OVERVIEW

OF
INDIAN
POWER
SECTOR

Prepared by- Dayanand kher

POWE
R 2003 onwards
Growth Era

19912003
Liberalisation
Era
19561991
Nationalisatio
n Electricity Act (2003)
Stage
National Tariff Policy (2006)
Legislative and policy Elimination of licensing for
Before 1956 initiatives (1991) generation projects
Introductory Private sector
Industrial Policy Increased competition through
Stage participation in
Resolution (1956) international competitive bidding
generation engaged in power generation,
Generation and Fast-track clearing transmission and distribution
distribution of power
mechanism of private Launch of UMPP scheme Various
Electricity under state investment proposals schemes and initiatives such as
(Supply) Act ownership
Electricity Regulatory Jawaharlal Nehru National
1948 Power losses, Commissions Act Solar Mission to promote
Establishment subsidies, (1998) for renewable
of semi- infrastructure establishing Central energy
autonomous bottlenecks and and State Electricity Civil nuclear agreement with the US
State Electricity resource constraints Regulatory for nuclear technology and fuel Fuel
Boards (SEBs) Commissions and
supply agreement of power
rationalisation of
tariffs companies with Coal India Ltd (CIL)
Private equity investments in the
sector have surged since 2010

Source:; WWW..NPTI.IN
POWE
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India as a power
With a production of 1,102.9 TWh, India is the third largest producer and fifth largest
consumer of electricity in the world
Producer and
Consumer globally The per capita electricity consumption in 2012-13 is -917.18 kWh.

As per census, only 55% of rural households have access to electricity.

The government targets capacity addition of 89 GW under the 12th Five-Year Plan (2012
17) and around 100 GW under the 13th Five-Year Plan (201722)
Large-scale government
initiated expansion Investments of around USD223.9 billion are planned for the power sector during the 12th
Plan Five-Year Plan
plans

Renewable energy capacity additions of 30 GW are planned in the next five years to meet
the growing energy demand
Robust growth in
Renewable sector Wind energy is estimated to contribute 15 GW, followed by solar power at 10 GW

Source:; WWW..CEA..nic.inC
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Thepower sectorin India is mainly governed by the Ministry of Power. There are three
major pillars
of power sector these are Generation, Transmission, and Distribution

PRESENT POWER SCENARIO OF INDIA

INSTALLED PER CAPITA ELECTRIFIED

ANNUAL SUPPLY
CAPACITY CONSUMPTIO PLF
GENERATION DEMAND GAP VILLAGES
(248509.63M N (68.15)
(1102.9 TWh) (4.1% PEAK) (95.60%)
W) (917.18)

Source:; WWW..CEA..nic.in
POWE
RGENERATIO
N
All India Installed Capacity (MW) as on 31-05-2014 Region -wise All India Installed Capacity(MW) as on 31-5-
2014(Sector-Wise)
300000

248509.64
250000

200000
171376.09
68255.9
86962.99
150000 CENTRAL
STATE
100000 PRIVATE

50000 39375.36 40661.41 93290.7

31692.14
4780
0
CAPTIVE TOTAL RES THERMAL NUCLEAR HYDRO

Source:; WWW..CEA..nic.in
POWE
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Electricity production in India (excluding captive generation) Electricity production in India (TWh)
stood at 911.6 TWh in FY13, a 4 per cent growth over
the previous fiscal
912
876
Over FY0713, electricity production expanded at a CAGR CAGR: 5.5%
of 5.5 per cent
811

The Planning Commissions Plan projects that total 772

12th
domestic energy production would reach 669.6 million 724
tonnes of oil equivalent (MTOE) by 201617 and 844 MTOE 663 705
by 202122

FY07 FY08 FY09 FY10 FY11 FY12 FY13

Source: Central Electricity Authority (CEA), Aranca Research;

Notes: FY - Indian Financial Year (April-March), TW h - Terra W att
Hour

Source:; WWW..CEA..nic.in
 POWE
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THERMAL POWER
Thermal fuel maintains a leading position among the fuel used for power generation
India has large reserves of coal. As of April 2012, total coal reserves
Coal stood at 293.5 billion tonnes; of this, 118.1 billion tonnes were
68% proven reserves
Thermal

Indias proven natural gas reserves measure about 1,074 billion

Gas
cubic metres

ower plants convert energy rich fuel into electricity and heat. Possible fuels include coal, natural gas, p
agricultural waste and domestic trash /waste. Thermal power accounts for 69 % in total energy product
ower is produced from coal oil and natural gas. Total installed capacity of thermal power is 171376.09 M

Diesel; 1199.75; 1%
Gas; 22607.95; 13% HYDRO; 40661.41; 16% RES; 31692.14; 13%

NUCLEAR; 4780; 2% RES

coal
THERMAL
Gas
NUCLEAR
Diesel
HYDRO

coal; 147568.39; 86% THERMAL; 171376.09; 69%

Source: Ministry of Coal,

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ISSUES AND CHALLENGES
Fuel quality & availability

Coal quality & availability constraints

Coal beneficiation

Power generation technology

Clean coal based technologies

Land accusation Problem

Logistic route Rail/ Road, pipelines, port etc (for fuel, water, ash etc)

Power evacuation route (Electricity Grid)

Water source

Price of Fuel

Volatility of coal price

Environmental clearance.
 POWE
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HYDRO POWER
is a renewable, non-polluting and environment friendly source of energy. Oldest energy technique known to
conversion of mechanical energy into electrical energy. Contributes around 22% of the world electricity supply

mshed ji Tata built the first hydroelectric power dam in the Western Ghats of Maharashtra in the early 1
wer to Bombays Cotton and Textile Mills

total power generation installed capacity in India of 2,48,509.64MW (June, 2014), hydro power contribu
0661.41 MW. The total hydroelectric power potential in the country is assessed at about 150,000 MW, e
W at 60% load factor. The potential of small hydro power projects is estimated at about 15,000 MW.

essment made by CEA, India is endowed with economically exploitable hydro-power potential to the tu
MW of installed capacity. The basin wise assessed potential is as
Basin/Rivers Probable Installed Capacity (MW)
Indus Basin 33,832
Ganga Basin 20,711
Central Indian River system 4,152

Western Flowing Rivers of southern India 9,430

Eastern Flowing Rivers of southern India 14,511

Brahmaputra Basin 66,065

Total 1,48,701
Source:; WWW..CEA..nic.in
POWE
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PROSPECTS OF HYDRO GENERATION

Share of Hydropower in Electricity Generation Initiatives to encourage Hydropower

Hydroelectric projects - Renewable, non-consumptive and environmentally benign source
120
of energy.
98.8
100 GoI has identified 162 schemes for preliminary feasibility reports under the 50, 000 MW
82.8 During Apr il-Feb 2007, shar e of hydroelectric initiative during the 12th plan period (FY 2012 17).
80 hydr opow er gene ration in India w as
higher at about 17%
Till recently, issues like dearth of adequately investigated projects, long clearance and
57 approval procedures, resettlement and rehabilitation issues, land acquisition problems,
60
39.6 power evacuation problems etc. had contributed to the slow pace of hydropower
40 development in the country. However, considering the large hydropower potential in the
16.1 16.1 country and the much required energy security, government is accelerating hydropower
20 12.7 8.8 6.5 reforms. Some of the recent government initiatives in this space include
- Preparation of a shelf of well- investigated projects and streamlining of
0
statutory clearances and approvals for the same.
Norw ay Brazil Canada Sw eden China World India Japan USA - Establishment of independent regulatory commissions
average - Providing for long-term financing for projects,
Source: IEA - Key World Energy Statistics 2006, CEA. Govt. of India is also cooperating with Bhutan and Nepal in hydropower development for
over a decade now. Indian companies are setting up hydropower plants in these
countries as both Bhutan and Nepal have huge potential of hydropower generation.
Evacuation from North Eastern region and Nepal
Vast untapped Hydropower potential in India

North East India as well as Nepal have huge potential of hydropower

generation.
MW %age North East India is already connected to Northern, Western and Eastern
Identified capacity as per re-assessment Grid. PGCIL is further strengthening the capacity to ensure that evacuation
148,701
study is not a constraint once the planned power plants in North East are
commissioned.
Capacity developed 29,572 19.9%
To encourage setting up of hydroelectric plants in Nepal and attract private
Capacity under construction 13,286 8.9% investment, Govt. of Nepal has set up a JV with ILFS to develop four 220 kv
double circuit lines from Nepal to India.
Capacity yet to be developed 105,843 71.2%

10
POWE
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ISSUES AND CHALLENGES
Geological surprises
Land acquisition
Rehabilitation & Resettlement
Forest clearance
Environment clearance
Agitations
Poor road infrastructure
Lack of access to data e.g. hydrological data
Renewable, but yet not counted as renewable
No RPO/REC
No Feed-in Tariff
No excise/customs duty benefit (except for mega projects)
No accelerated depreciation
Peaking power does not figure in long term power purchase plans of utilities. Nor do regulators insist on it and why
should they, when they can over-draw at will?
No utility ties up power years in advance. Long gestation projects such as hydro suffer
Consequently, hydro has to compete with thermal in power procurement. May suffer if tariff, particularly first year
tariff, is higher than thermal
Invariably, fuel costs rise faster than the indices for comparison
Excise/customs duty exemption only for equipment, but not for civil part
75% of hydro project costs are for civil, whereas only 10- 15%% project costs of thermal projects are for civil
Construction period 4 years for thermal, but 6 to 8 years for hydro. ROE not allowed during construction: Low IRR
Many projects have to pay upfront charges to States, which carry no return
Project preparation longer and more expensive than in thermal (DPR, Land acquisition, R & R etc)
POWE
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ISSUES AND CHALLENGES(CONTD)
Approach road construction also a heavy initial burden
Tariffs do not reflect peaking benefits
A large part of tariff of a thermal plant is fuel, whereas most of the tariff of a hydro plant is accounted for by capital cost
Longer gestation period adds to the IDC burden
Hydro projects are therefore more sensitive to terms of finance
Lack of long-term finance makes tariff front-loaded, comparing unfavorably with initial tariffs of thermal plants
Allotment of projects done haphazardly
After getting upfront payment no real support from state Govt.
Project developers are expected to provide many basic amenities such as schools as CSR
Next benefit to state accrues only after commercial operation starts and free power is received
 POWE
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NUCLEAR POWER
Nuclear power is the fourth-largest source of electricity in India after thermal, hydroelectric and renewable sources of
electricity. As of 2012, India has 20 Nuclear reactors in operation in six nuclear power plants, having an installed capacity
of 4780 MW and producing a total of 29,664.75 GWh of electricity while seven other reactors are under construction
and are expected to generate an additional 6,100 MW.

India's first research nuclear reactor and its first nuclear power plant were built with assistance from Canada. The 40 MW
research reactor agreement was signed in 1956, and achieved first criticality in 1960

There are two nuclear corporation in india

1. The Nuclear Power Corporation of India Limited (NPCIL) is a government-owned corporation of India based in
Mumbai. NPCIL was created in September 1987.Nuclear Power and electricity generation and distribution

2. The Bharatiya Nabhikiya Vidyut Nigam Limited(BHAVINI) is a government-owned corporation of India based
in Chennai. Bhavini was established on 2004.Nuclear Power and electricity generation and distribution

. India has a flourishing and largely indigenous nuclear power program and expects to have 14,600 MWe nuclear capacity
on line by 2020. It aims to supply 25% of electricity from nuclear power by 2050.

. Because India is outside the Nuclear Non-Proliferation Treaty due to its weapons program, it was for 34 years largely
excluded from trade in nuclear plant or materials, which has hampered its development of civil nuclear energy until 2009.

. Due to these trade bans and lack of indigenous uranium, India has uniquely been developing a nuclear fuel cycle to
exploit its reserves of thorium.
Source:www.world-nuclear.org/
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INDIAN NUCLEAR POWER INDUSTRY

Source:www.world-nuclear.org/
POWE
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INDIAS OPERATING NUCLEAR POWER REACTORS
Reactor State Type MWe net, each
Commercial
Safeguards status*
operation
Tarapur 1&2 Maharashtra BWR 150 1969 Item-specific, Oct 2009

Kaiga 1&2 Karnataka PHWR 202 1999-2000

Kaiga 3&4 Karnataka PHWR 202 2007, (due 2012)

December 2010 under

Kakrapar 1&2 Gujarat PHWR 202 1993-95
new agreement

Madras 1&2 (MAPS) Tamil Nadu PHWR 202 1984-86

Due in 2014 under new

Narora 1&2 Uttar Pradesh PHWR 202 1991-92
agreement

Rajasthan 1 Rajasthan PHWR 90 1973 Item-specific, Oct 2009

Rajasthan 2 Rajasthan PHWR 187 1981 Item-specific, Oct 2009

March 2010 under new

Rajasthan 3&4 Rajasthan PHWR 202 1999-2000
agreement

Oct 2009 under new

Rajasthan 5&6 Rajasthan PHWR 202 Feb & April 2010
agreement

Due in 2014 under new

Tarapur 3&4 Maharashtra PHWR 490 2006, 05
agreement

Kudankulam 1 Tamil Nadu PWR 917 (July 2014) Item-specific, Oct 2009

Total (21) 5302 MWe

POWE
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PROJECTED NUCLEAR POWER IN INDIA

Source:www.world-nuclear.org/
POWE
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INDIAS NUCLEAR POWER REACTORS UNDER CONSTRUCTION
MWe gross,
Construction Commercial Safeguards
Reactor Type net, Project control
start operation due status
each

item-specific, Oct
Kudankulam 2 PWR (VVER) 1000, 917 NPCIL July 2002 3/2014
2009

(9/2014 start-up)
Kalpakkam PFBR FBR 500, 470 Bhavini Oct 2004
2015
-

Kakrapar 3 PHWR 700, 630 NPCIL Nov 2010 June 2015

Kakrapar 4 PHWR 700, 630 NPCIL March 2011 Dec 2015

Rajasthan 7 PHWR 700, 630 NPCIL July 2011 June 2016

Rajasthan 8 PHWR 700, 630 NPCIL Sept 2011 Dec 2016

Total (6) 4300 MWe gross

Source:www.world-nuclear.org/
POWE
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INDIAS URANIUM MINES AND MILLS existing and planned
District Mine Mill Operating from tU per year
1967 (mine)
Jharkhand Jaduguda Jaduguda
1968 (mill)
200 total from mill

Bhatin Jaduguda 1967

Narwapahar Jaduguda 1995
Bagjata Jaduguda 2008

Jharkhand, East 2003 (u/g mine)

Turamdih Turamdih 190 total from mill
Singhbum dist. 2008 (mill)

Banduhurang Turamdih 2007 (open pit)

Mohuldih Turamdih 2012

Andhra Pradesh, Kadapa/

Tummalapalle Tummalapalle 2012 220 increasing to 330
YSR district

Andhra Pradesh, Kadapa/

Kanampalle Kanampalle? 2017
YSR district

Telengana, Nalgonda dist. Lambapur-Peddagattu Seripally /Mallapuram 2016? 130

Karnataka, Gulbarga dist. Gogi Diggi/ Saidpur 2014 130

Kylleng-Pyndeng-Sohiong-
Meghalaya Mawthabah (KPM), Mawthabah 2017 (open pit) 340
(Domiasiat), Wakhyn

Source:www.world-nuclear.org/
POWE
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ISSUES AND CHALLENGES
Economics

Poor management

Low net yield of energy of the nuclear fuel cycle

Safety concerns

Concerns of transporting uranium

Environmental costs not included in market price

Risk of catastrophic accidents

High environmental impact (with major accidents)

Cannot compete economically without huge government subsidies

Spreads knowledge and technology for building nuclear weapons

Subject to terrorist attack

POWE
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RENEWABLE POWER
India has 150GW of renewable energy potential, about half in the form of small hydropower, biomass, and wind and half in
solar, cogeneration, and waste-to-energy. Developing renewable energy can help India increase its energy security, reduce
the adverse impacts on the local environment, lower its carbon intensity, contribute to more balanced regional development
and realize its aspirations for leadership in high-technology industries.

Since 2005 the energy and climate change agenda has taken center stage in the domestic and international policy arena.
India is well placed to build on this momentum. It has tripled its renewable energy generation capacity in the past five years
now ranking fifth in the world in total installed renewable energy capacity, and it has established a legal and regulatory
framework for sector oversight

Source:; MNRE 2009

POWE
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As of April 2013, total installed power capacity India has the sixth largest renewable (eg, hydro
from power) power generation capacity (2012)
renewable energy sources (excluding Hydro power) was
27.5 GW. This accounts for 12.3 per cent of the total
India ranks
installed power capacity and forms 6.5 per cent of the total 90 sixth in the
86
electricity mix world
Wind energy is the largest source of renewable energy 71
in
India; it accounts for an estimated 87 per cent of total
installed capacity (18.3 GW). There are plans to
double wind power generation capacity to 20 GW by 2022
31 29 24
Biomass is the second largest source of renewable
energy,
accounting for 12 per cent of total installed capacity in
renewable energy. There is a strong upside potential in
biomass in the coming years China US Germany Spain Italy India
Solar energy accounts for 1 per cent of total renewable
energy installed capacity. The countrys true potential for
solar power stands at an estimated 5,000 TWh per annum

Capacity addition of 30 GW is planned using various

renewable energy technologies during the th Five-Year
12
Plan. Wind Energy is estimated to contribute 15
GW,
followed by solar power at 10 GW and the remaining by
other sources

Source: Renewables 2012 Global Status Report

(REN21),
POWE
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RENEWABLE ENERGY IN INDIA
Renewal Energy Installed Capacity in India (as of 31 January 2014)
Installed capacity
Type Technology
(in MW)
Grid Connected Power

Wind 20,298.83

Small Hydel Power Projects 3,774.15 1,285.60; 4% 99.08; 0%

2,208.36; 7%
Bagasse Cogeneration 2,512.88 2,512.88; 8%

Solar 2,208.36
3,774.15; 13%
Biomass Power &
1,285.60
Gasification 20,298.83; 67%

Waste to Power 99.08

Total - Grid Connected

30,177.90
Power
Off-Grid / Captive Power

Bagasse Cogeneration 517.34

Wind Small Hydel Power Pro
Bagasse Cogeneration Solar
SPV Systems (>1 kW) 159.77
Biomass Power & Gasification Waste to Power

Biomass Gasifiers- Industrial 146.40

Waste to Power 119.63 Source:; MNRE

POWE
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ECONOMIC POTENTIAL OF RENEWABLE ENERGY
India could produce about 62GW90 percent of technically feasible renewable capacity in wind, biomass, and small
hydropowerin an economically feasible manner, if the local and global environmental premiums of coal-based generation
are brought into consideration. About 3GW of renewable energy is economically feasible at the avoided cost of coal-based
generation of Rs 3.08/kWh, all of it from small hydropower. About 59GW of renewable energy in wind, biomass, and small
hydropower is available at an avoided cost of less than Rs 5/kWh. The full capacity of 68GW in these three technologies
can be harnessed at a price of less than Rs 6/kWh.

MW
60000
50000
50000 45000

40000

30000

20000 16000 15000

10000 7000 5000

Potential of renewable energy Fuel composition

in 2032
Source:; MNRE
POWE
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ISSUES AND CHALLENGES
The cost plus approach to tariff settingalong with the technology-specific focushas led to incentives that hinder the
economic development of Indias renewable energy resources. India currently offers a wide variety of incentives, including
feed-in tariffs; generation-based incentives; renewable purchase obligations (RPOs); central, state, and regional capital
subsidies; accelerated depreciation; and tax incentives. The lack of coordination between incentives and state programs
makes it difficult to adopt an economics-based least-cost development approach to tapping the countrys renewable energy
potential.

The limited availability of evacuation infrastructure and grid interconnections is one of the biggest obstacles to harnessing
renewable energy potential. Much economically attractive wind and small hydropower potential remains untapped because
of lack of adequate grid evacuation capacity and approach roads. The lack of good-quality data on renewable resources
also remains a problem, despite heavy investment by the MNRE in collecting data on renewable energy. The lack of
support infrastructure in the form of a strong indigenous supply chain remains a major barrier.

Existing mechanismsincluding single-window clearances, facilitation by state nodal agencies, and simplified regulation
for smaller renewable energy projectshave proved to be of limited effectiveness. In some cases multiple bottlenecks have
been replaced by single, larger, and more powerful roadblocks, and significant delays remain the norm. In addition,
speculative blocking of land has become common, leading to unsustainable price increases.

Skewed financial incentives for facilitating investments in renewable energy

Too many incentive programs

Failure to adequately address utilities

long-term financial concerns

POWE
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ISSUES AND CHALLENGES(CONTD)
Failure to develop least-cost resources first

Inadequate long-term funding sources

Inadequate evacuation and access infrastructure

Lack of good-quality data

Underdeveloped industry value chain

Delays in clearances and approvals and long development cycle

Land and resource acquisition issues

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In the central sector, the central transmission utility (CTU), known as the Power Grid Corporation of India Ltd (PGCIL), is
responsible for national and regional power transmission planning while the state sectors have separate State Transmission
Utilities (STU). Private sector participation is negligible in transmission

PGCIL is the premier organization which handles the transmission system of India.
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CURRENT TRANSMISSION MARKET STRUCTURE
Ministry of Power (MoP)
(Perspective planning, policy formulation, processing of projects for investment
decision, monitoring of the implementation of power projects, training and
manpower development and the administration and enactment of legislation in
regard to power generation, transmission and distribution)

Central Electricity Authority of India (CEA)

(Advises the government on matters relating to the National Electricity
Policy and formulates short-term and perspective plans for the
Central Electricity Regulatory
development of electricity systems)
Commission
State Electricity Regulation Commission
(CERC)
(SERC)

(Regulates tariff; formulates policies (Regulates tariff; formulates policies
regarding regarding
subsidies, and promotion of efficient subsidies, and promotion of efficient
and and
environmentally benign policies at environmentally benign policies at
central level) state level)
Central Transmission
State Transmission Utility
Utility(CTU) Private / PPP (STU)
(Develops transmission lines on
BOO model and charges for
(Ensures development of an wheeling electricity within the (Ensures development of an
efficient, coordinated and
tarrifs specified by CERC/SERC) efficient, coordinated and
economical system of
economical system of intra-State
interstate transmission lines and
transmission lines and undertakes intra-state
undertakes inter-state transmission)
transmission)
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MAJOR MILESTONES IN TRANSMISSION SECTOR
1991 1998 2003 2006 2011

Electricity The Electricity Act National Tarif

Laws
(Amendment) Electricity Laws Policy
Act (Amendment) Replaced the (Amendment)
Act earlier laws, Exemption to
aiming to enable intra-state
Private Private
participation reforms & National Tarif transmission
participation
allowed in enabled in restructure power Policy sector from
generation transmission sector mandatory
National Electricity
Mandatory competitive
Policy brought
Up to 100% CTU and STUs competitive bidding up to 5th
out, mandatory
foreign set up bidding of all Jan 2013
creation of Exemption of
ownership transmission
SERCs, emphasis
allowed Electricity projects after Jan select
on rural
Regulatory 2011 experimental
electrification,
Operators Commissions works/ urgent/
open access in
and SEBs Act Framework for compressed time
transmission and
entered into determining tariffs schedule work
Distribution
power CERC & SERCs and rate of return from tariff based
formed Introduced a non- for projects under competitive
purchase
discriminatory generation, bidding
agreements
open access in transmission as
(PPAs) Regulator to
the transmission
protect & well as distribution
SEBs to be promote
responsible for consumer
transmission interest, fair
Source:; www.powergridindia.com
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EVOLUTION OF NATIONAL GRID

National
Interconnectin Grid
Regional Grids g Regional
with ATS of Grids with
Central HVDC
Generation 1990s 2000 onwards
State
Grids by
1970-80s
SEBs

(Paradigm Shift from self

1950-60s sufficiency at Regional
level concept to National
Local level)
1950s

Source:; www.powergridindia.com
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REGIONAL AND NATIONAL GRID
Transmission forms a critical link in the power sector value chain. India's power
generation capacities are unevenly dispersed across the country creating
an imbalance between the distribution of power demand and supply centres.

The country has been demarcated into five electrical Regions:

Northern (NR)
Eastern (ER)
Western (WR)
Southern (SR)
North Eastern (NER)

All the regional grids are synchronously interconnected and operating as single
grid known as Central Grid or National Grid.
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TRANSMISSION LINE NETWORK STRENGTH

In six years from 2007 to 2013, the power transmission sector registered a growth of 4.37% CAGR.

Source:; www.powergridindia.com
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TRANSMISSION NETWORK -PRESENT
Transmission network
spread geographically over 3.3million sq
km : Inter-State and Intra-State level
Transmission line : 2,91,336 ckm
(POWERGRID : 1,08,307 ckm)
765kV : 11,096 ckm
400kV : 1,25,957 ckm
220kV : 1,44,851 ckm
HVDC Bipole (500kV) : 9,432 ckms

Transformation capacity (MVA/MW)

HVAC :474,091 MVA
(POWERGRID : 170,000MVA, 171 S/s)
765kV : 56,500 MVA
400kV : 170,397 MVA
220kV : 247,194 MVA
HVDC : 13,500 MW

FSC 33nos., TCSC 6 nos.

Source:; www.powergridindia.com
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TECHNOLOGY BEING ADOPTED
High Voltage line

Increase the capacity of trans. corridor through HSIL/re-conductoring with HTLS /Upgradation

Utilization of existing transmission lines upto full thermal capacity Series capacitors, SVC, FACTS

Optimization of Tower design tall tower, multi-ckt. Tower

GIS substation
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PURSUING HIGHER VOLTAGE LEVELS BY PGCIL

Worlds longest
Worlds Highest
Voltage level Test station
Charged in Oct.12
multi-terminal
HVDC to harness renewable
Hydro Power from North-east 765kV
Voltage D/C - AC
(kV) 1200kV
800kV
765kV HVDC

500kV
HVDC
400k
220kV V

1977 1990 2000 2002 2012 2017-18

Year
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ISSUES AND CHALLENGES
Issues concerning availability of RoW and same are becoming critical
Resistance of people, terrains in areas of mountains and forest

Sector to grow from 228 GW to 600 GW in next 20 years Even 765kV system may not be good enough.
New methods have to be found out

Challenges to develop Transmission system to meet the requirement of power flow from anywhere to
anywhere.

With increasing magnitude of power transmission, create new challenges of proper O&M

Upgrade to > 50 GW inter-regional evacuation

Creating High Voltage Evacuation Networks

Concept to Commissioning (C2C) time is significantly high

Delay in Commissioning of Projects Under Cost-Plus Regime

Insufficient focus on up gradation of existing transmission lines

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DISTRIBUTI
ON
Distribution and Retail Supply is the most critical link in the electricity market, which interfaces with the end customers and
provides revenue for the entire value chain.

Indian electricity distribution caters to nearly 200 million consumers with a connected load of about 400 GW that places the
country among the largest electricity consumer bases in the world
.
The consumers are served by around 73 distribution utilities
13 electricity departments,
17 private distribution companies,
41 corporatized distribution companies
2 State Electricity Boards

Rural distribution segment in India is characterized by wide dispersal of net work in large areas with long lines, high
cost of supply, low paying capacity of the people, large number of subsidized customers, un-metered flat rate supply to
farmers, non metering due to high cost and practical difficulties, low load and low rate of load growth. Consumer mix in
rural areas is mainly agriculture and residential.

Urban distribution is characterized by high consumer density, and higher rate of growth of load. The consumer mix in
urban areas is mostly commercial, residential, and industrial.

Both segments are distinct with different problems and issues.

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CONSUMER MIX IN INDIA

Industrial Industrial LT
HT 0.05% 2%
Agricultura
l 10%

Com m e
rcial
11%

Domestic 77%

Category wise % of No. of

Consumers
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DISTRIBUTION SCENARIO- High Distribution losses
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PRESENT DISTRIBUTION SCENARIO
High AT&C losses

Frequent power failures due to very old and dilapidated network

Massive load shedding

Low customer satisfaction

Customer service standards are poor
Lengthy and tedious mechanisms for resolving consumer grievances

Uninspiring work culture

Old and obsolete technologies still being used

Unacceptable safety standards

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STATE WISE AT&C LOSSES IN INDIA

Less than 20% Between 20-30% Between 30-40% Above 40%

Goa Andhra Pradesh Karnataka Delhi

Tamil Nadu Gujarat Kerala Uttar Pradesh

West Bengal Assam Bihar

Himachal Pradesh Haryana Jharkhand

Maharashtra Rajasthan Madhya Pradesh

Tripura Meghalaya Arunachal Pradesh

Punjab Mizoram Manipur

Uttaranchal Chhattisgarh Nagaland

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DISCOMS MODEL IN INDIA
Ownership
Ownership/ PPP Discom
No. Structure
Jaipur Vidyut Vitran Nigam
1 State Owned Discom
Limited (JVVNL)
100% Public

North Delhi Power Limited

49% State Govt.
Private Discom (in joint (NDPL)
2 venture with the State
Government) Noida Power Company Limited
27% GNIDA
(NPCL)

Private Discom (full Reliance Infrastructure

3 ownership with the Private Limited- Mumbai Distribution 100% Private
Entity) Operation (R-Infra)

Torrent Power Bhiwandi

Distribution
4 Public Private Partnership Limited (TPBL)-Bhiwandi &
Franchisee
Agra
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ISSUES IN THE ELECTRICITY DISTRIBUTION SECTOR IN INDIA

1.State Government related issues

Uncertain commitment of State Governments is key impediment to the ongoing reform process. This includes delay in unbundling and
restructuring of State Electricity Boards, minimal/no financial support to unbundled utilities during transition period, inadequate
financial support for providing subsidized power to domestic and agricultural consumers, inadequate administrative support in
curbing theft of power etc. Frequently changing policies of the State Governments in regard to subsidies/free power to farmers
adversely affecting the revenue recovery and cost coverage of utilities.

2. Regulatory process related issues

SERCs are inadequately staffed with poor infrastructure. Due to lack of competency and resources in Discoms, tariff filings are often
delayed. In several cases, SERC asks Discoms to revise their filings on account of data gaps or improper information. There is no
central repository of data in electronic form which leads to delay in filing petitions and responding to queries from the regulator.

3. Corporate governance and institutional issues

In many cases, unbundling is limited to operational and technical segregation. Successor companies are highly dependent on their
parent company (i.e. residual SEB or single buyer/trade co or Transco). and therefore, the focus on efficiency improvement from
respective entities is lacking. Due to in- adequate network expansion commensurate with load growth, many power transformers,
distribution transformers, 33kV lines and 11kV feeders are overloaded. Most of the distribution networks in India are quite old which
results in to reduced reliability, increased R&M expenses and poor quality of supply. The consumer awareness about Demand Side
Management (DSM) is limited which results in to higher consumption and increased losses.
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ISSUES IN THE ELECTRICITY DISTRIBUTION SECTOR IN INDIA
4.Commercial issues

Commercial losses are primarily due to improper energy accounting and billing processes, faulty metering, under-billing, theft and
pilferage of energy and lack of accountability within the organization. Only 87% of the total consumers in India are metered
(Source: Mop, 2004-05). Many states have undertaken 100% metering programs, but not yet completed. The chart below indicates
consumer metering level in some of the states.

High AT&C losses are due to high T&D losses coupled with low collection efficiency.
Low level of collection is attributable to lack of employees accountability, inadequate collection facilities, limited usage of advanced
systems and technology (e.g. payment through ECS, credit/debit cards, special centres like e-Seva centres), billing errors, political/
administrative interference etc.

5. Operational issues

Due to inadequate metering and data collection system in place, utilities have not been able to conduct energy audit, which is crucial
for any energy business. Discoms do not have proper load monitoring and control mechanisms (e.g. SCADA, Distribution Control
Centre, telecommunications etc.), which results in to haphazard control of the demand and often leads to loss of revenue and
inconvenience to the consumers
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DISTRIBUTION SECTOR REFORMS
Power sector reforms were first initiated in India in 1992 by the Ministry of Power (MoP) to invite private investments in power
generation to bridge the demand-supply gap

In the reform process distribution segment was identified as the key area for reform for putting the sector on the right track.
Distribution Reforms involve System up-gradation, Loss reduction, Theft control, Consumer orientation, Commercialization and
adoption of IT. The Government launched the Accelerated Power Development and Reforms Programme (APDRP) during the
10th Five Year Plan (2002-07) for the strengthening of Sub Transmission and Distribution network and reduction in AT&C

Continuing its support for power distribution reforms, the Government launched the Restructured APDRP (R-APDRP) in the 11th
Five Year Plan (2007-12) with revised terms and conditions. Under the Restructured Accelerated Power Development and Reforms
Programmed (R-APDRP), State energy utilities are required to adopt measures for

Reducing Aggregate Technical & Commercial losses,

Strengthen distribution network
Improve commercial viability

R-APDRP

It was in this backdrop that the Restructured APDRP (R-APDRP) was conceived in September 2008.With a total program size of
Rs 500bn, Restructured APDRP-II (R-APRDP) is Government of India s initiative to reform Distribution Sector as part of the 11th Five
Year plan. The program is proposed to cover urban areas towns and cities with population of more than 30,000 (10,000 in case of
special category states). The power reform initiative is spread over two phases of:

Phase 1: Covering IT applications in the distribution sector

Phase 2: Strengthening system improvement.
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EFFICENCY IMPROVEMENT IN DISTRIBUTION SECTOR
Models of: PPP
1. Distribution Franchising In Bhiwandi, Maharashtra M/s Torrent Power appointed Distribution Franchisee on energy
input basis in Dec 2006
Customer base of 0.16 million
Area spread over 721 square kilometres.
The estimated demand in the circle is 750 MVA with an annual power consumption of 2400 million units.

Achievements :
15% T&D loss reduction in 9 months (Losses brought down to 30% from 45%).
Improvement in Metering, Billing and Revenue Collection Defective Energy meters (25300 Nos.) replaced.
Approx. capital investment : USD 20 million Enhancement in customer service quality
DT failure reduced by replacement and revamping of DTs

Benefits of Franchise Model

Reduction in technical losses and theft
Improvement in Metering, Billing and Revenue Collection
Capital investments in upgradation of the network
Enhancement in customer service quality
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POWER
TRADING
Power trading inherently means a transaction where the price of power is negotiable and options exist about whom to trade
with and for what quantum. In India, power trading is in an evolving stage and the volumes of exchange are not huge. All
ultimate consumers of electricity are largely served by their respective State Electricity Boards or their successor entities,
Power Departments, private licenses etc. and their relationship is primarily that of captive customers versus monopoly
suppliers. In India, the generators of electricity like Central Generating Stations (CGSs), Independent Power Producers
(IPPs) and State Electricity Boards (SEBs) have all their capacities tied up. Each SEB has an allocated share in central
sector/ jointly owned projects and is expected to draw its share without much say about the price. In other words, the
suppliers of electricity have little choice about whom to sell the power and the buyers have no choice about whom to
purchase their power from.
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GENESIS OF POWER TRADING IN INDIA

PTC was formed in 1999 as a Government of India initiative for development of power market and
incentivizing market based investments to the Power Sector, specially from the private sector:

Facilitate development of Power Projects particularly through private investment

Promote Power Trading to optimally utilize the existing resources

Develop power market for market based investments into the Indian Power Sector

Promote exchange of power with neighbouring countries

Pioneer Role : Initiated development of short term power market and introduced innovative products for
customers

Efforts lead to beginning of sustained trading during 2000-01 (1.6 Billion units ) and also optimum utilization
of existing resources

Exponential growth established the viability of trading as a business concept

Source :47
www.ptcindia.com
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EVOLUTION OF THE TRADING REGULATIONS

2013
Procedure, Terms
and Conditions
for grant of
trading license
and other related
matters) (Second
Amendment)

Source : www.ptcindia.com
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INDIA POWER MARKET DESIGN

Source : www.ptcindia.com
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VOLUME OF ELECTRICITY TRANSACTED THROUGH TRADING
LICENSES AND POWER EXCHANGES
 Benefits of Trading (1)
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BENEFITS OF TRADING
Increasing realization among utilities of power as a source for revenue earning
Improved PLF, particularly of State Power Utilities

An example: DVC - a rise of 5% in PLF

No backing down

Reduction in load shedding

Encouraged IPPs to invest in generating assets- spurt in investment based on competitive tariff due to widening

demand supply gap

Market-based returns

No sovereign/government guarantee

Large merchant capacity is being funded

States Governments of Chhattisgarh, Jharkhand, Orissa, Himachal Pradesh, J&K, Uttaranchal, etc. have

recognized Power as Resource

Planned rapid capacity additions have devised policies to become Power Hubs
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CHALLENGES IN POWER TRADING
Market depth to be increased more players, regional participation

Open Access Implementation

New Segment of prospective participants

Industry

SEZs

HT consumers

Group Captives

Merchant generators

Sufficient transmission capacities required for a vibrant power market

Government to initially support through viability gap funding

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SOME MAJOR PLAYERS IN POWER MARKET

Company Business description

Power Finance Corporation Limited (PFC) is an NBFC engaged in financing and development activities
within the Indian power sector
Major products and services include project term loans, lease financing, direct discounting of bills, short-
term loans and consultancy services

Adani Power is one of Indias largest private thermal power producers, with total capacity of 4,620 MW;
the company aims to generate 20,000 MW of power by 2020
The company is building one of the worlds largest single-location thermal power plants in Mundra, Gujarat

Power Grid Corporation of India Limited (PGCIL) is the single largest transmission utility in India; it
is responsible for planning, co-ordination, supervision and control over inter-state transmission systems

Damodar Valley Corporation is engaged in power generation, distribution and transmission of electric
power, irrigation and flood control

SJVN Limited is the second largest hydro power company in India

The company plans to diversify into wind power projects soon

Source: Company websites, News Articles, Aranca Research

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SOME MAJOR PLAYERS IN POWER MARKET

Company Business description

NTPC is Indias largest power producer and the sixth-largest thermal power producer in the world,
with installed capacity of 41,184 MW (including 5,364 MW through JVs). By 2032, NTPC plans to reach
128,000
MW power capacity. Coal-based power accounts for more than 90 per cent of the total capacity
It has also diversified into hydro power, coal mining, power equipment manufacturing, oil and gas
exploration, power trading and distribution
Tata Power is Indias largest integrated power company, with significant presence in solar, hydro, wind and
geothermal energy space. The company accounts for 52 per cent of total generation capacity in the private
sector, with an installed capacity of 8,521 MW

The company has over 35,000 MW of power generation capacity, both operational and under
development.
Reliance Power has an operational power generation capacity of 2,500 MW. FY13 saw the development
of the 3,960 MW Sasan UMPP in Madhya Pradesh
CESC Limited is a vertically integrated player engaged in coal mining, and generation and distribution
of power
NHPC is the largest hydro power utility in India, with an installed capacity of 5,295MW; it has drawn up
a massive capacity expansion plan of adding 6,697 MW by 2017
NHPC is constructing nine projects aggregating to a total installed capacity of 4271 MW. NHPC added 1,970
MW and 1,150 MW during the 10th and 11th Plan periods, respectively

Source: Company websites, News Articles, Industry Sources, Aranca Research

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THANK YOU