Download - Transmission Economics & Finance

7/25/2019 Transmission Economics & Finance

1/18

Transmission - Economics and

Finance

Anil Raawal21stMay 2015

1


2/18

Contents

Lots of Work in Pieline Lots of Positi!es " T#e Trends Lots of Positi!es " Transmission as $nfra

%&siness

T#e reality c#eck T#e La' desite Ena(lin' Framework T#e Power and t#e Prayer T#e )oncerns

*ey Risks T#e Way Forward

2


3/18

Transmission Scenario

Lots of Work in Pipe Line

Source -Metis

Additions during 12thPlano As per the latest estimates of MoP

90,000 ckm transmission lines and

1,54,000 MVA transformer capacity is

projected to be added in Xth plan .

Historic Investment

Decito !espite "s 4,50,000 #rs in$estmentplanned in %eneration for 1&th and

1'th plan, the in$estments in the

transmission sector not ade()ate*

o +or e$ery ")pee in$ested in

%eneration, 50 sho)ld be in$ested

in transmission*

o n ndia, this ratio stands at '0*

o n$estment deficit - "e()ired more

than 0*5 times of the f)t)re

in$estments made in %eneration into

transmission*

+o&rce " )AREResearc#

3


4/18

Transmission Scenario

./o)rce 2P for 1&thPlan, #2A and Prospecti$e plan, 3o

./tate sector opport)nity yet to emer%e

Lots of Work in Pipe Line

12thPlan Capex estimates

CentralSector 125,000 Cr

State Sector 55,000 CrTotal 1,80,000 CrOut of kitt !s 25000 Cr for Pri"ate Participation

12thPlan Capex estimates

CentralSector 125,000 Cr

State Sector 55,000 CrTotal 1,80,000 CrOut of kitt !s 25000 Cr for Pri"ate Participation

12thPlan Tar#ets -

1,10,000 ckm of Transmission lines an$ 2%0000 M&' of

transformation capacit a$$ition

12thPlan Tar#ets -

1,10,000 ckm of Transmission lines an$ 2%0000 M&' of

transformation capacit a$$ition

1(thPlan Capex estimates

P)C*+ an$ States 1(0,000 Cr

Pri"ate Sector 1,10,000 Cr

Total 2,0,000 Cr

1(thPlan Capex estimates

P)C*+ an$ States 1(0,000 Cr

Pri"ate Sector 1,10,000 Cr

Total 2,0,000 Cr

4


5/18

Lots of Positives !he !rends

Competitive "idding !rendso

Sector is Maturing QRs were amended, No of players have settled to a reasonable numberwith major players in een contest.o !rend line of "st #RR $ %&' indicates upward trending

5


6/18

Lots of Positives !ransmission as Infra"usiness Competitive "idding

#Approacho (arger number of projects are being put for bidding

year on year with larger project )osts.

o )oncept to )ommissioning period has come downo*as come down from about + months previously to about - months

o "emption for State Sector from !/)/ is over andmore projects from State Sector are epected

o !ime period for )onstruction has been aligned with

the time period provided under !ariff Regulations

&%01%2

o "arly )ommissioning is under )onsideration by

Mo3 for recognising tariff

o )hange in 4pproving 4uthorities foro Section %+0

o 3owers now with )"4 )hairperson, shall save time.

o Section +5o 3owers now with )"4 )hairperson, shall save time.

o Selection of projectso 3owers now shifted to Mo3 as re6uired under 7a8ette

Notification6


7/18

Lots of Positives !ransmission as Infra"usinessAmendment in $A $%panding Hori&onso Section %0 4mendment

!he 4ppropriate )ommission may, on an application made to it under section %-, grant alicence to any person11

9a: to transmit electricity as a transmission licensee; or

9b: to distribute electricity as a distribution licensee; or

1111111111111111111111111111

9c: to undertae trading in electricity as an electricity trader, or

9d: to supply electricity as a supply licensee.

PoC 'echanismo National "lectricity 3olicy mandates that the national tariff framewor implemented should be

sensitive to distance, direction and related to 6uantum of power flow.o /illing, )ollection and


8/18

!ransmission # the real )ottlenecko #n recent times transmission has wored as major bottlenec, some facts 1

o Millions of


9/18

!he Lag despite $na)ling (rame,ork

2,

55

22

1-.

/0.

1.

StateCentral

Pri"ate

StateCentral

Pri"ate

11thplan - 67548 MW

12thplan (2 yrs) - 45516 MW

Source - 'PP

11thplan - Rs 1,40,000 Crs

12thplan - Rs 1,80,000 Crs

$um*ers te(( it

a((++++++++++++>#t is also a fact that in the

architecture of electricity sector,

generation

is delicensed and, accordingly,

generation capacities have

come up

and will continue to come up

based on technical and

commercial

feasibilities of these projects.

!herefore, the contention thatmassive

capacity additions, in a

delicensed regime, pose a

major challenge to

transmission system planning

and, therefore, this type of

mismatch is

inevitable, cannot be taen as

an acceptable argument. #n a

situation

of power sector being starvedof generation capacity,

delicensing have

been a correct strategy and

transmission system planners

will have to

devise strategy to cope with

thisA #2"# #on%estion

"eport 6)ne &015

Pri"ate *n"estment is must to match the monstrous $eman$s


10/18

!he Po,er and the Pra+er

10


11/18

* $on.t kno. ho. * am #oin# to $eci$e this case, /ut it appears from the paper.ork, .e ha"e a /ar o.ner .ho/elie"es in the po.er of praer an$ .e ha"e an entire church an$ its $e"otees that $oes not

!he Po,er and the Pra+er

11


12/18

Proect 3electiono Reconstitution of "mpowered )ommittee1

!he Concerns

Representation and confdence building or private parties to invest expectedmore than Rs 1 lac Crores!!!

efore 'fter

Mem*er '% Mem*er .S/ '

Mem*er .S/ ' Mem*er .'/ '

Mem*er .'/ ' oint Sec .Mo/

oint Sec .Mo/ irector .ro/

irector .ro/ &visor .'nerg8/, $T 8og

9ormer hairman, ' 9ormer hairman, '

9ormer hie: Sec, Mah ';-Mem*er.S/, '

irector .Trans/ Mo hie: 'ng .(an S/, '

Secretar8, '%

12


13/18

$na)ling (rame,orko Tari:: o(ic8 # ';em"tions "ro"ose eaves "ractica((8 nothing !hich necessari(8 has to *e

"ut un&er T ?>

Wor=s require& to *e &one cater to anurgent situration require& un&er

com"resse& time sche&u(e+

ntrastate transmission "roects u" to 6 than 2013

9irst t!o 1200 => su*station @"-gra&ations o: e;isting (ines o:T@AST@A

Some more u"-gra&ations o: (ines ugmentation o: e;istingAun&er

construction su*stations o:T@AST@A

'vacuation :rom $uc(ear o!er (ants roects un&er com"resse& timesche&u(e+

roects !here no *i&&ers comes:or!ar&+

13


14/18

Contractual (rame,orko $o TS # ost o, no TS :or "re-commissioning "erio&, current TS is not va(i&o TS "rovisions the "ena( "a8ment o: a&&itiona( in case the &eve(o"er :ai(s to o*tain

Transmission icense or get the tari:: a&o"te& !ithin sti"u(ate& time :rame+o $o recognition o: &e(a8s cause& *8 the reasons *e8on& contro( o: the &eve(o"er inc(u&ing the

c(earances (i=e :orest, !i(& (i:e, section 164 a""rova( etc+o $o incentive :or ear(8 commissioning, the change no! un&er consi&eration is a(so ha(: hearte&

as it &oes not s"e(( out an8 incentive an& on(8 recogniBes ear(8 commissioning, !hich means

ear(8 start o: 35 8ears earning stream+o

>er8 Stee" s # can eat u" to :irst 8ear tari::

Price 4ariations )e+ond a )ando >aria*(e com"onent o: *i& "ricing can not han&(e the stee" variation o: commo&itieso $o (ong term instruments o: he&ging on stee( an& a(uminium avai(a*(e in n&ia

-5 clearances involved6 processes for some of,hich are open ended ,ith no timel+ redressal

o s man8 as 120 transmission "roects have :ace& &e(a8s *ecause o: the &eve(o"erCs ina*i(it8 to

acquire (an& an& get time(8 c(earances :rom a(( sta=eho(&erso 9orest, Wi(& (i:e c(earances

Courts issuing directions for (I*s against

developers on *oW case ,ithout hearing the

!he 7e+ *isks

14


15/18

$ncouraging Private 3ector Participation

e"elopmental *ssues

!he Wa+ (or,ard

15


16/18


Pro3ect *mplementation *ssues

!he Wa+ (or,ard

16


17/18


4inancial *ssues

!he Wa+ (or,ard

17


18/18

Thank ou

Anil8ra,al9relianceada8com6anilraa,al9gmail8com

i Con#estion !eport C6!C, 2015ii )a7ette otifications of )o*iii 4*CC* !eport on Transmissioni" C'!6 !esearch *nputs" 'PP presentation to MoP

"i Po.er-line"ii e.spapers 9 6T, usiness +ine an$ 4inancial 6xpress

Ackno,ledgements

1)