Indian power sector overview

1. Prepared by- Dayanand kherwar

2. 2003 onwards
Growth Era
1991–2003
Liberalisation Era
1956–1991
Nationalisation
Stage Electricity Act (2003)
National Tariff Policy (2006)
Elimination of licensing for
generation projects
Increased competition through
international competitive bidding
engaged in power generation,
transmission and distribution
Launch of UMPP scheme Various
schemes and initiatives such as
Jawaharlal Nehru National
Solar Mission to promote renewable
energy
Civil nuclear agreement with the US
for nuclear technology and fuel Fuel
supply agreement of power
companies with Coal India Ltd (CIL)
Private equity investments in the
sector have surged since 2010
•
•
•Legislative and policy
initiatives (1991)
Private sector
participation in
generation
Fast-track clearing
mechanism of private
investment proposals
Electricity Regulatory
Commissions Act
(1998) for establishing
Central and State
Electricity Regulatory
Commissions and
rationalisation of tariffs
•
Before 1956
Introductory
Stage
• •
Industrial Policy
Resolution (1956)
Generation and
distribution of power
under state
ownership
Power losses,
subsidies,
infrastructure
bottlenecks and
resource constraints
•
• •
•
•• Electricity
(Supply) Act
1948
• Establishment
of semi-
autonomous
State Electricity
Boards (SEBs)
•
•
•
•
•
Source:; WWW..NPTI.IN
POWER

3. POWER
India as a power
Producer and
Consumer globally
• With a production of 1,102.9 TWh, India is the third largest producer and fifth largest
consumer of electricity in the world
• The per capita electricity consumption in 2012-13 is -917.18 kWh.
• As per census, only 55% of rural households have access to electricity.
Large-scale government
initiated expansion
plans
• 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 (2017–22)
• Investments of around USD223.9 billion are planned for the power sector during the 12th
Plan Five-Year Plan
Robust growth in
Renewable sector
• Renewable energy capacity additions of 30 GW are planned in the next five years to meet
the growing energy demand
• Wind energy is estimated to contribute 15 GW, followed by solar power at 10 GW
Source:; WWW..CEA..nic.inC

4. POWER
The power sector in 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
CAPACITY
(248509.63MW)
ANNUAL
GENERATION
(1102.9 TWh)
SUPPLY DEMAND
GAP
(4.1% PEAK)
PER CAPITA
CONSUMPTION
(917.18)
PLF
(68.15)
ELECTRIFIED
VILLAGES
(95.60%)
Source:; WWW..CEA..nic.in

5. POWER
GENERATION
39375.36
248509.64
31692.14
171376.09
4780
40661.41
0
50000
100000
150000
200000
250000
300000
CAPTIVE TOTAL RES THERMAL NUCLEAR HYDRO
CAPTIVE TOTAL RES THERMAL NUCLEAR HYDRO
All India Installed Capacity (MW) as on 31-05-2014 Region -wise
68255.9
93290.7
86962.99
CENTRAL
STATE
PRIVATE
All India Installed Capacity(MW) as on 31-5-
2014(Sector-Wise)
Source:; WWW..CEA..nic.in

6. Electricity production in India (TWh)Electricity production in India (excluding captive generation)
stood at 911.6 TWh in FY13, a 4 per cent growth over the
previous fiscal
912
876
Over FY07–13, electricity production expanded at a CAGR
of 5.5 per cent
CAGR: 5.5%
The Planning Commission’s 12th Plan projects that total 772
domestic energy production would reach 669.6 million
tonnes of oil equivalent (MTOE) by 2016–17 and 844 MTOE
by 2021–22
FY07 FY08 FY09 FY10 FY11 FY12 FY13
Source: Central Electricity Authority (CEA), Aranca Research;
Notes: FY - Indian Financial Year (April-March), TWh - Terra Watt Hour
811
724
705
663
POWER
Source:; WWW..CEA..nic.in

7. 68%
Source: Ministry of Coal,
Gas
India’s proven natural gas reserves measure about 1,074 billion
cubic metres
Thermal
Coal
India has large reserves of coal. As of April 2012, total coal reserves
stood at 293.5 billion tonnes; of this, 118.1 billion tonnes were
proven reserves
POWER
Thermal power plants convert energy rich fuel into electricity and heat. Possible fuels include coal, natural gas, petroleum
products, agricultural waste and domestic trash /waste. Thermal power accounts for 69 % in total energy production.
Thermal power is produced from coal oil and natural gas. Total installed capacity of thermal power is 171376.09 MW
THERMAL POWER
Thermal fuel maintains a leading position among the fuel used for power generation
RES,
31692.14,
13%
THERMAL,
171376.09,
69%
NUCLEAR,
4780, 2%
HYDRO,
40661.41, 16%
RES
THERMAL
NUCLEAR
HYDRO
coal,
147568.39, 86%
Gas,
22607.95,
13%
Diesel, 1199.75,
1%
coal
Gas
Diesel

8. POWER
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.

9. POWER
HYDRO POWER
Hydropower is a renewable, non-polluting and environment friendly source of energy. Oldest energy technique known to
mankind for conversion of mechanical energy into electrical energy. Contributes around 22% of the world electricity supply
generated .
In India, Jamshed ji Tata built the first hydroelectric power dam in the Western Ghats of Maharashtra in the early 1900s to
supply power to Bombay’s Cotton and Textile Mills
Out of the total power generation installed capacity in India of 2,48,509.64MW (June, 2014), hydro power contributes about
16% i.e. 40661.41 MW. The total hydroelectric power potential in the country is assessed at about 150,000 MW, equivalent to
84,000 MW at 60% load factor. The potential of small hydro power projects is estimated at about 15,000 MW.
As per assessment made by CEA, India is endowed with economically exploitable hydro-power potential to the tune of
1 48 700 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

10. 10
PROSPECTS OF HYDRO GENERATION
Source: IEA - Key World Energy Statistics 2006, CEA.
Share of Hydropower in Electricity Generation Initiatives to encourage Hydropower
Vast untapped Hydropower potential in India
 Hydroelectric projects - Renewable, non-consumptive and environmentally benign source
of energy.
 GoI has identified 162 schemes for preliminary feasibility reports under the 50, 000 MW
hydroelectric initiative during the 12th plan period (FY 2012 – 17).
 Till recently, issues like dearth of adequately investigated projects, long clearance and
approval procedures, resettlement and rehabilitation issues, land acquisition problems,
power evacuation problems etc. had contributed to the slow pace of hydropower
development in the country. However, considering the large hydropower potential in the
country and the much required energy security, government is accelerating hydropower
reforms. Some of the recent government initiatives in this space include
- Preparation of a shelf of well- investigated projects and streamlining of
statutory clearances and approvals for the same.
- Establishment of independent regulatory commissions’
- Providing for long-term financing for projects,
 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
 North East India as well as Nepal have huge potential of hydropower
generation.
 North East India is already connected to Northern, Western and Eastern
Grid. PGCIL is further strengthening the capacity to ensure that evacuation
is not a constraint once the planned power plants in North East are
commissioned.
 To encourage setting up of hydroelectric plants in Nepal and attract private
investment, Govt. of Nepal has set up a JV with ILFS to develop four 220 kv
double circuit lines from Nepal to India.
57
39.6
16.1 16.1
12.7
8.8 6.5
82.8
98.8
0
20
40
60
80
100
120
Norw ay Brazil Canada Sw eden China World
average
India Japan USA
During April-Feb 2007, share of
hydropower gene ration in India was
higher at about 17%
MW %age
Identified capacity as per re-assessment
study
148,701
Capacity developed 29,572 19.9%
Capacity under construction 13,286 8.9%
Capacity yet to be developed 105,843 71.2%
POWER

11. POWER
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)

12. POWER
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

13. POWER
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/

14. POWER
INDIAN NUCLEAR POWER INDUSTRY
Source:www.world-nuclear.org/

15. POWER
Reactor State Type MWe net, each
Commercial
operation
Safeguards status*
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)
Kakrapar 1&2 Gujarat PHWR 202 1993-95
December 2010 under
new agreement
Madras 1&2 (MAPS) Tamil Nadu PHWR 202 1984-86
Narora 1&2 Uttar Pradesh PHWR 202 1991-92
Due in 2014 under new
agreement
Rajasthan 1 Rajasthan PHWR 90 1973 Item-specific, Oct 2009
Rajasthan 2 Rajasthan PHWR 187 1981 Item-specific, Oct 2009
Rajasthan 3&4 Rajasthan PHWR 202 1999-2000
March 2010 under new
agreement
Rajasthan 5&6 Rajasthan PHWR 202 Feb & April 2010
Oct 2009 under new
agreement
Tarapur 3&4 Maharashtra PHWR 490 2006, 05
Due in 2014 under new
agreement
Kudankulam 1 Tamil Nadu PWR 917 (July 2014) Item-specific, Oct 2009
Total (21) 5302 MWe
INDIA’S OPERATING NUCLEAR POWER REACTORS

16. POWER
PROJECTED NUCLEAR POWER IN INDIA
Source:www.world-nuclear.org/

17. POWER
Reactor Type
MWe gross,
net,
each
Project control
Construction
start
Commercial
operation due
Safeguards
status
Kudankulam 2 PWR (VVER) 1000, 917 NPCIL July 2002 3/2014
item-specific, Oct
2009
Kalpakkam PFBR FBR 500, 470 Bhavini Oct 2004
(9/2014 start-up)
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
INDIA’S NUCLEAR POWER REACTORS UNDER CONSTRUCTION
Source:www.world-nuclear.org/

18. POWER
INDIA’S URANIUM MINES AND MILLS – existing and planned
District Mine Mill Operating from tU per year
Jharkhand Jaduguda Jaduguda
1967 (mine)
1968 (mill)
200 total from mill
Bhatin Jaduguda 1967
Narwapahar Jaduguda 1995
Bagjata Jaduguda 2008
Jharkhand, East
Singhbum dist.
Turamdih Turamdih
2003 (u/g mine)
2008 (mill)
190 total from mill
Banduhurang Turamdih 2007 (open pit)
Mohuldih Turamdih 2012
Andhra Pradesh, Kadapa/
YSR district
Tummalapalle Tummalapalle 2012 220 increasing to 330
Andhra Pradesh, Kadapa/
YSR district
Kanampalle Kanampalle? 2017
Telengana, Nalgonda dist. Lambapur-Peddagattu Seripally /Mallapuram 2016? 130
Karnataka, Gulbarga dist. Gogi Diggi/ Saidpur 2014 130
Meghalaya
Kylleng-Pyndeng-Sohiong-
Mawthabah (KPM),
(Domiasiat), Wakhyn
Mawthabah 2017 (open pit) 340
Source:www.world-nuclear.org/

19. POWER
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

20. POWER
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

21. India has the sixth largest renewable (eg, hydro
power) power generation capacity (2012)
As of April 2013, total installed power capacity from
renewable energy sources (excluding Hydro power) was
27.5 GW. This accounts for 12.3 per cent of the total
installed power capacity and forms 6.5 per cent of the total
electricity mix
India ranks
90 sixth in the
world
86
Wind energy is the largest source of renewable energy 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
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 country’s true potential for
solar power stands at an estimated 5,000 TWh per annum
Source: Renewables 2012 Global Status Report (REN21),
Capacity addition of 30 GW is planned using various
renewable energy technologies during the 12th Five-Year
Plan. Wind Energy is estimated to contribute 15 GW,
followed by solar power at 10 GW and the remaining by
other sources
71
31 29 24
POWER

22. POWER
Renewal Energy Installed Capacity in India (as of 31 January 2014)
Type Technology
Installed capacity
(in MW)
Grid Connected Power
Wind 20,298.83
Small Hydel Power Projects 3,774.15
Bagasse Cogeneration 2,512.88
Solar 2,208.36
Biomass Power &
Gasification
1,285.60
Waste to Power 99.08
Total - Grid Connected
Power
30,177.90
Off-Grid / Captive Power
Bagasse Cogeneration 517.34
SPV Systems (>1 kW) 159.77
Biomass Gasifiers- Industrial 146.40
Waste to Power 119.63
Biomass Gasifiers- Rural 17.63
Water Mills/Micro Hydel 10.18
Aero generator/ Hybrid
Systems
2.18
Total - Off-Grid / Captive
Power
973.13
TOTAL 31,151.03
20,298.83, 67%
3,774.15, 13%
2,512.88, 8%
2,208.36,
7%
1,285.60, 4% 99.08, 1%
Wind Small Hydel Power Projects
Bagasse Cogeneration Solar
Biomass Power & Gasification Waste to Power
RENEWABLE ENERGY IN INDIA
Source:; MNRE

23. POWER
50000
45000
16000 15000
7000
5000
0
10000
20000
30000
40000
50000
60000
SOLAR WIND BIOMASS SHP WASTE TO
ENERGY
CO GENERATION
MW
ECONOMIC POTENTIAL OF RENEWABLE ENERGY
India could produce about 62GW—90 percent of technically feasible renewable capacity in wind, biomass, and small
hydropower—in 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.
Fuel composition
in 2032
Potential of renewable energy
Source:; MNRE

24. POWER
ISSUES AND CHALLENGES
• The cost plus approach to tariff setting—along with the technology-specific focus—has led to incentives that hinder the
economic development of India’s 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 country’s 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 mechanisms—including single-window clearances, facilitation by state nodal agencies, and simplified regulation
for smaller renewable energy projects—have 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

25. POWER
• 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
ISSUES AND CHALLENGES(CONTD…)

26. POWER
TRANSMISSION
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.
PGCIL
TRANSMISSION
LINES
(108307ckm)
SUBSTATIONS
(186 NOS)
SYSTEM
AVAILABILITY
(99%)
TRANSFORMATION
CAPACITY
(2,09,274 MVA)
INTERREGIONAL
CAPACITY
(40,050MW)

27. POWER
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 development of electricity systems)
Central Electricity Regulatory Commission
(CERC)
(Regulates tariff; formulates policies regarding
subsidies, and promotion of efficient and
environmentally benign policies at central
level)
State Electricity Regulation Commission
(SERC)
(Regulates tariff; formulates policies regarding
subsidies, and promotion of efficient and
environmentally benign policies at state level)
Central Transmission
Utility(CTU)
(Ensures development of an
efficient, coordinated and
economical system of
interstate
transmission lines and
undertakes inter-state
transmission)
Private / PPP
(Develops transmission lines on
BOO model and charges for
wheeling electricity within the
tarrifs specified by CERC/SERC)
State Transmission Utility
(STU)
(Ensures development of an
efficient, coordinated and
economical system of intra-State
transmission lines and
undertakes intra-state
transmission)
CURRENT TRANSMISSION MARKET STRUCTURE

28. POWER
Electricity Laws
(Amendment) Act
Private
participation
allowed in
generation
– Up to 100%
foreign ownership
allowed
– Operators and
SEBs entered into
power purchase
agreements (PPAs)
SEBs to be
responsible for
transmission and
distribution of
power
Electricity Laws
(Amendment) Act
• Private participation
enabled in
transmission
• CTU and STUs set up
Electricity
Regulatory
Commissions Act
• CERC & SERCs
formed
• Regulator to protect
& promote consumer
interest, fair
competition,
transparency
• Provide a level-
playing-field for all
players
The Electricity Act
Replaced the
earlier laws,
aiming to enable
reforms &
restructure power
sector
• National Electricity
Policy brought
out, mandatory
creation of
SERCs, emphasis
on rural
electrification,
open access in
transmission and
Distribution
• Introduced a non-
discriminatory
open access in
the transmission
National Tariff
Policy
•Mandatory
competitive
bidding of all
transmission
projects after Jan
2011
•Framework for
determining tariffs
and rate of return
for projects under
generation,
transmission as
well as distribution
National Tariff
Policy
(Amendment)
• Exemption to
intra-state
transmission
sector from
mandatory
competitive
bidding up to 5th
Jan 2013
• Exemption of
select
experimental
works/ urgent/
compressed time
schedule work
from tariff based
competitive
bidding
1991 1998 2003 2006 2011
MAJOR MILESTONES IN TRANSMISSION SECTOR
Source:; www.powergridindia.com

29. National
Grid
1950-60’s
1970-80s
2000 onwards
Local
1950’s
State Grids
by SEBs
Regional Grids
with ATS of
Central
Generation
(Paradigm Shift from self
sufficiency at Regional level
concept to National level)
Interconnecting
Regional Grids
with HVDC
1990s
POWER
EVOLUTION OF NATIONAL GRID
Source:; www.powergridindia.com

30. POWER
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.

31. POWER
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

32. POWER
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

33. POWER
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

34. Voltage
(kV)
1977 1990 2000 2002 2012 2017-18
Year
220kV
400kV
500kV
HVDC
765kV
800kV
HVDC
1200kV
765kV D/C -
AC
World’s Highest
Voltage level – Test station
Charged in Oct.’12World’s longest
multi-terminal
HVDC to harness renewable
Hydro Power from North-east
POWER
PURSUING HIGHER VOLTAGE LEVELS BY PGCIL

35. POWER
• 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
ISSUES AND CHALLENGES

36. POWER
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.
DISTRIBUTION

37. POWER
Commercial
11%
Industrial HT
0.05%
Agricultural
10%
Industrial LT
2%
Domestic77%
Categorywise%ofNo.ofConsumers
CONSUMER MIX IN INDIA

38. POWER
0
5
10
15
20
25
India Russia China Brazil World
23.2
10.6
6.7
16.4
8.5
Distributionlosses in developingcountries in 2008
DISTRIBUTION SCENARIO- High Distribution losses

39. POWER
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

40. POWER
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
STATE WISE AT&C LOSSES IN INDIA

41. POWER
S. No. Ownership/ PPP Discom Ownership
Structure
1 State Owned Discom
Jaipur Vidyut Vitran Nigam
Limited (JVVNL)
100% Public
2
Private Discom (in joint
venture with the State
Government)
North Delhi Power Limited
(NDPL)
49% State Govt.
Noida Power Company Limited
(NPCL)
27% GNIDA
3
Private Discom (full
ownership with the Private
Entity)
Reliance Infrastructure
Limited- Mumbai Distribution
Operation (R-Infra)
100% Private
4 Public Private Partnership
Torrent Power Bhiwandi
Limited (TPBL)-Bhiwandi &
Agra
Distribution
Franchisee
DISCOMS MODEL IN INDIA

42. POWER
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.
ISSUES IN THE ELECTRICITY DISTRIBUTION SECTOR IN INDIA

43. POWER
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

44. POWER
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.
DISTRIBUTION SECTOR REFORMS

45. POWER
EFFICENCY IMPROVEMENT IN DISTRIBUTION SECTOR
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
Models of: PPP
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

46. POWER
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.

47. 47
• 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:
• 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
 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
POWER
GENESIS OF POWER TRADING IN INDIA
Source : www.ptcindia.com

48. 2003
Electricity
Act
formalized
concept of
trading and
power
market
2009
Procedure, Terms
and Conditions for
grant of trading
license and other
related matters
2009
Procedure, Terms
and Conditions for
grant of trading
license and other
related matters
(Second
Amendment)
2010
Fixation of
Trading
Margin
2010
Procedure,
Terms and
Conditions for
grant of trading
license and
other related
matters (First
Amendment)
2012
Procedure, Terms
and Conditions for
grant of trading
license and other
related matters (First
Amendment)
2013
Procedure, Terms
and Conditions for
grant of trading
license and other
related matters)
(Second
Amendment)
POWER
EVOLUTION OF THE TRADING REGULATIONS
Source : www.ptcindia.com

49. POWER
INDIA POWER MARKET DESIGN
Source : www.ptcindia.com

50. POWER
VOLUME OF ELECTRICITY TRANSACTED THROUGH TRADING
LICENSES AND POWER EXCHANGES

51. 51
• 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
Benefits of Trading (1)
POWER
BENEFITS OF TRADING

52. POWER
• 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’
CHALLENGES IN POWER TRADING

53. Source: Company websites, News Articles, Aranca Research
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 India’s 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 world’s 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
POWER
SOME MAJOR PLAYERS IN POWER MARKET

54. Source: Company websites, News Articles, Industry Sources, Aranca Research
Company Business description
• NTPC is India’s 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 India’s 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
POWER
SOME MAJOR PLAYERS IN POWER MARKET

55. POWER
THANK YOU