rs.17,600 crores are proposed.
A task force under the Chairmanship of Special Secretary (Power) has been constituted
by Ministry of Power to formulate a short-term action plan for evacuation of surplus
power from Eastern Region.
Monitoring of grid discipline and grid issues
Grid discipline is a pre-requisite for maintenance of primary grid parameters namely
frequency and voltage within permissible limits for safe, secure and stable operation of
the grid. However in India, the operating frequency goes beyond the permissible range
of 49-50.5 Hz. Mainly due to: -
Mismatch in generation and demand.
Due to chronic power shortages, there is a tendency among state utilities tooverdraw from the grid during peak hours. Predominance of thermal / base load stations and inadequate peaking capacity
(hydro / Gas Turbines) limiting the flexibility of generation control as per load
pattern of the grid.
Lack of grid discipline leads to critical situations of the kind, which happened on the 2nd
of January 2001 in the Northern region, when the entire grid failed. A failure of this
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
26/60
POWER SECTOR SNAPSHOT Page 26
proportion not only causes severe stress on the power plant equipment and reduces its
life, it also has a cascading effect on the industries and the people. It adds up to huge
economic losses and causes immense damage to the countrys image. After the grid
failure in January 2001, at the instance of the Minister of Power, the Chairman, CEA
conducted an inquiry and submitted its report. Follow-up action on the report is being
taken on priority. The following measures have already been taken. :
Modification and modernisation of Panipat 400 KVA substation. In-principle approval of CEA given to (i) series compensation for Panki-
Muradnagar, (ii) providing interconnection between 400 KVA substations of
POWERGRID and UPPCL at Agra, and (iii) preponing of Allahabad-Mainpuri-Ballabgarh 400 KV double circuit line.
All States have been advised to observe strict grid frequency discipline, promptlycarry out the instructions of RLDC, ensure free governor operation of their power
plants and expedite capacitor installation programme.
As a result of these measures, there has been substantial improvement in grid
frequency. However the situation is being closely monitored to prevent its recurrence.
Encouraging FDI in Transmission
Out of the Rs. 8,00,000 crores required for doubling the power capacity to 2,00,000 MW
by the year 2012, about Rs. 2,00,000 crores would be required for the associated
transmission system including creation of a National Grid. Out of this, an investment of
about Rs.70,000 crores would be required in Central Sector Transmission Systems alone.
POWERGRID is expected to mobilise an investment of Rs.41,000 crores from its own
resources. The balance requirement of Rs.29,000 Crores is proposed to be mobilisedthrough private investments.
Considering the scale of investment and the volume of expansion required, attracting
large private investment in transmission is essential. The Government of India amended
Indian Electricity Act and Electricity Supply Act in 1998, to enable private sector
participation in transmission sector. In January 2000, the Ministry of Power has issued
detailed guidelines for private sector participation in transmission. The Guidelines
envisage two routes for inviting private sector participation. One route is through Joint
Venture of POWERGRID and private investor. The other route called IPTC (Independent
Power Transmission Corporation) shall facilitate private investor including investors
coming through FDI to invest 100% by themselves.
Preparation of Manual on Disaster Management
Power is an essential service and it is one of the first to be affected by natural disasters
like the earthquake in Gujarat in January, 2001 and the cyclone in Orissa in October,
1999. It is, therefore, necessary to have a clear-cut action plan ready for managing
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
27/60
POWER SECTOR SNAPSHOT Page 27
major breakdown of essential power supply posing wide-spread and protracted
problems. Ministry of Power has directed all power sector utilities and State
Electricity Boards to prepare contingency plans to meet situations arising out of
breakdown of machinery and equipment and disruption of power system due to any
reasons including natural calamities. Such action plans have already been drawn by a
number of State Electricity Boards and Central Power Sector Undertakings such NTPC,NHPC, PGCIL, BBMB.
DISTRIBUTION REFORMS
The poor financial health of bulk power purchasers (SEBs/ State utilities) is a major
roadblock in the development of the sector. The continuously rising commercial losses
of SEBs have touched Rs. 26,000 crores in 2000-01. They The poor financial health of
SEBs also seriously affects their ability to invest in new generation capacity, to upgrade
their Transmission & Distribution network and to undertake system improvement. owe
to Central Power utilities, Railways and coal companies, nearly Rs. 40,000 crores. Thispayment deficit continues to rise and threatens the viability of the Central
power utilities. The inability of SEBs to pay has been the basic reason for poor private
investment, both domestic and foreign, in spite of liberalisation of policies at Central
Government level. Till the health of the SEBs improves, major investment from the
private sector cannot be expected.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
28/60
POWER SECTOR SNAPSHOT Page 28
Distribution is the weakest link in the chain of power supply. Hence distribution reforms
have been identified as the key area of focus in the power sector reform process. The
initiatives taken in this regard include:
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
29/60
POWER SECTOR SNAPSHOT Page 29
Development of district level distribution improvement plans for all districts in
the country.
All the districts in the country will have a detailed distribution improvement plan. The
Ministry/CEA will help the States in capacity building measures in areas related to
technical and commercial activities as well as planning and deployment of personnel.Assistance would also be provided to SEBs to improve their accounting practices.
The Expert Committee on Distribution has prepared technical manuals for project
formulation, energy audit & accounting, technical specification of equipments and
training. NTPC, CPRI, NPC, WAPCOS and POWERGRID have been assigned the task of
capacity building in SEBs, guide them to prepare DPR, train the manpower and also
supervise the execution of works in the identified circles in each States. A meeting was
held with these five organisations in July 2001 wherein it was agreed that
(a) The technical manual prepared by the Expert Committee be sent to all the States for
guidance(b) Each of these organisations be assigned certain States
(c) These organisations would station their team in assigned States
(d) The team would identify the area of data collection and under their supervision get
the necessary data collected through the counterpart team set up at the SEB level as
well as the circle level
(e) Analyse the data in the presence of the counterpart team using the appropriate
software
(f) Obtain computer aided HVDS model
(g) Help the SEB, thereafter, to prepare DPR
(h) train the manpower. In other words, the State officials will collect the data, analyse
the same using computer software and prepare DPR under the supervision andguidance of these organisations.
Such an approach will help in capacity building through on the job work and also
through training. The Ministry of Power is preparing the detailed scope of work for
these organisations, time frame for each activity, methodology and deliverables in order
to operationalise the project preparation for each of the identified circles.
District level Committees for Distribution Reforms Monitoring and District level
Generation Resource Planning
In order to provide for an institutional arrangement at the district level to oversee work
relating to formulation and implementation of projects aimed at strengthening the sub
transmission and distribution system and for promoting power generation from
renewable energy sources, district level committees are proposed to be constituted.
The district-level committees would be headed by the District Collector/Deputy
Commissioner. The committee could include the following:
i. Members of Parliament representing the District;
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
30/60
POWER SECTOR SNAPSHOT Page 30
ii. Members of the Legislative Assembly/Legislative Council to be nominated by the
State Government;
iii. Chairman, Zilla Parishad; and
iv. A few non-official Prominent Persons to be nominated by the State Government.
The Superintending Engineer of the State Electricity Board/ State Power Utilityresponsible for distribution in the district could be made the Convener of the
Committee.
The Committee would be entrusted with the following functions:
To review steps taken to formulate and implement projects aimed atimproving/upgrading the sub transmission and distribution system;
To oversee the implementation of the metering programme and theintroduction of Energy Accounting System;
To review the implementation of energy conservation measures includingDemand Side Management (DSM);
To promote local entrepreneurs in setting up power generation projects basedon Biomass, Wind, Solar and Small Hydro;
To encourage involvement of local bodies and NGOs/ Cooperatives in themanagement of generation and distribution;
To explore the possibility of supplying decentralized grid energy to remotevillages which cannot be Connected to the grid;
To organise funding of projects from funds provided by the Ministry of RuralDevelopment, Ministry of Non-conventional Energy Sources, MPs Local Area
Development Fund, RIDF, Rural Electrification Corporation and agencies such as
IREDA.
100% metering and MIS for reduction of T& D losses
Huge Transmission & Distribution (T&D) losses are a major drain on the revenue stream
affecting the very survival of the SEBs. Although reported total energy losses in T&D are
24 per cent on an all India average basis, a closer examination reveals that actual losses
including theft and wrong classification could be in the range of 40-45 per cent. Under
reporting of losses is revealed from the following table:
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
31/60
POWER SECTOR SNAPSHOT Page 31
The T&D losses are pegged at around 10 per cent in better managed power systems in
the developed countries. In order to reduce the T&D losses, the following measures
have been initiated.
Static meters on all 11 KV out-going feeders and HT consumers have beeninstalled in most of the States. These meters will record active energy, powerfactor and load information for 45 days at a time. The data recorded in the static
meters can be down loaded to a computer network and software packages will
be effectively utilised to process the data for meaningful management of the
distribution system. Consequently, it should now be possible to accurately
account for the energy received in each 11 kV sub-station and 11 kV out-going
feeders; energy billed and T&D losses at the various stages of transformation. It
is expected that by October 2001, the metering at 11 kV outgoing feeder level
will be accomplished in all the states.
In the next phase of the programme, meters will be installed in all thedistribution transformers and, thereafter, in the premises of the consumers.
With the installation of meters at all the transformation stages and in the
premises of consumers, it will be possible to operationalise the concept of cost
and profit centre. The implementation of energy accounting system, with billing
unit at subdivision level as the nodal point, the problem of commercial losses can
be solved. This will help fix proper responsibility at the sub-divisional, divisional,
circle and zonal levels.
Other measures required will include installation of capacitors at all levels;reconfiguration of feeder lines & distribution transformers in such a way as to
reduce the length of LT lines (which are characterised by large technical and
commercial losses) and make the system less LT oriented, installation of smaller
size energy efficient distribution transformers so that each\ transformer suppliespower to 10 to 15 households only; re-conductoring of over loaded sections;
development of digital mapping of the entire distribution system; and load flow
studies so that investments could be undertaken for long-term strengthening of
the distribution system.
Along with 100 per cent metering in the districts, it is necessary to enforceenergy accounting and auditing. In this regard an effective Management
Information System
(MIS) will be put in place to ensure effective flow of information to facilitate quick
decision-making and to improve the operation and management of the distributionsystem. With the adoption of above steps, it will be possible to develop the data base
essential for energy accounting and also to undertake system study and promote
measures aimed at improving load management.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
32/60
POWER SECTOR SNAPSHOT Page 32
60 Distribution circles as Centres of Excellence for Distribution Reforms under \
Accelerated Power Development Programme (APDP)
Under APDP, 60 distribution circles have been identified in different States for
improvement / strengthening of the sub-transmission & distribution network in such amanner as to develop Centres of Excellence. This would enable States to replicate the
strategy in other circles. The objective is to ensure that the investment in these
distribution circles would result in quantifiable physical & financial benefits.
During the year 2000-01, Rs.576.22 crores were sanctioned under APDP for the States to
undertake short-term measures like metering at all levels covering all consumers within
the circles, installation of capacitors to correct power factor and replacement of failed
distribution transformers (DTs) and augmentation of transformation capacity which
could result in
(a) Immediate financial gain(b) Reduction of technical losses and (c) reduction of system break downs.
All the States have taken action to implement the short-term projects. Certain States
where metering has been completed, have shown immediate gain in revenue ranging
from 20 to 30%.
Strengthening of sub-transmission & distribution network involves three broad areas of
action viz. commercial, technical and manpower restructuring.
(a) Commercial action includes tamper proof metering at all level of transformation and
for all the consumers; operationalising energy accounting up to feeder level; de-
centralised computerized billing & collection; development of MIS and proper duties &responsibilities up to the line man. Commercial activities target reduction of commercial
losses and improvement of revenue.
(b) Technical action involves conversion of the existing distribution network into a high
voltage distribution system (HVDS) which covers reduction of LT lines; taking high
voltage line up to the load centre and supplying power through smaller capacity energy
efficient distribution transformation; reconductoring of over loaded lines; power factor
correction; Geographic Information System(GIS) mapping; polewise consumer
information etc. This requires detailed energy audit & accounting studies, analysis of the
data using software for developing component aided HVDS network model.
(c) Restructuring the manpower involves review of the manpower right from the
Superintending Engineer to line man and fixing proper duties, responsibilities and
accountability at each level.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
33/60
POWER SECTOR SNAPSHOT Page 33
KV Feeder as Profit Centre
The approach mentioned above will need to be implemented for each 11 KV feeder
upward up to 33/11 kV sub-station and in the entire identified circles. This will ensure
energy accounting and reduction of commercial and technical losses in the entire
feeder. This way each feeder can be operationalised as an independent profit centre.This is possible as one junior engineer deals with two feeders on an average. Full
responsibility can be assigned to him.
Capacity Building
Even though SEBs have expertise in different fields, strengthening of sub-transmission &
distribution network as suggested above requires an integrated knowledge. SEBs, during
the regional meetings held in April and then later in June, 2001 expressed their inability
to take up such work with their own manpower. It is necessary to promote capacity
building exercise in the SEBs/State Power Utilities. This will enable SEB personnel toprepare detailed project reports for each of the districts/ circles and implement the
project using APDP funds at a later stage. It is proposed to take up capacity building
exercise in the SEBs/ Utilities, so that they are able to take up energy audit & accounting
studies, analyse the data, using computer tools, prepare project reports and implement
the same aimed at improving sub-transmission and distribution network.
Capacity building exercise will cover:
a) Training the manpower
b) Making the SEB officials collect relevant data from each 11 KV feeder in the identified
circle.
c) Analysis of the data using computer tools to prepare feeder wise computer aided
least cost project report.d) Supervision of implementation
Reform MOUs with the States and their monitoring
To give a strong impetus to the process of reforms, the Ministry of Power organised a
Conference of Chief Ministers / Power Ministers on Power Sector Reforms on 3rd March
2001. The Conference was chaired by the Prime Minister and was also attended by the
Deputy Chairman (Planning Commission), Union Finance Minister, and Union Power
Minister. In the Conference, a number of decisions on reforms, having farreaching
Consequences, were taken. Of various discussions on reforms, signing of MOUs withStates for undertaking reforms and restructuring in a time bound manner and linking
the support of Government of India to achievement of predetermined milestones is
expected to provide the necessary impetus to the reform process.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
34/60
POWER SECTOR SNAPSHOT Page 34
Privatisation / Corporatisation Models of Distribution through the Policy level
Committee
In the Chief Ministers conference held in March 2001, it was also decided to constitute a
Committee under Secretary (Power) to suggest strategies and measures for attracting
private sector investment in distribution with special reference to:
Methodology of seeking private sector participation; Handling of past liabilities and making privatisation offer attractive to potential
investors
Possible linking of private sector investments in generation with distribution; and Increasing the number of potential investors.
The committee has made sufficient progress and is likely to submit its report shortly.
World Bank Reform Packages
The Ministry of Power is working on a special package for reforming states, whereby,
the reform process could be partly funded through World Bank assistance. During the
visit of the President of World Bank to India in November 2000 the issue of providing
structural loans to reforming states was discussed and the World Bank has agreed to the
following in principle:
Assistance for preparation of bankable DPRs for run of the river hydro projects. Structural adjustment assistance for reforming states. Assistance for renovation, modernisation and uprating of generating stations.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
35/60
POWER SECTOR SNAPSHOT Page 35
RURAL ELECTRIFICATION
Implementation of Action Plan for electrification of villages
The pace of rural electrification in the VIII and IX Plans has declined. Nearly 80,000
villages are yet to be electrified. Only 31 per cent rural and 45 per cent urban
households have been covered so far. In order to accelerate rural electrification the
proposed Action Plan is as under:
(i). Rural Electrification will be treated as a Basic Minimum Service under the Prime
Ministers Gramodya Yojana (PMGY).
(ii). Completion of electrification of bulk of the remaining villages is targeted in the next
6 years. Full coverage of all households may be targeted for the end of the XI Plan, that
is, by the year 2012.
(iii). Setting up credit support from Rural Electrification Corporation to SEBs for speedyelectrification of dalit bastis, households of scheduled tribes and other weaker sections
of society.
(iv). Improving the quality of power supply in villages by strengthening of the
distribution network in rural areas is being supported by REC under the Accelerated
Power Development Programme.
(v). Earmarking a sum of at least Rs. 750 crores out of Rural Infrastructure Development
Fund (RIDF) for rural electrification works.
(vi). Augmenting the resources of REC, by allowing it to float capital gains tax exemption
bonds.
Sustainable Power Development
Concerns relating to pollution and the disposal of the large amount of ash from coal
based power stations, which are the mainstay of Indias power generation, are being
addressed through strategies to promote environmentally sustainable power
development.
Special Purpose Vehicle (SPV) for Afforestation
A Special Purpose Vehicle is being set up jointly by NTPC and other Central Power Sector
Undertakings as a Registered Society to take up afforestation and environmental
measures in order to reduce the carbon dioxide in the atmosphere. The objectives of
the Society shall be to:
Undertake fruitful channelising of investments by members to increase thenational forest cover.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
36/60
POWER SECTOR SNAPSHOT Page 36
Identify suitable lands for afforestation for power projects of NTPC and othermembers through Ministry of Environment and Forests (MOEF) which will
coordinate
with the State Forest Departments/District Rural Development Authority etc. Facilitate quick procurement of forest clearance for the forestland proposed to
be acquired by NTPC and other members for the future projects to be set up. Interact with MOEF to score off the necessary compensatory afforestation
required for projects of NTPC and other members, which needs diversion of
forestland.
It is noteworthy that NTPC has already planted over 1.45 crore trees, which is one of the
biggest afforestation efforts in the country. In fact the ambient temperature around the
Ramagundam Station of NTPC has come down by 30 Celsius due to the afforestation
done by NTPC as revealed in a study by the National Remote Sensing Agency (NRSA),
Hyderabad.
Fly Ash Utilisation Action Plan
All the coal based power stations put together generate around 90 million tonnes of fly-
ash per annum. The Fly Ash Mission of TIFAC has made several useful recommendations
for utilisation of fly-ash in the manufacture of cement, bricks, pavement materials, floor
tiles, wall panels etc., and in agriculture, road construction, land-filling and back-filling of
mines. Armed with the findings of the national laboratories that Fly ash is superior in
strength and durability as compared to conventional products, the Ministry of Power is
taking steps to make the use of fly ash products mandatory in road and bridge
construction, and construction of Government buildings as is being done in the
developed countries and to provide fiscal incentives initially to supplement the marketmechanism for taking up production and promotion of fly ash products.
Initiatives for improving the environmental performance of coal based stations
i) NTPC has achieved ISO-14001 standards for 11 plants owned by it and 2 more, being
managed by it. The Company is in the process of achieving the same in case of its
balance power plants.
ii) Improvement of Heat-rate is a continuous exercise in NTPC, which has yielded
significant benefits. NTPC officials have been asked to submit a detailed action plan for
the next five years for heat rate improvement not only in NTPC but also in powerstations of State Electricity Boards.
iii) Sipat Super Thermal Power of NTPC will adopt Super Critical Technology for the first
time in India. Thereafter, NTPC has planned to adopt super critical boiler technology for
North-Karanpura, Barh, Kahalgaon-II projects.
iv) With regard to setting up a commercial scale demonstration plant based on IGCC
technology, NTPC has sent coal samples to the Department of Energy in USA to find out
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
37/60
POWER SECTOR SNAPSHOT Page 37
feasibility of IGCC with Indian coal. Thereafter, a team of officials from NTPC will visit
the concerned laboratory as well as IGCC plant under operation in USA.
Clean Development Mechanism (CDM)
To address increasing concerns related to the environment and to improveenvironmental performance, the services of Tata Energy Research Institute (TERI) have
been engaged for providing consultancy services to the Ministry of Power on CDM. The
terms of reference include project formulation, base line surveys for each project,
negotiations with the CDM parties, identification of the counterpart CDM parties from
the developed countries, cost of CO2 monitoring and verification of CO2 emission
reduction and supervision of project implementation.
POWER BUSINESS AND INDUSTRY ANALYSIS
INVESTMENT OPPURTUNITIES
INVESTMENT OPPORTUNITIES IN THERMAL POWER DEVELOPMENT
70% of the country's total installed capacity and more than 80% of the totalelectricity generation is contributed by thermal power.
Coal continues to be the main source of for thermal generation. The major thrust in thermal generation could be fructified through significant
jump in unit size and steam parameters resulting in higher efficiencies and better
economics. The largest unit size in the country at present is 500 MW and 600MW super critical units are in the pipeline. The projected future unit size is 800-
1000 MW with still higher super critical parameters which will have low cost of
generation, higher efficiency and are environment friendly.
With the identification of new gas sources and availability in internationalmarket, there is renewed thrust in gas based combined cycle plants. Such CCGT
plants are increasingly becoming techno-economical viable with advancements
in efficient gas turbine technologies and their environmental benefits.
The post Electricity Act 2003 scenario provides for the opportunity for anygenerating company to establish, operate and maintain a thermal generating
station without the need of a license, thus providing a free hand in setting up of
a thermal generating plant.
Strong supportive factors conducive to investment opportunity such a vibrantstrong and stable economy, low cost indigenous fuel, availability of skilled
manpower, indigenous power plant manufacturing capability, presence of
independent power producers and power sector reforms initiatives as
confidence building measures for prospective investors.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
38/60
POWER SECTOR SNAPSHOT Page 38
Thrust to R&M / life extension activities with large investment potential forimproving the performance of old thermal power stations. The 10th Plan (2002-
07) is targeted towards 57 units (14270 MW) for R&M works and 106 units
(10413 MW) with anticipated total cost of more than Rs.10000 crores.
INVESTMENT OPPORTUNITIES IN HYDRO POWER DEVELOPMENT
The 10 Plan program envisages capacity addition of\ 14393 MW from hydelprojects in the total capacity addition of 41110.
The Govt. has initiated advance action for taking up new hydro projects. A50,000 hydro initiative has been launched and pre feasibility reports for 162
projects prepared. In the second phase of this programme, DPRs for about
30,000 MW are under preparation for eventual implementation through both
public & private sector agencies.
Govt. would take up for execution, all the CEA cleared projects and take steps toup to date and obtain clearance for pending DPRS.
Survey and investigations for new green field sites. Restart and activate the pending hydro projects for want of funds/inter state
issues.
Promoting small and mini hydel projects by simple design of turbines, generatorsand the civil works and in a shorter period.
Greater private investment through IPPs and joint ventures would beencouraged and conducive atmosphere created for attracting private sector
funds.
R&D in Power Sector
Government of India has set up a Standing Committee on Research in the Power Sector
under the Chairmanship of Chairman, CEA and DG, CPRI as the Member Secretary.
Members are drawn from various concerned organizations in the Power Sector, CSIR,
CFRI, TIFAC, NPC & other. The Committee has already identified the research projects to
be taken up on short, medium & long term basis. Action is being taken to initiate
research in each of these areas on prioritized basis.
Financial Requirements
The high capacity inter-regional transmission links, forming the back bone of the
National Power Grid would require an investment of the order of Rs. 40,000 crores of
which about 50% would be needed during the Tenth Plan period and the balance during
the Eleventh Plan period. Simultaneously, strengthening of the regional system for
meeting the increased transmission needs on account of increased inter-regional
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
39/60
POWER SECTOR SNAPSHOT Page 39
transactions as well as for evacuation, transmission and dispersal of power from
generation resources within the regions would have to be continued and the
transmission and distribution system in the State sector would also need to be
strengthened. The requirement of funds for transmission and distribution system in the
country corresponding to the programme of 1,00,000 MW of generation addition in the
next ten years has been estimated to be of the order of Rs.3,00,000 Crores as per thefollowing break-up:
Opportunities for Private Sector Participation in transmission
The Government made enabling provision for private sector participation intransmission sector way back in 1998 by amending the then existing ElectricityAct 1948. Generation of electricity was opened for private sector in 1991.
In the newly enacted Electricity Act 2003, any private player can seek licensefrom the Appropriate Commission to carry out business in transmission of
electricity.
Government of India envisages two routes for private sector participation intransmission ventures. IPTC route provides 100% fund mobilization by private
entrepreneurs as Independent Private Transmission Company. And JVC route -
provides formulation of a Joint Venture Company (JVC) with CTU/STU by
selecting a private investor as joint venture partner.
To start with, Central Electricity Regulatory Commission granted transmissionlicense on 13-11- 2003 to M/s Powerlinks Transmission Limited, a joint venture
company of the Power Grid Corporation of India Limited and Tata Power. This
Joint Venture (JV) project is first of its kind in India and is being promoted by
Government of India as a pilot project under its policy of encouraging private
sector participation in transmission of electricity.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
40/60
POWER SECTOR SNAPSHOT Page 40
As a first project to be undertaken under the IPTC route, the Government hasalready identified the Bina- Nagda-Dehgam 400kV Double Circuit transmission
line of about 700 KM route length to be taken up for private sector participation.
Opportunity of massive investment in Transmission exists and it is envisaged thatupto Rs.9,000 crores can be invested by the private sector by the end of Xth Five
Year Plan.
Distribution Reforms and Performance Improvement
Accelerated Power Development Reform Programme:
The Distribution Sector could not grow with the required pace due to paucity of funds
and therefore, Distribution Reforms were initiated by the Government.
MoUs and MoAs were signed with the States for linking the support of Government of
India through APDRP which is ambitious plan for upgradation and strengthening of
subtransmission and distribution system with the objective of reducing the AT&C lossesto around15%.
INVESTMENT OPPORTUNITIES IN DISTRIBUTION SCHEMES
Six Level Intervention Strategy:
In order to achieve commercial viability Ministry of Power has formulated six level
intervention strategy that encompasses initiatives at National level, State level,
SEB/Utility level, Distribution Circle level, Feeder level and the consumer level.
Anti-Theft Measures:
Several States viz. Andhra Pradesh, Karnataka, Madhya Pradesh, Uttar Pradesh, West
Bengal, Maharashtra, Kerala and Gujarat have taken number of initiative to curb the
theft of power which have shown improvement in collection of revenue by the
SEBs/Utilities. The Electricity Act, 2003 provides a legal framework for making theft of
electricity a cognizable offence. Under Section 135 of the Electricity Act, 2003, whoever
dishonestly taps lines or cables or service wires, tampers, damages or destroys meters
etc. shall be punishable with imprisonment for a term which may extend to three years
or with fine or with both.
100% Metering Programme:
A programme of 100% metering has been taken up by States subsequent to PowerMinisters/Chief Ministers conference held on 26.2.2000. As on 30th September, 2004,
95% and 87% metering have been achieved in respect of 11 kV feeders and consumer
feeders respectively.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
41/60
POWER SECTOR SNAPSHOT Page 41
Consumer Care Centre:
To address consumer grievances various States have taken initiatives by setting up
consumer care centres and these centers are effectively operating at Hyderabad,
Vadodara, Bangalore, Faridabad, Delhi and almost all States are taking steps for
implementing the consumer care centres for large towns of the States
INFORMATION TECHNOLOGY (IT) INITIATIVES:
(i) Supervisory Control and Data Acquisition (SCADA) System:
To improve reliability and quality of power Supervisory Control and Data Acquisition
(SCADA) System has been introduced in Accelerated Power Development Reforms
(APDRP) Schemes.
(ii) High Voltage Distribution System (HVDS):
HVDS has been introduced for arresting power pilferage and reduction of losses by
Andhra Pradesh, Delhi, West Bengal, Noida Power Company Ltd. etc.
(iii) Electronic/Static Meters:
Almost all States are installing electronic / Static meters on feeders and at consumer
premises to introduce energy accounting and auditing. Andhra Pradesh, Uttar
Pradesh, Orissa have successfully introduced Meter reading Instrument (MRI) for their
towns, as also Delhi having facilities of spot billing.
FUTURE INVESTMENT REQUIREMENT
Even after investment made by the Union Government through APDRP in ST&D system,the distribution sector needs further investment considering the growth rates of various
segments of the distribution system the projections by the end of 2006-07 are as
follows:
An investment of Rs. 86357 crores was assessed by the Working Group on Power at the
beginning of the Tenth Plan. However the same has gone to Rs. 1,00,000/- crore as on
today for the entire 10th Plan period (2002-07).
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
42/60
POWER SECTOR SNAPSHOT Page 42
According to the National Perspective Plan on R&D in Indian Power Sector up to 2015,
distribution sector was identified as the key area for taking up the Research and
development (R&D) in this sector. The identified areas are:
High voltage distribution system (HVDS) Demand side management Custom power devices Compact transformation devices Distribution automation Metering
Quality of Power Supply and Customer Satisfaction:
With the enactment of the Electricity Act, 2003 the emphasis has been given on
providing quality and interruption free supply to customers. Keeping this objective inview Central Electricity Authority (CEA) has started monitoring of reliability index,
average tripping per month in respect of 11 kV feeders in respect of towns having
population of more than 8 lakhs. This will facilitate in bench marking various indices for
the annual frequency and duration of tripping. Various State Electricity Regulatory
Commissions (SERCs) are also in the process of making regulations for standard of
performance in compliance to various provisions of the Electricity Act, 2003.
Regulation on Installation and Operation of Meters:
In compliance to provision of Section 55 of the Electricity Act, 2003, CEA is making
regulation on installation and operation of meters. This will facilitate in uniformity ofapproach for location of meters, selecting type of meters and their specification, new
investment opportunities.
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
43/60
POWER SECTOR SNAPSHOT Page 43
MAJOR CLEARANCES REQUIRED FOR POWER SECTOR
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
44/60
POWER SECTOR SNAPSHOT Page 44
Power Companies in India
Many government as well as private organizations have taken up the task of power
generation in India. The major Indian power companies playing prime are:
Bhakra Beas Management Board Enercon Systems India Essar Group GMR Group Gujarat State Petroleum Corporation Ltd Jindal Steel & Power Limited Karnataka Power Transmission Corporation Limited (KPTCL) Karnataka Renewable Energy Development Limited Konarka Magnum Power Generation Limited Nippo Batteries Reliance Energy Ltd. Shri Shakti Durgapur Projects Limited Satluj Jal Vidyut Nigam Ltd. United Power Ventral Systems Pvt. Ltd. Enron India Power Plant Celetronix Power India Caterpillar Power India Alton Power India Thorium Power India GE Power Controls India Green Power India
-
8/9/2019 Vikas Gupta, Mba (Et),Upes
45/60
POWER SECTOR SNAPSHOT Page 45
POWER TRADING
AGENDA
Introduction Global scenario in power trading Indian companies
Introduction
India is the third largest producer of electricity in Asia with an installed capacity that has
increased from 1362 MW in 1947 to about 143311 MW as of March 31 2008. However,
alongside this growth story is the existence of shortages in meeting peak (16.6% in FY
08) as well as overall demand (9.8% in FY 08). In spite of the overall shortage, the
inherent diversity in demand of various States and Regions in the country results in
periods of seasonal surplus in one State or region coinciding with periods of deficit in
another.
This coexistence of overall shortages with complementary geographical and temporal
surplus-deficits provides substantial opportunities to improve the economic efficiency
and security of supply through trading of power both within as well as across Regions.
Realizing the full benefits of trading requires the availability of adequate transmission
capacity and inter-regional links for transfer of power from a surplus to a deficit entity
and support the development of a power market in the country.
Trading is an activity in which transactions take place directly between two participants
or indirectly through an exchange.
In India, while there is a huge section of consumers, who are power deprived, there are
a lot of Captive Power Plants (CPPs) that are underutilized and a lot of merchant
capacity also expected to be added in the near future, there is a need to encourage the
peaking power plants and bring the surplus captive generation in the grid. The Electricity
Act, 2003, mandated development of power markets by appropriate commissions
through enabling regulations. This paved the way for the new trends to emerge like
Open Access and the one in February, 2