Energising India 2009 by vyas sivanand

January - 2009

Foreword

hen Thomas Alva Edison origi nated the concept and imple mentation of electric-power

As we hope that the Power for All 2012 agenda lives up to be a reality, the Indian Express Group thought of analyzing the sec-

generation and distribution to homes, businesses, and factories; he would never have imagined the widespread implications his discovery would have on a country as mammoth in diversity as India.

tor in its present form and its future shape through this edition of Energising India. In its second year, this edition has a futuristic touch to it, primarily because of the theme ‘Power for All 2012’.

Today, it is a unanimously derived factual conclusion that the Indian Power sector is in shambles. Plagued by the insincerities and limitations that can be, the Indian

While we have taken the KPMG report, a terse planning commission report, the XIth Five Year plan’s agenda for Power, and the Central Electricity Authority’s December

power sector had been dreaming of a silver lining, quite often.

report on installed power generation capacity, we have ensured that the hope continues to be alive.

But now, India is looking at a silver lining. With the Power for All 2012 agenda on priority, hope has sprouted. It is rekindled everyday, either through political rhetoric or a billion dollar private investment plan. The hope seems healthy if one does not look back on the Indian power sector’s history. But time changes everything and the hope is surviving on this fact.

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The edition is an optimistic approach to the future of the power sector in the country and we hope that this approach, inspite of all its uncertainty, will come true as scheduled. And for that hope, it’s now that India needs to rise, it’s now that India needs to live up, it’s now that India really needs to Power up.

January - 2009

He means what he says and he says what he means. Though the election fever haunts every ministry, Sushil Kumar Shinde, Minister for Power, is a man who never gets disturbed on getting elected or not. Having seen the essence of power during his two decades of power in different sectors and at different levels, he is dedicating himself to make a difference in the power sector. No gimmicks, no magics, but a reality that presents a scintillating picture on power sector. After he took over the reins of administration, Shinde brought new agendas to make a visible land mark that covers all mega power projects, converting power generating organisations into manufacturing companies, introducing power reforms on par with Western countries and finally power for all. Converting a myth into a refreshing reality without compromising on the common minimum program of the UPA Government. The excerpts speak in volumes how Shinde is redrawing the agenda of the power sector to benefit not only the poor but also industries. By P R Subas Chandran. January - 2009

Installed Capacity The Installed generation capacity in India has been increased from 1,23,901 MW as on 31.1.2006 to about 1,47,000 MW as on 30.11.2008 which means a capacity enhancement of about 23099 MW or a growth of 18.64%.

New Power Projects Thirty three power projects in the private sector have been initiated, out of which 9 are Hydel and 24 Thermal totaling a capacity of additional 27766 MW. For likely benefits during the 11th Plan. Further 41 projects (13 Hydel and 28 Thermal) totaling a capacity of 37908 MW are presently under various stages of development for likely benefits during the 12th Plan.

Statutory changes

conditioners has been launched. The Bachat Lamp Yojana envisages promotion of CFLs. Under the scheme high quality CFLs will be provided to domestic consumers at a rate comparable to that of an incandescent bulb.

By amendments to the Electricity Act of 2003 the Central Government was made responsible for rural electrification and a move for inclusion of provisions to check electricity theft was passed in Parliament.

The difference is to be made up by earning Certified Emission Reduction (CERs) under the Clean Development Mechanism (CDM) which would lead to a potential reduction of about 4000 MW of electricity. BEE is promoting energy efficiency measures through

Rural Electrification

the performance contracting route and has empanelled 37 Energy Services Companies (ESCO) to facilitate implementation of energy efficiency projects. These ESCOS have been accredited by independent third party agencies like CRISIL and ICRI.

Under the Rajiv Gandhi Grameen Vidyuitikaran Yojana, 53,048 unelectrified villages were electrified and 66,808 villages were intensively electrified. Free electricity connections have been provided to 40.75 Lakhs BPL households. 94,770 villages were covered under Franchisee Development in 14 States. 558 projects with an estimated outlay of Rs. 25679.64 Crores have been sanctioned. A total Capital Subsidy of Rs. 10079.87 Crores has been released by the Government.

Energy Saving Energy labelling scheme for fluorscent tube lights and frost free refrigerators and air 7

Under the Standards and Labelling Scheme notification of mandatory labelling for four equipments / appliances is at an advanced stage and the scheme has been introduced on a voluntary basis for six other equipments / appliances. During the last three years the total avoided capacity addition achieved by various schemes of energy efficiency and conservation is around 1200 MV.

Power Projects in Private Sector Three Ultra Mega Power Projects with an aggregate capacity of 12000 MW have been awarded to the private sector. This will involve an investment of another Rs. 48,000 Crores over and above the investments in the private sector mentioned above. Further, bidding process in respect of Tilaiya is currently on.

Total Generation The total generation in the country during 2006-2007 was 662.5 Billion Units (BU) as compared to 617.5 BU during 2005-2006, showing a growth of 7.3% as compared to a 5.1% growth in 2005-2006 over the previous year. The total generation during 2008-2009 (upto November, 2008) was 479.774 BU as compared to 466.699 BU during the same period of last year with a growth of about 2.80%. Excluding neuclar power total generation during the same periods was 469.517 BU against 455.202 BU with a growth of 3.14%.

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Overall Plant Load Factor The overall Plant Load Factor of thermal power stations in the country improved significantly from 73.6% during 2005-2006 to 76.4% during 2007-08. Further improvement in PLF would have been possible during 2008-09 but for shortage of coal, delay in synchronisation and commercial operation of units due to lack of completion of balance of plant works by contractors.

pacity under the scheme is expected to be around 500 MW.

Rural Electrification Policy

mated cost of Rs. 27518.46 Crores have been approved by the board of the PGCIL during this period.

Rural Electrification Policy under Section 4 and 5 of the Electricity Act, 2003 was notified.

5668 MW was added in the Hydro Sector by the commissioning of 17 Hydro Electric Projects in Central / State / Private Sector including difficult areas.

Foreign Players

Hydro Electric Policy

Twenty one agreements have been signed with external funding agencies viz., World Bank, Asian Development Bank, JBIC and

The Union Cabinet has approved the New Hydro Electric Policy in February, 2008. In this new policy, private entrepreneurs can take up projects on the basis of MoUs till

The Energy Conservation Germany bringing in approximately US 4.5 Million Dollars for the Indian Power Sec- January, 2011 and they will be allowed Building Code: (ECBC) tor. This has been launced for five climatic zones (hot and dry, warm and humid, composite, temperate, and cold). Energy conservation measures have been initiated in 300 Government buildings in which investment grade energy audit is being undertaken. For the new commercial buildings having a connected load of more than 500 MW or a contract demand of 600 KVA, the ECBC has been developed. The targeted avoided ca-

Power Exchange Capacity Inter – Regional Power Exchange Capacity was a enhanced to 17000 MW from 9500 MW.

New Transmission Projects Six New Transmission Projects with a total estimated cost of Rs. 7293 Crores were approved by the Union Cabinet. In addition, 35 transmission projects at a total esti-

merchant sale of upto 40% of the saleable power. The policy also envisages exemption from tariff based bidding till January 2011, merchant sale of 40% of saleable power allowed, 1% free power above the 12% earmarked for local area development. The New Hydro Power Policy, 2008 goes one step ahead of the National Rehabilitation and Resettlement Policy (NRRP), 2007 so far as R & R provisions for Hydro Power projects are concerned. These provisions shall be applicable even is one family is affected by the development of a Hydro Power project.

Setting up of ITIs Setting up of Industrial Training Institutes to train locals for employment in the projects an International Conclave was organised by the Central Electricity Authority and Ministry of Power on the 4th and 5th July, 2007 on “Key Inputs for Accelerated Development of Indian Power Sector for 11th Plan and Beyond.” Participants included State Governments, Ministry of Labour & Employment, Power

January - 2009

Utilities from Central, State and Private Sectors besides Research institutions. It was noted at the Conclave that the large capacity addition planned in the generation, transmission and distribution sectors offers a great opportunity for employment generation and building up of a large skilled man power base. Shortage of skilled man power was flagged as an issue of concern, more so in the context of competing requirements on account of the infrastructure development boom in the country. It was agreed that one of the steps required to be taken urgently is to train the required additional man power from the existing ITIs to suit the requirements of the power sector. There was a consensus in the Conclave that the project developers should contribute to building up of a trained manpower base which could be utilized by them and their contractors/sub contractors. One of the recommendations of the Conclave was adoption of ITIs located close to the project site by the project developers and major EPC contractors who would contribute by means of providing necessary infrastructure at the ITIs and also assist in organizing practical training programmes at the project sites under the technical apprenticeship programme. The issue of ITI adoption came up for discussion during the 18th Bimonthly Coordination meeting held by Secretary (Power) on 18th July,2007 wherein, it was agreed that the CPSUs would adopt one or more ITIs at their places of choice near to the project sites to build up the required trained manpower. During the Seminar on “Requirement and Availability of Highly Skilled Manpower for

the Power Sector” organised by the Ministry of Power on 3rd October 2007, in which representatives of Central Electricity Authority, CPSUs/Autonomous Bodies/Statutory bodies under the administrative control of Ministry of Power, AICTE, Director General (Employment & Training), Ministry

The overall Plant Load Factor of thermal power stations in the country improved significantly from 73.6% during 2005-2006 to 76.4% during 2007-08. Further improvement in PLF would have been possible during 2008-09 but for shortage of coal, delay in synchronisation and commercial operation of units due to lack of completion of balance of plant works by contractors.

of Labour, Power Secretaries & Secretaries (Technical Education) from the States, representatives of ASSOCHAM, FICCI, CII, IPPs etc. participated, the power developers were impressed upon to adopt ITIs near their project sites to develop the base of skilled manpower for the power sector. So far 14 ITIs have been adopted by various CPSUs under Ministry of Power and 26 ITIs are under process to be adopted.

Damodar Valley Corporation DVC signed an agreement with DTL to power the October, 2010 Common Wealth Games in Delhi. 2500 MW from 3 New Projects viz. Mejia TPS Phase II, Durgapur Steel TPS and Koderma TPS Stage – 1 will go to Delhi.

Capacity Addition DVC has placed orders / LoA for capacity addition of 6250 MW including 500 MW targeted for December, 2008 against an installed capacity of 2710 MW. ❑

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The Government of India recently announced that 53,000 villages in the country have been electrified and promised ‘electricity for all’ by the year 2012. The Ministry of Power has set a target to electrify 1,20,000 villages in the current Five Year Plan (2007-12) under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY). The Indian government, in the Eleventh Five-Year Plan (2007-12), has increased its target of capacity addition to 90, 000 MW from the initial 78,530MW to meet the country’s rising energy demands, taking the total generation installed capacity from 1,46,902 MW as on November 2008 to 2,38,902 MW by 2012. It is a big task indeed and even if India does not touch the target, it would have still reached a fairly substantial capacity.

“

o far, 53,000 villages have been elec trified and by 2012 everyone will get electricity,” said Power Minister Sushilkumar Shinde. 1,20,000 villages are being targeted. But having previously been criticised for hyping up miniscule achievements, this ambitious announcement must have been made with calculated refinement. RGGVY was launched in 2005 with the objective to electrify all villages in the country where there is no power. Under the scheme, Government provides 90 per cent

subsidy for electricity distribution infrastructure and 100 per cent subsidy for providing power connections to the rural household. Government has already provided electricity connections to 18-lakh Below Poverty Line (BPL) households out of the targeted 50 lakh such families this fiscal. It has earmarked a total capital subsidy of Rs 33,000 crore for providing electricity connections and for the distribution infrastructure to the rural household. “A subsidy of Rs 28,000 crore has been provided for the XIth plan period for rural electrification. During the previous five year plan period, we got a subsidy of Rs 5,000 crore,” said Chairman and Managing Director REC, P Uma Shankar. “We have made arrangements for electrifying 1,20,000 village during XIth plan period,” she added. But to achieve the target Mission of ‘Power for All by 2012’ would mean achieving the target of 1000 KwHr (Units) of per capita consumption of electricity by this period. Achieving this would mean that there is an immediate need to attract US $ 250 Billion Investment into the sector. (FDI & Domestic Investment Combined); adequate capacity growth to Sustain GDP Growth at 8% plus; reliable & quality power On 24 x 7 basis, at least in Urban & Industrialized areas; 100% Rural Electrification with adequate & qualitative power for irrigation purpose; increasing the role of Hydel & Renewable Energy in the energy mix; urgent need to develop the alternatives, both in the Fuel & Technology terms, and focus on implementation.

MoP’s Blueprint The Ministry of Power has prepared a comprehensive Blueprint for Power Sector development encompassing an integrated

strategy for the sector development with following objectives:●

Sufficient power to achieve GDP growth

rate of 8% ● Reliability of power ● Quality power ● Optimum power cost ● Commercial viability of power industry ● Power for all Strategies to achieve the objectives: Power Generation Strategy with focus on low cost generation, optimization of capacity utilization, controlling the input cost, optimisation of fuel mix, Technology upgradation and utilization of Non Conventional energy sources Transmission Strategy with focus on development of National Grid including Interstate connections, Technology upgradation & optimization of transmission cost. Distribution strategy to achieve Distribution Reforms with focus on System upgradation, loss reduction, theft control, consumer service orientation, quality power supply commercialization, Decentralized distributed generation and supply for rural areas. Regulation Strategy aimed at protecting Consumer interests and making the sector commercially viable. Financing Strategy to generate resources for required growth of the power sector. Conservation Strategy to optimise the utilization of electricity with focus on Demand Side management, Load management and Technology upgradation to provide energy efficient equipment / gadgets. Communication Strategy for political consensus with media support to enhance the genera; public awareness.

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(PED),followed by oil at 31.8%, gas at 8.9% and hydro-power with a 6.8% share of PED. Regional energy demand is forecast to reach 4,915mn tonnes of oil equivalent (toe) by 2012, representing 32.9% growth over the period. India’s 2007 market share of 10.94% is set to rise to 11.49% by 2012. The country’s17.8TWh of nuclear demand in 2007 is forecast to reach 30TWh by 2012, with its share of the Asia Pacific nuclear market rising from 3.27% to 4.65% over the period.”

APDRP The government has proposed to introduce a restructured Accelerated Power Development and Reforms Programme (APDRP) in the 11th Five Year Plan to cut transmission and distribution losses, early 2008. The APDRP was launched in 2002-03 with the objective of encouraging reforms, reducing aggregate technical and commercial loss and improving quality of supply of power.

ecutives in more than 125 countries, the forecast is that the country will account for 12.12% of Asia Pacific regional power generation by 2012, with a growing generation shortfall that requires rising imports. BMI’s Asia Pacific power generation assumption for 2007 is 6,865 terawatt hours (TWh), representing an increase of 9.6% over the previous year. It is forecasting an increase in regional generation to 9,435TWh by 2012, representing a rise of 37.4%.

The Distribution Reform was identified as the key area to bring about the efficiency

Asia Pacific power generation in 2007 was 5,407TWh, accounting for 78.8% of the total electricity supplied in the region. BMI’s

and improve financial health of the power sector. Ministry of Power took various initiatives in the recent past for bringing improvement in the distribution sector. 29 states have signed the Memorandum of Understandings with the Ministry to take

forecast for 2012 is 7,155TWh, implying 32.3% growth that reduces the market share of thermal generation to 75.8% thanks partly to environmental concerns that should be promoting renewables, hydro-electricity and nuclear generation.

various steps to undertake distribution reforms in a time bound manner.

India’s thermal generation in 2007 was 622TWh, or 11.50% of the regional total. By 2012, the country is expected to account for 12.49% of regional thermal generation, says the BMI report.

BMI Report According to India Power Report from Business Monitor International (BMI), which publishes specialist business information on global emerging markets for senior exJanuary - 2009

The report further states that, “For India, coal is the dominant fuel, accounting for 51.4% of 2007 primary energy demand

India is still ranked second, behind China in BMI’s updated Power Business Environment rating, thanks to its vast market size and excellent growth prospects. Certain country risk factors offset some of the industry strength, but the country seems destined to vie with China at the head of the table for the foreseeable future. BMI is now forecasting Indian real GDP growth averaging 8.25% per annum between 2007 and 2012, with the 2008 forecast being 9.00%. Population is expected to expand from 1.16bn to 1.24bn over the period, with GDP per capita and electricity consumption per capita both forecast to increase significantly. The country’s power consumption is expected to increase from 890TWh in 2007 to 1,471TWh by the end of the forecast period, leaving a theoretical shortfall in generation rising from 115TWh in 2007 to328TWh in 2012, assuming 7.8% annual growth in generating capacity. Between 2007 and 2018, BMI forecasts an increase in Indian electricity generation of 115.4%, which is among the highest for the Asia Pacific region. This equates to 37.7% in the 2013-2018 period, down from 47.6% in 2007-12. PED growth is set to fall from 39.6% in 2007-12 to 32.6%, representing 94.3%for the entire forecast period. An increase of 88.5% in hydro-power use dur-

ing 2007-18 is a key element of generation growth. Thermal power generation is forecast to rise by 113.4% between 2007 and 2018, with nuclear consumption up by 197.2%.

The Target The Indian government, in the Eleventh Five-Year Plan (2007-12), had initially recommended a capacity addition of 78,530MW to meet the country’s rising energy demands, which was later revised to 78,577-MW. The proposed capacity addition has again been revised to 92,000-MW. The earlier estimate of 78,577-MW consisted of 16,553-MW of hydropower, 58,644-MW of thermal power and 3,380-MW of nuclear power. According to the Central Electricity Authority (New Delhi), the Indian government’s statutory organization for regulating the power sector, projects with a total capacity of 11,404-MW have been commissioned through August 2009 for the Eleventh FiveYear Plan. The energy mix includes 8,472MW from thermal power, 2,712-MW of hydropower and 220-MW of nuclear power. The total installed power generation capacity of the country currently stands at 146,902.81 MW, consisting of 92,892.64 MW of thermal power, 36,647.76 MW of hydro power, 4,120-MW of nuclear power and 13,242.41 MW from renewable sources. In the earlier target of 78,577-MW, the contribution of the private sector was 10,760-MW, compared with 27,952-MW by state and 39,865 from the CEA. An estimated 7,530-MW of additional capacity was planned for the fiscal year 200809. Of this, 2,141-MW has already been commissioned. The remaining 5,389-MW is targeted to be operational before March 2009. Some of the projects under construc-

tion that will be commissioned by the end of this fiscal year include: ●

NTPC Limited’s (New Delhi) 500-MW

the plan are commissioned under the plan, the country’s total generation capacity would be 237,554-MW in 2012.

thermal power plant in Kahalgaon ● Torrent Power Limited’s (Ahmedabad, Gujarat) 752-MW thermal power plant at Sugen in Gujarat ● Oakwell Power Limited’s (Hyderabad, Andhra Pradesh) 445-MW thermal power plant at Konaseema, Andhra

The proposed 92,000-MW capacity addition is a very ambitious initiative, representing more than four times the additional capacity achieved in the Tenth Five-Year Plan (2002-07), from which project slippage was inherited by the Eleventh Five-Year Plan. The government’s vision of meeting the

Pradesh Gautami Power Private Limited’s (Secunderabad, Andhra Pradesh) 464MW thermal plant in Andhra Pradesh ● Nuclear Power Corporation of India Limited’s (Mumbai) RAPP units 5 and 6

soaring energy requirements of the country domestically will serve as a catalyst for growth.

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in Rajasthan and Kaiga Unit 4 in Karnataka. While the ongoing prevalent global liquidity crunch is likely to affect proposed projects that are yet to obtain financial closure, the government has stepped in to provide credit for those projects which have obtained financial closure. All the projects listed above are currently on schedule. The Standing Linkage Committee of the Indian government recently approved coal linkages to power projects with an aggregate capacity of 35,000-MW that are scheduled to be commissioned and start production by the end of the 2012. If all projects under

The Indian government, in the 11th Five-Year Plan , had initially recommended a capacity addition of 78,530-MW. The capacity addition has again been revised to 92,000-MW.

Coal Needs According to the working group of the Planning Commission, India will have to import 100 million tons of coal during the Eleventh Five-Year Plan (2007-12) to fulfill increasing domestic demand, which is projected to 730 million tons by 2012. The group also indicated that the country’s production capacity by 2012 will be around 680 million tons per year, said the Industrial Info Resources, a marketing information service specializing in industrial process, energy and financial related markets. India’s largest coal producer, Coal India Limited (Kolkata, West Bengal), has agreed to increase production from 520 million tons per year to 600 million tons per year by 2012. In an effort to bridge the supply-demand gap, for the first time, CIL will import 4 million tons per year this fiscal year. Compared with the previous five-year plan, the company has reported an 8 percent increase in coal production in the current period, but the increasing demand is proving this growth to be inadequate. NTPC Limited (New Delhi), India’s largest power producer, is also importing 8.2 million tons per year of coal during the 2008-09 fiscal year,

January - 2009

and reports indicate that the imports are likely to rise. India’s power sector is facing acute coal shortages and power companies have been asked to immediately increase imports. Thermal power plants have coal stocks of 4.9 million tons, although the requirement is 22 million tons. Out of the 77 thermal power plants monitored, 55 have less than a week’s supply of coal. India has 256 billion tons of coal reserves, but only 455 million tons are mined every year. India’s current imports stand at 40 million tons and is expected to touch 50 million tons by the end of this fiscal year. Domestic demand is expected to rise to 2 billion tons per year by 2016-17. It has become inevitable for India’s Ministry of Coal to earmark expansion plans to reduce the supply deficit. There have been 187 captive coal blocks allocated for mining to private players with reserves of 41 billion tons. Only 20 blocks are now operational, producing about 30 million tons per year of coal. The rest have either been allocated recently or are awaiting environmental and procedural clearances. Steps are now being taken to expedite the clearance procedures and make these blocks operational. CIL and public sector companies, such as the Steel Authority of India (New Delhi), NTPC and National Mineral Development Corporation have set up a special-purpose vehicle, International Coal Ventures, to explore mining opportunities overseas. International Coal Ventures plans to raise $1 billion to develop coal mines with potential of 10 million tons per year in Mozambique. There are also plans to acquire assets in Canada, Indonesia, Mozambique, South Africa and Australia. The current economic crisis in the United States has gained India’s January - 2009

attention. CIL is in talks with U.S. mining companies to acquire assets. CIL also plans to revive 18 abandoned mines belonging to its subsidiaries Eastern Coal Fields, Bharat Coking Coal and Central Coal Fields. The 50:50 partnership with global companies will develop six mines belonging to Eastern Coal Fields, eight from Bharat Coking Coal and four from Central Coal Fields. The combined potential of these 18 sites is expected to be about 1.6 billion tons per year. ArcelorMittal (Luxembourg) and Ispat Industries Limited (Kolkata, West Bengal) have expressed interest in this project. CIL has also received bids from international players like Walter Mining Company (Brisbane, Australia), Anglo American Plc (London) and Rio Tinto Plc (London). Recently, an agreement was reached between officials of the ministries of coal and power, and representatives from CIL, NTPC and the Central Electricity Authority that 10 to 15 percent of coal required for new power projects in India will be imported. It has also been indicated that the cost of power from imported coal will be higher than power produced from domestic coal. But coal waste will be low since the quality of imported coal is higher than domestic coal. The Ministry of Power will facilitate the fuel-supply agreement between power utilities and CIL. It was also announced that the imported coal may be used in existing power plants. Coal India plans to increase its production target from 380 million tons per year to 405 million tons per year by 2009-10. Experts indicate that at the rate at which India’s coal demand is rising, the country will lose 60 billion-70 billion tons of its coal reserves by 2040-41. It has become imperative for the Ministry of Coal and CIL to explore new mining avenues both internationally and in the domestic front to sustain demand.

Renewable Energy The Indian government has set a target of generating 14,000 MW additional power through renewable resources in the 11th Five-Year Plan (2007-2012), taking the total generation to more than 26,000 MW, according to Minister for New and Renewable Energy, Vilas Muttemwar. “We are doing remarkably well in generating power from renewable resources, as we are at the fourth spot after Germany, Spain and the US in harnessing the wind energy. But still there is much more potential that goes unused,” Muttemwar said. According to the Minister, India has the potential of generating 70,000 MW of power from wind. “We are one of the luckiest countries, where we have plenty of sunshine throughout the year. With this solar energy, we can fulfill the energy needs of the whole world if we harness it in proper channel,” Muttemwar said. India is in a process to establish a solar thermal energy project at Nagpur in Maharashtra which will be Asia’s biggest solar power generation project, according to Minister Muttemwar. “We will also establish many special economic zones (SEZs) exclusively for renewable projects at various locations of the country,” he said. ❑

References: ●

Ministry of Power – www.powermin.nic.in

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http://en.sxcoal.com

Industrial Info Resources: A marketing information service specializing in industrial process, energy and financial related markets .

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India PR Wire

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PTI

The Ministry of Power has set a target to electrify 1,20,000 villages in the current Five Year Plan (2007-12) under the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY).

146,902.81 MW is the total installed power generation capacity of the country currently, consisting of 92,892.64 MW of thermal power, 36,647.76 MW of hydro power, 4,120-MW of nuclear power and 13,242.41 MW from renewable sources.

BMI forecast is that the country will account for 12.12% of Asia Pacific regional power generation by 2012, with a growing generation shortfall that requires rising imports.

â&#x20AC;&#x2DC;Power for All by 2012â&#x20AC;&#x2122; mission achievement would mean achieving the target of 1000 KwHr (Units) of per capita consumption of electricity by this period. Achieving this would mean that there is an immediate need to attract US $ 250 Billion Investment into the sector.

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The 11th Plan provides an opportunity to restructure policies to achieve a new vision based on faster, more broad-based and inclusive growth. It is designed to reduce poverty and focus on bridging the various divides that continue to fragment our society. The energy sector prominently features in the Planning commissionâ&#x20AC;&#x2122;s 11th plan and offers certain strategic solace to the sector, both in terms of the plan period as well as long term sustainability.

ergy, electricity, coal, oil and gas and other fuels. Further, with nearly half the countryâ&#x20AC;&#x2122;s population without electricity and without a consistent supply of any other form of commercial energy either, distribution of energy is as crucial to bridging the divide

Technical and Commercial (AT&C) losses of most State Power Utilities (SPUs) remain high and have made SPUs financially sick and unable to invest adequately in generating capacity. For the same reason they have also had only limited success in at-

between the haves and the have-nots. Ensuring lifeline supply of commercial energy to all is essential for empowering individuals, especially women and girls, who have the back-breaking, time consuming and unhealthy task of collecting and using noncommercial fuels that remain the primary

tracting private investors to set up power plants.

energy source for cooking in over two thirds of the households. Provision of clean fuels or at least wood plantation within one kilometer of habitation and dissemination of technology for use of clean fuels is vital for good health. Electric Power

he 11th Plan aims at putting the economy on a sustainable growth trajectory with a growth rate of approximately 10 per cent by the end of the Plan period. It will create productive employment at a faster pace than before, and

Rapid growth of the economy will place a heavy demand on electric power and this is an area of weakness at present. Reforms in this sector have been under way for several years and they have brought about

target robust agriculture growth at 4% per year. It seeks to reduce disparities across regions and communities by ensuring access to basic physical infrastructure as well as health and education services to all. It recognises gender as a cross-cutting theme

several important institutional changes which were needed to make the power sector efficient and more competitive: The Electricity Act 2003 is in place; The National Electricity and Tariff policies envisaged in the Act have been notified; Regulators are in place in the states and have issued a

across all sectors and commit to respect and promote the rights of the common person. Among other sectors in focus by the planning commission towards the 11th plan, Energy finds an important place. Its significance is immense and it surely stands as a

series of regulatory orders which are beginning to reduce the wide dispersion in electricity tariffs that have existed traditionally and to contain tariffs charged for industries; Many states have unbundled their SEBs into generation, transmission, and

sector which will govern most of our lives in the near future.

distribution companies for better transparency and accountability.

Energy GDP growth of 9% is not possible without a commensurate increase in supply of en17

The greatest weakness in the power sector is on the distribution side which is entirely the domain of the states. Aggregate

The Accelerated Power Development and Reform Programme (APDRP) initiated in 2001 was expected to bring down AT&C losses to 15% by the end of the 10th Plan. In fact, the average for all states is closer to 40% (including uncollected bills). However, there are encouraging success stories in loss reduction in a number of cities and small areas as a result of intensified management efforts. Some states, for example, Tamil Nadu and more recently Andhra Pradesh, have shown a much better performance than the national average. This gives hope and provides guidance on how to restructure APDRP, using technological tools such as smart metering and GIS mapping for real time, monitoring and accountability at each distribution transformer. State governments should adopt the goal of bringing down AT&C losses from the current level of around 40% to at least 15% by the end of the 11th Plan. This can be done if managements of SEBs are professionalised and given autonomy of operation without political interference. The Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) is a key initiative providing electricity access to all households and actually connecting all BPL households. However, the success of this commendable effort depends critically upon adequate availability of electricity and actual electrification of all households. Mere access without supply of power will only add to frustration.

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Coal Coal will remain the dominant primary source of commercial energy and total demand for coal is projected to increase from 432 million tonnes in 2005-06 to 670 million in 2011-12. The need for the power sector itself would increase by 180 million tonne taking the total to about 500 million tonnes in 201112. Meeting these demands poses a formidable challenge in increasing coal production. Coal India is aiming to increase production Utility-based generation capacity is expected to rise by less than 30,000 MW in the 10th Plan but we should plan for an increase by 60,000 MW in the 11th Plan to move to a comfortable situation consistent with a growth rate between 8 - 9% per annum. The 11th Plan must evolve policies that can ensure completion of on-going projects quickly and that generation capacity of this order is created in an efficient, least cost manner while emphasizing exploitation of India’s hydro potential and nuclear capabilities especially in the field of fast breeder reactors. Renewables such as wind power can play a useful role in the 11th Plan. These can be set up in a short time and though they have a low load factor with a good transmission system, can be balanced by

● Long

term finance should be made available to lower capital charge;

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The presently provided guaranteed rate of post tax returns for CPSUs should be lowered to reduce cost of power and augment resources of state power utilities;

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An efficient inter-state and intra-state transmission system of adequate capacity that is capable of transferring power from one region to another;

by an unprecedented 60% during the 11th Plan period inclusive of the recently approved emergency production plan. However, realistically speaking, this level of increase in output together with the necessary rail infrastructure to move the additional coal production may be difficult to achieve by Coal India alone.

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An efficient distribution system which alone can ensure financially viable expansion;

● Rehabilitation of thermal stations through

R&M to augment generating capacity and improve PLF;

hydro power and can contribute to meeting peak demands.

●

Rehabilitation of hydro stations to yield additional peaking capacity;

Establishment of new generation capacity and reducing cost of power will require ac-

●

Improving supply side and demand side efficiencies to effectively lower primary energy demand by 5-7% during the 11th Plan period;

tion on many fronts: ● Availability of fuel such as coal or natural

Coal production is nationalized at present and private investment in coal mining is only allowed for captive mines supplying coal to designated sectors power, steel, and cement. Taking a longer term view of energy production there is a strong case for de-nationalizing coal so that private sector investment can come into this crucial area. If petroleum, which is much scarcer than coal, is open to the private sector there is no reason why coal should not also be opened up, especially if we take a longer term view of energy constraints and also the need to absorb new clean coal technologies.

gas for new power plants must be assured;

●

Ensuring use of washed coal for power generation; and

●

Harnessing captive capacity to support the grid.

● A national consensus on royalty rates for

fuels and compensation for host states also needs to be worked; January - 2009

Pending a consensus on this issue, every effort should be made to expand coal production through the route of captive mines. Large coal users, especially in the power

sector, can be given available proven coal blocks for developing captive mines. Preliminary estimates suggest that in addition to coking coal we may also need to import 40-50 million tonnes of superior grade thermal coal by the end of the 11th Plan. Thermal power stations on the southern and western coasts can be competitive using imported coal and the countryâ&#x20AC;&#x2122;s electricity requirement does justify such import.

Consumption of petroleum products is likely to rise from 112 MT in 2005-06 to about 135 MT by the end of the 11th Plan with net crude oil imports reaching 110 MT. Gas consumption is forecast to rise to about 55 MTOE with imports reaching 20 MTOE unless the recent finds announced in the KG basin actually start flowing in significant quantities by the terminal year of the 11th Plan. This assumes that Naphtha based fer-

This would require necessary port handling capacity and coast based power generation capacity of around 12000 to 15000 MW to absorb the imports.

tilizer production switches completely to gas by the end of the 11th Plan.

Coal pricing and marketing also needs to be modernized. The e-auction route which has been opened recently has worked well, and has helped to nudge consumers to-

needs to be explored from a longer term perspective, but no pipelines are likely to become available for this level of gas import during the 11th Plan. Thus LNG imports

wards more rational coal pricing. This window can be expanded over the 11th Plan. The method of pricing coal also needs to be rationalized by shifting to gross caloric value instead of useful heat value and by having more finely graded price bands.

would need to rise to four times from the current level of 5 million tonnes.

Oil and Gas India will remain dependent on crude oil imports. Fortunately, the demand for petroleum products has grown at only 2.7% per annum in the first 4 years of the 10th Plan. 19

The scope for transnational gas pipelines

The most important policy issue in this sector relates to pricing petroleum products. The recent increase in oil prices is now expected to persist for some years and although prices of some petroleum products have been raised the increase still leaves a large uncovered gap. This gap is being borne partly by the oil companies and partly by the issue of bonds by the government to

the companies, which is equivalent to a government subsidy. Other critical issues facing the oil and gas sector relate to: â&#x2014;? pricing

of domestically produced natural gas and its allocation to the power and fertilizer industry;

â&#x2014;? strengthening upstream regulation in the

oil and gas sector; and (iii) ensuring competition and open access in the proposed pipeline transportation and distribution grid. In the longer run, the only viable policy to deal with high international oil prices is to

rationalize the tax burden on oil products over time, rationalise existing pricing mechanisms which give the oil companies an excessive margin, realize efficiency gains through competition at the refinery gate and retail prices of petroleum products, and pass on the rest of the international oil price increase to consumers, while compensating targeted groups below the poverty line as much as possible. The current method of determining prices for petroleum products needs reconsideration. Full price competition at the refinery gate and the retail level needs to be adopted. India is deficient in crude oil but has developed surplus capacity in products. January - 2009

●

Treat environmental externalities uniformly under the polluter pays principle. Thus renewables should be given appropriate incentives.

●

Promote energy efficiency and energy conservation.

A consistent policy framework embodying these principles would minimize distortions across sectors and maximize efficiency gains.

Many products are exported in sizable quantities. Product price entitlement should therefore be based on trade parity pricing,

tion, conversion, transportation, and end use of energy. ●

which would be much lower than import parity. The 10% duty on products has been reduced to 7.5% which is a step in the right direction. There is a strong case for further reducing the duty on products to 5% to equate it with the duty on crude.

Ensure energy pricing that leads to efficient choice of fuel, inter-fuel substitution, and technology so that resource allocation takes place based on market forces operating under a credible regulatory regime.

● Incentivize rational use of energy across

Other Energy Initiatives

all sectors including, agriculture, industry, commerce, domestic, personal trans-

‘More broadly, as we move into the 11 Plan, we need to take an integrated view of energy policy towards different energy subsectors. While the Central and state sectors will continue to dominate the energy sector in the 11th Plan, energy policy should not be determined sector by sector where the dominant public sector players often have significant vested interests. We need to move towards a more transparent policy framework that treats different sources of energy in a similar fashion. Such a framework must meet the following objective: ●

Ensure energy competition in each sub segment of the energy sector and remove all entry barriers so as to realize optimal fuel and technology choices for extrac-

January - 2009

port, public transport, and haulage. ●

Ensure an institutional framework that provides a level playing field to public sector and private sector players and provides comparable incentives to producers across all energy sectors.

●

Ensure a consistent tax and regulatory structure across all energy sub-sectors. There is no reason why energy resource should be taxed much more than others unless there are some externalities involved.

● Meet

social objectives as far as possible through direct and tradable entitlements offered to those in genuine need.

Institutions for promoting and forcing the pace of energy conservation and improvement in energy efficiency also need to be strengthened. Development and use of renewable and nonconventional energy sources have not progressed to the extent they could have. The 11th Plan will restructure incentives and support from supply driven programmes to demand driven programmes and technologies. It will also link subsidies and support to outcomes in terms of renewable energy generated, rather than to capital investments. Available fossil energy resources must be optimally exploited using enhanced recovery techniques. Coal bed methane must be fully exploited and fossil fuel reserves enhanced through more intensive exploration. Renewable energy sources such as wind energy, bio-mass and bio-fuels account for a very small percentage of total energy but they could increase to 2 - 3 percent in the course of the 11th Plan period. The 11th Plan must also set up a robust energy R&D system to develop relevant technology and energy sources to enhance energy security and lead to energy independence in a cost effective way in the long run. ❑ Source: www.planningcommission.nic.in 20

The greatest weakness in the power sector is on the distribution side which is entirely the domain of the states. Aggregate Technical and Commercial (AT&C) losses of most State Power Utilities (SPUs) remain high and have made SPUs financially sick and unable to invest adequately in generating capacity.

Coal will remain the dominant primary source of commercial energy and total demand for coal is projected to increase from 432 million tonnes in 2005-06 to 670 million in 2011-12.

9 per cent GDP growth The 11th Plan must evolve policies that can ensure completion of on-going projects quickly and that generation capacity of this order is created in an efficient, least cost manner while emphasizing exploitation of Indiaâ&#x20AC;&#x2122;s hydro potential and nuclear capabilities especially in the field of fast breeder reactors.

is not possible without a commensurate increase in supply of energy, electricity, coal, oil and gas and other fuels. Further, with nearly half the countryâ&#x20AC;&#x2122;s population without electricity and without a consistent supply of any other form of commercial energy either, distribution of energy is as crucial to bridging the divide between the haves and the have-nots.

January - 2009

A KPMG REPORT

The Electricity Act, 2003 was a watershed regulation in the Government’s attempts towards creating a conducive environment for development of the Indian Power sector. This was further supported by a number of policies and regulations; however, almost five years down the line the sector is yet to achieve the desired progress. The inflection point is still awaited by many; the point where a consumer can freely choose his electricity provider and generators have multiple choices for the sale of the power they generate and can manage risks through evolved contracting instruments. Recently, Confederation of Indian Industries (CII) had organised a conclave - India Energy Conclave 2008 wherein KPMG prepared a report which examines some of the recent developments that are important in the move towards ‘Competitive Power Markets’. It has also presented its view on the expected developments and identified potential roadblocks.

January - 2009

A KPMG REPORT The Demand-Supply Equation more efficient and transparent solution to The Role of Power Markets The big question on every project developer’s mind today is likely to be ‘When will the demand and supply curves for power cross each other?’. While the country is facing a very significant power deficit today to the tune of 20,000 MW (18 percent peak deficit), there are plans for very large supply additions going forward. Until the Xth Plan (FY 2007), the 5 year plans were dominated by Gov-

coal mine allocation and two, the procedures related to Government clearances should be further streamlined. The recent turmoil in the financial and commodity markets has been a cause for concern and there are apprehensions about the

Power markets have an important role to play in making the country achieve this capacity requirement. The phenomenon of aggressive merchant plant build-up can already be attributed to short-term price signals in the power mar-

ernment capacity additions and constraints to capacity additions were mainly due to Government procurement procedures, equipment sector constraints and project implementation delays. Going forward, the constraints would largely occur on account of fuel sector issues including allotment and development of coal mines. While over 81 coal mines have been allotted, delays are being seen

Demand Supply Supply (Impact of Financial Market Crisis)

in mine development on account of reasons ranging from land acquisition, delays in obtaining Government clearances, multiple mine allottees for a given mine with differing viewpoints on mine development plans, and even lack of mine development capa-

extent to which this would delay the ‘crossover’ point of demand and supply. Financing for new projects is a challenge in the

bilities.

current environment.

As market forces play out in creation of new capacities, some of the constraints, particu-

However, assuming that the effects of the current turmoil will last for 12-18 months, we expect that the overall impact on the

larly relating to project management capabilities, equipment procurement and even technical capabilities related to mining are expected to ease out. We, therefore, expect supply side response to the current deficit to speed up and catch up with the demand curve during the XIIth Plan. The Government would still have a very important role to play if this has to be achieved sooner than later. One, it should evolve a

‘cross-over’ point would be to a lesser extent, as supply will eventually catch up and the demand side impact would also be present during the current slowdown. Our estimate is that the cross-over is likely to happen in the timeframe FY 2015 to FY 2017. This is based on an assumption of GDP growth rate of 8 percent till 2017.

ket today. Short term power prices are at times as high as INR 8.0/kwh with the average price for FY 2007-08 being INR 4.50/ kwh. The existence of a power market has meant that merchant plants have been able to find a ‘market’ for sale of their produce and thereby it has become easier to justify viability and achieve financial closure. In the short run, it has also increased efficiency of utilization of generation assets by trying to match surpluses with deficits. The trading market got a further boost in February 2007, when CERC issued its ‘Guidelines for grant of permission for setting up and operation of a Power Exchange’. Till date, the central regulator has granted

January - 2009

A KPMG REPORT of contracting strategies of utilities. Currently, the contracting behavior of utilities in India involves long-term base load contracting. As power market liquidity improves, contracting behaviors are likely to change to reflect different types of contracts for base load and peak load requirements as well as for long term, medium term and short term requirements.

Key Enablers for Deepening the Power Market

permission to two applicants; the Multi Commodity Exchange led India Energy Exchange (IEX) and the National Commodity & Derivatives Exchange led Power Exchange of India (PXI). The IEX started operations in June 2008. According to the CERCâ&#x20AC;&#x2122;s Market Monitor-

quick ramp-up of volumes traded on these power exchanges; while the IEX has received total purchase bids for more than 2,000 Million Units (MUs) since its inception on June 27, 2008 the PXI received purchase bids to the tune of 63 MUs on its first day of operation (October 23, 2008).

ing Report for the month of August 2008, ~ 5 percent of short-term trading transactions were done through the IEX, ~ 57 percent was traded through bilateral contracts and ~ 38 percent through the UI route.

The availability of such a platform is likely to provide a boost for sector development since it acts as an open and transparent platform for buyers and sellers and simultaneously provides a price signal for upcoming generation plants.

Though this represents a small percentage of the total transactions, the demand for such a platform can be judged from the

The other benefit of a vibrant trading market is that this could lead to the evolution

In order for the power markets to deepen, the country needs rapid addition of new capacity so that there can be adequate tradeable stock of power. Merchant plant developers face certain difficulties in achieving financial closure. These include assurance of fuel supply, comfort of a certain minimum level of power off-take and comfort that transmission bottlenecks will not be constraints. The Government has to facilitate fuel access and market opening through distribution open access. Market forces are then likely to play out to build capacity. Some of the key enablers to overcome these are as follows: Transparent and speedy process for coal allocation The Ministry of Power (MoP) in order to facilitate capacity addition through MPPs, has been coordinating with the Ministry of Coal to identify coal linkages (for 1000 MW plant) and coal blocks (for 500 - 1000 MW plant) for allotment to such plants. However, the framework for such fuel allocation is yet to be notified and this uncertainty is causing delays in plans for new capacities.

January - 2009

A KPMG REPORT

Strengthening of the national transmission grid and efficient transmission access and pricing Uncertainties in availability of transmission system capacities had been a concern for some of the MPPs who are not sure of their power off takers. A large portion of new capacity (approximately 30 percent) is coming in the coal belt

power generation, capacity addition in power transmission through the competitive bidding route has been slower and till date only two projects6 have been awarded to private developers. Considering the urgent need to augment the transmission network in India, the MoP has taken steps to speed up the bidding process.

down to the retail consumer level is the last leg in the development of a fully competitive power market and will likely ultimately lead to depth in the power market. Today, merchant power developers have to depend largely on tenders issued by state utilities through the Case 1 route to tie up capacities through long-term contracts. This is essential for them to get the comfort of minimum off-take and achieve financial closure. However, if the retail segment were to open up, then access to large customers would have provided an alternate option for tie-up on medium to long-term basis.

states while the demand centers are in the North and West of the country. According to the CEA Plan, the incremental inter-regional power transfer capacity will be 21,000 MW by 2012. Building this out in a timely manner is critical for the power market to function effectively. To augment transmission networks, significant investments are required. Unlike 25

The ministry has now issued draft Standard Bid Documents for selection of Transmission Service Provider. The MoP has also notified PFC and REC to act as the Bid Process Coordinators to undertake the bidding for a few identified projects.

Merchant developers could then be proac-

Retail market opening through distribution open access

timeline of end 2008 for opening up the distribution open access for consumers with connected load of less than 1 MW.

Freedom and ease of getting open access

tive in identifying buyers to make their projects viable rather than wait for tenders to be floated and procurement processes to be completed for setting up power projects. This could speed up capacity addition. Most of the SERCs had fixed a

January - 2009

A KPMG REPORT Further, taking cues from the National Tariff Policy, few state regulators have passed orders for reduction of cross-subsidy surcharge in the recent past. State

Cross-subsidy Surcharge

Maharashtra

INR 0.00/kWh

Delhi *

INR 0.00/kWh

Gujarat

INR 0.37/kWh

Generators and power players would do well to start planning to develop their capabilities and strengthening their presence in this area as the retail supply segment begins to open up. Once we overcome the supply deficit and retail competition establishes freedom of choice in its true sense a n d

availability of products and information symmetry among consumers; we believe the inflection point can be reached. A well functioning power market can also go a long way in helping ensure that the prolonged history of power deficit in the country does not repeat itself in future. â?&#x2018;

Source: Open-access orders of SERCs * Only for Domestic category consumers This will likely promote open access as reduction in cross-subsidies will likely help maintain the attractiveness of a cheaper power source. Few regulators like the Maharashtra State Electricity Regulatory Commission have kept a zero level of cross-subsidy surcharge so as to promote competition. While the retail market represents a miniscule proportion of the power market currently, this will likely increase going forward. As the demand-supply gap begins to narrow down, competitive advantage will likely begin to shift towards access to customers. In some states, this is likely to happen sooner.

January - 2009

is the INR 8.0/kwh high point for short term prices with the average price for FY 2007-08 being INR 4.50/kwh. So, the phenomenon of aggressive merchant plant build-up can already be attributed to shortterm price signals in the power market today.

will be the incremental inter-regional power transfer capacity by 2012, according to the CEA Plan. Building this out in a timely manner is critical for the power market to function effectively.

21,000 MW

20,000 MW (18 percent peak deficit) is the power deficit faced by the country today.

Rapid addition

of new capacity is needed in order for the power markets to deepen within the country so that there can be adequate trade-able stock of power.

January - 2009

A KPMG REPORT

KPMG recently concluded a study of the Indian CEO/CXO covering around 70 such respondents aimed at understanding the position of Indian business leaders on the issue of climate change. The study covered a wide range of industries with the aim of understanding their level of interest, knowledge and preparedness on the issue of climate change and how it impacts their businesses.

January - 2009

he study revealed a high level of awareness (83 percent) amongst Indian businesses on the issue of climate change. The intent for action on their part was encouraging, with 48 percent of respondents perceiving climate change as a crucial issue that should be near the top of the business agenda. The industry captains also felt that India should be leading the way (65 percent) in action against climate change. However, the leadership role in bringing about change in the areas of education, leading by example and adoption of technology was largely left to the Government. Significantly, businesses are of the opinion that the Government is currently not doing enough in these areas. However, the prime motivation for action by businesses was the need to comply with expected regulation, though there were other factors that are also catalysts for change. The benefit of the whole community and the desire to align with a global trend of climate friendly business practices emerged as other significant influences. Whilst a number of businesses claim to be aware of the need to reduce their carbon impact and believe they are taking steps towards it, only 21 percent of respondents have taken the crucial first step of measuring their carbon footprint. Further, whilst 94 percent of businesses undertake the significant step of using energy efficient appliances, much fewer businesses are engaged in other primary drivers of emission reduction.

house Gas (GHG) emissions globally started largely as a reluctant player to introduce GHG mitigating measures. However, today it is considered as a central issue, for these units to baseline their emission levels and make efforts to reduce them. The reasons vary from existence of a carbon tax or outright non-approval to set up these units in some of the annex 1 countries. Even in developing countries like India it is recognised as a key requirement which is reflected in the National Action Plan where GHG emission from thermal power has been accorded the highest priority.

Multiple Drivers for Change The need for the power sector in India to explicitly account for emissions in the generation of electricity and to actively develop alternative sources of energy comes from a combination of the following factors. Emission-Intensity of Power Generation in India The power sector is the largest source of GHG emissions in India, estimated to contribute approximately 40 percent of total emissions. This is significantly higher than the global average contribution of this sector, which is estimated to be 25 percent. This can be attributed to a large extent, to the dominance of fossil fuels in the fuel-mix of Indian power stations, with coal generating 72 percent of utility supplied electricity in the country. Global attention is likely to shift to India and China post 2012 since their collective cumulative emission levels by 2030 are likely to be more than that of the US or EU.

sia, have underlined the importance of energy security for preserving a country’s economic growth, sovereignty and stability. India’s current options for base-load power, namely coal and nuclear, do not provide complete energy security owing to their reliance on raw material imports. In the case of nuclear power, the numerous stumbling blocks overcome in the recently concluded 1-2-3 agreement highlight the vulnerabilities of complete reliance on nuclear technology for base-load power. Issues with the quality and availability of domestic coal is expected to increase the demand-supply gap in the future. Thus imported coal is likely to constitute a significant portion of coal utilization for power generation in India. Renewable energy sources, by their very nature and design, are far more decentralized and afford the host country with almost complete autonomy in electricity generation. A greater uptake of renewable energy is not only desirable for its environmental benefits, but can also go a long way in achieving the country’s stated primary aims of energy security, economic growth and poverty alleviation. This would likely vindicate India’s position in international climate negotiations, which is based on the pursuit of these very aims, at the expense of accepting binding emission targets. Thus, a diversification of the energy source base through expansion of renewable sources would be a useful tool for mitigating potential supply risks and augment India’s energy security and self-reliance.

Key Drivers for Carbon Sensitive Growth in the Indian Pursuit of Energy Security and Access to The Nature of Electricity as an IntermediPower Sector ate Good Energy Resources The thermal power industry – which is the single largest contributor of the Green29

Geo-political events of the early 21st century, most notably those in Iraq and Rus-

The nature of electricity as an intermediate good which is used by industries in the January - 2009

A KPMG REPORT efits outlined above, can spur complimentary growth in other sectors through positive externalities. The call by India at the G-8 summit in July for increased global cooperation in the areas of carbon capture, development of low cost solar photovoltaicâ&#x20AC;&#x2122;s and energy storage have the potential to spur an uptake in research and development and education in a range of industries and ancillaries related to these technologies. Further, the countryâ&#x20AC;&#x2122;s proposed joint ventures in bio-energy, including biomass and biogas-based power gen-

production process implies that the higher the emission-intensity of the electricity supplied by the grid, the larger is the carbon footprint of the end product. This is because electricity consumption is a necessary component of the scope of the carbon footprint of a product. This becomes particularly important in the context of proposals by US, UK and Australia to impose import restrictions on goods manufactured in countries with less-stringent environmental regulation, such as India. These measures, designed to prevent carbon leakage, may take the form of a carbon tax or a requirement to purchase emission permits. As such, the penalties on goods manufactured in India would be commensurate to the emission-intensity of the production process, including electricity, used in their manufacture. Thus, it is in the interest of a wide variety of manufacturing and service sectors of the economy that the emission-intensity of the power sector is rationalized as far as possible.

Benefits of Carbon Sensitive Growth It is evident that carbon sensitive growth in power generation is beneficial from the point of view of mitigating the various risks outlined above. Whilst this is a compelling reason for concerted, rapid change in itself, the case for explicit action is strengthened when the potential benefits afforded by this expansion in the market for green energy are taken into account. Employment Generation It has been established that renewable energy has the potential to generate considerable number of jobs when compared with employment opportunities in fossil fuels. This is evidenced by international experience in China, where a large population is already employed in solar thermal making and installing products such as solar water heaters. In Nigeria, a bio fuels industry based on cassava and sugar cane crops has generated significant employment. Positive Externalities Investments in renewable energy technologies, apart from providing the direct ben-

January - 2009

eration, built-in environment and distributed generation may also lead to a host of benefits for associated industries. Thus, not only is carbon sensitive growth in the power sector prudent from the view of mitigating potential risks, but the benefits of quick, concerted action now also have the potential for significant payoffs across the economy.

Interventions to effect change India is expected to become the third largest emitter of GHG after US and China in the next 10 years. Also, given the fact that most of our carbon stocks are likely to build up in the next 25 years, it is important that we take measures to mitigate emissions. Thus, moving from the largely accepted point of departure of Indiaâ&#x20AC;&#x2122;s need to curb its emissions (for a multitude of reasons), interventions in the power sector can be justified as being both, effective (the power sector is the largest source of GHG emissions in India) as well as efficient (impacting a large number of upstream and downstream economic agents). With the power sector accounting for approximately one fourth of total CO2 emissions globally and being one of the foremost targets of proposed sectoral caps, a concerted effort to reduce the Indian power 30

sectorâ&#x20AC;&#x2122;s emission intensity would be timely and prudent. The imperatives of change for the Indian power sector emanate from the aforementioned sources through a range of vehicles, which may take one or more of the following forms:

emission allowances from other more-efficient plants in order to continue operating. In this manner, power plants have an economic incentive to evolve towards cleaner production methods. Such a system would fundamentally affect the operation of ev-

Carbon Tax

ery power station in India and is likely to have far-reaching effects on industry.

The Energy Coordination Committee has mulled a proposal to impose a carbon tax on polluting power stations in the country. Such a tax is widely prevalent in Europe including in the UK. The proposed system is likely to start by taxing power plants emitting above a certain accepted level (which still needs to be determined) and allowing them to pass on this cost to consumers for a specified period of time (e.g. 5 years).

However, the accepted level of emissions is likely to decline over time, thereby raising the bar and forcing plants to achieve ever-increasing levels of efficiency. After the expiry of the initial indemnity peiod, plants emitting more than the dynamically reducing efficiency level will be taxed and not be allowed to pass on this additional cost to the consumer. They will then have to either shut down (because operations become unprofitable after the tax), implement abatement measures to reduce emissions or pay the additional tax / purchase 31

The impact at the level of the overall economy however, will be determined largely by the use of the tax revenues thus collected, and will be discussed at a later stage. Stakeholder Pressure Ever-increasing accuracy in climate theory and modelling and an accumulation of com-

local public domain, given the recent experiences in the same industry in US, a country which is considered as the leader of the environmental movements. A poignant example of this increasing public pressure in US is the veto of the expansion of a power plant in Kansas on environmental grounds. The governor of the state successfully vetoed a bill allowing expansion of the power plant after the project failed to secure a permit from the State Department of Health and Environment on the grounds that it would produce 11 million tonnes of CO2 annually. Despite attempts by the legislature to override the veto, the decision still stands and the project is not allowed to commence.

pelling evidence have brought increasing

public attention to the issue of climate change and intensified the calls for action. Whilst public opinion around environmental issues in India has been relatively weak in the past, the historical record of populist pressure vis-Ă -vis social and environmental issues demonstrates that pressure for change from customers, investors and employees does not grow at a steady state, but rather increases exponentially once a critical mass is achieved. As such, the Indian power sector would do well to heed to the still-nascent calls for action from the

Similarly, in an unprecedented move in the albeit environmentally-conscious state of California, the city of San Francisco is striving to oust its existing power utility as its future supplier on the grounds that it uses too little renewable energy. This is envisioned to be achieved through tabling Proposition H, which would require the city to get 51 percent of electricity from renewable sources by 2017, and 75 percent by 2030. The decision to oust the existing utility, PG&E on the stated grounds is even more significant when considered in the January - 2009

A KPMG REPORT the cap-and-trade system that all sectors of the economy are subject to will likely become more stringent, requiring deeper and more frequent cuts. Should such a capand-trade system linked to the European ETS be extended under a subsequent international collective agreement which includes India, the sheer size of the Indian power sector and its large relative and absolute contribution to emissions would make it vulnerable to intense pressure for urgent reform.

How businesses should respond to this light of the fact that 11.4 percent of the utility’s electricity came from renewable sources, which is far greater than the national average. Finally, the proposal tabled by former Vice President Al Gore that called for all of US’s energy to be procured from renewable means in the next ten years has won support from both presidential candidates. Whilst it is unclear whether the next Presidency would follow through with this radical and ambitious proposition, it signals an important and definite shift in policy direction in the world’s biggest polluter. Thus, even though customers and investors in the Indian power sector are not yet vociferous in their calls for change, the industry would be well served to learn from the lessons of a country such as US, long regarded as environmentally irresponsible. As such, it is in their best interests to make greater strides towards securing a larger proportion of electricity supplies from renewable sources and reducing emissions from current methods.

Emissions Trading Schemes and International Collective Agreements The recently passed the UK Climate Change Bill may have an important bearing on all sectors and industries of the economy not only in the UK, but potentially in the rest of the world, including India. Widely regarded as the world’s first legally binding framework for the transition to a low carbon economy, the bill commits to reducing the UK’s emissions by 80 percent by 2050 from a 1990 baseline. Importantly, whilst the initial draft of the bill did not include emissions from international aviation and shipping, backbench pressure has compelled the Government to take account of projected emissions from these industries when setting the five yearly budgets. However it will not force the industry to make particular cuts because as yet there is no way to measure accurately each country’s contribution to international transport emissions. Whilst this may temporarily immunise the aviation and shipping industries, it implies that all other sectors of the economy in the UK will be faced with more stringent targets to absorb the additional emissions included in the purview of the budget. Thus,

A structured response at individual business leaders’ level would involve the following components: ●

Measurement of the carbon footprint of the business

●

Projecting the likely carbon footprint if the business continues to grow under the “Business As Usual (BAU)” scenario

●

Analysis of the risk of climate change issues to the sector including upcoming regulations and the business

●

Identification of opportunities within the business, and beyond (CDM projects, clean technologies, renewable sources, etc.) to maintain growth, but with a different approach

●

Preparation of a time bound action plan for reducing the carbon footprint compared to the projected carbon footprint

●

Institutionalize the action plan in business processes

● Institutionalize a measurement and veri-

fication system to monitor progress against the plan ● Periodically report progress to stakehold-

ers. January - 2009

the 40 percent iscontribution of the power sector in India, of the total, making the sector the largest source of GHG emissions. This is significantly higher than the global average contribution of this sector, which is estimated to be 25 percent.

now, 10 years from India is expected to become the third largest emitter of Greenhouse Gas (GHG) after US and China.

Only 21% ofrespondents a survey when,most 2030 islikely, India and China, post 2012 , will collectively have a cumulative emission level more than that of the US or EU.

conducted by KPMG have taken the crucial first step of measuring their carbon footprint. According to the survey, number of businesses claim to be aware of the need to reduce their carbon impact and believe they are taking steps towards it.

January - 2009

With a Power Sector order booking worth Rs.41,069 Crore for supply and installation of 14,556 MW of generating equipment as well as services and supply of spares, which claimed to be the highest ever order booked by Power Sector in financial and physical terms, Bharat Heavy Electricals Limited (BHEL) is looking at a new era through up-gradation of technology and a foray into new product segment & ratings like 660 MW Supercritical thermal sets, Advance Class 9 FA GT CCPP, new rating of 270 MW, 525 MW, 600 MW Turbine Generator and Secondary Piping for Nuclear Set based on Fast Breeder Reactor. K Ravi Kumar, CMD, BHEL sheds light. January - 2009

Q&A

BHEL is one among the

Navaratna’s of India that has contributed immensely for the development of the Indian Power Sector, Could you please elaborate on your company’s performance in terms of business in the last financial year and how has it improved from the previous?

We have reported turnover of Rs. 21,401 Crore in 2007-08, registering a growth of 14% over the previous year, while PAT rose 18%, to Rs.2,859 Crore, against Rs 2414 Crore in the previous year. Order inflow during the year FY07-08 was at Rs 50270 Crore. Our outstanding order book increased 55% and stood at Rs 85,200 Crore, the highest ever both in physical and finan-

sulted in up-gradation of technology and a foray into new product segment & ratings like 660 MW Supercritical thermal sets, Advance Class 9 FA GT CCPP, new rating of 270 MW, 525 MW, 600 MW Turbine Generator and Secondary Piping for Nuclear Set

the previous year which is on top of 68% growth over 2005-06. A turnover of Rs.2,982 Crore was achieved through products and systems developed in-house. BHEL also filed 175 patents and copyrights, enhancing the company’s intellectual capital

based on Fast Breeder Reactor. Power sector commissioned 40 sets totaling 6837.5 MW during the year within the country and abroad. And performance of BHEL thermal sets during the year was best ever and better than the national average.

to 664 patents and copyrights filed, which are in productive use in the company’s business.

In Industry Sector, BHEL secured record orders worth Rs. 7,860 Crore in FY 200708 achieving a growth rate of 20% over pre-

To enhance our presence and capitalize on the market opportunities, we have forged strategic relationships in the form of MoU/ JV with various parties like NTPC, TNEB, MMTC, PTC, HEC and NPCIL. We have also completed acquisition of Bharat Heavy Plate

cial terms. During the year, capital investment of Rs.726 Crore was made towards augmentation of manufacturing capacities and modernization of facilities in manufacturing units and at power project sites registering an increase of 100% compared with capital investment of Rs.362 Crore during FY06-07. BHEL spent Rs.464 Crore on R&D during FY07-08, which is 2% of the turnover, an 83% growth over last fiscal. The company crossed the landmark of installing cumulative projects of more than 100,000 MW across the globe and it has become a 10,000 MW power plant equipment manufacturing company. What according to you were the main achievements of BHEL in the last financial year? In addition to what I have already told Power Sector booked orders worth Rs.41,069 Crore for supply and installation of 14,556 MW of generating equipment as well as services and supply of spares. This is the highest ever order booked by Power Sector in financial and physical terms. Successful initiatives of the company have re35

vious year. Each of the business segment registered a high growth and the year witnessed a number of first time ever achievements.

& Vessels (BHPV) engaged in manufacturing of Industrial Boilers and process equipments as 100% subsidiary company.

In International Business, BHEL secured physical export orders of Rs.2,312 Crore during the year in comparison to last year’s order book of Rs.1,903 Crore, an increase of 21%. The year marked significant steps towards globalization with maiden entries

looking at foraying in the coming few years and why?

in new markets and new product areas, apart from firmly establishing in existing markets and areas. During the year, BHEL spent Rs.464 Crore on R&D efforts - nearly 83% higher than

Which other areas of specialization are you

We have taken several initiatives in order to face the future with optimism. Having already tied up technology for supercritical thermal sets, BHEL broke new ground by successfully bagging its first order in 200708 for Supercritical Boilers (2x660 MW) from NTPC for Barh Stage-II. To meet the emerging competition head on in the subcritical range, BHEL has introduced new

January - 2009

rating thermal sets of 270 MW, 525 MW & 600 MW. In the Advanced-class gas turbine (Fr.9FA) field, the company achieved its first success during the year by bagging four orders against international competitive bidding. BHEL is also giving strong thrust in its Industry related business areas. Some of the initiatives include Coach Building for Indian Railways, Electric Locomotives, refurbishment and up-gradation of Onshore Drilling Rigs, development of Disc Insulators for 800 kV HVDC applications etc.

What according to you are the main hurdles being faced by your specialization and what could be the possible solution for the same?

factors such as slowing economy, global liquidity crunch, high interest rates etc may affect our business partners.

Presently Indian power plant equipment market is in a midst of a structural change with emergence of new players both domestic as well as international. With new players building capacities in near future, we expect heightened competition to change dynamics of the sector.

Government has already taken various fiscal and monetary measures to contain impact of global financial crisis. We expect the government to take more measures to ease liquidity position and interest rates and continued thrust on infrastructure sector for ensuring reasonable GDP growth rate.

With the strong order book, order execution has emerged as the key challenge for the company. However we have performed much better than our other competitors in

Are you planning to go global? If so, what are the potential markets that you are planning to enter and why?

BHEL is on its way to establish 15,000 MW p.a. manufacturing capacity by December 2009. We have also decided to go in for 20,000 MW p.a. capacity expansion by December 2011. Our other major areas of investment include facilities for higher rating nuclear sets, 765 kV Transformers and other associated transmission equipment. Attention is being given to rebuild and retrofit the existing facilities to enhance their life, accuracy and productivity through additional investment. Today improving project delivery is a priority area and we are placing extra emphasis on project execution by equipping our regions with necessary plant & tools by way of higher capacity cranes, manpower etc. A better project monitoring system using Primavera has been put in place. What are your targets for the next five years in terms of financial products and services? BHEL is well on its way of attaining a sustainable profitable growth with the objective of reaching a turnover level of Rs.45,000 Crore by 2011-12 as per the Strategic Plan of the company. With ample capacity and capability initiatives in place and strong order book, you will see strong growth momentum in BHEL in coming five years. January - 2009

terms of execution, constraints in Balance of Plant supplies unless otherwise resolved will pose some threat to whole power sector expansion plans. And finally, with the financial meltdown hitting Indian shores, things are becoming slightly difficult for India industries as well. And the road ahead seems to be slightly bumpy for capital intensive capital goods sector. After a strong GDP growth of more than 9% for three consecutive years, the growth estimates for the current year have already been revised downwards in the range of 7.0-7.5%. Similarly, the Index of Industrial Production (IIP) is also showing signs of slowdown. BHEL with huge cash reserves and strong and firm order book may not feel the heat. But adverse macro

BHEL is already having the footprint in International markets and established its references in all the six inhabited continents spanning 70 countries. In FY0708 we have the entry into new market, New Caledonia in the south west pacific ocean for supply of environment friendly CFBC boilers. We are establishing our presence in the existing as well as in new market and area. We have also received order for supply of Power Generating Equipments and supervision of 2x42 MW Gas Turbine Generator sets Power Plant from UAE.This achievement is expected to pave way for more opportunities not only in UAE but also in other Middle East and North African Countries. â?&#x2018;

January - 2009

pee & Foreign Currency), Short Term Loan, Bill Discounting, Lease Financing, Buyers’ Line of Credit, Debt Refinancing, Take-out Financing, Loan to Equipment Manufacturers, Suppliers’ Credit, Deferred Payment Guarantee, Consultancy Advisory Services (through Subsidiary Company namely., PFC Consulting Ltd).

PFC was set-up in the year 1986 and it started its operations in 1988. The Corporation was primarily set up to on-lend money to State Power Utilities. PFC’s main objective is to finance power projects of all types. For this purpose, PFC raises money from the domestic and international markets at competitive rates and onlends it as a loan or in other forms of financial assistance. As a responsible Financial Institution, PFC also helps in the institutional development aspect of the power sector that is, trying to bring about improvements in the technical, managerial, operational and financial aspects of the State Power Utilities in order to help them become fully viable. Satnam Singh, Chairman & Managing Director (CMD) of Power Finance

It has been more than two decades since PFC was formed. Could you please elaborate on the contribution it has made to the sector so far?

PFC has registered a loan disbursement growth of 45% and loan asset growth of 28% upto the Quarter ended 31st Dec, 2008

Since its inception, PFC has shown consistent growth in assets and is currently a leading player in the power sector with cumulative sanctions of about Rs.2,22,370 crore, cumulative disbursements of about Rs.1,06,166 crore and a total asset base of

of FY 2008-09. During the same period, PFC earned a net profit of Rs.965 crores and PFC’s networth stood at Rs.9,587 crores as on 31st Dec., 2008. Major projects sanctioned by PFC during the quarter ended 31st Dec, 2008 of FY 2008-09 include - Koradi

Rs.64,618 crore as on 31st Dec, 2008. I feel that PFC is and shall continue to be the key Financial Institution in the power sector. Today we are doing about 20 per cent of the total funding in the power sector – all central, state and private projects put to-

extension power station of Maharashtra State Power Generation Corporation (6,512 crore), Bellary thermal power station of Karnataka Power Corporation (Rs 1,806 crore) and RKM Power Generation (Rs 1,250 crore).

gether. Additionally, PFC has played and is playing key role by participating in various Government of India flagship programmes for the development of power sector like APDRP, AG&SP, DRUM, UMPP, R-APDRP etc. PFC therefore has played a dominant role in the development Indian power sector and it shall continue to be the key player as far as Indian power sector is concerned. What are the products and services offered by PFC to the entities in the Power Sector? PFC’s borrowers are primarily the State Power Utilities, Central Sector, Joint Sector, Private Sector and Co-operative Sector Power Utilities. The range of our products and services include; Term Loan (Ru-

January - 2009

Could you please elaborate on the recent achievements of PFC?

Considering PFC’s invaluable contribution, the Corporation has recently been conferred with the prestigious “Most Admired Company – Power Enabler Award 2008” by ‘KPMGInfrastructure Today’ and also ‘India Power Award 2008’ for its contribution to power sector under DRUM programme of Govt. of India. 38

PFC is the nodal agency for Ultra Mega Power Projects (UMPP) initiative and after successfully transferring three UMPPs of 4000MW each, we have completed the bidding process for Tilaiya UMPP. We have also recently identified three more UMPPs in Tamil Nadu, Orissa & Chattisgarh which are under active consideration and the RFQs for these projects are likely to be issued in the next financial year. Two more UMPPs at Karnataka & Maharashtra are under consideration and are in the process of site finalization.

●

Consortium Lending to power projects including UMPPs

its contribution to power sector under DRUM programme of Govt. of India.

●

Financing of Fuel Supply linkages like coal,

What are the major plans of PFC in the pipe-

gas, transportation etc

line?

●

Financing Equipment Manufacturing related to Power Sector

●

Financing equity capital for power projects

PFC will further consolidate its position in power sector and continue to expand its operations. In addition to that our future

●

Restructured APDRP

Additionally to provide exclusive focus to Consultancy Services related to power sector, which was earlier handled by a busi-

plans include foraying into allied sectors and to expand our borrower portfolio to cover various fuel suppliers for power generation such as coal, lignite, oil& gas companies. PFC also intends to finance infrastructure agencies facilitating supply of fuel

PFC plans to fund about Rs1.28 lakh crore during the XI Plan which is an increase of about 150 per cent over the level of its disbursement made in the X Plan. On the other hand to channelize funds into power sector, PFC will continue to play a catalytic role in power sector development by participating in various Government of India programmes for the power sector. Satnam Singh, CMD,PFC PFC has been appointed as the nodal agency by the Govt. of India for the ‘Restructured Accelerated Power Development and Reform Programme’, aimed at reducing aggregate technical & commercial losses with a total outlay of Rs.51,577 crores. In this regard, PFC appointed process consultant for assistance in implementation of the scheme and has also empanelled IT consultants, who will assist States in preparing DPRs and in implementation of the projects under the R-APDRP programme. PFC, in order to expand its operations in power sector and allied sector has restructured its organization to have strategic business groups having exclusive focus on the following business areas: ●

Renewable Energy & Clean Development Mechanism (CDM)

ness unit within PFC, we had formed a subsidiary company namely ‘PFC Consulting Ltd’ which caters to the consultancy requirements of power sector including UMPP business & related advisory services. PFC in order to facilitate efficient market mechanism for power trading has floated Power Exchange India Limited jointly with NSE & NCDEX, which has already started its operations and PFC is also a Professional Clearing Member of the Exchange. In addition to this, PFC has promoted another power exchange in association with NTPC, NHPC and TCS namely National Exchange Limited. Considering PFC’s invaluable contribution to power sector, the Corporation has recently been conferred with the prestigious “Most Admired Company – Power Enabler Award 2008” by ‘KPMG-Infrastructure Today’ and also ‘India Power Award 2008’ for

such as Railways, Port Trusts, etc. In addition to this, we are planning to finance development of Coal blocks/mines, setting up of coal washeries / coal beneficiation plants, expansion of gas pipelines, etc. and to finance establishment of Equipment Manufacturing facilities for Power Sector. In addition, we are also looking at funding renewable energy projects such as solar, wind and bio-mass in a big way. PFC has targeted to sanction Rs.2000 crore in the next four to five months for renewable projects. PFC being the Nodal Agency for the R-APDRP, we expect enhancement in our business prospects especially in the distribution sector. What exactly is the ‘Power Lenders’ club that you had formed? Could you please explain the purpose behind it? PFC formalized common lending documents with Life Insurance Corporation of India and January - 2009

ten (10) Indian Banks to establish the “Power Lenders’ Club”(PLC), to facilitate “one stop shopping” for clients in the power sector and to provide them access to capital from a consortium of financial institutions and banks to enable power projects to achieve faster financial closure. Later, HUDCO and another 8 banks also joined the PLC and has emerged as a 21 members strong Club. PLC is expected to play a major role in funding of large power projects including Ultra Mega Power Projects for which PFC is the nodal agency. The Consortium approach offered by PLC would provide a comprehensive solution to the debt requirements of the power projects without the developer having to queue up before a number of lenders to arrange for the funds. As on date, PFC with some of the other members of PLC has been associated with funding of three power projects (viz; 350 MW Domestic Coal based project of RKM power Gen in Chattisgarh, 20 MW Bagasse based project by Viswanath Sugar in Karnataka and 820 MW Konaseema Gas Based power project in AP). Further, M/s. IFFCO Chattisgarh Power Ltd have placed a Letter of Intent on PFC for providing project advisory, appraisal and loan syndication services for their 1000 MW power project to be set up in Chattisgarh (estimated cost Rs.5400 crore with debt component of Rs.3780 crore.) With the aim to give impetus to Consortium Lending Operations, PFC has recently established a Consortium Lending Group (CLG). The CLG is working towards harnessing the huge business potential offered by the Power Sector. CLG is interacting with the Banks/FIs to make an assessment regarding the cumulative exposure which could be taken by PLC members with a view to identify and firm up the various power projects to meet their funding requirements January - 2009

and to facilitate their expeditious financial closure. In the XI Plan the Government has targeted to achieve 80,000 MW. As the largest lending institution, how does PFC plan to support this? PFC plans to fund about Rs1.28 lakh crore during the XI Plan which is an increase of about 150 per cent over the level of its disbursement made in the X Plan. It is the endeavour of PFC to see that development of the power sector is not constrained for want of finance. On the other hand to channelize funds into power sector, PFC will continue to play a catalytic role in power sector development by participating in various Government of India programmes for the power sector. The role of PFC is essentially to participate in structural reform programmes of Government so as to improve the viability of the sector and attract investments into the sector, for instance PFC’s is playing such a role in R-APDRP by aiming to bring down AT&C losses. I believe this approach equally facilitates funding of power sector for meeting the capacity additions targeted. Please elucidate on PFC’s annual sanctions / disbursements, its share in the power financing pie and profitability figures? During the FY 2007-08, we sanctioned an amount of over Rs.69,500 crore and disbursed about Rs.16,200 crore and we earned a Profit After Tax of Rs.1207 crore. As of 31st March 2008, PFC enjoys a Net Worth of Rs.8,688 crore and Loan Assets of Rs.51,568 crore. Currently, PFC enjoys a market share of over 20% and hopes to further consolidate its position as the premier Financial Institution for the power sector. What according to you are the key constraints faced by PFC today? As per the working group report on power for XI Plan, the fund requirement is about

Rs.10.60 lakh crores and the available sources of funds are about Rs.6.40 lakh crores leaving gap of about Rs.4.20 lakh crores. The Lenders to PFC are constrained by their exposure limits to lend large amounts to PFC because of RBI as well as IRDA guidelines for Banks and Insurance companies. Under the current ECB norms, the financial intermediaries like PFC can access ECB borrowings only under approval route. PFC as a whole sale borrower in the debt markets at times faces volatile market conditions, which constrains the borrowing programme of PFC. Further, lack of depth in the long tenure market for borrowing also constrains the lending to power sector which requires long tenure loans ranging upto 25 years. The commercial viability of power sector is affected by high AT&C losses and therefore attracting fewer investments into the sector. Another issue could be lack of trained personnel. Considering the huge targeted capacity additions and the power projects to be implemented it would require a tremendous increase in trained manpower in technical and financial areas. We are trying to address it through programmes like the DRUM with USAID initiative. We also intend to set up a National resource centre for training institute for personnel in the power sector. The supply of power equipment also needs to gear up for the requirements of power sector, which has been a bottleneck and this is likely to be one of the constraints in the future as well unless the domestic capacities are expanded and international players allowed shoring up equipment manufacturing facilities. ❑ 40

January - 2009

A KPMG REPORT

Coal has been the dominant fuel source for power generation in India, meeting 40 percent of the total primary energy demand. Some recent developments in the sector are briefly presented.

January - 2009

●

Coal linkage replaced with Fuel Supply Agreements (FSA): The earlier policy of providing coal linkages to core and noncore sectors has been dispensed with. Regulated utilities are allowed up to 100 percent of their certified requirement through FSAs. Most of the consumers have now entered into long term FSAs with coal companies.

have been identified for this purpose. Twenty eight companies have submitted applications for the coal liquefaction projects.

ing blocks by way of a competitive bidding process: ●

Government is considering establishing an independent coal regulator to provide a level playing field for public and private sector players. The coal regulator would regulate coal pricing mechanism, regulate upstream allotment and exploitation of available coal, develop a mechanism for

Outlook Coal production in India is expected to rise from 432 mn tonnes in 2007 to 680 mn tonnes in 2012 (XIth plan) and further to

adequate quantities of coal imports

under long-term contracts to bridge the gap between supply and demand, and finally, create the environment for a ●

●

Government completes allocation of another 81 coal blocks: Government has completed allocation of another 81 blocks with total coal resources of 20

bn tonnes to non-CIL companies of which about 15.7 bn tonnes has been allocated for the power sector. ● New technological investments: Government is encouraging clean coal technologies, such as coal liquefaction and gasification. Currently, it is in the process of allocating coal blocks for coal liquefaction. Three coal blocks with total coal resources of 6 bn tonnes 43

1055 mn tonnes in 2017 (XIIth plan). The public sector investment for the XIth Plan for supporting their production plan is estimated to be USD 5 bn (CIL USD 3 bn; SCCL USD 1 bn; NLC USD 1 bn). Most of this investment will be funded by internal accruals of the respective coal companies. Private sector investment requirement for ramping up the capacity from 18 mn tonnes (in Xth plan) to 104 mn tonnes in (XIth plan) would be of the order of USD 2.5 bn. Government is bringing in two major changes for the coal sector viz. appointment of a coal sector regulator and allotment of coal min-

competitive coal market to operate. To encourage private sector participants to invest in coal mining and usher in greater transparency in coal mine allocation, the Government is considering competitive bidding for coal blocks, as is being done in case of ultra mega power projects. Independent mining companies are to bring in relevant expertise and desired technological upgradation leading to more comprehensive, efficient and quicker mining of

available coal. It has been suggested that coal blocks can be bid out by inviting competitive bids for arriving at the lowest price per tonne of coal. ● Government is also bringing out a New Mine Closure Policy for returning of the Mined Out Land (after mine closure by the coal company), back to the Government. ❑

January - 2009

Coal India Limited is the single largest coal producing company in the world and plays a dominant role in meeting India’s primary commercial energy needs. Currently CIL produces 84% of overall coal production of the country, and meets 46% of India’s primary commercial energy requirements. It is also true that CIL’s production predominantly comes from open cast mines. Out of 379.46 Million Tonnes (MTs) of coal produced during the fiscal 2007-08 the production from OC mines was 335.92 MTs, that is, around 89%. CIL has hitherto been pursuing the softer option of Open Cast production and has now realized the need to tap Underground reserves. Partha S Bhattacharyya, Chairman, Coal India Limited speaks.

o sustain the reserves for longer pe riod of time CIL is refocusing on UG production for tapping large reserves below 300 metres depth. In a paradigm shift, keeping with the recent global trend, Coal India has set its eyes on developing underground mines in a big way by adopting state-of–the–art mass production technology. A major performance highlight in 2007-08 has been the arresting of the trend of persistent decline in underground coal production continuing for decades. The most important aim of CIL is to be the leading energy provider to the country for the years to come.

Recent achievements Among others the most coveted achievement of CIL recently has been the conferment of Navratna status. The improved physical performance and strong financial showing in recent years, coupled with the need for accelerated coal production to meet huge capacity addition that is taking place in the country, led to CIL being conferred the coveted Navratna status. CIL is now bracketed with the top notch corporate bodies of the country. With the Navratna status CIL now joins the select band of significant players in the economic development of the country. Navratna means a lot more in terms of empowerment and the increased powers will help CIL in taking speedier decisions for its project implementation. The newly accorded status provides more financial and operational autonomy to CIL. CIL can now take decisions on its own for investing However, the Navratna status comes with a condition that CIL’s listing may be done in three years. CIL is on the verge of finalising the National Coal Wage Agreement (NCWA) VIII revising the salaries of around 4.33 Lakh workmen of CIL and its eight subsidiary companies. Incidentally, CIL will be the first Central PSU to finalize the wage revision due since 2006-07. CIL is on the lookout for internationally reputed and proven mine developers and operators for development, construction, and operation of high capacity underground mining blocks on a long term contract basis. Seven such properties have been identified and a global Expression of Interest has been issued 17 bids that have been received from national and international operators are under technical evaluation.

Another significant initiative has been the revisit of mines abandoned in the past for reasons other than exhaustion of reserves. 18 such mines with estimated reserves of over 1600 Million Tonnes of high quality coking and thermal coal have been identified for developing once again under a Joint Venture arrangement with the association of global underground mining companies.

New projects As leader in the energy sector, CIL envisioned its role to meet multi-dimensional challenges in the years to come. With the annualized growth rate pegged at 7.6% during the XI Five Year Plan, ending in 201112, CIL is committed to produce 520.5 MTs in 2011-12. Looking further into the future perspective, CIL envisages reaching a production level of 664 MTs in 2016-17. CIL is gearing up to meet these challenges. For this purpose, 125 coal projects for a capacity of about 298 Mty. have been identified to be taken up during XI Plan period. Where as 31 are underground (UG) projects 94 are opencast (OC). While the capacity of UG projects is about 21 MTs the same in case of OC projects is about 277 MTs. About 98 projects (of the 125) are likely to contribute to the tune of 132 MTs during the terminal year of XI Plan. UG projects are expected to chip in about 6 MTs. with OC projects shouldering 126 MTs.

New technologies Technology drive in CIL is a constant endeavour. CIL also provides a lot of importance to Man-Machine interface. Adopting multi-pronged thrust areas, CIL is developing itself as a globally competitive industry through introduction of state-of-the-art high productive mining & beneficiation technologies and capacity building in all facets of January - 2009

the industry covering equipment utilization, manpower deployment, introduction of modern management tools in marketing and HR practices. Some of the thrust areas that CIL has identified to consolidate its role in securitizing the energy needs of the country are necessity of increasing underground production by opening high capacity mechanized underground mines through state-of the-art technology such as continuous miner, Powered Support Long Wall (PSLW) and High wall Mining. About 20 High Wall Mining Machines are expected to be introduced in next 4 to 5 years. Setting up of washeries under Build-Own-Maintain (BOM) scheme for creating new capacities is another thrust area in CIL. New strategies for increasing coal production from opencast mines include introduction of higher size equipment to work at a larger stripping ratio with higher availability and utilization secured through long term Maintenance

As leader in the energy sector, CIL envisioned its role to meet multidimensional challenges in the years to come. With the annualized growth rate pegged at 7.6% during the XI Five Year Plan, ending in 2011-12, CIL is committed to produce 520.5 MTs in 2011-12. Looking further into the future perspective, CIL envisages reaching a production level of 664 MTs in 2016-17. January - 2009

and Repair Contract (MARC), introduction of in-pit crushing and conveying technology for large volume handling etc.

Projected targets CIL’s production target for the fiscal 200809 is 405 Million Tonnes, while the projected target for 2009-10 is 435 Million Tonnes. Expected Gross Turnover of CIL during 2008-09 is around Rs 44,000 Crores and during 09-10 Rs 46,000 Crores Yes, CIL performed appreciably during 2007-08 year and produced 379.49 Million Tonnes (MTs) of raw coal during the year. Coal off-take to consumers was the highest ever at 375.33 MTs in 2007-08. As I stated earlier, a major performance highlight in 2007-08 has been the arresting of the trend of persistent decline in underground coal production continuing for decades. CIL’s financial performance was also very strong. CIL grossed sales of Rs 38,865.70 Crores during the fiscal 2007-08 and earned a pre-tax profit of Rs 8738.46 Crores. Coal India’s Net Worth stands at Rs 19,342.37 Crores. CIL paid Rs 4380.53 Crores to Government exchequer during fiscal 2007-08 by way of Corporate and Dividend Tax, over and above the highest ever dividend of Rs 1,705.42 Crores paid during the year, which is 27% of paid up equity of Rs 6316.36 Crores. By way of Royalty, Cess and Other Taxes CIL paid Rs 5,999.28 Crores during the year.

Partnerships CIL has conceived many long term collaborative partnerships to enhance its strategic advantages. CIL has initiated actions for launching Joint Venture Companies (JVC) and entering into strategic alliances (SA) with different organisations in the areas of

power generation, mining activities overseas and non-conventional energy sources such as under ground coal gasification, coal liquefaction and commercial extraction of coal-bed methane. Another diversification initiative undertaken by CIL is revival of closed PSU Mining and Allied Machinery Corporation (MAMC) to create indigenous facilities of manufacturing underground mining machinery and spares. CIL and DVC signed an MOU for jointly take-over and revive MAMC. Subsequently, BEML also joined in this venture as a stakeholder and operating partner. An MoU has been signed with NTPC on 15.03.2007 to form a JV company to undertake coal mining and power generation as integrated operations. The equity participation of CIL and NTPC in this company is proposed to be 50:50. CIL entered into JV with ONGC for extraction of Coal Bed Methane (CBM) in two blocks (Jharia & Raniganj) and Underground Coal gasification (UCG) project in one block. ‘India CMM/CBM Clearing House’ - a joint effort of Govt. of India & US Govt. - established at Central Mine Planning and Design Institute Limited (CMPDIL) Ranchi – a mine design and consultation arm of Coal India Limited (CIL). The clearing house would provide thrust to development of Coal Bed Methane/Coal Mine Methane in India as part of CIL’s commitment to make use of coal in an environment friendly manner as well as pursuing clean coal technologies in right stride. Coal India Limited and GAIL (India) Limited have entered into a Memorandum of Understanding (MoU) for jointly setting up of a surface coal gasification project for production of synthesis gas, to be used as feedstock, for fertilizer production. The MoU was 46

signed on 10 January 2008 in New Delhi. The project would entail an investment of around Rs.2400 crore for setting up the coal gasification plant. The two companies will form a joint Working Group to evaluate detailed feasibility report prepared by GAIL to evaluate the viability of the project in terms of techno-economic feasibility for the project. Recently Bharat Coking Coal Limited (BCCL) the Dhanbad based subsidiary of Coal India Limited (CIL) entered into an equipment and service agreement with Chinese based Zhengzhou Coal Mining Machinery (Group) Company Limited (ZMJ) for development of Powered Support Longwall at Moonidih Underground project of BCCL. This would ensure production of 3.5 million tonne of coking coal in 5 years. It would be premature to predict the growth or to quantify in any realistic terms of the initiatives at this juncture. The goal is to bring together complimentary skills of the partners to increase CIL’s long-term competitive edge in the market and to achieve certain strategic advantages in the long run.

Challenges Yes, we do have roadblocks for Coal India’s growth or aspired growth. (1) Delays in Procurement of large sized equipment (2) Environmental Impact of Mining (3) Social Sustainability issues. But, we are addressing them with alacrity and in a proactive manner. To increase productivity, we need larger high capacity equipments. Usually, it takes a long time for all formalities to get over and during these stages different problems crop up. So now we have introduced an Integrity Pact with our buyers, which will be under the supervision of Transparency International and Central Vigilance Commission. 47

Generally speaking, Integrity Pact means good behaviour on both sides, which requires buyers and bidders to agree to a high degree of fairness and transparency in contracts. It is a tool devised to fight corruption in public contracting, thus contributing to improve credibility of public procedures and administration. CIL has appointed independent external monitors who will oversee the tendering process. Coming to the second challenge, when we mine an area, the environment comes under threat, so CIL directs a lot of attention towards land restoration. As a matter of fact, in order to promote transparency in environmental sustainability, Central Mine Planning and Design Institute - an in house consultancy arm of CIL – will be undertaking the satellite surveillance of all open-cast projects of five million tonnes capacity and more, which will track reclamation and renovation activities and to monitor the restoration made to the original habitat. The satellite images will be uploaded on the website. Finally, another important area that we are

addressing is that the social sustainable issue. One of the problems of coal mining in India is that, coal mines are situated near peoples’ habitat and forest areas. Hence Rehabilitation & Resettlement Policies are modified and reintroduced to make them more Project Affected People (PAP) friendly with their active involvement. CIL will be pursuing an inclusive model of growth by ensuring that PAPs are included in the decision making process underlining the need for wider contribution in R&R policies of communities affected due to mining. This is being done through creation of Social assets; imparting training and letting PAPs decides what they want to do. Then CIL will facilitate and provide help in providing resource flow to most backward people. Concern for safety of miners and mines is also an important challenge for us. Coal mining by its inherent nature is a hazardous profession. It is a fight against nature. Safety can be increased with improved training, skill development and approaching the issue in a scientific manner. ❑ January - 2009

A KPMG REPORT

Globally, the oil and gas sector is finding it increasingly difficult to replace conventional reserves. Rising crude prices have led to an increase in Exploration & Production (E&P) activities during the last few years. But there is change being experienced by the sector with several new activities taking shape.

Pic Source: Flick.com, clicked by discusser- Domk

January - 2009

New activities in the Oil and Gas sector include: Enhanced Oil Recovery (EORs) – EOR

●

techniques have been applied to get more oil from older and marginal fields ●

(NELP) and Pre-NELP (28 Blocks). Award of blocks under NELP –VII is due. Key issues for E&P players include uncertain crude price, complex geological exploration conditions and political risks. However, oil & gas remain a fundamental sector for meet-

Newer challenging opportunities like ultra deep water and non-conventional oil

ing India’s growing energy needs which in turn is driving the country’s oil imports.

resources like oil sands, coal bed methane, oil shale, etc. have gained promi-

Downstream - Refining and Marketing

nence in recent years. Concerns about shortfall in supply and inventory levels to meet the global demand for oil led to crude price rise, whereas fears of global economic recession and lower demand projections have contributed to a significant drop in crude price in the recent times. Currently, India is the sixth largest global oil consumer and is forecast to be the fifth largest in the next two years. In its effort to reduce dependence on imports, Government of India (GoI) has followed a proactive exploration policy inviting private sector participation through bidding rounds. About 162 blocks have been awarded to E&P players through international competitive bidding process under six rounds of the New Exploration Licensing Programmes 49

With new supplies coming into the market, marketing and pricing of gas assumes a lot of importance. Marketing of gas - The Empowered Group of Ministers (EGOM) has already issued guidelines on utilization of gas, which accord top priority for fertilizer sector.

●

is expected that many of the cities with population of more than 25 lakhs may be supplied gas within 3 to 5 years through city gas distribution networks

From a relatively deficit refining capacity in the mid 90s to the current surplus position, India aims to increase its oil refining capacity by 66 percent to 253.8 mtpa by 201213. Surplus refining capacity could enable India to emerge as a key player in the global refining industry.

Natural Gas

City gas distribution is likely to emerge as a major customer segment for gas. It

●

The Petroleum and Natural Gas Regulatory Board (PNGRB) has already drafted regulations allowing exclusivity to players operating in the City Gas Distribution (CGD) network.

India is currently in a deficit situation unable to meet its gas demand requirements.

Outlook

But going forward, natural gas demand supply dynamics could be more optimistic. This could happen on the back of the large discoveries made by RIL, GSPC and ONGC in the KG basin block. RIL is expected to supply 80 mmscmd of gas within the next 2

India has witnessed a spate of significant oil and gas discoveries over the past few

years.

years from the NELP blocks. The new gas discoveries have not only provided a stimulus to the upstream segment but also to the development of gas-based projects which are hopeful of accessing gas supply from January - 2009

A KPMG REPORT

significant quantities of oil and gas from abandoned and marginal fields which were not considered viable earlier. Partnerships between Indian and foreign companies in this area can be explored

these new discoveries. Immediate opportunity for participation in exploration would be the NELP – VIII, which is expected in early 2009. ● Open-acreage could be the future for ex-

ploration opportunities in India ●

Open acreage system allows companies to identify the blocks or areas they want to explore instead of bidding for pre-assigned blocks offered by the Government

●

On the mergers and acquisitions front, acquisition costs are likely to come down due to crude price decrease and the current credit squeeze. The financial turmoil

in global markets has resulted in a significant drop in share prices of independent E&P companies with aggressive development activities. This could lead to consolidation among small and mid-sized E&P companies. It could also be an opportunity for larger companies to take over smaller E&P companies as part of their E&P portfolio diversification. ❑

● Opportunities

in Coal To Liquid (CTL) and Coal Bed Methane (CBM) have also attracted many players in India. CTL is commercially at a nascent stage and the outlook would depend on coal availability and crude prices. CBM on the other hand has attracted smaller E&P companies. In fact, commercial production and sale of CBM has already begun through Great Eastern Energy Corporation Ltd (GEECL)

●

Marginal fields - Advancements in technology have made it possible to extract

January - 2009

HPCL is a Fortune 500 company, with an annual turnover of over Rs 1,03,837 Crores during FY 2007-08, 16% Refining & Marketing share in India and a strong market infrastructure. Corresponding figures for FY 2006-07 was Rs 91,448 crores. Arun Balakrishnan, CMD, HPCL talks about the company’s current strategies, growth and its future plans. What are the latest activities being carried out by Hindustan Petroleum Corporation Limited? In order to further improve physical & financial performance, HPCL is implementing following mega projects:

DHT unit is being implemented for producing diesel conforming to Euro-IV. ● Cavern for storage of crude oil and product tanks are being developed adjacent to Refinery. ● In order to adhere to stringent ●

environmental norms, the Refinery is setting up Integrated Effluent Treatment Plant (IETP)

HPCL has also been awarded equity in one block each in Oman and Australia and two blocks in Egypt in consortium with other partners. These NELP and overseas blocks are in exploratory stage and in the process of taking up development of fields for commercial production thereafter.

Visakh Refinery

Gas Initiatives

Clean Fuels Project for MS quality upgradation conforming to Euro-111 with a capability to produce Euro-IV. The project is under commissioning stage. ● Augmentation of FCCU-II at Visakh

Basis the approval obtained from Govern-

●

Refinery. ● DHT unit is being implemented for producing diesel conforming to Euro-IV. ● HPCL is setting up a Single Point Mooring (SPM) facility to receive crude oil by Very Large Crude Carrier (VLCC). This will reduce the freight cost.

ment of Gujarat, HPCL had set up initially 1 mother station and 9 daughter stations during December 2005 and subsequently added 6 more daughter stations. The above facilities are developed by HPCL, directly at an investment of Rs.30.00 Crores approx. HPCL is sourcing natural gas from GSPCL through a commercial agreement, to a tune of 40,000 SCMD. Ethanol Production ●

Bihar Sugar: As per MOP&NG Gazette

HPCL’s gross sale during 2007-08 was 22 MMT. The industry growth during 2007-08 was 7%. Taking into account the present economic conditions, HPCL envisages to achieve at least an annual average growth rate of 5% during the next 7 years. Hence it is expected that the market sales volume would reach 31 MMT by the year 2015. Arun Balakrishnan, CMD,HPCL Mumbai Refinery ●

Green Fuels & Emission Control Project for MS quality upgradation conforming to Euro-111 with a capability to produce Euro-IV. The project is under commissioning stage.

Additional FCCU at Mumbai Refinery with a capacity of 1.45 MMTPA ● LOBS quality upgradation from existing level of Group-I to Group-II/Group-111 specification. ●

Please comment on the major diversifications planned. HPCL has forayed in Exploration and Production (E&P) upstream sector and has taken initiatives to secure equity crude oil & gas by participating in the NELP rounds for E&P blocks offered by Govt. of India, in consortium with E&P Companies. HPCL has been awarded a total of 20 nos. E&P blocks since its participation in NELP-IV till NELPVI round.

notification No. GSR 580 (E), dated 20th September 06, directed OMCs to blend 5% Ethanol with petrol subject to commercial viability, in twenty states and four union territories. The OMCs estimated requirement of Ethanol for 5% blend is approximately 600 TKL per annum. HPCL sells approximately 3500 TKL of MS which is around 24% of the domestic consumption. The requirement of Ethanol will be 175 TKL at 5% blending. HPCL intends to set up a new January - 2009

plant’for production of Ethanol with sugarcane as feedstock at Sugauli or Lauria in Northern Bihar. ●

Renuka Sugars: HPCL has joined with Mis. Sree Renuka Sugars Ltd. for setting up an Ethanol Plant in the south

of Maharashtra. The plant would be operated on the Brazilian mode of production, i.e., more of Ethanol and less of sugar, rather than maximizing sugar production. Biodiesel Production A Subsidiary company of our Corporation, ‘CREDA-HPCL Biofuel Ltd’, a joint venture with Chhattisgarh State Renewable Energy Development Agency, has been constituted. CREDA would acquire land on lease from the Govt of Chhattisgarh for cultivation of Jatropha which would yield Biodiesel. This is in line with Corporation’s pursuit for promoting alternate fuels. HPCL would have exclusive rights on the entire produce of Jatropha seeds & would facilitate production and marketing of Biodiesel across the state of Chhattisgarh. At Pantnagar in the State of Utranchal, 5.8 lakhs Jatropha plants have been planted in the first phase. Could you elucidate on the partnerships (JVs-MOUs) made in the recent past by HPCL and what is the growth that it is witnessing since going for this mode of diversification? HPCL signed MOU with GB Pant University of Agriculture & Technology, Pantnagar for experimental plantation of Jatropha, installation of transesterification unit (Pilot Plant) and R&D on tissue culture development. ●

Has acquired 2 sugar mills in Bihar for

production of Ethanol with sugarcane as feedstock ● HPCL has joined with Mis. Sree Renuka Sugars Ltd. for setting up an Ethanol Plant in the south of Maharashtra. The January - 2009

HPCL in collaboration with TOTAL SA of France has set up’ a cavern at Visakhapatnam for storage of 60,000 MT LPG. The project has been commissioned in January 2008. The project cost was Rs.333 Cr. The SALPG Cavern is the largest LPG storage facility in South Asia. Hindustan Colas Ltd. (HINCOL) The performance of HINCOL, another Joint Venture with Colas of France, for production of bitumen emulsion has been extremely impressive. HINCOL achieved a volume growth of 32% and profitability growth of 97% during 2007-08 and consolidated its status as the Market Leader. The turnover of the company crossed Rs.250 crores for the year 2007-08. The products of ~INCOL are widely used by agencies associated with road construction. HPCL-Mittal Energy Ltd. (HMEL) HPCL in collaboration with Mis. Mittal Energy Investments Pte. Limited (MEI) is setting up a 9 MMTPA green field refinery at Bhatinda in Punjab. The refinery is designed to process Arab Heavy Crude with flexibility to process other heavy I sour I acidic crudes. The project is progressing as per schedule and is expected to be completed by first quarter of 2010-11. Prize Petroleum Company Ltd. (PPCL) HPCL, in partnership with ICICI and HDFC,

HPCL’s gross sale during 2007-08 was 22 MMT. HPCL envisages to achieve at least an annual average growth rate of 5% during the next 7 years.

had formed this Joint Venture E&P Company for participating in exploration and production of hydrocarbons. PPCL is also providing consultancy services related to E&P. PPCL has signed a Service Contract with ONGC Ltd for development of marginal fields in Cambay basin with 50% holding in the consortium. During the year, these fields produced 49,123 barrels of oil. PPCL has also entered into a Production Sharing Contract (PSC) with 50% stake in an onland marginal field at Sanganpur. During the year, there was a production of 1,426 barrels of oil from this field. Bhagyanagar Gas Ltd. (BGL) Bhagyanagar Gas Ltd. (BGL) is a Joint Venture Company by GAIL and HPCL for distribution and marketing of environmental friendly fuels (green fuels) viz., CNG and Auto LPG for use in the transportation, domestic, commercial and industrial sectors, in the State of Andhra Pradesh. Aavantika Gas Ltd. (AGL) Aavantika Gas Limited (AGL) is a Joint Venture Company by GAIL and HPCL for distribution and marketing of environmental friendly fuels (green fuels) viz., CNG and Auto LPG for use in the transportation, domestic, commercial and industrial sectors, in the State of Madhya Pradesh. During 2007-08, AGL has completed construction of CNG Mother Station at Indore. 5 Daughter Stations for dispensing CNG, 4 at Indore and 1 at Ujjain are also ready for operation. What are the targets both in terms of revenues and sales? Also comment on strategic initiatives taken by Hindustan Petroleum Corporation Limited in the recent past? HPCL targets to achieve market sales of 24 MMT and revenue generation of about Rs.

115,000 Cr. during the year 2009-10. HPCL’s strategic vision has been to continue focus on enhancing its business in core competency area of refining and marketing and diversify into upstream business. Currently gas constitutes about 8% of the primary energy mix of the country which is expected to grow twofold by the year 2030. Hence HPCL also intends to enter into Gas business. As per Government Directive, OMCs have to blend 5% Ethanol with petrol subject to commercial viability, in twenty states and four union territories. Therefore, HPCL

ucts viz Polypropylene. The project is progressing as scheduled and the refinery is

intends to enter into manufacture of Ethanol. Further, HPCL also plans to get into production of Bio-Diesel , an alternate fuel, for which a subsidiary company called “CREDAHPCL Biofuel Ltd” has been formed to pursue this objective.

expected to be commissioned by the last quarter of 2010-11. Low cost revamping projects are also being planned to enhance crude processing capacity at MR VR from the current level of 17 MMT to 20 MMT / year by 2011-12. Petroleum retailing is the

Please provide details in terms of what is your vision; what would be your target and achievements by the year 2012? Do you have any ballpark figure in terms of revenue which you think would be feasible for HPC Limited to achieve by year 2012? HPCL’s gross sale during 2007-08 was 22 MMT. The industry growth during 2007-08 was 7%. Taking into account the present economic conditions, HPCL envisages to achieve at least an annual average growth rate of 5% during the next 7 years. Hence it is expected that the market sales volume would reach 31 MMT by the year 2015. Currently our crude processing capacity is about 17 MMT while the sale is 22 MMT. The gap is being bridged by sourcing products from other Indian refineries and through imports. HPCL is setting up a 9 MMTPA capacity refinery at Bathinda in Punjab in collaboration with Mittal Investments pte Ltd. The refinery has been designed to process high sulphur & heavy crudes and also produce value added prod-

core business of HPCL and will continue to play a dominant role in our domestic marketing in the near future too. HPCl will pursue its retail strategy of positioning its retail outlets at right location, format and differentiated customer offerings in Urban, Highway and Rural markets across the country. However, expansion of retail network will be carried out judiciously in future to ensure viable operation and avoid cannibalisation of the existing network. HPCL is conscious of the increasing importance of alternate auto fuels like CNG and Auto LPG and has already set up storage and dispensing facilities across the country to tap this business. Currently, we have 91 stations retailing CNG across 10 cities/ towns (average sales exceeding 10.2 TMT/ month) and 131 stations retailing Auto LPG across 71 cities/towns (average sales exceeding 3.2 TMT/month) across the country. We will continue our efforts in this direction depending upon the considerations of product availability/sourcing, physical

space, safety norms and economic potential. Upstream HPCL has forayed into E&P business and has taken initiatives to secure equity oil and gas. HPCL has already been awarded equity in 24 blocks in consortium with other partners which encompasses 4 overseas blocks, one each in Australia & Oman and 2 in Egypt. HPCL is focusing on acquiring equity in prospective E&P blocks. Petrochemicals HPCL in consortium with some MNC & PSU partners has carried out Front End Loading (FEL-I) study for setting up a world class 14 MMTPA capacity Refinery cum Aromatics project in the proposed Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) near Visakhapatnam. Techno economic evaluation of the project is under progress to proceed with the next stage. Gas HPCL intends to get into city and commercial gas distribution. HPCL has already set up 1 Mother Station and 9 daughter stations for marketing and distribution of natural gas in Gujarat. HPCL along with GAIL (India) Ltd has also set up JVCs for city gas and commercial gas distribution in the State of Andhra Pradesh and Madhya Pradesh. ❑

January - 2009

A KPMG REPORT

Nuclear energy development had slowed down considerably all over the world, in the last few decades after some high profile accidents. However, it acquired prominence globally in last few years due to its positive impact on global warming. India with its overwhelming dominance of coal-based thermal power generation becomes even more attractive for nuclear power as it limits the CO2 emissions levels, can address the issue of availability of coal in India to sustain future demand; and effectively address the potential issue of energy security for the country.

January - 2009

uclear power can potentially con tribute approximately 15 percent20 percent of global power needs in 30 countries. These countries have 439 commercially operational nuclear power reactors with a total installed capacity of 3,72,000 MWe, 36 nuclear power reactors are under various stages of construction and of these 19 new reactors are coming up in emerging economic powers-China, India and Russia.

In India, Nuclear Power Corporation of India (NPCIL) is the sole agency generating nuclear power. It has a total installed capacity of 3900 MWe from 17 reactors which are mostly Pressurized Heavy Water Reactors (PHWRs). Planned addition in capacity of nuclear power did not follow the predicted path on account of geopolitical constraints leading to fuel shortages and lack

of funding during the 90s. Limited availability of uranium and abundance of thorium in India has been the prime driver of the threestage program of Department of Atomic Energy (DAE). Under this programme, plutonium and depleted uranium recovered

NPCIL in 2006 (2x1000 MWe Pressurized Water Reactor (PWR) to be set-up at Jaitapur in Maharashtra, 2x700 MWe PHWR each at Kakrapar in Gujarat and Rawatbhata in Rajasthan and 2x1000 MWe VVER at Kudankulam in TN). Based on the

from the spent fuel of the first stage PHWRs would be used in the Fast Breeder Reactor (FBR) of the second stage, which would produce more plutonium than consumed. The third stage would exploit the large re-

successful operation of Fast Breeder Test Reactor (FBTR) (13 MWe) located at Indira Gandhi Centre for Atomic Research (IGCAR) Kalpakkam, a 500 MWe Fast Breeder Prototype Reactor (FBPR) is under construc-

sources of thorium available in the country

tion and is expected to be commissioned

using advanced power system concepts like Advance Heavy Water Reactor (AHWR), Accelerated Driven System (ADS), etc.

by 2010, for breeding of fissile material and power generation using Thorium as fuel.

At present, 6 nuclear reactors are under

Demand for power in India is projected at 800 GW by 2032 which will imply a 6 fold

construction in India, which will add 2880 MWe during XIth plan. The Government has sanctioned an additional 6800 MWe for

growth of the current capacities in about 25 years. This would be a challenge given our overwhelming dependence on coal.

January - 2009

A KPMG REPORT Nuclear power could potentially play a key role if the right steps are taken to facilitate it.

Outlook The Indo-US 1-2-3 agreement does open up a possibility of India leapfrogging its nuclear power generation and expanding it substantially in next 25 years. The agreement permits the members of the Nuclear Supply Group (NSG) to enter into a bilateral as well as third party agreement with India for supply of fuel, technology or spares the three biggest constraints faced by the Indian nuclear power industry. The other major constraint is investment, which can be overcome by involving the private sector and other public sector companies into nuclear power generation. Recently, there was an announcement on the formation of a joint venture company of National Thermal Power Corporation (NTPC) and NPCIL which marks the entry of NTPC into nuclear power generation30. However, in order to facilitate the entry of other serious players, especially the private sector, into nuclear power generation a lot more needs to be done. Some of the obvious steps would be the amendment of the Atomic Energy Act of India, 1962, to address the issue of liability limitation, streamlining of the regulatory process for approvals at various stages of nuclear power development, clarity on the tariff of power generated from nuclear power plants and issues related to allotment of sites for setting up of the nuclear power plants for new companies. The Indian nuclear power industry is looking for an investment of over USD 60 to 80 billion in the next 25 years31 and an enabling situation would need to be created for facilitating this.

January - 2009

Given that the Government of India is keen to facilitate the private sector participation in the generation of power from nuclear sources one can assume that the act will be amended soon. However, for the industry and investors it is important to start

●

looking at some of the key questions and exploring the options.

requirement of nuclear industry be met given the present low level of expertise and manpower available- outside of DAE- in the country for the capacity planned for the next 25 years? Other areas where the investors may like to start working with the Government are

Some of the questions facing a potential entrant to nuclear power include: Which technology to deploy and why? ● What does the market offer in terms of technology options and the contractual ●

●

models on parameters like cost, supply of fuel, supply of spares and expertise? How can the fuel security be best ensured, is it through an Uranium mine ownership internationally or an arrangement with the potential technology supplier or with UCIL (GOI)? Given lack of prior experience and its complexity, should they go for an independent route or a JV route with a technology supplier (like what NTPC chose to do)? How does the long –term power cost work out for nuclear power compared to other sources and what other benefits will nuclear generation provide to them?

Demand for power in India is projected at 800 GW by 2032. This would be a challenge given our dependence on coal. Nuclear power could potentially play a key role if the right steps are taken to facilitate it.

What kind of relationship and support can they expect from nuclear ancillary industry since most of that is controlled by the Government in India, unlike in many other countries? ● How would the human resource

the issues related to how the regulation will work and the way AERB and CERC would regulate the industry. Currently, CERC does not have a role in tariff fixing for nuclear power which is done by the DAE. AERB whose approval is required at all stages leading to setting up of a nuclear power plant- starting from approval of technology to approval for commissioning of the plantis controlled by Atomic Energy Commission (AEC) which also controls NPCL. ●

What kind of a role AERB can play will likely become more important once private players and other public sector companies plan to enter nuclear power

generation. The private sector may like the Government to address the liability issue as financers will likely be wary, if this issue is not addressed. Allotment of site from the Government approved list would be another area where companies interested in entering nuclear power generation may like to start a dialogue with the Government. If India would like to add another 60,000 MW through nuclear in next 25 years, it is important that these issues are addressed early as nuclear generation has a relatively longer gestation compared to thermal power plants. ❑

January - 2009

A KPMG REPORT

Cost reductions due to technological innovations, climate change considerations and rising trends in long term prices of conventional fuels give rise to a strong long-term positive outlook for renewable energy sources. Even though a miniscule contribution right now, this sector of energy is seen as having the most potential and the only one for the future.

January - 2009

ind energy has the largest in stalled capacity among renew able energy sources. Relatively stable technology and negligible variable costs of generation make wind power competitive vis-à-vis conventional fuels. Key is-

●

Technological advancements are expected to reduce the costs by about 8 to 10 percent year-on-year over the next few years. In fact, the NREL (National Renewable Energy Laboratory, US) has al-

set up goals for solar energy in the overall long term energy mix. MNRE has announced a generation-based incentive scheme for solar power. Currently, this is applicable for the first 50 MW of installed capacity to come up in the country. Investors have shown

sues affecting the industry include availability of land and shortage of turbine equipment.

ready achieved a 20 percent efficient thinfilm which is far higher compared to the 910 percent efficient thin film currently being produced.

interest in availing this scheme. In addition, few states have announced feed-in tariffs for Solar PV and Concentrating Solar Power (CSP) technologies and have announced

Among the renewable energy sources, solar energy has received a lot of emphasis in recent times and is expected to be an important long term energy source.

Key issues currently influencing the performance of the solar industry like shortage of silicon and system reliability are expected to be overcome in the next few years. Though there is some uncertainty regard-

Recent technological advancements in solar Photovoltaic (PV) systems like emergence of thin-film and higher efficiencies in conversion are expected to reduce the cost of solar power to levels comparable to that of conventional fuels in the future. Some of the likely trends include: ●

It is expected that at module cost of USD 1 / Wp, solar power is likely to be at grid parity with conventional fuel sources

ing the most economic technology, it has not stopped key stakeholders including the Government and private sector players to Particulars

that they will support additional capacities beyond the 50 MW supported by MNRE. The Government of India has also launched a ‘National Mission on Solar Energy’ with a goal to generate at least 10 percent of India’s power from solar energy over the next several years.

Module- (USD/Wp)

Crystalline PV 2007-08 3.6

Thin Film 2007-08 2.15

2011 Forecasts 1

Electricity - (USD/KWH)

0.63

0.45

0.16

Source – Industry research, Photon Consulting Magazine – ‘Costs of Solar Power’

January - 2009

A KPMG REPORT financing costs due to the global credit squeeze and excess mid-term polysilicon and panel capacity persist. However, solar power could be on par with grid power in the coming decade given the Governments’ incentive support and investments in this area globally. Germany has already issued the draft energy legislation which is expected to extend incentives beginning 2009 for 5 years. The US recently approved the investment tax credit policy for solar power for a period of 8 years.

Outlook Ministry of New and Renewable Energy (MNRE), Government of India has set up aggressive targets for renewable energy.

MNRE has set up provisions for subsidy to the tune of about USD 650 million for gridinteractive and distributed renewable power.

Many Indian players have entered various stages of the solar PV manufacturing value chain. While currently the focus has been on cell and module manufacturing, there are aggressive plans by many larger players into early stages of the value chain such as polysilicon and wafers.

From the current levels of around 10,500 MW, it is projected to touch about 25,000 MW by 2012. Investment requirement for setting up an additional 14,500 MW renewable power capacity is expected to be around USD 12 billion.

The ‘National Solar Mission’ has set a vision of increasing production of photovoltaic to 1000 MW per year over the next several years. The recent market turmoil has led to significant drop in stocks of renewable technology companies. Concerns about higher

While there is global shortage of polysilicon currently, thereby leading to very high prices in the spot as well as contracts market, it is important for new entrants to look at cost competitiveness at a global level while planning new capacities. In the case of wind power, better utilization of existing wind sites through repowering (by installing larger and aerodynamically efficient turbines) and large capacity off-shore wind projects will likely be the emerging trends in the next few years. From the point of view of long term energy security and to strengthen India’s position in the global response to climate change, encouragement to renewable energy will likely continue to be an important element of the Government’s energy policy. ❑

January - 2009

U.C.Misra, Chairman, BBMB January - 2009

Bhakra-Beas River Valley Development forms a major part of the master plan formulated for optimum utilization of waters from three rivers viz. Sutlej, Beas and Ravi which came to the share of India as per Indus Water Treaty concluded with neighboring Pakistan in the year 1960. A ‘surprise’ started from there…

version dam on river Beas to divert its water to river Sutlej through a 38 KM long water conductor system in the form of tunnels, open channel, balancing reservoir and Dehar power station (990 MW) at the tail. The annual energy generation of 10,000 to 14,000 Gwh from these power stations is shared by four states of Northern India. Bhakra- Beas power stations are sources of low cost electrical energy (about 19 paise per kWh) and provide invaluable peaking power to the Northern Regional Grid of India. Bhakra, Pong and Dehar machines are also subjected to large number of start-stop operations due to peaking duties assigned to these power stations.

BBMB – Origin Bhakra-Nangal Project was taken up immediately after independence in the joint collaboration of the erstwhile State of Punjab and the State of Rajasthan. 65

After reorganisation of Punjab, Bhakra Management Board was constituted on Ist October, 1967 under the Punjab Reorganisation Act, 1966 for administration, operation and maintenance of Bhakra-Nangal Project.

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The works of Beas Projects were entrusted to Beas Construction Board as per the provisions of the Punjab Reorganisation Act. On completion of Beas Projects, these were transferred to Bhakra Management Board on 15th May,1976 and it was renamed as Bhakra Beas Management Board as per the provisions of Punjab Reorganisation Act.

hakra-Beas projects constructed

between 1955 and 1983 comprise Bhakra Dam on river Sutlej with Power Stations on left and right banks (1325 MW), irrigation channel with two canal power houses (168 MW), Pong Dam on river Beas with a power station (390 MW), a di-

●

Functions To regulate the supply of waters from Bhakra-Nangal and Beas projects to the states of Punjab, Haryana and Rajasthan. ● To regulate supply of power generated at the Bhakra-Beas Power Houses to power utilities incharge of distribution ●

of power in the participating States.

●

To provide and perform engineering and related technical and consultancy services in various fields of Hydroelectric Power and Irrigation Projects and to carry on all kind of business related thereto, either independently or as a joint venture with any Central/State/ Public Undertaking(s) or Establishment(s) under the administrative control of Ministry of Power or as a joint venture with any other Agency/ Organisation with the approval of Government of India.

●

Such other functions as the Central Government may, after consultation with the Governments of the States of Haryana, Punjab and Rajasthan, entrust to it.

Power Wing General Review The Power Wing is entrusted with the administration, operation and maintenance of Power Stations, Transmission System and System Load Dispatch Centre (SLDC) of BBMB.

Installed Capacity (As on 31.3.2008) Power House

Capacity

Bhakra (Right Bank)

5x157

785

Bhakra (Left Bank)

5x108

540

Ganguwal

1x27.99+1x24.20+1x24.20

76.39

Kotla

1x28.94+1x24.20+1x24.20

77.34

Dehar

6x165

990

Pong

6x66

396

Total

2864.73

January - 2009

Transmission System (As on 31.3.2008)

Unit-II (Beas Dam at Pong):

BBMB transmission system, spread over the states of Himachal Pradesh, Punjab, Haryana, UT-Chandigarh and Delhi, operates in integrated manner with

Beas Dam at Pong including Reservoir, Outlet Works, Spillway and works appurtenant thereto and Talwara Township.

Northern Regional Power Grid. The transmission system of BBMB comprises as under:-

No. of Sub-Stations Line

Length (Ckt. km)

400kV

574

220kV

2995

132kV

66kV

115.5

Total:

3706.5

Bhakra- Beas power stations are sources of low cost electrical energy (about 19 paise per kWh) and provide invaluable peaking power to the Northern Regional Grid of India. Bhakra, Pong and Dehar machines are also subjected to large number of start-stop operations due to peaking duties assigned to these power stations.

Clean Development Mechanism (CDM) Initiative Initiated the possibilities of Carbon Trading through sale of Certified Emission Reduction (CERs) generated on account of the additional uprated capacity and improved efficiency of the Hydro projects under R,M & U programme which would now add 94.44 MW. World Bank has agreed to buy them $US 8/ CER with all expenditure upto registration to be borne by them.

will remain constant in the subsequent

Irrigation Wing

Process in advance stage of completion. ● Other CDM Projects under development around 5 lacs Jatropha plants are being cultivated in a phased manner in 300 ●

General Review ●

The Irrigation Wing is entrusted with the administration, maintenance and operation of the following Project components:

●

years upto 35 years. Expected Revenue: Rs 80 Lacs per year.

hectare surplus land at Talwara. After 2012, all plants will start yield of seeds upto 1980 tonnes per year which

Bhakra-Nangal Project ●

Bhakra Dam and Reservoir and works appurtenant thereto, including Nangal Workshop and Nangal Township.

●

Nangal Dam and Nangal Hydel Channel.

Beas Project Unit-I (BSL Project): Beas Satluj Link Project comprising Pandoh Dam, Pandoh-Baggi Tunnel, Sundernagar Hydel Channel, Balancing Reservoir, Sundernagar-Satluj Tunnel and connected Civil Works and townships at Sundernagar and Pandoh.

January - 2009

Understanding the potential of a segment with prescience and growing every year with consistent patience often leads to practical fulfillment of dreams. Dinesh Kumar, the managing director of XL Telecom and Energy Ltd once dreamt of touching the sky. Succeeding metaphorically, he even eyed the sun, taming and tapping its energy and widening the energy scope for the future.

e see ourselves as Leader in “ Non-conventional Energy gen erating and Equipment supplying company by 2015 with overall revenues being in excess of US$ 1 Billion. Our focus is going to be export Market segment including Europe, USA, Canada and Middle East as Target Market Opportunities,” says Kumar with a mature confidence that has seen him through since he started his business in 1985. Having achieved Rs 650-plus crores revenue in 2007-08 as compared to Rs 500 crores in 2006-07, the company is confident of revenues of over US$ 1 Billion by 2015 on a conservative basis. “During the last one year, XL Telecom & Energy Ltd has grown significantly in Solar Photovoltaic space and has become a leader in the segment. XL in last financial year 2007-08 ending 30th June for the first time has earned more revenues from Energy Segment than Telecom Segment and

going forward, the Company should be predominantly Non-Conventional Energy Player with revenues contributing about 80 to 90 per cent. Even in Non-Conventional Energy, it is largely Solar PV Space only,” says Kumar.

initially or for the next few years through Nuclear Technology and as we understand, by 2012, this particular technology should be about 10 per cent or so. It is difficult to predict the Indian market especially in solar space.

XL has initiated the 120 MW Solar Cell Manufacturing plant along with 40 MW Module Expansion Project during the last few months and the same should be opera-

Global demand for solar is growing at exponential space largely due to the ‘Subsidy’ provided for the segment. Given the current situation in India, we are not sure

tional in the Jan – March 2009 – the total capex being about Rs.360 crores.

whether the Indian Government could follow a similar model of subsidy programmes considering that the priority is providing food and shelter for a large population at an affordable price.

“During the last one year the Company has also become virtually the ‘First company’ in the world to have exposure to Solar Cell – Solar Module – System Integration – EPC – Solar Power Generating Farms – by establishing its first 1.6 MW Solar Farm in Spain, Italy,” says Kumar. The company is already also has interests in Ethanol and has an Ethanol plant in Maharashtra, which was set up in 2002. With the 1,50,000 Litres of Ethanol Manufacturing plant, XL is in the process of establishing backward integration plant of the Distillery with similar capacity in the same State with overall capex of about Rs.75 crores. The company has also crystallized plans on entering into Bio Diesel segment by producing the Bio-diesel through Algae. “We have already placed an order for the Pilot Plant and once the Pilot plant is established and technology is proven, we plan to invest significant efforts to be a leader in the segment,” says Kumar. Keeping his eyes firm on the international market, Kumar has his own doubts about the solar penetration in the country. He says, “Renewable energy sector includes Nuclear Power Generation. As we see, India is going to focus on Renewable energy

The trend may change by 2015, but we are not really sure. India still has a relatively smaller subsidy model for the solar space currently. Given the situation we feel that though in the overall plan there is huge potential in the Power sector in India, we as solar sector, may not see significant opportunities going forward other than small portion of overall opportunity.” ❑

January - 2009

As per Central Electricity Authorityâ&#x20AC;&#x2122;s monthly update, Indiaâ&#x20AC;&#x2122;s installed power generation capacity reached 146902.81 MW as of November 2008. This capacity growth was augmented by 150 MW against that of October 2008 (146752.81 MW). In comparison, the total installed power generation capacity was 138251.63 MW in November 2007, which translates into an increase of 8651.18 MW in one year. The drivers of this growth are the State, Central & Private sector and they together make for the generation giants of the Indian power sector. Till November 2008, the energy source was: Coal (76988.88 MW), Gas (14704.01 MW), Diesel (1199.75 MW), Nuclear (4120 MW), Hydro (36647.76 MW) and other renewable energy sources (13242.41 MW). The total has been calculated after segregation into three sectors, viz., State/UT Sector, Central Sector and the Private sector. As of November 2008, the State sector, which involves all 28 states and 7 union territories contributed a total of 76185.57 MW while the Central Sector which includes centre governed corporations like the National Thermal Power Corporation (NTPC), Nuclear Power Corporation of India (NPCI), National Hydroelectric Power Corporation (NHPC) and such like contributed 48, 470.99 MW. The private sector involves varied companies in each state and UT and it contributed 22,246.25 MW all put together. From the statistics provided by CEA, it is clearly indicated that the maximum growth potential seen in the last few months has been Hydro showing immense potential in terms of installed capacity, while data for Renewables is available only till March 2008. Nuclear is nil from all quarters except from the Central Sector (Nuclear Power Corporation of India). In the following pages, we have identified the top states which have contributed towards this installed capacity of the country, which in the future (read 2012) has to touch 238902.81 MW, going by the November 2008 figure of installed capacity. The Indian government, in the Eleventh Five-Year Plan (2007-12), has proposed a capacity addition to 92,000-MW after revising the figure twice!

January - 2009

Ten states have earned their place in the Top in terms of total installed power generation capacity as on November 2008. Figures are in MW.

Maharashtra Tamil Nadu Andhra Pradesh Gujarat Uttar Pradesh Karnataka Madhya Pradesh West Bengal Punjab Rajasthan

20289.5 14136.3 12088.6 11335.9 9318.4 9135.2 8274.2 7979.4 6823.0 6423.1

Source: Central Electricity Authority (Power at a Glance)

January - 2009

X The top 10 Installed Power Generation Capacity Giants among states peaks from 20289.5 MW to as low as 6423.1 MW. But even though these states have all earned a position in the top slot, there is still a big lacuna. For India. For us Indians. Each of these states is short of power. Power cuts, T&D losses, population, geography...all are standing as huge hurdles from these states to reach their ultimate Goal. That of Power Sufficiency.

But we call them Giants, because we feel they deserve the recognition. With all their diversity and their entire shortcoming, these states have managed to pull such figures which when compared to few years back look gigantic. It is indeed applaudable and these states with all their challenges ahead seem to be confident of attaining the dream of â&#x20AC;&#x153;Power for All -2012â&#x20AC;?

January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

Hydro

Thermal Coal

Gas

2888.9

6800.0

PRIVATE

444.0

CENTRAL

STATE

TOTAL

January - 2009

Nuclear

R.E.S.

Total

Diesel

Total

(MNRE)

912.0

0.0

7712.0

0.0

216.7

10817.6

1650.0

180.0

0.0

1830.0

0.0

1942.5

4216.5

0.0

1953.5

2611.9

0.0

4565.4

690.0

0.0

5255.4

3332.9

10403.5

3703.9

0.0

14107.4

690.0

2159.2

20289.5

The main authority towards electricity generation in Maharashtra is MAHAGENCO with the highest overall generation capacity and the highest thermal installed capacity amongst all the State Power Generation Utilities in India. In terms of installed capacity, it is the second highest generation company in Nation after NTPC. The existing Generation capacity of 9996 MW comprising 6800 MW Thermal, 2344 MW Hydel & 852 MW Gas turbine shows its balanced portfolio. The other main bodies of power in Maharashtra are Mahatransco and MSEDCL.

Latest Technologies MAHAGENCO has introduced latest technologies at our on-going power projects also. Thus, at one end where we are actually implementing our ambitious capacity addition programme, on the other end, we are trying to generate maximum possible power from its existing Gen-sets. It is noticeable that even though most of our units are ‘vintaged’, we have established new record generation through them.

Challenges faced by MAHAGENCO Supply of adequate fuel for power plant is one of our major constraints. In fact, as far as our main fuel supply (obviously coal) is concerned, we are suffering a lot qualitatively & quantitatively. By anticipating such coal- crisis, we have already established a joint venture company namely ‘MAHGUJ Collieries Ltd’ for captive coal mining. In future, we are expecting our own fuel linkage for some of our plants from these coalfields allotted to us at

Ajoy Mehta - Managing DiMachhakata (Orissa) & Chendipada. rector, Mahagenco sheds light on MAHAGENCO, its fu- Further to meet with present challenges, we are using washed coal & imported coal ture plans and challenges. Contribution Erstwhile MSEB & now MAHAGENCO has contributed a lot for overall industrial, commercial & agricultural development of Maharashtra. We generate Power for more than 1,30,00000 end consumers in Maharashtra at economical & affordable rates. In fact, it is in-line with vision-mission statement of our company. With diligent management practices & excellent operational-maintenance methodology, we are trying hard to perform our best.

to improve ‘loadability’ of our units & to minimize breakdowns in our power plants. For our existing Gas Power Plant at Uran, we are trying hard to obtain adequate gaslinkage for maximum possible generation.

Future Plans In the first phase of its capacity addition programme, MAHAGENCO has already started power generation through each one set of 250 MW at Parli and Paras Expansion.

another sets of 250 MW at Parli and Paras Projects are near about to complete. We are expecting power generation through these sets by 2009. Mahagenco is also working hard to complete its prestigious power projects of each 500 MW at Bhusawal (2 sets of 500 MW), Khaperkheda (1 set of 500 MW) and Chandrapur (2 sets of 500 MW). If things will go smoothly as per the schedule decided, we will be able to complete these projects also within coming 2-3 years. Actually, 500 MW projects at Bhusawal and Khaperkheda are expected to complete in next year itself. The total capacity addition through these on-going projects is 3000 MW. It is prominently noticeable that in line with the ambitious plan of our capacity addition, we are taking extensive efforts for our other projects also. We have already issued NIT for main plant packages for 3 units of 660 MW at Koradi out of which 1 unit will be the replacement unit. Further, NIT for main plant package already issued for replacement units at Parli, Bhusawal, Paras by new 250 MW units. Considering the present immense starvation of Gas fuel for power plants all over the country, MAHAGENCO feels that if it will be able to ensure adequate fuel gas linkage it will be going to expand its existing gas power station at Uran where Block I will add 814 MW and Block II will add 406 MW. Thus, as an aggregate MAHAGENCO have not only planned to add 6380 MW in next 23 years but also we are implementing most of these projects on field.

Further, as far as our other on-going ambitious power projects are concerned, the

January - 2009

Driving the State’s installed ing a vital role in the overall power scenario pansion in generation capacity and the anof the state. ticipated load growth corresponding to capacity in the future Of course, thermal. Apart from current coal crisis all over the country; there might be no option in present situation rather than to rely on thermal power plants. The reason being, this is the abundant coal stock in India. Further, as now there is a common trend of use of washed coal & imported coal by power generating utilities to operate their plants energy efficiently. As far as Maharashtra is concerned, there are definitely geographical limitations to

Mahatransco: Overview Mahatransco is the largest electric power transmission power Utility/company in State sector in India in virtually all terms. As of March 31, 2008, it owned and operated a transmission network of 36287 circuit kilometres of electrical transmission lines and 498 electrical substations with 61529 MVA transformation capacity. This infrastructure constitutes mainly of interregional as well as intra-regional electric

rapid industrial growth in Maharashtra, the State needs a robust and vibrant Transmission network. Mahatransco, has therefore embarked upon a very ambitious plan for expansion and up-gradation of its transmission infrastructure by 2012 to handle such a large amount of power. Operational Highlights In FY07-08, MSETCL transmitted 79,888 MUs of electricity as compared to that of 75,537 MUs in the previous year. For the

In the first phase of its capacity addition programme, MAHAGENCO has already started power generation through each one set of 250 MW at Parli and Paras Expansion. Further, as far as our other on-going ambitious power projects are concerned, the other sets of 250 MW at Parli and Paras Projects are nearly complete. Ajoy Mehta - Managing Director, Mahagenco new hydro- potential. Further, the hydro generation depends upon the rotation norms set down by Irrigation Dept. Even though, Gas thermal plant is highly efficient; the guaranteed long term linkage of adequate gas fuel has to be ensured before commissioning any new gas power plant. Similarly, at present, other power sources of renewable energy comprising wind, solar, tidal, etc. seems to be inadequate considering the upstream trend of Power Demand. Considering all these facts, it will be inherently essential to operate our thermal plants more and more efficiently and that to in eco- friendly manner. Mahatranso and MSEDL are the transmission and distribution bodies of the state of Maharashtra, which have also been play-

January - 2009

power transmission system in Maharashtra State and carries electric power across the same. Mahatransco’s transmission system is capable of handling about 15000 MW of power.

same period, the Transmission System Availability for EHV AC system was 98.90% as compared to 98.80 per cent in the previous year. The HVDC System Availability also improved to 90.9 per cent in FY 07-08 on account of

Mahatransco’s Developmenoutages required for replacement of tal Role in State earth wire. Mahatransco fulfils three key roles: It is expected to improve further in FY 08●

●

it provides transportation service from generation sources which are mainly located in eastern Vidharbha to load centres i.e. mainly Mumbai, Thane, Pune and Western Maharashtra with reliability, security and economy Facilitates competition

Ensures secure and reliable supply to consumers. At least 4-fold growth in electricity generation capacity is needed over the period of next 10 years. Considering the planned ex●

09. Overall losses Transmission losses were restricted to 4.86 As the present system is quite inadequate Mahatransco has planned to establish a robust Transmission network with Transmission capacity of 30 to 35 thousand MW by 2012, an increase of more than 120 per cent. It has become necessary to speed up the projects implementation so as to enable to 76

LIKELY CAPACITY ADDITION DURING 11TH PLAN FOR THE STATE : - MAHARASTRA Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR SIPAT STPS II

1000.00

257.93

COMM 1000.00

27.12.2008

SIPAT I

1980.00

510.69

DABHOL RATNAGIR

740.00

*KORBA ST.-III

500.00

128.96

KAHALGAON 6,7

1000.00

98.56

*BARH ST-I

1980.00

1320.00

100.00

(2011-2012)

*SUBANSIRI LOWE

2000.00

151.32

(2011-2012)

(2009-2011) COMM 740.00

28.10.2007 (2010-2011)

COMM 500.00

16.03.2008

CENTRAL-SECTOR TOTAL:- 1987.46 STATE-SECTOR GHATGHAR PSS

250.00

COMM 250.00

KHAPERKHEDA EX

500.00

(2010-2011)

BHUSAWAL

1000.00

(2010-2011)

PARLI EXT U-2

250.00

(2009-2010)

PARAS EXT U-1&2

500.00

COMM 250.00

01.07.2008

31.05.2007

STATE - SECTOR TOTAL:- 2500.00 PRIVATE-SECTOR TROMBAY EXTN.

250.00

(2008-2009)

RATNAGIRI JSW

1200.00

(2010-2012)

PRIVATE-SECTOR TOTAL:- 1450.00 GRAND-TOTAL:- 5937.46 NOTE :- U - UNDER CONSTRUCTION PROJECTS C - CONSTRUCTION YET TO START (LOA TO BE PLACED) * SHARES FROM CENTRAL SECTOR PROJECTS FOR WHICH M.O.P. ORDERS ARE YET TO BE ISSUED ARE TENTATIVE keep the Transmission network ready by the time additional planned Generation capacity comes up to achieve targets by 2012. Partnership Mahatransco is also exploring possibilities of entering into joint venture with private companies for evacuation of power from 77

generating stations to be established by the IPPs. A Joint Venture arrangement between Mahatransco and JSW Energy has been reached to evacuate the power from the 1200 MW Jaigad Power Project, with equity participation of 74:26 per cent between

JSW Energy and Mahatransco respectively. Jaigad Power Transco Ltd. a special purpose vehicle (SPV) has been accordingly floated for the purpose of setting up Transmission Evacuation System consisting of 400KV Double Circuit Transmission Lines from Jaigad to 400 KV Karad and New January - 2009

Koyna Receiving Stations of Mahatransco. The project is expected to be commissioned progressively in stages from October 2009 onwards. Funding Arrangement / Institutional Borrowings and IPO Mahatransco is a planning to come out with initial public offerings (IPOs) in the range of Rs 1,000-1,500 crore to meet its capital expenditure plan of around Rs 20,000 crores. By the end of 2007-08, Mahatransco became richer by Rs 779 crore. It is planning to raise 80 per cent resources through debt and the remaining through equity. For debt, Mahatransco has tied up with Power Finance Corporation (PFC) and Rural Electrification Corporation (REC) and International Agencies like World Bank and Japanese Bank for International Co-opera (JBIC) Financial Performance: The total gross asset base of Mahatransco at the end of 2007-08 was Rs. 9879 crores. In the year 2007-08, the profit of Company was Rs. 258 Crore against Rs. 169 Crore last year. Capital expenditure was pegged at Rs. 1114 crore for up-gradation of the transmission infrastructure. Assets were increased by Rs. 869 crore during 2007-08.

sub-stations, and a few lakh transformers. As the largest public sector distributor of electricity in the state (and indeed all of Asia), Mahavitaran plays an important role in the power scenario of Maharashtra. MSEDCL was formed on June 6, 2005 and in just three years, MSEDCL reduced distribution losses from whopping 35 per cent to 24.09 per cent. Collection efficiency improved from 89.2 per cent to 97.3 per cent. Monthly revenues shot up from Rs. 1100 Crore to Rs. 1600 Crore. In one summer, load shedding reduced by more than 1500 MW from 5500 MW. 2007-08 was an excellent year in which losses went down by a drastic 5.41 per cent. Considering the circumstances today, achievements like these are nothing short of outstanding in nature. With a booming economy, power demand is on the rise as opposed to power availability. Today that demand is about 15000 MW, which is higher than the demand of any other progressive state in the country. Notwithstanding, MSEDCL made headway with confidence and continues to aim high. Distribution loss reduction after restructuring

MSEDCL Year The Maharashtra State Electricity Distribution Company Limited (MSEDCL), also known as MAHAVITARAN or MAHADISCOM, supplies electricity to a staggering 1.57 Crore consumers all over Maharashtra, and has revenues of about Rs. 21,278 Crore.

Distribution loss (%)

2004-05

34.91

2005-06

31.75

2006-07

29.50

2007-08

24.09

Demand Side Management (DSM) Measures Mahavitaran has been implementing a number of short and long term DSM schemes to reduce load shedding. Feeder separation is one such long term scheme in which agricultural feeders are carved out. This not only helps load management but also strengthens the infrastructure and reduces losses. As a short term measure, single phasing scheme in some parts of Maharashtra has also been implemented. Currently, rural areas face 11 to 12 hours of load shedding a day, as approximated by the loss-level formula of MERC. However, the load shedding hours have been almost halved in about 15,000 villages. All out efforts are being made on war footing to adhere to the deadline of completing the feeder separation work by the end of 2008. These steps helped 15,000 villages in rural Maharashtra by cutting load-shedding hours in half (from around 11-12 hours to 4-6 hours). By next year, another 13,000 villages will see such benefits. The other villages are either Naxal infested or they do not have very great power needs and therefore do not face as much load-shedding. Franchisee Model of Distribution Bhiwandi, a powerloom city, also known as

A business of this magnitude is achieved

Successful Projects

with the efforts of over 75,000 employees. In terms of infrastructure, MSEDCL operates a vast network comprising of thousands of kilometers of lines, hundreds of

The exemplary achievements of MSEDCL can be credited to projects which carefully located areas of concern and found simple and direct courses of action. These plans

January - 2009

did not always necessitate finding more sources of power i.e. increase supply, but rather involved making the most of the resources at hand.

the Manchester of India, had typical problems like rampant theft and non-payment. Mahavitaran needed to find a solution which fit into its role as a public sector entity and in the end, opted for a franchisee model for electricity distribution as envisaged in the 78

Electricity Act–2003. It handed over Bhiwandi to M/S Torrent Power on 26th January 2007. This experiment proved to be a success and Mahavitaran then decided to hand over 3 divisions of the Nagpur City to M/S Crompton Greaves Ltd. The process

amples include the people of Bhandup, Mulund, Thane and Navi Mumbai towns who have helped achieve zero load-shedding. As these examples show, this model works best in low loss and high consumption areas and where people can contribute for

is almost on the verge of completion. Other urban areas are also being planned to be franchised in the near future.

additional power.

The Electricity Act, 2003 provides for dis-

This is truly a case in which people help themselves - regulators only play the role of facilitators and Mahavitaran, of manag-

tributed generation based on a distribution franchisee (DGBDF) model to mitigate load shedding. The model calls on local citizens, consumer organizations, and the industry organizations to step in and make power to the extent of shortfall available and pay

ing business through its existing system and mechanism. The success of this model can be credited to the people’s reliability and desire to give to their community.

extra cost of this power to avoid load shedding. By following this concept, the areas under the Pune and Pimpri-Chinchwad Municipal Corporations have become free of load shedding.

●

LT consumer bills have been made

●

available on MSEDCL’s website (www.mahadiscom.in). People in Pune, Bhandup, Kalyan, Thane, Vashi, Kolhapur, Nasik, Aurangabad and Nagpur can pay online as well. Customers can receive their monthly

This much talked about Pune Model has been in place since June 2006. The town of Baramati in Pune district decided to introduce this model and has become free from load shedding recently. Other excellent ex-

●

Technological Initiatives

●

bills via email by registering on MSEDCL’s website. ● A Data Centre has been established in

MSEDCL at Prakashganga, Mumbai. All the zonal and 40 circle offices have been connected with a connectivity of 2 mbps. The company is implementing the ERP which covers HR, Payroll, and Asset Management Modules. 85 Lakh customers have their meters digitally photographed and the images printed on the bill for verification of meter readings. DTCs and feeder meters are also being photographed. A new concept of Data Collection for Energy Audit. E-mailing is the communication & decision support at every level in MSEDCL. Employees down to the rank of sub divisional officer are provided with email addresses. SMS – Consumer can receive billing information by sending an SMS to a short number (36677). This facility has been introduced for Aurangabad, Bhandup, Nasik, Pune, Thane and Vashi. MSEDCL will send power failure/ interruption information to affected consumers through this service. This service requires that the consumer registers his mobile number with MSEDCL’s call centre. However, the service is for free.

●

15 call centers have been established at the Municipal Corporations of Kalyan, Bhandup, Pune, Nasik, Aurangabad, Nagpur, Kolhapur, Sangli, Akola, Solapur, Nanded, Dhule, Jalgaon, Ahmednagar, and Amravati.

●

Consumer Facility Centres (CFCs) have been launched at 50 sub divisional offices. They comprise of a single window system with a help desk for customers. The CFCs accept consumer complaints, application forms for new connections, meter change requests and name or address changes. ❑

January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

Hydro

Thermal Coal

STATE

Gas

Nuclear Diesel

Total

R.E.S.

Total

(MNRE)

2093.9

2970.0

490.8

0.0

3460.8

0.0

110.5

5665.3

PRIVATE

0.0

250.0

503.1

411.7

1164.8

0.0

4269.1

5433.9

CENTRAL

0.0

2384.2

175.0

0.0

2559.2

477.9

0.0

3037.1

2093.9

5604.2

1168.9

411.7

7184.8

477.9

4379.6

14136.3

TOTAL

January - 2009

Tamil Nadu figures among the Top Ten states in the country with 10,122 MW installed capacity of power in the State. Even with its limitations, it is one state which has been growing in all streams…even in power, though with the ever pervasive shortcoming. Chandra Prakash Singh, Chairman, Tamil Nadu Electricity Board tells P R Subas Chandran about the state’s power scenario and the role TNEB is playing in taking it to new levels of sufficiency. “

he present installed capacity of the state is 10,214 MW which comprises 5,690 MW under State sector, 2,825 MW as share from central generating stations, 1,180 MW from Independent power producers and balance 519 MW from captive plants, power purchases from eastern regions and Kayamkulam. In addition, the windmills with a capacity of 4126 MW, cogeneration with 466 MW and biomass with 148 MW are also available to meet the demand. With improved standard of living of the people and massive investments in the state due to liberalised industrial policy of the state, the demand for electricity has increased rapidly. The growth in sustained demand, which was in the range of 3.4% to 3.9% from 2003-04 to 2005-06, has unexpectedly very rapidly grown, between 9 9.8%, during the last two years. Since its formation in 1957, the TNEB’s consumer base has increased from 4.3 lakhs to 2.01 crores. TNEB is now having a con81

sumer base of 2.01 Crores at present as detailed below and it is likely to grow at 9% per annum. Domestic:1,35,23,554

(67.15 %)

●

Agricultural: 18,67,766

(9.27%)

●

Commercial: 24,66,122

(12.24%)

●

Industrial: 3,41,165

(1.7%)

●

Others: 19,41,931

(9.64 %)

●

Total: 2,01,40,538

●

The per capita consumption of the state is 1000 units as against the National average of around 631 units. At present the state is facing some power shortage and is unable to meet its full (unrestricted) demand mainly due to inadequate inflows in the Hydel reservoirs of the State and reduced infirm generation from Non Conventional Energy Sources viz. Wind during the current season. Due to the State Government’s concerted efforts, however, TNEB has been able to bridge the demand-supply gap by availing of increased share from central generating stations and also by drawing power from the open market. Since most of the states are reeling under power crisis, availability of power in the open market is also an issue and hence the state has to take certain power management measures to bridge the supplydemand gap. But with the upcoming thermal and hydro projects and several Merchant Power Plants in the state, the situation is set to improve in the years to come.

level of power supply in the state, certain restriction & control measure had to be adopted. Of the total installed generating capacity, the availability will normally be 85% for thermal and nuclear stations, 88% for gas stations, after considering the maintenance period of the machines and 60% for hydel stations since most of them are irrigation tied. Therefore the total available capacity in the state will be around 8200 MW out of the installed capacity of 10214 MW, of which 4300 MW will be available out of 5690 MW under the state sector, 2400 MW will be available out of 2825 MW under the central share and 1030 MW will be available out of 1180 MW from IPPs/CPPs etc. Apart from the above measures, to augment the power supply, the Government of Tamil Nadu have also permitted third party sale of power produced by IPPs, CPPs & other private power producers through short term Intra-State open access to HT consumers within Tamil Nadu; for we believe that this will incentivise the generators within the State to produce to their full capacity.

Renewable sources Wind power plants TNEB has been in the forefront in harnessing wind potential in the state. The total

Power cuts

windmill capacity in the state is 4118 MW under private sector and 17 MW on its own. Tamil Nadu state has the distinction of having a wind power plant capacity of nearly 50% of the total country’s capacity.

In Tamil Nadu, there had been no power

Solar Power Plants

cut for the last ten years. However, due to the sudden high growth in demand witnessed in the last 2 years, there existed a gap between the Demand and Power availability. In order to maintain a reasonable

The capital cost required for installing a solar generating station is comparatively very high when compared to conventional generation station. With a view to develop January - 2009

and demonstrate technical performance of grid interactive solar power generation, the Ministry of New and Renewable energy(MNRE),GOI have launched a generation based incentive scheme to encourage grid quality Solar Photovoltaic(PV) and

Pvt Limited, New Delhi at Rettaipillai Iynarkulam, New Kallathur, Sivagangai, Tamil Nadu and another proposal for establishment of 1 MW Solar thermal Power plant by KG Design Services Pvt Limited, Coimbatore at Vadakku Sandhanur Village,

groundnut shell tapioca roots (dry), saw dust stick waste, Maize stalk are used in bio â&#x20AC;&#x201C;mass based power plants. However usage of coconut husk is banned. TEDA recommends the proposals to TNEB based on statistics of availability of excess

Solar Thermal Power generation in megawatt size power plants. Based on the above scheme, Tamil Nadu Energy Development Agency(TEDA) has recommended one proposal for establishment of 5 MW SPV plant by M/s Sapphire Industrial Infrastructures

Manamadurai Taluk, Sivaganga District through tendering process.

Bio mass fuel District vise. TNEB process the proposals for establishment of Bio mass plants.

Bio mass Power Plants Bio mass fuels such as proposals Julia flora, wood chips, rice, husk, sugarcane trash,

At present, there are 17 bio mass power plants with a total capacity of 147.55 MW are in service in Tamil Nadu 11 more bio

LIKELY CAPACITY ADDITION DURING 11TH PLAN FOR THE STATE : - TAMILNADU Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR NEYVELI II MC X

500.00

230.00

(2009-2010)

*SIMHADRI ST-II

1000.00

190.28

(2011-2012)

*ENNORE JV COST

1000.00

750.00

(2010-2012)

KAIGA U-3 & 4

440.00

91.00

KUDANKULAM 1&2

2000.00

925.00

(2009-2010)

*KALPAKKAM PFBR

500.00

145.14

(2010-2011)

COMM 220.00

11.04.2007

CENTRAL-SECTOR TOTAL:- 2331.42 STATE-SECTOR BHAWANI KAT 1&2

60.00

(2009-2011)

VALUTHUR EXTN

92.20

NORTH CHENNAI X

600.00

(2011-2012)

METTUR EXT.

600.00

(2011-2012)

NORTH CHENNAI 2

600.00

(2011-2012)

COMM 59.80

06.05.2008

STATE - SECTOR TOTAL:- 1952.20 GRAND-TOTAL:- 4283.62 NOTE :- U - UNDER CONSTRUCTION PROJECTS C - CONSTRUCTION YET TO START (LOA TO BE PLACED) * SHARES FROM CENTRAL SECTOR PROJECTS FOR WHICH M.O.P. ORDERS ARE YET TO BE ISSUED ARE TENTATIVE

January - 2009

mass power plants with a total capacity of 115 MW are under pipe line and are being promoted by private developers. TNEB is encouraging bio â&#x20AC;&#x201C; mass power plant developers with conducive policies of purchase price, wheeling and etc. by allowing them to operate their plant in gird interactive mode. The wheeling charges for Bio mass power is 3% and 6% of total energy generated for wheeled HT services located within 25Kms. radius and beyond 25Kms. radius respectively. The wheeling charges will be deducted at generating end. The entire power generation from bio mass power plants will be purchased without merit order backing down.

Projects in the pipeline Sugar mills co-generation plants In Sugar mills co-generation plants the bagasse generated by crushing the sugarcane is used to produce power. The purchase rate for power exported from Co-generation plants is fixed at Rs.3.15 per unit. Wheeling of power from co-generation plants is permitted for captive use. Wheeling charges for bagasse based power is 3% and 6% of total energy generated for wheeled HT services located within 25Kms. radius and beyond 25Kms. radius respectively. At present, there are 22 Nos. sugar mills co-generation plants now in service with total capacity of 466.10 MW. There are 5 nos. of proposals by the private developers for the establishment of co-generation plant with total capacity of 142 MW.

In addition the Tamil Nadu Electricity Board has proposed to establish co-generation plants in 15 nos. co-operative and 2 Nos. Public Sector sugar mills in Tamil Nadu at a total cost of Rs.1176.70 Crores and to carryout sugar mills modernization in all the above sugar mills at a total cost of Rs. 321.77 Crores. This is expected to generate 234 MW.

Future source In future, the coal based power plant is the backbone of the States installed capacity and will continue to be a major source of electricity generation in Tamil Nadu. To improve thermal efficiency of coal based plant, super critical technology has been introduced in Tamil Nadu. The introduction of super critical technology in thermal power station would address the problem of envi-

January - 2009

ronmental degradation and green house gases. In addition, the efficient technology would help in conserving limited fossil fuel resources apart from providing reliability in power supply. Presently, power sector is dominated by Government sector having about 55% share in the total installed capacity. In future, Govt., through various measures encourages private sector participation and has accordingly planned to develop ultra mega power project of 4000MW and offer these for construction on competitive bidding route. Further, the Electricity Act 2003 and Government’s policy encourages private developers to promote Merchant

HVDS is proposed to be implemented in the 150 feeders during 2009-10. The balance feeders will be completed during the 12th Plan period. Installation of LT fixed capacitors on LV side of distribution transformers, strengthening of lines etc. About 6,000 distribution transformers are erected in a year and LT fixed capacitors will be erected on LV side of the DTs. Further, other improvement works such as ●

strengthening of lines,

●

erection of link lines,

●

re-routing of feeders,

power plants along the coastal areas using imported coal as fuel.

●

bifurcation of feeders etc. will be taken up for execution.

T&D Loss

These improvement works are proposed to

The Transmission and Distribution loss (T&D loss) in Tamil Nadu Electricity Board has been estimated as 18% for the year 2007-08. However, the estimated Aggregate Technical & Commercial loss (AT&C loss) for the same period is 19.71%. These losses in power system is an inherent characteristic. As such, this power loss cannot be totally eliminated, but can be reduced to an optimum level at a considerable investment.

be implemented by Tamil Nadu Electricity Board in a phased manner. Re-Structured APDRP Accelerated Power Development and Reforms Programme ( APDRP ) is implemented to improve the Sub Transmission and Distribution network in 30 Districts in Tamil Nadu from 2001-02.

Initially under APDRP, 50 % of the scheme cost was funded by the Govt. of India and out of which 25 % was grant and the balance 25 % was given as loan. The balance 50 % of the scheme cost is funded by the Rural Electrification Corporation (REC). From 2005-06, the funding pattern has been changed as 25 % of scheme cost as grant from GOI and the balance 75 % as loan by REC/PFC. This funding pattern is likely to be changed in XI plan by GOI. 25 schemes sanctioned under this program for an amount of Rs. 949.54 Crs. are being implemented. The scheme period is two years and further extended for 4 years up to 31.03.2009.

Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) The Government have launched a centrally sponsored scheme, “Rajiv Gandhi Grameen Vidyutikaran yojana (RGGVY)” on 18.3.2005 with the goal of creating electricity infrastructure by 2009 to all un-electrified villages/ un- electrified hamlets in order to provide access to electricity to all households within 2012 to be funded by Govern-

It is proposed to undertake the following improvement works to reduce the losses, in turn to reduce loss of revenue in a phased manner by availing funds from APDRP and REC: Segregation of agricultural and non agricultural loads and High Voltage Distribution System (HVDS) Out of the 2,900 rural feeders with predominant agricultural services, 150 feeders have been identified throughout the state and

January - 2009

ment of India through M/s. Rural Electrification Corporation Ltd., New Delhi. Out of the fund, 90 % is given as subsidy and 10% as loan. Further 100 % subsidy is given for effecting service connections to the Below Poverty Line House holds (BPLHH). REC has accorded sanction for the implementation of the scheme in 26 districts in March 2008 at a total cost of Rs.447.41 crores to create the infrastructure for the

Automatic Remote Meter Reading Tamil Nadu Electricity Board has planned to introduce online web-based real time remote automatic meter reading for HT Services. As a first step, TNEB has proposed for a pilot study covering 724 HT Services in Chennai North Region, at a cost of Rs.60

Reforms

Transformers and feeders and Automatic Data Logging for all DTs and feeders and Asset mapping in respect of 126 cities and town qualifying under Restructured Accelerated Power Development and Reforms Programme (RAPDRP).

power failure redressal system in all other district headquarters will be taken up under Restructured APDRP in the XI plan period during 2009-12.

●

First in Commissioning of Extra High Voltage Gas insulated Sub-station- Chennai Metro.

●

Distribution Control Centre with “SCADA” – Chennai Metro.

●

EHT 230KV Voltage level grid with a Load Dispatch Centre- Erode.

●

First in introducing RCC poles in LT and HT line work, Power Line Carrier Communication (PLCC) in grid operation and Wireless Communication System to attend Fuse off Call – Chennai Metro.

Tamil Nadu has been one of States with higher per capita consumption (1000) as against the national average (631).

●

TNEB has 100% billing efficiency and 99% collection efficiency.

●

TNEB has been in the forefront in judiciously utilising the hydel resources to the Maximum extent.

●

Tamil Nadu is one of the forefront to extend power supply to all Below Poverty Line households.

●

The domestic consumers in the state have been assured a minimum of 22 Hours uninterrupted power supply.

●

First in Wind Power generation in the Country (accounting for more than 40% (4118 MW) of the total generation capacity).

‘Online payment’ of current consumption charges has become effective from

every month through internet from their homes by using their credit / debit cards. The address of the website is www.tneb.in. This facility is proposed to be extended to remaining part of the state during the year 2009-10.

Pumped Storage Hydro-electric Scheme to meet the Peak Power Demand Kadamparai PSHES (400 MW).

Achievements

Online Payment of CC Bills

15.09.2008 through AXIS Bank payment gateway. Subsequently two more banks viz., Indian Bank and ICICI Banks also have been added with the facility. The consumers of Chennai can pay their current consumption charges between 1st and 15th of

●

RAPDRP TNEB has proposed to avail Rs.300 Crores for preparing the baseline data for the project area covering consumer indexing, GIS mapping, metering of Distribution

Computer based power failure redressal centres are functioning in Chennai, Coimbatore, Madurai, Trichy, Erode, Salem , Tiruppur, Tirunelveli, Nagercoil , Karur and Vellore. Setting up of Computer based

The High Head Hydro-Electric SchemePykara Hydro Station, Cascading type Hydro-Electric Station in the hilly areaKundah System and Cascading Low Head Barrage Power Houses across Cauvery River.

lakhs.

electrification of un-electrified households by installing 16/25 KVA distribution transformers and associated lines.

Computer based Power Failure Redressal Centres

●

First in completing All Village Electrification, covering 15400 village.

January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

Hydro

Thermal Coal

STATE

Gas

Nuclear Diesel

Total

R.E.S.

Total

(MNRE)

3572.9

3342.5

272.3

0.0

3614.8

0.0

182.4

7370.1

PRIVATE

0.0

1603.4

36.8

1640.2

0.0

486.2

2126.4

CENTRAL

0.0

2378.0

0.0

2378.0

214.0

0.0

2592.0

3572.9

5720.5

1875.7

36.8

7633.0

214.0

668.7

12088.6

TOTAL

January - 2009

With an installed capacity of 12,423.59 MW, Andhra Pradesh is now standing tall as one of the highest power producing states in south India. The ever- increasing power demand is making his seat a hot plate. But Mohammed Ali Shabber, the Minister for energy, Government of Andhra Pradesh, is leaving no stone unturned to bridge the gap of demand and supply. Known for his art of getting the job done at the center, this minister applied all the tricks of the trade and brought Rs. 71,086 crore investment with 15, 880 MW of power projects spreading the length and breadth of Andhra Pradesh. He tells P R Subas Chandran about AP’s potential and how it can out number rest of the southern states and possibly become a hub of industrial proliferation centre.

“

formances. We, for the first time ,brought down transmission and distribution loss to a significant figure of 18.42 % from a shocking figure of 37.1 % (1999 - 2000). DTR failure rate till September 2008 was 4.41% against 28.05% in 1999 – 2000. The industrial consumption (HT 1 category) is 12,143 MU compared to 10,217 MU during 2006 – 2007. This is not the end of the story. APTRANSCO and all four distribution companies have not incurred any losses during Mr. Rajasekhara Reddy’s Government. We have established an effective energy auditing system for greater accountability. Of course T&D loss of 2,288 MW (18.42% of 12,423.59 MW) costing Rs. 11,440 crore (Rs. 5 crore per MW) which is a great burden to a growing state, is a fact. It is a concern for the whole country. Planning Commission has said that a whopping 40% of the generated power is lost due to T&D. We have brought it down to 18.42% which is encouraging figure compared to the rest of the states. Of course, complacency has no place in power administration. We are trying to bring down T&D loss further by inducting effective energy auditing, replacing outdated infrastructure etc. To make energy auditing a powerful tool, the government has replaced 6.87 lakh defective metres. The Energy Ministry introduced computer linked spot billing as well

e are committed to bring power reforms and feel proud to be a forerunner in power sector per-

as online billings to make greater transparency and increased the collection centres from 1390 (2003) to 2677 (2008) with an

addition of 1120 e-kiosks and 261 e seva centres to facilitate the power users. Various IT initiatives have been taken up in Distribution Companies to improve the performance, and bring in transparency / accountability. Enterprise Resource Planning (ERP) is being implemented in AP Transco & Discoms. The first phase is already in testing in one operation circles of each DISCOM. Another important facility, through e-Vaaradhi, an electronic way to reach electricity consumers, is introduced in EPDCL for passing the messages relating to billing information, power shut down info etc' through SMS. The Power Ministry has reiterated its commitment to the people living below the poverty line through subsidising Rs.10 per month towards the cost of consumption of 140 Wat bulb and benefited 13.92 lakh consumers. I am sometimes blamed that I have been giving special touch to Telangana by allocating more and more power projects to Telangana region than others which I do not deny because it is the commitment of the Congress government to undo the injustice meted out to this region. Telangana produces 40.36 % of the total installed capacity and we are adding more power to this region .If you look at the capacity addition in the 11th plan, Telangana would be the number one region with 4, 379 MW while Andhra 3, 303 MW and Rayalaseema

Planning Commission has said that a whopping 40% of the generated power is lost due to T&D. We have brought it down to 18.42% which is encouraging figure compared to other states. Of course, complacency has no place in power administration. We are trying to bring it down further by inducting effective energy auditing. Mohammed Ali Shabber, Minister for Energy, Govt of Andhra Pradesh 87

January - 2009

1, 020 MW respectively. This is not the end of the agenda for Telangana. We have given 15,42,252 (58.56 %) of agricultural services to farmers from this region which is the highest compared to 5,14,784 (Andhra) and

5,76,713 (Rayalaseema). I have no inhibitions in saying that industrial growth solely depends upon power sector and we will bring some more mega power projects when we come back to power. One side free

power and another side increasing gap between demand and supply are the questions echoing everywhere while every politician justify party’s freebies manifesto.” ❑

LIKELY CAPACITY ADDITION DURING 11TH PLAN FOR THE STATE : - ANDHRA PRADESH

Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR *SIMHADRI ST-II

1000.00

398.03

(2011-2012)

*ENNORE JV COST

1000.00

133.12

(2010-2012)

KAIGA U-3 & 4

440.00

123.00

*KALPAKKAM PFBR

500.00

149.02

COMM 220.00

11.04.2007 (2010-2011)

CENTRAL-SECTOR TOTAL:- 803.17 STATE-SECTOR NAGAR SAGAR TR

50.00

(2009-2010)

LOWER JURALA

240.00

120.00

240.00

(2011-2012)

POLICHINTALA

120.00

(2011-2012)

VIJAYWADA TPP

500.00

(2009-2010)

KOTHAGUDEM ST-V T

U 500.00

500.00

(2010-2011)

JURALA PRIYA

234.00

COMM 78.00

31.08.2008

RAYALSEEMA 4&5

420.00

COMM 210.00

20.11.2007

KAKATIYA

500.00

(2009-2010)

STATE - SECTOR TOTAL:- 2564.00 PRIVATE-SECTOR KONASEEMA CCGT

445.00

(2008-2009)

GAUTAMI CCGT

464.00

(2008-2009)

KONDAPALLI CCPP

366.00

(2009-2010)

PRIVATE-SECTOR TOTAL:- 1275.00 GRAND-TOTAL:- 4642.17 NOTE :- U - UNDER CONSTRUCTION PROJECTS C - CONSTRUCTION YET TO START (LOA TO BE PLACED) * SHARES FROM CENTRAL SECTOR PROJECTS FOR WHICH M.O.P. ORDERS ARE YET TO BE ISSUED ARE TENTATIVE January - 2009

January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

Hydro

Thermal

Nuclear

R.E.S.

Total

Coal

Gas

Diesel

Total

772.0

4115.0

518.8

17.3

4651.1

0.0

24.3

5447.4

PRIVATE

0.0

640.0

1430.0

0.2

2070.2

0.0

1373.2

3443.4

CENTRAL

0.0

1461.8

424.3

0.0

1886.1

559.0

0.0

2445.1

772.0

6216.8

2373.1

17.5

8607.4

559.0

1397.5

11335.9

STATE

TOTAL

January - 2009

(MNRE)

4350 MW proposals lying with our Trans- in the longer run from renewable sources Gujarat is one of the few states in India which supply mission Utility for transmission system like wind and solar for which Gujarat has study. The State Government has recently potentials in excess of 20,000 MW. power round-the-clock in most of its towns, cities and come up with revised policies to facilitate exploitation of the potentials for wind and Future plans villages. Power situation in solar based power generation in Gujarat. We expect that Gujarat will be comfortable this industrialised state has in terms of availability of power by the end been satisfactory and people T&D losses of the 11th Plan, and therefore the focus will in most towns and cities When Gujarat Electricity Board was re- be on quality of supply and services. Genhave not known loadorganised effective from 1st April, 2005, the eration capacity addition will, of course, shedding or power cuts for T&D loss was 30.64%. This loss has been have to keep pace with increase in demand, a long time. L Chuaungo, brought down to 21.71 by 31st March, 2008 which we are confident will be very subIAS, MD, Gujarat Industries and we have been able to maintain collec- stantial. Power Company Ltd tion efficiency of 100%. This was achieved The Jyoti Gram Yojana has enabled us to elaborates through combination of measures like im-

“

ujarat ranks 1 in terms of pro jected generation capacity addition during the 11th Plan with 9613 MW

followed by Maharashtra with 5937 MW.

provements of transmission and distribution infrastructure, vigilance, enhancing the competence and motivation levels of employees through training and other administrative measures etc.

provide 24 hours 3- phase power supply for domestic, commercial and industrial uses not only to towns and cities, but also to all villages in Gujarat. We have to not only maintain this, but also improve them in

“Though we have no coal resource in the State, coal based generation is likely to remain one of the principal sources for capacity addition in future through a mix of domestic and imported sources. Gujarat has lignite deposits based on which we currently generate 800 MW and additional 2000 MW lignite based plants can come up in the coming years.” L Chuaungo, IAS, MD, Gujarat Industries Power Company Ltd Good Governance, progressive State Government & its Institutions and conducive environment for investments in Gujarat enabled the State to achieve this feat.

Renewable Energy At present we have 1397 MW installed capacity on renewable sources and 559 MW share of Nuclear power from Kakrapar and Tarapur Atomic Power Stations. In addition, we have Wind farms with installed capacity of 564 MW where works have been completed awaiting commissioning, and another 880 MW where works are in various stages of progress. There are additional 91

Future source Though we have no coal resource in the State, coal based generation is likely to remain one of the principal sources for capacity addition in future through a mix of domestic and imported sources. Gujarat has lignite deposits based on which we currently generate 800 MW and additional 2000 MW lignite based plants can come up in the coming years. Gas will continue to play significant role (21% of installed capacity in Gujarat is on gas as against the national average of 10%) through Gujarat State Petroleum Corporation Ltd. However, significant capacity addition will also come

terms of reducing the frequency and duration of unscheduled interruptions. Therefore, we have proposals to make substantial investments for strengthening and expansion our transmission and distribution infrastructure. We have also taken up implementation of what we called ‘E-Urja’, an end-to-end ERP solutions covering the entire areas of operations of our generation, transmission and distribution activities, which we will be dovetailing with the RGGVY and revised APDRP to maximise the benefits to our utilities and to our consumers.” ❑ January - 2009

LIKELY CAPACITY ADDITION DURING 11TH PLAN FOR THE STATE : - GUJARAT Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR *PARBATI ST-II

800.00

174.46

(2011-2012)

*PARBATI ST-III

520.00

113.40

(2010-2011)

*CHAMERA III

231.00

50.38

(2010-2011)

*SEWA ST.II

120.00

26.17

(2009-2010)

*URI -II

240.00

52.34

(2010-2011)

*KOLDAM

800.00

174.46

(2009-2010)

*LOHARI NAGPALA

600.00

130.84

(2011-2012)

*TAPOVAN V GARH

520.00

113.40

(2011-2012)

DADRI EXT.U-5&6

980.00

98.00

(2009-2011)

*RAMPUR

412.00

89.85

(2011-2012)

*KOTESHWAR

400.00

155.03

(2010-2011)

RAPP U-5&6

440.00

86.00

(2008-2009)

KAHALGAON 6,7

1000.00

100.00

*SUBANSIRI LOWE

2000.00

131.44

COMM 500.00

16.03.2008 (2011-2012)

CENTRAL-SECTOR TOTAL:- 1495.77 STATE-SECTOR ANPARA ‘D’

1000.00

(2011-2012)

HARDUAGANJ

500.00

(2009-2010)

PARICHHA EXTN.

500.00

(2009-2010)

STATE - SECTOR TOTAL:- 2000.00 PRIVATE-SECTOR ROSA THERMAL

600.00

(2010-2012)

$ ANPARA ‘C’

1200.00

(2011-2012)

ROSA UNIT-2

600.00

(2011-2012)

PRIVATE-SECTOR TOTAL:- 2400.00 GRAND-TOTAL:- 5895.77 NOTE :- U - UNDER CONSTRUCTION PROJECTS C - CONSTRUCTION YET TO START (LOA TO BE PLACED) * SHARES FROM CENTRAL SECTOR PROJECTS FOR WHICH M.O.P. ORDERS ARE YET TO BE ISSUED ARE TENTATIVE January - 2009

January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

Hydro

Thermal

Nuclear

R.E.S.

Total

Coal

Gas

Diesel

Total

527.4

4120.0

0.0

4120.0

0.0

25.1

4672.5

PRIVATE

0.0

377.9

CENTRAL

1073.0

2441.1

550.0

0.0

2991.1

204.0

0.0

4268.1

TOTAL

1600.3

6561.1

550.0

0.0

7111.1

204.0

403.0

9318.4

STATE

January - 2009

(MNRE)

According to the CEA report, Uttar Pradesh does figure in the top 10 with its position standing at fifth, but the state still has a lot more to do even more challenges to face. a peak into the state’s power scenario.

Name of Project State Sector (Thermal) Anpara-D (2*500 MW)

try with 4723.5 MW (4197 MW Thermal Generation + 526.10 MW Hydro Generation), the point is that majority of these power houses were commissioned by early Nineties and thereafter the dependence on the central share has increased and now nearly 50% of the demand is met by central sector share. The annual per capita consumption of electricity in Uttar Pradesh is 340 kWh which is nearly half of the National average of 672 kWh and Northern Region average of 623 kWh. Presently Uttar Pradesh faces a peak shortfall of 1500-2000 MW. By the end of 11th Plan i.e. 2012 the forecasted Peak de-

1000

Harduaganj Ext. (2*250 MW)

500

Parichha Ext. (2*250 MW)

500

● ◆

Obra-C (2*500 MW)

1000

IPP’s Rosa Thermal (2*300 MW)

lthough Uttar Pradesh figures among the Top Ten states in the country when it comes to Generation installed capacity of power in the coun-

losses by about 20% i.e. achieve a AT&C level of 15% by the end of 11th plan. Brief details of the actions being taken are as below:-

Capacity (MW)

Anpara-C Thermal (2*500 MW) Srinagar Hydra (4*82.5 MW)

◆

600

◆

1000 330

The Renewable sources are 1022.16 MW capacity for which the PPA’s already have been signed, out of which 864.66 MW capacity has been commissioned and 157.50 MW is in pipeline for completion. PLF based

●

incentive scheme is being implemented by UPPCL to address these sources. Diesel generation is NIL but in our State we have a nurclear power plan of Central Sector (Narora Atomic Power Plant 2x220 MW) in Distt. Bulandshahar from which U.P. States gets a share of 31.3%. Electricity plays an vital role in improving the living standard of the people and therefore the main challenge is to bridge the gap

●

Prevention of theft. Checking of consumers and lodging of FIRs in case of theft. Laying of ABC Conductors. Strengthening of Enforcement Squad to carry effective raids to catch power thieves-JEs and Inspectors have been authorized to lodge FIRs which increases the vigilance effectiveness. Implementation of Demand Side Management measures like replacement of incandescent bulbs by CFL and proposed measures of all Government Departments switching over to CFL lighting. Guarantee Period for all transformers enhanced from 1 year to 3 years to ensure quality. Star rating specifica-

tions have been adopted for Transformers. ● Plan for metering of Distribution Transformers. ● Increase in revenue realization. ● To regularize the Katiya Connections

Currently consolidated Distribution losses are in the range of 30.38% in FY07 to 27.93 % in FY08 where as T& D losses which include inter as well as intra state transmission losses varies between 34.59% in FY07 to 32.55% in FY08. Reducing these losses is a big challenge as this comprises technical losses as well as commercial losses. Navneet Sehgal, Chairman, UPPCL mand for Uttar Pradesh is 13947 MW. To meet this demand about 5000 MW capacity addition through State sector and IPPs is expected to be added during 11th Plan as given below:

between demand and availability for which augmentation of generation capacity as mentioned in point no. 1 is envisaged. This will also necessitate commensurate augmentation of transmission capacity. Besides a major challenge is reduction of AT&C

new scheme launched in which initial payment for regular connection is only Rs. 250. ●

Appointment of Collection Franchisees in Rural Areas has been done covering approx. 19100 villages which has led to

January - 2009

LIKELY CAPACITY ADDITION DURING 11TH PLAN

FOR THE STATE : - UTTAR PRADESH

Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR SIPAT STPS II

1000.00

272.78

COMM 1000.00

SIPAT I

1980.00

540.09

(2009-2011)

*KORBA ST.-III

500.00

136.39

(2010-2011)

KAHALGAON 6,7

1000.00

94.00

*BARH ST-I

1980.00

1320.00

260.00

(2011-2012)

*SUBANSIRI LOWE

2000.00

160.02

(2011-2012)

COMM 500.00

27.12.2008

16.03.2008

CENTRAL-SECTOR TOTAL:- 1463.28 STATE-SECTOR KLTPS EXT(PANAN

75.00

(2008-2009)

DHUVRAN ST

40.00

SIKKA EXT.

500.00

(2010-2011)

SURAT LIGNITE

250.00

(2009-2010)

UTRAN CCPP

374.00

(2009-2010)

UKAI EXT.

490.00

(2011-2012)

HAZIRA CCGT

351.00

(2010-2011)

PIPAVA GAS

702.00

(2010-2012)

COMM 40.00

13.08.2007

STATE - SECTOR TOTAL:- 2782.00 PRIVATE-SECTOR SUGEN AKHAKHOL

1128.00

(2008-2010)

MUNDRA-I

1320.00

(2009-2011)

MUNDRA-II

1320.00

(2011-2012)

MUNDRA UMPP

1600.00

(2011-2012)

PRIVATE-SECTOR TOTAL:- 5368.00 GRAND-TOTAL:- 9613.28 NOTE :- U - UNDER CONSTRUCTION PROJECTS C - CONSTRUCTION YET TO START (LOA TO BE PLACED) * SHARES FROM CENTRAL SECTOR PROJECTS FOR WHICH M.O.P. ORDERS ARE YET TO BE ISSUED ARE TENTATIVE

January - 2009

collection efficiency of 70% in rural area. ● Effective recovery of Government overdue of previous year and 100% realization of current dues. ● Process has been started for appointment of Input based urban franchisee. With the capacity augmentation programme as envisaged above and central sector projects, from which Uttar Pradesh is getting share, commissioning as scheduled then by the end of 11th plan i.e. 2012 there will be no gap between supply & demand, which will meet a peak demand of about 14,000 MW. FY 2011-12 Energy Requirement (MU)

76322

Energy Availability (MU)

76514

Uttar Pradesh Power sector (UPPCL) comprises five distribution companies mainly Lucknow DisCom, Agra DisCom, Meerut DisCom, Varanasi DisComs & KesCo (collectively DisComs). Currently consolidated Distribution losses are in the range of 30.38% in FY07 to 27.93 % in FY08 where as T& D losses which include inter as well as intra state transmission losses varies between 34.59% in FY07 to 32.55% in FY08. Reducing these losses is a big challenge as this comprises technical losses as well as commercial losses. To reduce technical losses huge amount of investment is required to strengthened distribution system. To reduce commercial losses which is partly due to unauthorized use of electricity Katia connection & un metered rural consumers in far of villages who often use unauthorized connection or utilizes more than sanction load & pay no money or very less on flat rate tariff.

It is well known facts that full utilization of power is not possible with out adequate and efficient Transmission & distribution System. Details of Technical & Commercial Losses are given below: ●

Technical Losses: Technical losses are

●

inherent in the electrical system and its magnitude depends upon pattern of loading of Transmission & distribution lines, substations type of load, designs of lines etc. Commercial Losses: Commercial losses are caused by pilferage/katia connection, theft, defective meters and error in meter reading and excessive power supply in comparison to flat rate tariff in rural/un-metered supply areas.

However, U.P. Power Corporation / DisComs are making concerted effort to reduce T&D losses to a desirable level. To achieve this short term as well as long term planning as mentioned below has been formulated:

Capacitor Banks UPPCL/DisComs has started to ensure new/adequate installation of capacitor banks at various substations as per system requirements. Old and defective/ not working units are being identified and being repaired to make them fully operational. This will reduce energy/load requirement to match the demand after reducing the reactive load. Consumers, specially using inductive load are being ensured to install matching capacitor units and defaulters are being penalized and discouraged. It will reduce technical losses.

HV Distribution Mains/ L T less system In the colonies, developed by various development authorities, private builders / colonizers, electrification by High Voltage Distribution System (HVDS) has been made compulsory. New village electrification is being done on LT Less system as no LT mains is being laid as each pole shall have arrangement to house one no. single phase 10-16 kVA, 11/0.4 kV transformer with facility to draw number of LT cables with the help of LT box to consumer premises. This will reduce losses of Lt System and minimize possibility of theft/katia connection of electricity up to great extent and system will be comparatively neat and clean.

High Line Loss 11kV Feeders UPPCL/DisComs after identifying high line loss 11 KV feeders has started appointing franchisees (collection base franchisee in rural areas and input base franchisees in urban area) for better consumer service as well as better control over pilferage of energy and maintenance of line and double pole transformers as well as efficient generation and distribution of bills and collection of revenue. This will help in coping up various problems of field units being faced due to inadequate manpower.

Metering of Multiplexes/Colonies For multiplexes - cinema houses, shopping malls, multiple offices cum commercial complexes and various government offices and colonies etc, single point supply is being made mandatory. This will enhance revenue due to the fact that watch on proper metering will be effective and loss of revenue due to transfer or shifting of residence will become zero. January - 2009

Metering of Distribution sonal (e.g. cold storage, cane crushers) and ployees and vigilance squad against sustheft prone consumers, (having notorious pected defaulting consumers and being Transformers The metering of Distribution Transformers is being done in a phased manner which will help in assessing the correct energy input to the area for which the area in charge lineman, junior engineer or the assistant engineer (SDO) will be held responsible for excess line losses and realization of maximum revenue against assessment; besides this identification of defaulting consumer will be more easy for timely action.

Metering of PTWs Installation of energy meters at PTWâ&#x20AC;&#x2122;s is being done to assess correct/actual energy consumed by it to revise norms for energy assessment. This will help in reducing the present level of losses. Proper measurement of energy will help in revision of norms especially when the duration of supply has increased and offset the loss on this account 100% metering is being ensured for the PTW consumers who have installed additional appliances with their pump sets, such as chaff cutters, cane crushers and rice hullers. This will in enhancement of revenue against these consumers.

history) have been done with double metering (one in the premises of consumer and other out side premises. This arrangement has shown very encouraging result in re-

dealt with sternly, such as imposing penalty, arrest and sending jail etc. In the FY2007-08 in different district of UP total 742727 nos. of raids were carried out of

spect of reducing losses and increasing revenue.

which in 48319 cases of theft were detected and FIR was filed in 33439 cases . Total Rs 14350 lakh revenue was realized

Geographical Information in these raids. InFY2008-09 till10/2008 toSystem UPPCL have under taken a plan to procure and set up a Geographical Information System for a pilot study to improve the database on distribution system. One of the goals of this is to have data base of location of feeders, L T lines, substations, distribution transformers and other equipment, and locate/ identify and know the actual no of consumers on a particular feeders. This will help in a long way for monitoring of performance and identify the area of losses, deficient revenue, transformer failures and break downs of feeder etc. Thus UPPCL will have full data base to assess the deficient area of performance e.g. revenue collection, assessment, and losses and timely taking suitable corrective measure.

Installation of Electronic Unauthorized connection Meters For correct measurement of energy Electronic meters have been installed on all 11 kV feeders at 33 kV substations and replacing all other mechanical meters in a phased manner. Presently more than 25 lakhs of electronic meters have already been installed in various Discoms .This will help in reducing the losses.

ABC conductors are being installed in phased manner in theft prone localities, similarly replacing of LT with single phase HT is being done wherever possible. This will help in reducing the possibility of theft and unauthorized Katia connections. In FY2006-07& FY2007-08 nearly 2185km & 2339kM of ABC conductor gas been installed where as for FY2008-09 a target of 11500 kM of laying ABC has been planned .

Double Metering of Seasonal and Theft Prone Consumers Apart from above frequent/surprise raids

tal 333671 numbers of raids were carried & 17999 cases of mall practices were found & out of which FIR was lodged in 11043 cases resulting revenue realization of Rs 4059 lakhs. All above measures and its regular monitoring at highest level have resulted in improvement of performance and as well as gradual reduction of T&D losses. However due to various reasons and continuing reform process though pace of improvement is slow but desired result will be achieved shortly.

Investment Plan: Sort term as well long term investment plan has been formulated to reduce overloading of transformers, replacement of defective meters, DT metering, augmentation of distribution system, replacement of poles, conductors and switchgears etc. This scheme will not only cater to the increasing loads but it also brings down the loading on transformers and associated networks thus considerably result in reduction in technical losses consequently T&D losses in addition to reliability of supply to consumers which has a cascading effects in revenue collection. â&#x2014;?

Although we are giving emphasis to non-conventional sources in the future, yet thermal power will be our major

are being conducted by departmental emTo ensure 100 % foolproof metering of seaJanuary - 2009

Future Plans for Generation

The annual per capita consumption of electricity in UP is 340 kWh which is nearly half of the National average of 672 kWh. Presently UP faces a peak shortfall of 1500-2000 MW. By the end of 11th Plan, the forecasted Peak demand for UP is 13947 MW. To meet this demand about 5000 MW capacity addition through State sector and IPPs is expected to be added.

●

energy source for a period of 10-15 years. In terms of the private sector contribution towards installed capacity, Uttar Pradesh contributes 1022.16 MW from renewable sources. As regards private

sector contribution in respect of Thermal & Hydro projects, the status is as under under : ◆ Vishnu Prayag HEP (400 MW) – all units commissioned in Oct 2006. ◆ Srinagar HEP (330 MW) – Ist unit likely to be commissioned in July 2010 and remaining on one month interval. ◆ Rosa TPP (600 MW) – Ist unit likely to be commissioned in March 2010 and 2nd unit in June 2010. ◆ Anpara TPP (1000 MW) – ist unit likely to be commissioned in March 2011 and 2nd in July 2011. To increase this capacity suitable incentive schemes may be implemented and Power policy may be changed suitably in respect of tariff etc. to promote private sector in Thermal & Hydro projects. 99

Besides mentioned above the future plan for the augmentation of generation capacity is also envisaged as below: ●

●

In line with Mega Power Policy of GoI UPPCL has taken up at present two projects based on competitive bidding guidelines (Case-2) viz. (1) 3x660 MW Prayagraj Thermal Power Project (tehsil Bara-Distt Allahabad) (2) 2x660 MW Sangam Thermal Power Project (tehsil Karchhana-Distt Allahabad). JV with NTPC (Meja Urja Nigam Pvt

22,735.00 crores have been framed. The details regarding the plan are annexed herewith. The projects of 765KV, 400 KV, voltage levels have been identified. Most of the 220KV and 132KV projects have also been identified and rest projects of 220 KV and 132 KV shall be developed, as per the field load conditions of different areas and shall be intimated in due course.

Future Plans for Distribution Works ●

Ltd.) of 2x660 MW at Distt. Allahabad. MOU being done for JV with Nevelli Lignite for 2000 MW Thermal power project at Distt. Fatehpur. Anpara-E thermal power project on basis of Case-2 competitive bidding

supply, catering to increasing demand, reduction in T&D losses, and rural electrification, we estimate a total capital expenditure requirement of Rs. 24,527 crore over the Plan period. A macro overview of this amount is as

guidelines.

Future Plans for Transmission Works At present U.P. Power System is catering about 8,000 – 10,000 MW of power. In the end of 11th Five Year Plan (2011-12) substantial power to the tune of 10,000 MW will be available from different sources i.e. newly envisaged power generating stations

◆

in private and public sectors such as ANPARA ‘C’, ANPARA ‘D’, Bara, Karchhana, Meja, Roza, Harduaganj, Parichha, Tanda extension and also from increased share from central pool and Co-gen. Hence, at the end of 11th five year plan U.P. Transmission System will have to cater a total power to the tune of 18,000-20,000 MW for which new transmission system at different voltages levels has to be developed and available transmission system is also to be strengthened.

To achieve the desired operational objectives of maintaining reliable

◆

under: Rs. 15,800 crore has been considered under Government Schemes for Rural Electrification and Energisation of PTW. Rs 3,035 crore has been budgeted for laying ABC conductors over 51,500 ckt kms. Rs. 2,417 crore has been earmarked for augmentation of Distribution System which includes erection of new 33/11 kV substation, Distribution Transformers and the associated conductors , which would be required by the distribution system needs to cater to 4757 MW of additional capacity to be procured during the Plan period. Rs. 1,022 crore would be invested in Metering of consumers, wherein about 72 lakh meters will be installed. Another Rs. 348 crore has been envisaged for segregation of feeders.❑

Accordingly transmission development plan for 11th five years plan amounting to Rs. January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

Hydro

Thermal

Nuclear

R.E.S.

Total

Coal

Gas

Diesel

Total

3300.9

1970.0

0.0

127.9

2097.9

0.0

452.4

5851.2

PRIVATE

0.0

260.0

220.0

106.5

586.5

0.0

1428.1

2014.6

CENTRAL

0.0

1073.4

0.0

1073.4

196.0

0.0

1269.4

3300.9

3303.4

220.0

234.4

3757.8

196.0

1880.5

9135.2

STATE

TOTAL

January - 2009

(MNRE)

100

Karnataka’s pioneering spirit in the field of power has been translated into several major milestones. Karnataka was the first to embark on Alternating current, when Bangalore City’s lighting scheme was completed. Karnataka had the longest transmission line in the world in 1902, from Shivanasamudram to KGF, covering a distance of 147 km. and Karnataka was the first state in the country to conceive and set up a professionally managed Corporation to plan, construct, operate and maintain power generation projects in the state. That’s the legacy that KPCL started with and built on.

arnataka Power Corporation Limited (or KPCL) is a company owned by the government of Karnataka, and is engaged in the generation of electrical power.

cost per megawatt - a commendable costvalue equation that has become a benchmark on the national grid. KPCL’s stock in trade is industry proven well-established infrastructure & modern, progressive management concepts and a commitment to excel, helping it meet the challenges of the rising energy demands of Karnataka. KPCL received clearance from the state cabinet for executing a 270-mw hydropower project at Shivanasamudram in Mandya district, 120 km from Bangalore. The project will come up in the Cauvery basin. Construction work is likely to start by the end of November 2009. KPCL has also completed the DPR (Detailed Project Report) for the 2x200 mw Gundia hydropower project to be set up in the Western Ghats in Hassan district. The corporation is also taking up thermal power projects at Yermaras (2x800 mw) and Yedlapur (1x800 mw), close to Raichur thermal power station in Raichur district. KPCL will set up a joint venture with Bharat Heavy Electricals Ltd for these projects. The DPR for solar power projects of 3 mw each to be set up in Kolar, Belgaum and Raichur districts is ready.

KPCL is a highly IT Savvy company among the public sector units in the state at large and power sector in particular and has the distinction of being the first state owned company in the power sector to have established SHAKTINET- a satellite based communication network through VSATs among all its power stations and Bangalore. During 2007-08, KPCL achieved a total income of 3651.35 crores and Rs 206 crores as profit after taxes.

KPTCL Karnataka Power Transmission Corporation Limited (KPTCL) is mainly vested with the functions of Transmission and Distribution of power in the entire State of Karnataka. It operates under a license issued by Karnataka Electricity Regulatory Commission. KPTCL purchases power from Karnataka Power Corporation Limited, which generates and operates major power generating projects in the state consisting of Hydel, Thermal and other sources. KPTCL purchases power from KPC at the rate fixed by the State Govt. from time to time.

The modes for generation of electric power are hydroelectric, thermal and diesel. KPCL today has an installed capacity of 5509.82 MW of hydel, thermal and wind energy, with 4000 MW in the pipeline. The 1470 MW Raichur Thermal Power Station located in Raichur dist is accredited with ISO 14001-2004 certification for its environment protection measures. From an industry vantage point, KPCL has raised the bar on the quality of deliverables and is constantly working at lowering the

101

January - 2009

KPTCL also purchases power from Central Government owned generating stations like National Thermal Power Corporation, Neyvelli Lignite Corporation and the Atomic Power Stations at Kalpakkam and Kaiga. The approximate share of power from these generating stations is around 16%.

As on 31.01.2009, KPTCL operates 1153 Substations & 35895 Tr. Line in CKMs. The KPTCL is further divided into Zones and Circles are also known as Electric Supply Companies popularly known as ESCOM’s. Each of these zones look after distribution of electricity in a particular region of Karnataka consisting of few districts of the

state, whereas KPTCL looks after transmission. The KPTCL has five zones at present, viz., Bangalore Electricity Supply Company, Mangalore Electricity Supply Company (Mescom ), Hubli Electricity Supply Company, Gulbarga Electricity Supply Company and Chamundeshwari Electricity Supply Company. ❑

LIKELY CAPACITY ADDITION DURING 11TH PLAN FOR THE STATE : - KARNATAKA

Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR SIPAT STPS II

1000.00

272.78

COMM 1000.00

NEYVELI II MC X

500.00

110.00

(2009-2010)

*SIMHADRI ST-II

1000.00

175.28

(2011-2012)

*ENNORE JV COST

1000.00

78.29

(2010-2012)

KAIGA U-3 & 4

440.00

119.00

KUDANKULAM 1&2

2000.00

442.00

(2009-2010)

*KALPAKKAM PFBR

500.00

87.64

(2010-2011)

COMM 220.00

27.12.2008

11.04.2007

CENTRAL-SECTOR TOTAL:- 1012.21 STATE-SECTOR BELLARY U-1 & 2

1000.00

COMM 500.00

03.12.2007

VARAHI EXT.

230.00

(2008-2009)

RAICHUR U-8

250.00

(2009-2010)

STATE - SECTOR TOTAL:- 1480.00 PRIVATE-SECTOR LANCO NAGARJUNA

1015.00

(2010-2011)

TORANGALLU

600.00

(2008-2010)

PRIVATE-SECTOR TOTAL:- 1615.00 GRAND-TOTAL:- 4107.21 NOTE :- U - UNDER CONSTRUCTION PROJECTS C - CONSTRUCTION YET TO START (LOA TO BE PLACED) * SHARES FROM CENTRAL SECTOR PROJECTS FOR WHICH M.O.P. ORDERS ARE YET TO BE ISSUED ARE TENTATIVE January - 2009

102

103

January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

Hydro

Thermal

Nuclear

R.E.S.

Total

Coal

Gas

Diesel

Total

1703.6

2807.5

0.0

2807.5

0.0

71.8

4582.9

PRIVATE

0.0

190.9

CENTRAL

1520.0

1450.2

257.2

0.0

1707.4

273.0

0.0

3500.4

TOTAL

3223.6

4257.7

257.2

0.0

4514.9

273.0

262.7

8274.2

STATE

January - 2009

(MNRE)

104

Madhya Pradesh, once the largest state in the country until Chhattisgarh was carved out from it, is dominated by the Tribal population, which translates into the fact that the population is in varied corners of the state. This makes it even more intricate the challenge for power sufficiency, but even then in terms of installed generation capacity, it stands seventh, amidst huge hurdles.

adhya Pradesh Chief Minister Shivraj Singh Chouhan had re

cently announced that his government was committed to make the state power surplus in near future. He had said that the state was facing crisis of power due to curtailment in state’s share by the central government, non-supply of coal for power plants and lack of water in Indra Sagar and Omkareshwar. But when it comes to installed power generation capacity, the state sure stands firm on Seventh. Madhya Pradesh’s main power generating body, the Madhya Pradesh Power Generating Co. Ltd. (MPPGCL) is a wholly owned company of MP Government engaged in generation of electricity in the state of Madhya Pradesh. It is a successor entity of erstwhile Madhya Pradesh State Electricity Board (MPSEB). The Company, while operating and maintaining its existing units, is also constructing new Power Plants for increasing capacity in the State of Madhya Pradesh. MPPGCL, last year, had requested Ministry of Coal (MoC) for grant of long term coal linkage to Satpura Thermal Power Station 105

The Company has been incorporated as a part of the implementation of the power sector reform in Madhya Pradesh initiated by the Government of Madhya Pradesh. The Company has taken over the Generation activities of MPSEB. The Company is a public company fully owned by Govt. of M.P. ● The Company was incorporated on 22.11.2001. ● The Company obtained the Certificate of Commencement of Business on 16-072002. ● ●

The Registered office of the Company is at Shakti-Bhawan, Rampur, Jabalpur. ● The Authorized Capital of the Company at present is Rs. 2,500 Cr. (Two Thousand Five Hundred Crore) divided into 2,500,00,000 Shares of Rs.100 each. ● The issued, subscribed and paid up capital is Rs.2,164,16,01,000 (Two Thousand One Hundred Sixty Four Crores Sixteen Lacs One Thousand only) divided into 2,1,64,16,010 shares of Rs.100 each. ●

(TPS) Extension units 10th &11th, each of 250 MW capacity. The plant is located in

power to create platform for multi-faceted growth. To develop a financially viable and

Sarni, Madhya Pradesh. Letter of Intent (LOI) for execution of Main Power Block has already been issued to BHEL on March 10, 2008 with expected schedule of commissioning as February/June 2011, i.e. during 11th Plan respectively for unit 10 & 11.

competitive power sector that ensures quality power for all at affordable price is objective of the Energy Department. Energy Department aims to develop non-conventional sources of energy and an economically viable power sector. Policy deci-

The initial advance to BHEL has also been released on 31st March, 2008. Now, in a recent appraisal of project conducted by “Expert Appraisal Committee” of MoEF, confirmed coal linkage has been made as one of the preconditions for clearance. Hence, MPPGCL has requested MoC for grant of coal linkage at the earliest for getting the project completed well within the 11th Plan.

Energy Department Energy Department, Government of Madhya Pradesh is concerned with power policy framework and administrative control, safeguarding consumers’ interest, promotion of non-conventional energy sources and efficient power system in the state. The Department is committed to make Madhya Pradesh self-reliant in the field of

sions regarding hydro and hydel power, administrative control of Urja Vikas Nigam and co-ordination and control of power companies carved out of Madhya Pradesh State Electricity Board are entrusted with the department.

Budget The Madhya Pradesh government recently approved the action plans presented by various state-run electricity companies for 11th Plan period (2007-12). The action plans were approved at a cabinet meeting presided over by Chief Minister Shivraj Singh Chouhan. The state government makes budgetary allocations every year for power transmission companies for improvement and strengthening of power transmission and distribution. In the 2008-09 budget, the government has allocated Rs.1.69 billion for Madhya Pradesh Central Zone Power

January - 2009

LIKELY CAPACITY ADDITION DURING 11TH PLAN FOR THE STATE : - MADHYAPRADESH

Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR OMKARESHWAR

520.00

COMM 520.00

04.11.2007

SIPAT STPS II

1000.00

143.00

COMM 1000.00

27.12.2008

SIPAT I

1980.00

283.16

(2009-2011)

*KORBA ST.-III

500.00

71.50

(2010-2011)

KAHALGAON 6,7

1000.00

49.11

*BARH ST-I

1980.00

1320.00

224.00

(2011-2012)

*SUBANSIRI LOWE

2000.00

83.90

(2011-2012)

COMM 500.00

16.03.2008

CENTRAL-SECTOR TOTAL:- 1374.67 STATE-SECTOR BIRSINGPUR EXT.

500.00

SATPURA EXT.

500.00

AMARKANTAK U-5

210.00

COMM 500.00

18.06.2007 (2010-2012)

COMM 210.00

15.06.2008

STATE - SECTOR TOTAL:- 1210.00 PRIVATE-SECTOR MAHESHWAR

400.00

(2011-2012)

SASAN-ULT. MEGA

1320.00

(2011-2012)

PRIVATE-SECTOR TOTAL:- 1720.00 GRAND-TOTAL:- 4304.67 NOTE :- U - UNDER CONSTRUCTION PROJECTS C - CONSTRUCTION YET TO START (LOA TO BE PLACED) * SHARES FROM CENTRAL SECTOR PROJECTS FOR WHICH M.O.P. ORDERS ARE YET TO BE ISSUED ARE TENTATIVE Transmission Co, Rs.710 million for Madhya Pradesh Power Distribution Co, Rs.983 million for Madhya Pradesh East Power Distribution Co and Rs.107 million for Madhya Pradesh West Power Distribution Co. The Madhya Pradesh Power Transmission had submitted an action plan worth Rs.52 January - 2009

billion for the period. Of this, a provision of Rs.21.4 million would come under the limit of the 11th Plan. Similarly, the Bhopal-based Central Zone Power had presented an action plan to the tune of Rs.25.84 billion, of

West Zone Power has submitted an action plan of Rs.43.42 billion. However, only Rs.19 billion would be provided during the plan period. Similarly, the Jabalpur-based East Zone Power has presented an action worth

which Rs.13.2 billion would be covered under the 11th Plan fund. The Indore-based

Rs.36.36 billion. Of this, Rs.13.35 billion would be provided during the five-year period. â?&#x2018; 106

107

January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

Hydro

Thermal

Nuclear

R.E.S.

Total

Coal

Gas

Diesel

Total

1022.0

4575.1

100.0

12.1

4687.1

0.0

99.5

5808.6

PRIVATE

0.0

1081.4

0.0

0.1

1081.5

0.0

0.1

1081.6

CENTRAL

136.8

952.4

0.0

952.4

0.0

1089.2

1158.8

6608.8

100.0

12.2

6721.0

0.0

99.5

7979.4

STATE

TOTAL

January - 2009

(MNRE)

108

West Bengal has been a pioneer in power development over the years. NASSCOM-Gartner had even ranked West Bengalâ&#x20AC;&#x2122;s power infrastructure as the best in the country. With an installed capacity of 7979.4 MW, it is Eigth among the installed power generation capacity. Power Generation and distribution in the State is handled by various unitsThe West Bengal State Electricity Board, the West Bengal Power Development Corporation Ltd. and Durgapur Projects Ltd. (State Sector); Damodar Valley Corporation and the National Thermal Power Corporation (Central Sector); and the Calcutta Electric Supply Company and Dishergarh Power Supply Company (Private Sector).

Kolaghat, Bakreswar, Santaldih,and Bandel. A new plant in Sagardighi is in progress.

Sagardighi Project at Murshidabad Unit 1 (1x300 MW)

Kolaghat Thermal Power Station involves a

To meet acute shortage of power in the

total installed capacity of 1260 MW. There are two Bakreswar Thermal Power Project plants having a capacity of 630 MW.

State, particularly during the last summer the unit has been put into generation.

This unit is under the final stage of construction. It will take some more time to come into the synchronization stage.

triving to provide optimum electric ity resources to all the districts, Power Sector of West Bengal works

towards meeting the ever-increasing demands of the state. Attracting investors from all corners of India, the Power industry of West Bengal aims to establish more units within its premises.

Bandel Thermal Power Station and Santaldih Thermal Power Station have been undertaken by WBPDCL as per re-organization measures of power sector in West Bengal. WBPDCL works in tandem with West Bengal State Electricity Board (WBSEB) and Calcutta Electric Supply Corporation (CESC).

WBPDCL Ongoing Projects Bakreswar Thermal Power Project Unit 4 (1x210 MW) To meet acute shortage of power in the State, particularly during the last summer the unit has been put into generation. However, the unit is nearing to be completed with all the load bearing equipments very shortly. Bakreswar Thermal Power Project Unit 5 (1x210 MW)

Sagardighi Project at Murshidabad Unit 2 (1x300 MW) This unit is under the final stage of construction. Santaldih Thermal Power Station Unit 5 (1x250 MW) To meet acute shortage of power in the State, particularly during the last summer the unit has been put into generation. The unit is on the verge of completion and will be declared for commercial operation with all the related load bearing equipments shortly. Bandel Thermal Power Station The objective of the proposed project funded by World Bank and Global Environment Facility (GEF) is to improve energy efficiency of coal-fired power generation units in selected Thermal Power Stations through Renovation and Modernization (R&M) and improved operations and maintenance (O&M). Among other power stations in India , include the Unit 5 (210 MW) of Bandel TPS.

West Bengal Power Development Corporation Limited (WBPDCL) is a company owned by the Government of West Bengal with the goal to carry on interalia the business of electric power generation and supply in the state of West Bengal, India. The main thermal power plants under WBPDCL are in 109

January - 2009

The proposed project intervention to improve energy efficiency is expected to result in reduction in fuel (coal and oil) consumption per unit of power generation after completion of R&M. The proposed project will also reduce carbon emission intensity as a result of R&M. As part of the project preparation activities, the following

Environmental and Social Safeguard studies were carried out and are endorsed by WBPDCL for implementation.

Future Projects In 11th 5-year Plan, WBPDCL proposed to make the following capacity additional programme

Santaldih 6th Unit (1 x 250 MW) Financial closure completed ● Katwa (2x660 MW)- Financial closure Awaited ● Bakreswar (1x660 MW)- Financial closure Awaited. ●

●

Sagardighi (2x660 MW)- Financial closure Awaited.

LIKELY CAPACITY ADDITION DURING 11TH PLAN FOR THE STATE : - WEST BENGAL

Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR *TEESTA ST.V

510.00

122.78

COMM 510.00

TEESTA L.D. III

132.00

(2009-2010)

TEESTA L.D. IV

160.00

(2010-2011)

KAHALGAON 6,7

1000.00

55.44

*FARAKKA ST-III

500.00

173.67

(2010-2011)

*NABINAGAR JV R

500.00

123.68

(2011-2012)

COMM 500.00

28.03.2008

16.03.2008

CENTRAL-SECTOR TOTAL:- 767.57 STATE-SECTOR BAKRESHWAR 4&5

420.00

COMM 210.00

24.12.2007

PURLIA PSS JV

900.00

COMM 900.00

20.01.2008

SAGARDIGHI

600.00

COMM 600.00

20.07.2008

SANTALDIH

500.00

COMM 250.00

07.11.2007

DURGAPUR DPL

300.00

COMM 300.00

24.11.2007

STATE - SECTOR TOTAL:- 2720.00 PRIVATE-SECTOR BUDGE-BUDGE EXT

250.00

(2009-2010)

PRIVATE-SECTOR TOTAL:- 250.00 GRAND-TOTAL:- 3737.57 NOTE :- U - UNDER CONSTRUCTION PROJECTS C - CONSTRUCTION YET TO START (LOA TO BE PLACED) * SHARES FROM CENTRAL SECTOR PROJECTS FOR WHICH M.O.P. ORDERS ARE YET TO BE ISSUED ARE TENTATIVE January - 2009

110

111

January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

STATE PRIVATE CENTRAL 7 TOTAL

January - 2009

Hydro

Thermal

Nuclear

R.E.S.

Total

Coal

Gas

Diesel

Total

(MNRE)

2319.8

2630.0

0.0

2630.0

0.0

123.9

5073.7

0.0

37.6

36.0

560.7

264.0

0.0

824.7

151.0

0.0

1711.7

3055.9

3190.7

264.0

0.0

3454.7

151.0

161.5

6823.0

112

electricity the state needs, to save 11 Agriculturally and even million unit annually - seems to be an industrially rich, Punjab answer to the severe power crisis figures in the top 10 even here. though there is a lot of gap It is a clear indication that the state is in between demand and dire straits when it comes to Power. But supply. There are many challenges in front of Punjab then the state is better off than many others…thanks to the untiring efforts by State Electricity Board. It has the Punjab government as well as the to maintain harmony with Punjab State Electricity Board. the farmers; it has to balance its relations with the PSEB industries – both large and The PSEB is a statutory body formed in the medium…and all this year 1959 under the Electricity Supply amidst daily power cuts. Act.1948. Subsequently with the re-organiThe board has been facing zation of the erstwhile State of Punjab unthe flak, the nevertheless, in der the Punjab Re-organization Act 1966 the India’s top installed power present form came into existence w.e.f. 1st generation capacity Punjab May, 1967. stands Ninth, even if bruised Starting with the modest installed capacity like most other of its of 62 MW, the PSEB has grown up by leaps counterparts.

PSEB also constructs and maintains its Transmission and Distribution system for providing efficient services to the various categories of electricity consumers in the state.

Sample these.

tions in the budgetary proposals have been made for revamping the power transmission system of the Punjab State Electricity Board.

●

Punjab State Electricity Board (PSEB) recently accepted the major demand of

farmer organisations for increasing power supply due to scanty rains this winter. ● While Punjab has a requirement of 11,000 MW, at present, it generates a little more than half the power. According to load generation balance

and bounds with generating capacity 6803 MW as on 30-12-2008.

PSEB operates its own Generation Power Plants and also gets power as its share from BBMB. It also gets power as per allocation from the Central Sector Power Projects. The

Though the well-knit network of Transmission and Distribution System, PSEB is proud of serving more than 62.31 lakhs consumers comprising of approximate 51.49 lakhs General, 1.09 lakhs Industrial, 9.7 lakhs Agricultural connections. The existing projects of PSEB include Guru Nanak Dev Thermal Plant, Bhatinda, Guru Gobind Singh Super Thermal Plant, Ropar, Guru Hargobind Thermal Power Plant, Lehra Mohabbat (Bhatinda) & Guru Hargobind Thermal Plant Stage – II, Lehra Mohabbat (Bhatinda) Recently, it was announced that in the budget, provision for pay panel is expected to be anywhere between Rs 1,500 and Rs 2,000 crore annually, other major alloca-

report of Central Electricity Authority, the net energy requirement during 2008-09 was 43,796 million units against the anticipated availability of 39,093 million units. ● Looking at the severe power crisis of the state, the audit report of Punjab Energy Development Agency (PEDA) says if about 24 of Punjab’s big industries follow conservation norms, they will be able to save half the 113

January - 2009

LIKELY CAPACITY ADDITION DURING 11TH PLAN FOR THE STATE : - PUNJAB

Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR *PARBATI ST-II

800.00

66.23

(2011-2012)

*PARBATI ST-III

520.00

43.05

(2010-2011)

*CHAMERA III

231.00

19.12

(2010-2011)

*SEWA ST.II

120.00

9.93

(2009-2010)

*URI -II

240.00

19.87

(2010-2011)

*KOLDAM

800.00

66.23

(2009-2010)

*LOHARI NAGPALA

600.00

49.67

(2011-2012)

*TAPOVAN V GARH

520.00

43.05

(2011-2012)

*RAMPUR

412.00

34.11

(2011-2012)

*KOTESHWAR

400.00

25.45

(2010-2011)

RAPP U-5&6

440.00

45.00

(2008-2009)

KAHALGAON 6,7

1000.00

35.33

*BARH ST-I

1980.00

1320.00

137.00

(2011-2012)

*SUBANSIRI LOWE

2000.00

49.90

(2011-2012)

COMM 500.00

16.03.2008

CENTRAL-SECTOR TOTAL:- 643.94 STATE-SECTOR GHGTPP-II,LEHRA

500.00

COMM 500.00

31.07.2008

STATE - SECTOR TOTAL:- 500.00 PRIVATE-SECTOR GOINDWAL SAHIB

540.00

(2011-2012)

PRIVATE-SECTOR TOTAL:- 540.00 GRAND-TOTAL:- 1683.94 NOTE :- U - UNDER CONSTRUCTION PROJECTS C - CONSTRUCTION YET TO START (LOA TO BE PLACED) * SHARES FROM CENTRAL SECTOR PROJECTS FOR WHICH M.O.P. ORDERS ARE YET TO BE ISSUED ARE TENTATIVE

January - 2009

114

115

January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

Hydro

Thermal

Nuclear

R.E.S.

Total

Coal

Gas

Diesel

Total

987.8

2545.0

443.8 0.0

2988.8

0.0

30.2

4006.9

PRIVATE

0.0

696.0

CENTRAL

405.8

624.3

221.0

0.0

845.3

469.0

0.0

1720.2

1393.7

3169.3

664.8

0.0

3834.2

469.0

726.3

6423.1

STATE

TOTAL

January - 2009

(MNRE)

116

Rajasthan is among the few power plants. Rajasthan has abundant soStates which could achieve lar potential. Efforts are being made to attract technologies to make Rajasthan a So10th Plan targets for generation capacity addition. lar hub in the country. This was result of Renewable, Diesel & Nuclear Rajasthanâ&#x20AC;&#x2122;s effort to timely complete power generation potential projects. Implementation of Rajasthan has around 693 MW installed capacity from the grid connected Renewgeneration projects was able sources. This includes 662 MW from given utmost priority and wind power sources and 31 MW from Bioduring execution, the same mass sources. was monitored at various levels, says Sudhansh Pant, Rajasthan Renewable Energy Corporation CMD, Rajasthan Rajya is the nodal agency in the state for promotVidyut Prasaran Nigam ing development of Renewable energy sources. Rajasthan has very clear and supLimited. portive policy for development of renewable

planned evacuation of such power through 400 kV system. Development of Bio mass has also been given importance. Mustered husk based power plants are being installed. Recently, Central Govt. has notified policy for promotion of Solar power. Rajasthan has tied up full capacity allocated to the state and has demanded higher capacity looking to the available potential. Years back projects were formulated based on liquid fuel but dropped due to volatile nature of prices of such fuels. Rajasthan is now concentrating on viable projects. State had full capacity allocation (300 MW) from first two units of the Rajasthan Atomic Power Plant in Rawatbhata. After de-rat-

Current Scenario

sources of power.

ing these two units, Rajasthanâ&#x20AC;&#x2122;s share has dropped in Nuclear power.

Presently Rajasthan has access to 6672 MW of installed generation capacity from State, Central and Private sector sources.

The state provides various concessions and assistance to the developers of renewable

The state has raised voice to compensate

The State has tried to tap every available source of generation of power despite lack of perennial source of water, being far away from coal fields and seaports and non-availability of fossil fuels. The only available conventional source of power generation is lignite which is now given attention. A lignite based thermal power project of 1080 MW capacity is under implementation in private sector.

power. State regulator has given preferential tariff to wind power generators. Renewable purchase obligation has also been specified by the regulator for Discoms and Captive consumers in the state for promotion of Renewable sources. Though wind energy sources are concentrated in western area, Rajasthan has

this loss at various forums. Only 88 MW has been allocated from upcoming units of RAPP. A site in Banswara District near Mahi Bajaj Dam has been found suitable for establishment of new nuclear power plant. The site has been approved by the Site Selection Committee of the Nuclear Power Corporation.

In State sector, 2x 125 MW lignite based TPS at Giral has been commissioned and other project at Barsingsar (2x125 MW) in Central Sector is likely to be commissioned shortly. Rajasthan has also successfully tapped the renewable sources of generation of electricity. Though wind energy potential is concentrated in far western border area, Rajasthan has developed 662 MW wind

117

January - 2009

LIKELY CAPACITY ADDITION DURING 11TH PLAN FOR THE STATE : - RAJASTHAN

Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR *PARBATI ST-II

800.00

87.02

(2011-2012)

*PARBATI ST-III

520.00

56.55

(2010-2011)

*CHAMERA III

231.00

25.13

(2010-2011)

*SEWA ST.II

120.00

13.05

(2009-2010)

*URI -II

240.00

26.10

(2010-2011)

BARSINGSAR LIGN

500.00

250.00

(2009-2010)

*KOLDAM

800.00

87.02

(2009-2010)

*LOHARI NAGPALA

600.00

65.26

(2011-2012)

*TAPOVAN V GARH

520.00

56.56

(2011-2012)

*RAMPUR

412.00

44.81

(2011-2012)

*KOTESHWAR

400.00

33.44

(2010-2011)

RAPP U-5&6

440.00

88.00

(2008-2009)

KAHALGAON 6,7

1000.00

48.67

*BARH ST-I

1980.00

1320.00

150.00

(2011-2012)

*SUBANSIRI LOWE

2000.00

65.55

(2011-2012)

COMM 500.00

16.03.2008

CENTRAL-SECTOR TOTAL:- 1097.16 STATE-SECTOR SURATGARH U-6

250.00

(2009-2010)

CHABRA I TPS

500.00

(2009-2010)

GIRAL LIGNITE

250.00

125.00

(2008-2009)

DHOLPUR CCGT

220.00

KOTA U-7

195.00

(2009-2010)

CHABRA II TPS

500.00

(2011-2012)

COMM 220.00

27.12.2007

STATE - SECTOR TOTAL:- 1790.00 PRIVATE-SECTOR JALIPA LIGNITE

1080.00

(2009-2011)

PRIVATE-SECTOR TOTAL:- 1080.00 GRAND-TOTAL:- 3967.16 NOTE :- U - UNDER CONSTRUCTION PROJECTS, C - CONSTRUCTION YET TO START (LOA TO BE PLACED) * SHARES FROM CENTRAL SECTOR PROJECTS FOR WHICH M.O.P. ORDERS ARE YET TO BE ISSUED ARE TENTATIVE

January - 2009

118

Challenges

By 2012

The major challenge faced by Rajasthan is

Rajasthan’s power sector may witness

to rapidly enhance generation capacity despite farness from fuel sources and sea ports and lack of perennial sources of water.

drastic changes in the near future. Around 2800 MW projects are already under implementation.

Rajasthan has large geographical area and long transmission and distribution system is required. This requires additional investment and has operational problems.

7109 MW capacity is planned to be commissioned by 2011-12 when state will be self sufficient in its power requirement and to provide power security to the consumers.

Rajasthan has taken challenge to rapidly increase generation capacity from all available sources.

The state has Transmission losses of around 4.44% which are near to international standards.

State’s generation programme has been formulated to double the capacity by 201112 in consonance with the National Electricity Policy.

State has recently completed a massive Feeder Renovation Programme to renovate all 8475 rural distribution feeders to reduce losses below 15%.

Transmission system is also being planned to evacuate this power. Three 400 kV GSS are under construction.

By March-09, the T & D losses will be reduced by 25%. Distribution losses in Rajasthan are 30.09%. Steps have been taken to keep the pace of reduction of dis-

The construction of another three GSS of 400 kV is in the pipeline. Rajasthan has strong transmission system and its operation has been applauded at various forums. Every year 2 to3, 220 kV GSS and 10 to12, 132 kV GSS are added looking to the load growth. Around 200 new 33 kV GSS are added every year to the distribution sys-

tribution losses at the rate of 5% every year. For sustaining loss reduction, effective vigilance and monitoring is given priority. Special courts have been notified in each district for speedy trial of electricity theft

cases. 32 Anti Power Theft Police Stations have been established to investigate the cases. Rajasthan’s power sector faces challenge of peculiar nature due to climatic and geographic conditions. The state has given due importance to the power sector. In future, Rajasthan has set goals to rapidly increase generation capacity to overcome demand-supply gaps and become self sufficient, create reliable and efficient power system to evacuate the generated power and distribute in the vast areas of the state, and meet the increased level of satisfaction of consumers by implementing IT enabled better customer services.

Potential sources For development of hydro power projects Rajasthan has to tie up with other states to harness potential in Himalayan region. Rajasthan has good wind potential for renewable energy. Rajasthan has abundant potential of Solar power with best sunshine in the country. Technologies need to be updated for harnessing this potential. ❑

tem. Due to depleting water table agriculture load is very high in Rajasthan. This causes lot of financial burden on Discoms as this sector is subsidized. Though Daily load curve of Rajasthan is almost flat due to better load management, state experiences peaks in irrigation season of Rabi crop. In recent years Rajasthan’s effort to supply power without major load shedding were highly praised.

119

January - 2009

120

POWERGRID, a Navratna Public Sector Enterprise, is one of the largest transmission utilities in the world. POWERGRID wheels about 45% of the total power generated in the country on its transmission network. POWERGRID has a pan India presence with around 69,480 Circuit Kms of Transmission network. S.K. Chaturvedi, CMD, POWERGRID elaborates on the company’s growth, its financial achievements as well as its alliances.

Since 1992-93 to the present Fiscal year the company has grown ten folds. How do you rate this achievement and what do you think are the significant turning points that led your company to achieve this success? Since 1992-93, POWERGRID has registered growth of about ten times in asset base, eight times in turnover, six times in profit with incremental increase in manpower. This amplified productivity of organization can be attributed to consistent efforts on the part of employees, adoption of latest technologies, advancement in the field of Research and Development and moving ahead with a strategic vision constantly renewing and streamlining the systems, procedures and processes. At the same time engagement of a talented pool of work force achieved through motivation and encouragement towards an elevated level of commitment, have resulted in this manifold and multifarious growth.

121

Based on its impeccable performance in a short span of time, POWERGRID was recognized as the Miniratna Category–I PSE by Government of India w.e.f. October, 1998 and then recognized as a Navratna PSE in May, 2008. Further, POWERGRID was notified as Central Transmission Utility (CTU) in December, 1998 with the mandate for planning, co-ordination, supervision and control over complete inter-State transmission system. POWERGRID took lead role in attracting private investment into the transmission sector. The first Public-Private Partnership project with M/s Tata Power Ltd. for Transmission system associated with Tala HEP is under successful operation. For development of dedicated transmission systems for Independent Power Producers (IPPs), POWERGRID has established five Joint Ventures (JVs) namely, M/s Parbati-Koldam Transmission Company Limited, M/s Torrent POWERGRID Limited, M/s Jaypee POWERGRID Ltd., POWERGRID IL&FS Transmission Company Pvt. Ltd., M/s Teestavalley Power Transmission Company Ltd. Besides, POWERGRID has also facilitated establishment of 100% private owned company (Independent Power Transmission Company) for implementation of WRSS-II (B&C elements) transmission project through international tariff based

During the FY 2007-08, Company was listed on stock exchanges (BSE and NSE) through the Initial Public Offer (IPO) of 573.9 million equity shares of Rs. 10 each comprising 10% (ten percent) of fresh issue of existing paid-up capital along with disinvestment of 5% (five percent) of GoI’s shareholding in the Company. The IPO met with a resounding success, demonstrating investor’s confidence in the Company and its growth prospects. This has further enhanced company’s quest for excellence. In the post-issue scenario, holding of GoI is 86.36% of equity paid-up share capital of the Company. POWERGRID is able to maintain its growth of profit by diversifying into Telecom & Consultancy Business. Our revenue from Telecom was Rs. 126 Crore during FY 200708, a growth of 62% over last year (Rs. 78 Crore). Further, Company has realised revenue of about Rs. 250 Crore during FY 200708 as a consultancy fee from its various ongoing assignments. Can you provide details on the financial achievement s of POWERGRID during 200708 and the present year? Also, what are the future targets? POWERGRID has recorded an impressive

Further, POWERGRID has been entrusted by Government of India to develop associ-

financial performance during FY 2007-08. Turnover for the year grew by about 25% to Rs. 5,082 Crore. Similarly, Profit after Tax during the year increased to Rs. 1,448 Crore from Rs. 1,229 Crore in FY 2006-07, thereby registering a growth of about 18%. The

ated transmission systems for development of very large size Ultra Mega Power Projects (UMPP) approximately 4000 MW capacity each located at coastal locations and at coal pitheads such as Mundra UMPP in Gujarat, Sasan UMPP in Madhya Pradesh,

Company’s Gross asset base at the end of the financial year 2007-08 stood at Rs. 35,417 Crore as against Rs 29,015 Crore at the end of last financial year, an increase of about 21%. During FY 2008-09 till September, 2008, POWERGRID achieved a

Krishnapatnam UMPP in Andhra Pradesh, Tilaiyya UMPP in Jharkhand.

turnover of about Rs. 3,131 Crore and Net Profit of Rs. 702 Crore. Total fixed assets

competitive bidding.

January - 2009

of the company have grown to Rs. 37,240 Crore till September 2008. Government of India’s vision of “Power to All by 2012” is the driving force for all players in the sector. POWERGRID is closely working towards achieving this objective. As a part of this, we are envisaging an investment of about Rs. 55,000 Crore during XI Plan for creating requisite transmission infrastructure in the country matching with generation capacity addition under central sector including Ultra Mega Power Projects. With the Navratna status, we can now prioritize the projects as per requirement and accord investment approval for their expeditious implementation. What is the present installed capacity of POWERGRID? Does it adequately meet the present requirements? If not , what is the future plan to built its capacity to the complete level? A3:POWERGRID, the Central Transmission

ing Right of Way (RoW) for constructing transmission system is getting increasingly difficult. This necessitated creation of high capacity “Transmission Highways”, so that in future, constraints in RoW do not become bottleneck in harnessing natural resources. For meeting power demand in various parts of the country and for optimum utilisation of generation resources, development of a strong National Grid is a prerequisite, implementation of which has been taken up in a phased manner matching with generation capacity addition programme. Toward this, perspective transmission plan has been evolved for strengthening the regional grids and enhance the inter-regional power

●

18,700 MW has been established in the country, the capacity will be further enhanced to more than 37,000 MW by 2012.

2009. This gigantic transmission network is consistently maintained at an availability of over 99% through deployment of stateof-the-art Operation & Maintenance techniques at par with global standards. About 40-45% of total power generated in the

●

POWERGRID was the first Power Sector Utility to be certified for operating an Integrated Management System involving ISO: 18001 (Occupational Health & Safety Management System), ISO: 9001 (Quality) & ISO: 14001(Environment).

●

POWERGRID achieved another milestone during FY 2007-08 in its quest for quality and got certified to Social Accountability Standard, SA 8000:2001 after successful audit by British Standards Institution (BSI), India.

●

The World Bank has awarded POWERGRID “Green Award’ 2006" on the commendable work done in the field

Presently, National Grid with inter-regional power transmission capacity of about

What are the important Awards and Rewards achieved by Power Grid?

of sustainability and has also recognized

Continuously achieving the “Excellent” rating for the MOUs with Ministry of Power, since signing its first MOU in the year 1993-94. POWERGRID bagged the prestigious “MoU Excellence Award” for seven years, i.e. 1998-99, 1999-2000, 20002001 and continuously since 2003-04.

●

country wheeled through this transmission network. In our country, energy resources are dis-

January - 2009

Management System).

transfer capacity of National Grid.

Utility, owns and operates about 69,500 ckt kms of transmission lines at 800/765 kV, 400 kV, 220 kV & 132 kV EHVAC & +500 kV HVDC levels, 116 sub-stations with transformation capacity of about 77,200 MVA & inter-regional power transfer capacity of about 18,700 MW as on January 01,

persed unevenly: major Hydro resources being in North-Eastern & Northern Regions and Coal reserves mainly in Eastern Region. But the demand for power continues to grow all over the country. Further, acquir-

tor Utility and second company in the world to get certified for Publicly Available Specification (PAS) 99:2006 integrating the requirement of ISO: 9001 (Quality), ISO: 14001(Environment) and ISO: 18001 (Occupational Health & Safety

POWERGRID has been conferred upon six (6) National Awards for meritorious performance, instituted by Ministry of Power, Government of India consecutively for three years 2004-05, 2005-06 and 2006-07 in Transmission Sector for system availability and early project implementation categories.

●

POWERGRID became the first Power Sec-

122

For meeting power demand in various parts of the country and for optimum utilisation of generation resources, development of a strong National Grid is a prerequisite, implementation of which has been taken up in a phased manner matching with generation capacity addition programme. POWERGRID’s “Corporate Leadership in sustainability” in its report “Strengthening Institutions for Sustainable Growth – Country Environment Analysis for India”: August, 2007. ●

Received “Golden Peacock National Quality Award (Runners up)” for the year 2004, for maintaining quality standards.

Government of India’s confidence in POWERGRID’s capability and the ability to discharge enhanced responsibilities. These awards and certifications are very significant for POWERGRID as such awards and certificates act as a token of appreciation and help us create new benchmarks of excellence. They also inspire us for enhancing our future performances and motivate us to work hard to retain our position in

POWERGRID’s initiatives for e-governance were recognized at National level and the company received Bronze medal for “In-house development of Web based Inspection Call Management System” under National Awards for E-Governance

●

in last quarter of 2009-10.

Awarded “Safety Award” by Institution of Engineers (India) for recognition of the Safety initiatives adopted in practice in the Safety. Recognizing the contribution of POWERGRID for overall development of power sector, it has been conferred upon ‘Navratna’ status by Government of India in May, 2008, the highest honor for a Public Sector Enterprise. This reflects

123

project. Total estimated cost of project is s1900Crore and project is likely to be completed in 2011. ●

Transmission system associated with 1100 MW Sugen generating project at Surat (A Joint Venture With Torrent Power Limited): The JVC has been granted transmission license by CERC and developing transmission system matching generation schedule. Total estimated cost of the project is Rs.350Crore and project is likely to be commissioned

●

Transmission System Associated with 1000 MW Power Project at KarchamWangtoo Hydro Project H.P. (A Joint Venture with Jaiprakash Hydropower Limited). The JVC has been granted transmission license by CERC and construction work is going on. Total estimated cost of project is Rs880Crore and project is likely to be completed by 2011.

Transmission System associated with 740MW Gas based project in Tripura (A Joint venture with ONGC Tripura Power Corporation). JVC has applied for transmission license, other activities are going ahead so that project is completed matching with commissioning of power

development of project on JV route.

2007-08 scheme for “Exemplary usage of ICT by PSU” category. ●

●

Can you elucidate on the Partnerships (JVMoUs) made in the recent past by POWERGRID and what is the growth that it is witnessing since going for this mode of diversification? POWERGRID signed MOU with promoters of following five generation project in presence of Minister of Power on 23.03.06 for

Transmission System Associated with 1200 MW Teesta – III HEP Sikkim (A Joint Venture With Teesta Urja Limited). JVC has applied for transmission license which is likely to be granted soon. Project is likely to be commissioned ahead of generation schedule. Total estimated cost of project is Rs708 Crore and project is likely to be completed in end of 2011.

future. They provide acknowledgement to the contribution that POWERGRID is making in the field of Power Sector at National and International levels.

● ●

●

Transmission system associated with 1500MW Hazira Gas based project (A JV with Essar Power Ltd.): The generation project is struct due to non-linkage of gas. The transmission system would be taken after work on generation project has begun.

●

In addition to above five MOU based projects POWERGRID had formed following two more JV companies for construction of transmission system.

●

Powerlinks Transmission Limited (A JV With TATA POWERS Ltd.): Specific Transmission Lines associated with Tala HEP (Bhutan) This JV is the first joint venture to be formed by POWERGRID. POWERGRID holds 49% equity whereas Tata Power holds51%. Selection of JV partner was through global bidding. Transmission system has been completed and is under commercial operation .JVC is paying dividend from very first year of commercial operation. ❑

January - 2009

INSTALLED CAPACITY AS ON 31-12-2008 (FIGURES IN MW) Sector

Hydro

Thermal

Nuclear

R.E.S.

Total

Coal

Gas

Diesel

Total

2067.9

420.0

0.0

420.0

0.0

32.3

2520.2

Private

0.0

Central

116.9

913.4

0.0

913.4

0.0

1030.3

2184.8

1333.4

0.0

1333.4

0.0

32.3

3550.5

State

Total

January - 2009

(MNRE)

124

Orissa The Power Surplus State Orissa stunned many when it privatised the distribution work. It did stun many more when it reduced T&D losses from 62% to 32% under the leadership of Surya Narayana Patro, Minister for Energy, Government of Orissa. Even then there are hiccups. Still, the state surely is surplus in power and it is riding it on with ventures abundant and a focused vision.

Orissa is the first state to undertake power sector reforms in the country in the year 1996. Utilities in the power sector are not dependant on budgetary support from the government and there has been no hike in retail supply tariff since 2000-01. The electricity tariff in Orissa is one of the lowest in the country. While 500 Mw is sourced through hydro power generation, 800 Mw is obtained from thermal power. 13 MoU signed independent power producers (IPPs) are making good progress to produce 17,245 mw of power. The state will get 25% power at regulated price from these power plants. The first unit of 600 mw capacity of M/s Sterlite energy will be commissioned during September, 2009 and 150 mw of M/s Bushan Energy Ltd. will be commissioned during march 2009. The state is drawing 630Mw from Central pool and 130 Mw from captive power plants (CPPs). Since the average demand in summer is likely to increase to 2250 Mw, this will require sourcing about 200 Mw to 250 Mw additional power. Demand for electricity is increasing rapidly in the state as stated below in view of massive industrialization and rural electrification.

OPGC Orissa Power Generation Corporation (OPGC) also recorded good generation of 3047 MU during 2007-08 and achieved Plant Factor of 82.6% from its 1st and 2nd units of capacity 210 MW each. It also has moved ahead for its expansion project by way of construction of 3rd and 4th units of capacity 600 MW each.

OHPC Orissa Hydro Power Corporation (OHPC) achieved a record generation of 8060 MU during 2007-08. During the year 2008, OHPC commissioned the 7th and 8th units of Balimela Power house of capacity 75 MW each. OHPC has identified to set up 3 nos. of potential hydro projects namely Sindol-I, II & III with total Capacity 300 MW.

GRIDCO GRIDCO, the bulk power supplier, has been able to earn Rs 1124 crore by sale of surplus power and earned a profit of Rs 566 crore in 2007-08 and narrowed down its accumulated previous losses.

ecently, the Orissa government chalked out plans to source 380

Mw additional power to meet the peak summer demand starting from March. It also announced that there will not be any power cut during the coming summer season. Energy minister Surya Narayana Patro had said that the present demand of the state is about 2060Mw and the state is able to meet the demand fully. 125

January - 2009

OPTCL

(OHPC) and Orissa Mining Corp (OMC), is setting up a 2,000 Mw plant near Kaniha with an investment of Rs 8,000 crore.

OPTCL, the State Transmission Utility, has taken up the commissioning work of 18 nos. Grid Sub-stations and Transmission line during 2008-09 for quantitative and reliable power supply in the state. The main thrust is to eradicate the low voltage problem in some remote and non-remunerative pockets of the state.

●

Other Initiatives ●

Orissa Thermal Power Corporation Ltd (OTPCL) a joint venture company floated by state-owned Orissa Hydro Power Corp

An Ultra Mega Power Plant (UMPP) of 4000 MW capacity with state share of 1300 MW is proposed to be set up by PFC at Bedhabahal in Sundergarh district. NTPC has moved to set up 4 Nos. power projects in the state namely; 3200MW NTPC Darlipali at Sundergarh district, 3200 MW NTPC Gajamara at Denkanal district, 2400 MW NTPC, Deranga at Angul district and 1320 MW NTPC, TTPS Expansion projects at Angul district.

2005 2006 2007 to 06 to 07 to 08 Demand 1558 1726 1975 (in MW) Availability 1862 2149 2358 (in MW)

2008-09 (upto Nov-08) 2142 2060-2360* (*with CGPs support)

●

27 MoUs have been signed with private developers for setting up small hydro projects in the state.

●

OERC has released a policy guideline on pricing of surplus power from CGPs to optimize of generations from CGPs and encourage CGPs to supply of surplus power to the state. ❑

LIKELY CAPACITY ADDITION DURING 11TH PLAN FOR THE STATE : - ORISSA

Project Name

Type

Status

Installed

Capacity

Benefits

Commissioned/

Last Unit

Capacity

Addition

slipped

Commissioning

During

during

Date/

XIth Plan

state

2007-2012

(Likely Date of

(MW)

Commissioning)

CENTRAL-SECTOR *Teesta ST.V

510.00

106.89

COMM 510.00

28.03.2008

Kahalgaon 6,7

1000.00

49.44

COMM 500.00

16.03.2008

*Farakka ST-III

500.00

107.66

(2010-2011)

*Nabinagar JV R

500.00

107.66

(2011-2012)

CENTRAL-SECTOR TOTAL:- 371.65 STATE-SECTOR Balimela ST-2

150.00

COMM 150.00

27.03.2008

STATE - SECTORTOTAL:- 150.00 PRIVATE-SECTOR Sterlite Energy

2400.00

600.00

(2009-2010)

PRIVATE-SECTOR TOTAL:- 600.00 GRAND-TOTAL:- 1121.65 Note :- U - under construction projects C - construction yet to start (loa to be placed) * Shares from central sector projects for which m.o.p. Orders are yet to be issued are tentative January - 2009

126

127

January - 2009

From the Central Sector, the following were the Top 5 corporations in terms of Total Installed Power Generation Capacity. Figures are in MW.

National Thermal Power Corporation: 28333.99 (Coal- 22810 & Gas – 5523.99) Nuclear Power Corporation of India: 4120.00 (Nuclear) National Hydroelectric Power Corporation: 3673.00 (Hydro) Damodar Valley Corporation: 3244.00 (Coal- 3100.00 & Hydro – 144.00) Neyveli Lignite Corporation Limited: 2490.00 (Coal) Source: Central Electricity Authority

January - 2009

128

V Central Sector installed power generation capacity according to the Central Electricity Authority is 48970.99 MW as on 31st December 2008. With National Thermal Power Corporation playing the lead, the CEA has identified 11 other corporations which are playing a vital role in lending this credible figure of MegaWatts to the Central sector. While overall Coal still leads in generation with 29620 MW, Hydro comes next with 8592 MW. Thermal, which includes coal, Gas and Diesel totals to about 36258.99 MW.

The contribution towards Nuclear energy is only through Nuclear Power corporation of India while Renewable Energy (MNRE) has no contribution from the Central Sector.

Further to the statistics provided by CEA, we take a look at each of the top installed power generation corporations in the central sector.

129

January - 2009

NTPC, the largest power Company in India and among the world’s largest and most efficient power generation companies having even occupied 411th place on the Forbes list of World’s 2000 Largest Companies for the year 2007, is going great guns. The Corporation is and has been playing a pre-eminent part in strengthening the powerbase of the country’s economic growth. R.S. Sharma, CMD, NTPC speaks to P R Subas Chandran, our editorial associate, about NTPC’s current position, its future plans, eye on other sources of energy, AT&C losses and the challenges faced by the corporation.

January - 2009

130

NTPC’s 11th plan targets of 22430 MW suggest that you will be more than 60 percent share of the central power pool. How are going to meet this massive capacity target? Aligning its corporate strategies to national priorities, market dynamics, environment protection, social responsibility and ethics, NTPC has consistently demonstrated high performance. NTPC’s growth and performance so far has emboldened it to think big and think integrated. In the multi-project implementation scenario, NTPC follows an ‘Integrated Project Management & Control System’ from concept to commissioning, which has been the key to our success. This system integrates the Engineering, Contracting and Executing groups to ensure coordinated and timely output. Further, the project monitoring is done through a structured mechanism so that issues can be flagged timely for early resolution. NTPC has evolved as an organisation which has developed and implemented the projects with exacting schedules. The project implementation skills of NTPC have been globally recognised and two of its projects have been given the prestigious

project management and monitoring solutions and is integrated with the supplier as well. What are the main strategies planned by NTPC for the future preparedness of India in terms of “Power for all”? NTPC’s vision is to become “a World class integrated power major, powering India’s growth, with increasing global presence”. With its sound business concept and strong management team, it sees itself as significantly contributing towards the economic development of the country. We have a target of taking our generating capacity from the present level of nearly 30,000 MW to 50,000 MW by 2012 and 75,000 plus by 2017. This forms a major part of the country’s capacity addition programme to meet the power need. We intend to have a multi-fuel diverse portfolio of generating capacity which includes Hydro, Nuclear & Renewable Energy Sources apart from Coal and Gas. Underpinning the fuel security for our power plants, we will have presence in Coal Mining, Natural Gas / LNG value chain too. With the opportunities thrown on its way by Electricity Act 2003, NTPC plans an increasing presence in the power trading and

IPMA Award for Excellence in Project Management – Simhadri Project in 2005 and Vindhyachal-III Project in 2008.

distribution segment also.

NTPC is in the process of setting up a Central Project Monitoring Centre for monitoring of project implementation activities. We have also started, on pilot basis, on-line web based project monitoring system for our Dadri unit.

Partnership in Excellence (PIE) initiative, where many projects belonging to the State Electricity Boards were helped by NTPC to improve their performance.

This pilot project is a step in the direction to have a real time web-based system to provide simultaneous and integrated

131

As part of its role towards sector support, NTPC contributed significantly through the

NTPC has also been actively involved in the Government of India initiatives like Accelerated Power Development and Reform Programme (APDRP) for reforms in distribution sector and bringing about commer-

cial viability in the power sector and Rajiv Gandhi Gramin Vidyutikaran Yojana (RGGVY) for developing rural infrastructure and take up electrification of rural households through its subsidiary NESCL. What are the main challenges faced by NTPC on date and what according to you could be a strategic solution of each of them? The major challenge pertains to supply of equipments, which includes limitations with respect to main plant as well as manufacturing capability in the area of Balance of Plants such as Coal handling plants, Ash handling plants, Cooling Towers, Chimney etc.

NTPC has ventured in to coal mining and have got eight coal blocks from the Government of India including two blocks to be developed in joint venture with Coal India Ltd. By 2017, NTPC targets to source 2025% of its coal requirement from captive mines.

The major issues are thus relating to equipment supply in a timely and sequential manner, adequate resource deployment by the Construction and erection agencies and having right number of skilled persons. With continuous follow-up, with our suppliers and contractors, we have been able to overcome most of these constraints.

January - 2009

Acquisition of land requirement for the new power projects is also a challenge being faced by us. Land being the key input, its timely availability is vital for project implementation. We have also formulated Initial Community Development Policy and have also created a specialized Land Acquisition Group at our Corporate Centre. NTPC has taken a number of initiatives for involvement of states for facilitation of land acquisition. We are setting up / adopting ITIs near the projects. We are involving credible institutions like TERI etc. in R&R activities. As its fleet of projects increases, ensuring adequate fuel supply to the power projects is another challenge faced by NTPC.

with Coal India Limited to ensure adequacy, reliability, quality and appropriate pricing of coal supplies to our power plants. NTPC has ventured in to coal mining and have got eight coal blocks from the Government of India including two blocks to be developed in joint venture with Coal India Ltd. By 2017, NTPC targets to source 2025% of its coal requirement from captive mines. International Coal Ventures Limited, a JV between NTPC, RINL, SAIL, NMDC & CIL is being incorporated for sourcing coking coal and thermal coal from abroad. Further, NTPC on its own is also scouting for coal mines abroad in countries like Indonesia. Mozambique etc. What are your plans in the area of HYDRO?

As such while focusing on rapid capacity

The total hydro potential of the country is

growth plans, NTPC is also aware of the issues and challenges of making available the fuel for its power plants to retain its cost and performance leadership.

assessed to be about 1,50,000 MW of which about 25% has been tapped so far.

We have conceived and initiated an array of strategic fuel security measures. We have initialed a model long term coal supply agreement for a period of twenty years

and is unaffected by volatility in fuel prices. Hydro plants also provide better load management options. Accordingly, NTPC has forayed into Hydro Power development and

Hydro power generation is renewable and environmentally benign source of energy

construction activities are in full swing at the Koldam Hydro Electric Power Project (800 MW), Loharinag-Pala Hydro Electric Power Project (600 MW) and Tapovan Vishnugad Hydro Electric Power Project (520 MW). As per our Corporate Plan, NTPC plans to have 9000 MW of Hydro Power projects in its portfolio by 2017. NTPC is certainly not limited to just 9000 MW, but is pursuing with states for allocation of more hydro projects and would be willing to implement them subject to establishment of techno-economic viability. NTPC is also willing to look at hydro projects in Bhutan, Nepal etc. Comment on your plans to enter into the renewable source based power generation? To meet the power need of the country, fossil fuel based power will remain the predominant mode in the coming decades. NTPC has devised its corporate plan in that line. However NTPC also envisages having a well balanced and diversified fuel mix. By 2017, NTPC plans to have at least 1000 MW through renewable sources of energy such as wind, bio-mass, solar etc. NTPC has signed a MoU with ADB, GE Energy Financial Services, Kyushu Electric Power Company and Brookfield Renewable Power to undertake renewable power generation projects. NTPC has also initiated the bidding process for setting up a 100 MW wind farm. We have also signed an MOU with Karnataka for setting up 500 MW of wind projects. Further, NTPC has taken an initiative for fast-tracking its solar power development

January - 2009

132

programme – we shall be setting up 15 MW solar capacity by 2012 and 50 MW capacity by 2014. NTPC shall also review its Renewables portfolio as a part of framing its new Corporate Plan which is in the process of formulation. Please elaborate on the projects recently completed and the envisaged future ones. In the 11th plan, NTPC has so far added 2490 MW generation capacity. The projects which have been completed so far are 500 MW at Kahalgaon, 1000 MW at Sipat, 250 MW at Bhilai and 740 MW at Ratnagiri Gas and Power Private Limited. 18180 MW capacity is under construction. This include 500 MW at Kahalgaon, 250 MW at Bhilai, 1000 MW at Dadri, 500 MW at Korba, 1980 MW at Sipat, 500 MW at Simhadri, 500 MW at Farakka, 1500 MW at Aravali Power Company private Ltd. (Jhajjar), 250 MW at Bongaigaon and 11200 MW at other locations. Planning Commission presents a dismal picture on power scenario saying that a whopping 40% of generated power is lost due to Aggregate Technical & Commercial (AT&C) loss. In other words 29894 MW is lost on account of AT&C loss of 11,957.60 MW (40%) of total installed power generation capacity . It means there is a recurring financial loss of Rs. 59,788 crore every year. The Eleventh Five-Year Plan (2007-12) proposed a capacity addition of 22430 MW and 40% of AT&C loss will be 8972 MW costing Rs. 44860 crore. In other words a colossal AT&C loss works out to be Rs. 1,04,648 crore (11,957.60+8972=20,929.60 MW @ Rs. 5 crore / MW) which is equal to the toal annual budget of Andhra Pradesh. Can a poor country like India afford such avoidable astronomical loss? What are your comments? 133

It is true that AT&C losses in the country are about 35%, where by a significant portion of the generated power is lost or goes unaccounted. This is largely on account of old and outdated sub-transmission and distribution infrastructure and heavy commercial leakages. The Government of India has undertaken initiatives like the APDRP program to provide incentives for reduction of losses by the state distribution utilities. These programs have started showing results and many states have significantly reduced the AT&C losses. Recently, GoI has come out with a Restructured- APDRP program. NTPC is a lead assessor for many of the APDRP schemes. Concerted efforts and actions are required for reducing the distribution losses to achieve turnaround of distribution sector. Reduction in AT&C losses and consequently improved health of the distribution companies shall also contribute to reduced realization risk for generators. How do you see Indian power sector meeting the challenge of GHG mitigation? I will emphasize about NTPC’s approaches and efforts for GHG mitigation. NTPC’s pro-

active approach in promoting efficient and environmentally sustainable utilization of coal makes it one of the cleanest power generators in terms of CO2 intensity. An analysis of CO2 intensity of the largest power generating companies in the world reveals that NTPC is among the lowest emitters in terms of CO2 emission per unit of power generation and is at par with the leading global utilities, including those in the US and Europe. NTPC has taken concrete steps to intensify its initiatives on the front of technologyenvironment interface. In this context, NTPC has adopted a vision for sustainable growth - “Going Higher on Generation, lowering GHG intensity”. Continuous efficiency improvement, through technological initiatives and up-gradation and promoting environmentally sustainable power development, has always been high in NTPC’s agenda. Currently several 660 MW supercritical units are under implementation by NTPC and India’s first super critical power generation unit will be commissioned by NTPC at Sipat by the end of fiscal 2009. Further NTPC plans to introduce 800 MW Super critical units and shall also examine January - 2009

the feasibility of introducing ultra-super critical units based on Indian coal. NTPC’s existing divisions for Research and Development and Energy Technologies are being merged into NTPC Energy Technology Research Alliance (NETRA) and shall look at research activities in areas like carbon capture, power plant efficiency improvement, waste heat utilization, flue gas conditioning, Coal Gasification Technology for commercial use, reducing cost of harnessing solar energy, LED lighting etc. Further, NETRA shall continue to support NTPC stations through applied research. NTPC sets aside up to 1% of its distributable profit for research and technology development, including 0.5% earmarked for research projects and technology initiatives for sustainable energy development. Further, More than 18 Million trees have been planted in and around NTPC’s power projects throughout the country. The afforestation has not only contributed to the aesthetics but also has been serving as a sink for the pollutants released from the station and thereby protecting the quality of ecology and environment. What are the new JVs? Explain the details of much awaited ‘NTPC BHEL Power Projects Private Limited’ and ‘BF NTPC Energy Systems Limited’? NTPC has formed following Joint Ventures in the year 2008-09 ●

●

NTPC BHEL Power Projects Private Limited BF NTPC Energy Systems Limited

●

National Power Exchange Limited

●

Nabinagar Power Generating Company Limited

●

Meja Urja Nigam Private Limited

January - 2009

The proposed Joint Ventures include: ●

●

JV for power generation through Renewable Energy Sources JV with NPCIL for setting up Nuclear Power Projects

NTPC, ADB, GE Energy Financial Services, Kyushu electric Power Company Inc. and Brookfield Renewable Power Inc. have signed an MOU to form a Joint Venture Company for undertaking the renewable power generation activities. Majority stake (40%) in the JV Company shall be held by NTPC and 15% stake shall be held by each of the other partners. NTPC envisages forming a Joint Venture Company with majority stake (51%) by NPCIL and 49% by NTPC. We are in discussion with NPCIL on the matter. The Joint Venture Company “NTPC BHEL Power Projects Private Limited” has been formed with equal equity participation by both NTPC and BHEL, to take up work related to Engineering, Procurement & Construction (EPC) and Manufacturing & Supply of equipment for power plants and other infrastructure projects in India and abroad. On the manufacturing side, the company is looking at various options and tentatively plans to have manufacturing facility includ-

ing BOP operational before the end of 11th plan. The Business Plan for Phase-I including facilities fro AHP, CHP has been finalized and is under approval of their Board. NTPC has also formed a Joint Venture company namely BF NTPC Energy Systems Private Limited with Bharat Forge Limited to initially take up manufacture of castings, forgings, fittings and high pressure pipings required for power and other industries, Balance of Plant (BOP) equipment for the power sector etc. You have been maintaining an enviable PLF which touched 92.24% (2007-08) all time high. Could you unravel the technique so that the rest of the players can adopt? NTPC PLF has now surpassed all known benchmarks of power utilities Worldwide of the size of NTPC which has about 30, 000 MW in over 110 units. The operations strategy consists of multiple initiatives taken to tackle the impediments and enhancing efficiency. The strategy can be divided into four broad approaches: Institution Building: This consisted of initiatives taken for creation/ strengthening of building blocks aimed at increasing

134

knowledge content and process optimization. Formation of knowledge teams, technology projects, condition monitoring focus, Reliability Centered Maintenance system incorporation, MRO industry initiative, competency- role linkage, efficiency improvement initiatives, fuel group restructuring with separate focus on coal and gas, etc have been some of the efforts. Emphasis has been given to competency development of Human resources by providing and promoting training in the related field. Resource Availability: This consisted of initiatives taken to sustain and improve the supply of resources like fuel, spares and services. Coal/ gas imports, modular spares purchase, long term overhauling planning, services/ spares preparedness planning, 105% plant capacity bottlenecks removal, etc. have been some of the efforts. Follow up: This consists of initiatives taken to effectively monitor the station processes so that issues arising can be resolved systematically and timely. These also act as a control tab over other initiatives. Periodic regional operations performance reviews, PEER reviews, Technical Audits, Real Time Overhaul guidance, Efficiency gap removal follow-up etc. are some of the efforts.

operations environment and anticipated business challenges. NTPC sets stretch targets for itself. Recently we have resolved to achieve: Zero forced outage, Zero boiler tube leakage, Zero tripping and Zero accidents in our stations. What are the recent achievements of NTPC? On the operational and financial front NTPC has been performing consistently with characteristic efficiency and profitability. During the year 2007-08, the Company crossed some highly impressive markers. To mention a few, our Gross revenue crossed Rs. 400 billion mark (Rs. 400.113 billion); Power generation crossed 200 billion mark (200.8 billion Units); Capacity utilization (PLF) of coal based power stations crossed the 90% mark (92.24%); Net profit crossed Rs. 70 billion mark (Rs.74.148 billion); Capex crossed Rs. 85 billion mark (Rs. 86.21 billion); and Contribution to central exchequer crossed Rs. 55 billion mark (Rs. 57 billion). On the commercial front, we were able to realize 100% of the amount billed for the

fifth year in a row. In terms of Station performance, 10 of our stations achieved a PLF of over 90% including 4 whose PLF was above 95%. Apart from the above, NTPC also added 1,740 MW in the year 2007-08 and a capacity of 750 MW has been commissioned in the year 2008-09 taking the total capacity commissioned in the 11th Plan to 2490 MW. In the current financial year 2008-09 till January 2009, record generation of 169.26 Billion Units, as against 165.30 Billion Units during the same period last year has been achieved registering an increase of 2.4%. NTPC stations recorded the highest ever monthly generation of 19.18 Billion units in January 2009. NTPC has added 2000 MW to its commercial capacity so far during the year, taking total commercial capacity to 27,912 MW. Further in the month of January 2009, NTPC recorded its highest ever monthly generation of 19.2 billion units. In the same month eight NTPC stations achieved more than 100 percent PLF. â?&#x2018;

Information Enablement: This consists of initiatives taken to improve the information flow and data analysis and have been a great help in facilitating management decisions. IT enablement of planned outage, generation and other MIS has been a key initiative. Introduction of outage preparedness index, station performance evaluation matrix, knowledge sharing through regular workshops, best practice inputs, etc are few other strategic initiatives. The present management system and style has been the result of constant metamorphosis over the years in light of prevailing 135

January - 2009

six new sites including those that will be identified for the imported Light Water Reactors.’ NPCIL is unique in having built, under one roof, comprehensive capability in all facets of nuclear technology namely – site selection, design, construction, commissioning, operation, maintenance and life extension of Nuclear Power Plants.

The objective of incorporating Nuclear Power Corporation of India (NPCIL) as a Public Limited Company was to operate the atomic power stations and implement the atomic power projects for the generation of electricity in pursuance of the schemes and programmes of Government of India under the Atomic Energy Act. With the limited resources of coal and oil available in the country and with growing global concerns of green house gases generated by fossil fuel fired stations, nuclear power is being looked at to play a greater role in medium and long term perspective. And NPCIL is playing the most important role in this front. NPCIL, under the support of Department of Atomic Energy, is setting new benchmarks in construction time and operations of nuclear power reactors.

January - 2009

n the annual General meeting held Au gust last year, Dr SK Jain, CMD, NPCIL had courageously mentioned that the

company had been going through a rough patch during the last year with the generation and profits falling for the first time in many years. He said, ‘However, the resilience that is the hallmark of a strong company like NPCIL, has helped in tiding over the temporary crisis. During this period the generation from the operating units had to be adjusted to match the supply of Uranium. As a result, the revenues were less even though the units operated at availability factors in excess of 80 %. In spite of this,

the Company was in a position to pay dividend to the Government. The heartening fact is that the ebb has been crossed and the good times are round the corner. I am confident that fuel supply is soon to improve and we will see increased capacity factors and quick completion of the three new units which had been waiting for fuel. The recent initiatives taken by the Government has further rekindled hopes of an end to the nuclear isolation and open up possibilities of nuclear commerce with the world. We are looking forward to a very busy year ahead, where activities related to launching our indigenous 700 MWe units will take priority and of course exploration of collaboration avenues with nuclear partners from other supplier countries is expected to reach a peak. If everything goes as per plans we should be able to start work on

NPCIL has at present 17 Nuclear Power Reactors of 4120 MWe in operation and 5 Nuclear Power Reactors of 2660 MWe under construction. NPCIL has plans for significant capacity addition. Government of India has contemplated plans to build series of reactors based on technical co-operation with France, Russian Federation and USA at coastal locations in the country. Four such locations are currently under consideration of the Government of India.

Noteworthy Successes The most noteworthy was the successful commissioning of Kaiga Unit-3 within five years. The uninterrupted operation of Kaiga Unit-2 for 529 days not only created another benchmark among all Heavy Water Reactors worldwide, but also demonstrated the insatiable hunger for achieving excellence Completion of Life Extension work on Narora Unit-l and its successful connection to the grid was a testimony of the maturity in handling such intricate work. Construction work at the 1000 MWe units at Kudankulam are progressing at a fast pace and system commissioning has already begun in the first unit. Progress in the second unit is closely following the first. After getting the approval of the Government of India for four 700 MWe units, the tendering of long delivery items and site preparations have been stepped up. Site

136

work is likely to start by year end at Kakrapar, where two of the units are to be set up. The remaining two are to come up at Rawatbhata in Rajasthan. Additional sites for the expansion programme are under active consideration of the Government.

payment system, publishing of tenders on the website. Considering the fact that Procurement and Contract Management rules are frequently challenged due to ambiguous and primitive conditions, NPClL took the giant step to revolutionise the Contract

today in New Delhi to set up Nuclear Power Reactors at Jaitapur in Maharashtra. This MoU provides for engagement of NPCIL and AVERA into the discussion for preparing the contract and related detail of setting up of two to six 1650 MWe EPRTM reactor units

The Company has recognised the necessity of developing indigenous capability to support this growth and has initiated the setting up of facilities to manufacture major components by the leading industry partners. In the diversification front, action is being taken to enhance the capacity of the

Conditions in tune with the current domestic and international market trends, This initiative has been widely appreciated in the Government and Public Sector.

including life time fuel supply for these reactors. This MoU comes in wake of the bilateral agreement signed between India and France on 30th September, 2008, wherein two countries agreed to work together for the development of peaceful use of Nuclear Energy.

Kudankulam Wind Farm of 10 MWe by an equal amount. NPCIL had been looking for opportunities for investing in Hydel to support the peak demands. An MOU has been signed with Tehri Hydro Electric Development Corporation for set up of Pump Storage Scheme at two potential sites. Maharashtra Government has already given its approval for the proposed sites. The Company maintained its contact with the International community through the WANO and IAEA to take maximum benefit and make contributions through expert missions. This has resulted in accumulation of 275 reactor years of safe operation. The

CSR The Company also attaches a high value to its Corporate Social Responsibility and has been successful in providing the basic infrastructure support to the neighbourhood. The Environment Stewardship Programme aims at identifying the rare species and providing valuable information to the public.

MoUs NPCIL and AREVA Recently, NPCIL and AREVA, France signed a Memorandum of Understanding (MoU)

NPCIL and KAZATOMPROM NPCIL Chairman & Managing Director, S.K.Jain and KAZATOMPROM President Moukhtar Dzhakishev, also signed in New Delhi a Memorandum of Understanding to strengthen their partnership. The signed MOM reflects in interest of the two companies in joint cooperation on a wide variety of nuclear energy subjects, including mining for natural uranium, deliveries of Kazakh natural uranium products for Indian nuclear industry, and personnel training. â?&#x2018;

high quality standards adopted in NPClL has been well acknowledged by other organisations. On special request the QA Units located in different parts of the country have been providing consultancy services to the Defence Department, BARC. L& T, BHAVINI, BHEL and State Electricity Boards. According to Dr Jain, the total installed capacity of NPCIL will be 7000 mw by March 2012 and it will be at a higher plant load factor.

Transparency Major emphasis has been given to maintaining transparency in all areas of functioning. This has lead to introduction of e137

January - 2009

Highlights January 2009 ●

Initially, on incorporation, NHPC took over the execution of Salal Stage-I, Bairasiul and Loktak Hydroelectric Projects from Central Hydroelectric Projects Control Board. Since then, it has executed 13 projects with an installed capacity of 5175 MW on ownership basis including projects taken up in joint venture. NHPC has also executed 5 projects with an installed capacity of 89.35 MW on turnkey basis. Two of these projects have been commissioned in neighbouring countries i.e. Nepal and Bhutan.

conferred “Excellent rating” to NHPC for MoU 2007-08

vestment. Department of Public Enterprise, Govt. of India recently conferred prestigious Miniratna status to NHPC.

●

period. 8 projects of 5861 MW are awaiting clearances/Govt. approval for their implementation. Detailed Projects report are being prepared for 11 projects of 5400 MW and 1 project of 11000 MW are at Survey & Investigation Stage. Since its inception in 1975, NHPC has grown to become one of the largest organisations in the field of hydro power development in

NHPC Power Stations together achieved an aggregate generation of 705 million units against the target of 537 million units in January 2009.

On-going Work Presently NHPC is engaged in the construction of 11 projects aggregating to a total installed capacity of 4622 MW . NHPC has planned to add 1970 MW during the 10th Plan period and 5837 MW during 11th Plan

Department of Public Enterprises has

●

A possibility for setting up a Joint Venture Company to develop hydroelectric projects in Orissa and also for taking up renovation and modernization of two units (2 x 37.5 MW) of Burla Power Station on river Mahanadi in Orissa, is being explored.

●

Ministry of Power has conveyed the Government sanction to the revised cost estimate of 330 MW Kishanganga Project in Jammu & Kashmir on 14.01.2009.

●

Computational Fluid Dynamics (CFD) Laboratory has been setup at Corpo-

ational Hydroelectric Power Cor poration Limited (NHPC), A Govt. of India Enterprise, was incorpo-

the country. With its present capabilities, NHPC can undertake all activities from concept to commissioning of hydroelectric projects.

rated in the year 1975 with an authorised capital of Rs. 2000 million and with an objective to plan, promote and organize an integrated and efficient development of hydroelectric power in all aspects. Later on NHPC expanded its objects to include other

The Audited half yearly financial results of the Company for the half year ending 30.09.2008 was adopted by the Board in its 38th Audit Committee Meeting held on 28.11.2008. The company has registered a net profit of Rs. 1103 crore against Rs.735

sources of energy like Geothermal, Tidal, Wind etc.

crore for the corresponding period last year. practices as a strong people centric orgaNHPC was awarded with the “SCOPE Meri- nization.

At present, NHPC is a schedule 'A' Enterprise of the Govt. of India with an authorized share capital of Rs. 1,50,000 Million . With an investment base of over Rs. 2,20,000 Million Approx., NHPC is among the top ten companies in India in terms of in-

January - 2009

torious Award for Best Practices in Human Resource Management for the year 200607” in recognition of its constant endeavours in incorporating the best HR

rate Office to facilitate the design and analysis of hydro power systems & its components. ●

MoU has been signed between NHPC and Government of Arunachal Pradesh on 23.01.2009 for construction of NHPC College of Science & Technology, Arts & Commerce at Tawang in Arunachal Pradesh.

NHPC was also conferred with the “Jury Award” for environmental upgradation at the “India Power Awards 2008” in recognition of its achievement in the field environmental upgradation. 138

Looking Ahead - Plan XI Project

Country/State

Teesta - V

Capacity

Total Capacity

Status

Sikkim

3 * 170

510

Commissioned

Madhya Pradesh

8 * 65

520

Commissioned

Parbati - II

Himachal Pradesh

4 * 200

800

Under Construction

Sewa - II

Jammu & Kashmir

3 * 40

120

Under Construction

Assam

8 * 250

2000

Under Construction

Uri-II

Jammu & Kashmir

4 * 60

240

Under Construction

Chamera-III

Himachal Pradesh

3 * 77

231

Under Construction

Teesta Low Dam - III

West Bangal

4 * 33

132

Under Construction

Teesta Low Dam - IV

West Bangal

4 * 40

160

Under Construction

Parbati - III

Himachal Pradesh

4 * 130

520

Under Construction

Nimmo-Bazgo

Jammu & Kashmir

3 * 15

Under Construction

Chutak

Jammu & Kashmir

4 * 11

Under Construction

Total

5322

Omkareshwar *

Subansiri (Lower)

* NHDC - A Joint venture between NHPC & Govt. of Madhya Pradesh Updated On :- 11/04/2008

Performance 2007-08 ●

Highlights

Commissioned three projects namely the 520 MW Omkareshwar (JV) in Madhya Pradesh, 390 MW Dul Hasti in J&K and 510 MW Teesta Stage-V in Sikkim.

●

erated during previous corresponding year, thereby registering an increase of 13.5 %. Implementing India’s largest hydroelectric project, the 2000 MW Subansiri Lower Project in Arunachal Pradesh.

●

Plans to become 10000 MW plus company by 11th Plan.

139

●

Achieved an all time high sales turnover of Rs. 2,311 crore as against Rs. 1,963 crore during the previous year.

●

Recommendation of PIB for Govt. sanction and TEC of CEA obtained for the 3000 MW Dibang Multipurpose Project. Dr.

Crossed profit figure of Rs. 1000 crore and installed capacity of 5000 MW. Registered a net Profit of Rs. 1,002 crore against Rs. 925 crore during the previous financial year. Name of the Company

Manmohan Singh, Hon’ble Prime Minister of India laid the foundation stone of the Project on 31.1.2008.

has been changed from National Hydroelectric Power Corporation Ltd. to NHPC Limited. ❑

Tawang-II Project by NHPC.

Generated 14811.35 Million Units electricity against 13048.74 Million Units gen-

●

Revised MoA signed with Govt. of Arunachal Pradesh for implementation of 3000 MW Dibang Multipurpose Project, 750 MW Tawang-I Project and 750 MW

●

Govt. sanction accorded for the 330 MW Kishanganga Project in Jammu & Kashmir.

●

Achieved 100% revenue realization of Rs. 2270 crore.

January - 2009

sion and distribution network and augmentation to match with the capacity addition.

Entrusted with the responsibilities of providing the vital input power for industrial growth in the resource rich Damodar Valley region, DVC(Damodar Valley Corporation) has been practically operating as a pioneer, using latest available technologies to supply bulk power at reasonable rates to the major industries.

VC has maintained its lead role in the eastern region by adopting it self to the challenges of time and

technology during the course of last 59 years. DVC has been generating and transmitting power since 1953 and has succeeded not only in meeting the needs of consumers but has also helped to increase the demand of power which itself is an index of development. DVC came into existence with the avowed mission to tame the turbulent Damodar and control damages caused by recurring and devastating floods in the valley. Following the model of the Tennessee Valley Corporation, DVC incorporated other activities to broaden the scope of its primary mission. Hence the mission was de-

●

Eco-Conservation and afforestation

●

Socio-economic welfare of the inhabitants of the Damodar valley

●

Water supply for industrial and domestic

Transmit, distribute and supply reliable and quality power at competitive tariff.

●

Improve the financial health of the Corporation by adoption of efficient industrial, commercial and human resource management practices.

●

DVC is finely tuned to changes with time, and has, from time to time, revised its priorities. Hence, the shift of emphasis in recent times to generation, transmission and distribution of electrical energy to meet the increasing demand for power from core sector industries like steel, coal and railways as well as other industrial consumers. The need to view development In a holistic manner has reinforced DVC’s firm commitment to social responsibility, which remains an integral part of its overall mission.

Objectives To realize DVC’s Mission, the following corporate objectives have been identified for persuasion: Corporate Objectives: ●

Generate maximum on sustainable basis through implementation of best O&M practices.

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Rejuvenate old generating units through refurbishment / replacement / comprehensive overhauling programme.

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Flood control and irrigation.

●

Capacity augmentation through extension and green field projects.

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Generation, transmission and distribution of power.

●

Strengthening of the existing transmis-

Ensure optimum utilization of available water resources through effective and efficient management and harnessing the remaining potential of Damodar basin.

use.

fined by the following objectives:

January - 2009

●

Adopt measures for pollution abatement of Damodar River.

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Ensure environmental protection at plant level.

●

Strengthen activities of eco-conservation in the valley area & to make Damodar valley more Green.

DVC has been generating and transmitting power since 1953 and has succeeded not only in meeting the needs of consumers but has also helped to increase the demand of power which itself is an index of development. DVC came into existence with the avowed mission to tame the turbulent Damodar and control damages caused by recurring and devastating floods in the valley.

140

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Unified socio-economic development for the inhabitants of villages neighboring major projects of DVC.

ing the energy needs of power deficient regions on export basis.

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To pursue with development of tourism at Maithon, Panchet, Tilaiya and Hazaribagh.

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Revival of Fish Farming in DVC reservoirs.

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Skill development training to local youth around DVC Projects to improve their employability & upgrading infrastructural fa-

venture company of DVC and SAIL has been established to operate and maintain the captive power and steam generation plant, hived off by SAIL and its Bokaro Steel Plant and supply power and steam exclusively to Bokaro Steel Ltd.

cilities at existing Industrial Training Institute (ITI) at Purulia, Durgapur & Chhatna in West Bengal & Chas and Hazaribagh in Jharkhand and also setting up of the Jharkhand Govt. proposed new ITI at Kodarma as well as new ITI at existing Chandrapura Training Institute of DVC.

Joint Venture Project Maithon Power Limited a joint venture company by DVC and Tata Power has been formed to implement 1000 MW Maithon Right Bank Thermal Power Project for meet-

●

Bokaro TPS, the nation’s biggest thermal power plant in the 50s of the last century

●

BTPS boilers, first to burn untapped lowgrade coal in pulverized fuel furnaces.

●

The first re-heat units in India, utilizing high steam parameter at Chandrapura

Bokaro Power Supply Co Ltd (BPSCL) a joint

DVC EMTA Coal Mines Ltd, a joint venture company formed with Eastern Minerals & Trading Agency for development and operation of Captive Coal Mine Blocks and supply of coal exclusively to DVC Thermal Power Projects of 10th and 11th plan.

TPS. ●

Mejia, first of its kind in Eastern India with tube mills in service for zero reject.Direct ignition of pulverized coal (DIPC) system for reducing oil consumption in the boiler conceived for the first time in Eastern India at Mejia TPS. ❑

Landmarks Achieved ●

DVC is the first multipurpose river valley project taken up by the Govt. of India.

●

DVC, the only GOI organization generating power through three sources- coal, water and liquid fuel.

●

India’s first underground hydel station set up at Maithon.

Anticipated System Growth Plan Period

Year

Energy Requirement (MU)

Peak Demand (MW)

10th Plan

2002-2003

9307.52

1758

2003-2004

9635.00

1819

2004-2005

10018.08

1892

2005-2006

13588.80

1986

2006-2007

14155.00

2145

2007-2008

15146.00

2340

2008-2009

15903.00

2574

2009-2010

17334.00

2857

2010-2011

18200.00

3085

2011-2012

19135.00

3333

11th Plan

141

January - 2009

and reclamation of waste land development to control pollution free air in Neyveli as a regular activity of the Corporation.

NLC has marched as a leading lignite mining and power company in India. NLC's growth is sustained and its contribution to India's social and economic development is significant.

eyveli Lignite Corporation Limited (NLC) is a government-owned lig nite mining company in India. One of the public sector undertakings, the company is wholly owned by the Union Government (49 percent) and administered through the Ministry of Coal. NLC operates the largest open-pit lignite mines in India and mines some 24 million tonnes of lignite per year for fuel, with an installed capacity of 2490 MW of electricity per year. Of this, the origin state of Tamil Nadu consumes 1167 MW, with the neighboring states (Kerala, Karnataka, and Andra Pradesh) consuming most of the rest. NLC is considered as nodal agency for lignite mining in India by Government of India. Lignite deposit in India occur in subsurface deposits and as part of Tertiary formation through deposits of occurrence vary from 100 metres to depths 300 metres. But major lignite deposits in India are in the states of Tamil Nadu, Rajasthan, Gujarat, Jammu and Kashmir and Kerala. Exploration in identifying lignite occurrence in the above States is being carried out in various stages. January - 2009

About 87 percent of lignite reserves in the country are in Tamil Nadu. 19 Blocks have been identified in Tamil Nadu and Pondicherry The company's operations are in Neyveli, 197 km south of Chennai and 70 km west of Chokecherries. NLC now expanded its project to Rajasthan also in mining and thermal stations. NLC Neyveli,covers an area of about 54 square km, including Neyveli Township and temporary colonies such as Mandarakuppam, Thedirkuppam, Thandavankuppam, and Block-21'. Neyveli Township has about 32 blocks. The company operates thermal power plants, three large mines. The company also supplies a large quantity of sweet water to Chennai, thanks to the artesian aquifers in the lignite mines.

Neyveli Lignite Corporation is well aware of the effects of open cast mining to the environment. It therefore gives a lot of importance to pollution control, reclaiming land and maintaining ecological balance. A pollution level in air is being continuously monitored through six air monitoring stations in Neyveli. All the guidelines of the Central Pollution Control Board have been adhered too. NLC's success in land reclamation of mines spoils and afforestation has been overwhelming. The mined out area or the de-coaled area is refilled with overburden, since this does not contain plant nutrients. Or have the proper texture; great effort is put to successfully reclaim the land. The dumped soil is improved in stages through modern techniques to bring back its original fertility and the agricultural operations are carried out by adding nutrients, like organic, inorganic and bio--fertilizers.

Exchange and National Stock Exchange of India.

Now crops and vegetables of various varieties are being continuously raised in about 250 hectares. Further it is also proposed to increase this backfilled area into cultivable land.

Ecology

CARD

Neyveli Lignite Corporation has accorded high priority to ecology development and pollution control. Continuous monitoring in respect of liquid/ gaseous effluents control is carried out at units and treated effluents

Centre for Applied Research and Development (CARD) is the In-house Research and

The company is listed on the Bombay Stock

meet all MINAS and the statutory requirements. To improve the environment the Corporation has planned afforestation programmes,

Development Centre of Neyveli Lignite Corporation Limited and recognized by the Department of Science and Technology since 1975, it is continiously pursuing research and development programmes in the area of diversified use of lignite, waste utilization, soil reclamation and much more.

142

Primarily and R & D Unit CARD has service facilities with facilities for monitoring of air, water, materialogy and soil and also caters to various testing and analytical needs of various industrial units of Neyveli Lignite Corporation. Abient and quality management is done throughout the year at eight diffferent locations in and around neyveli. Effluents from thermal power stations and mine outlets are regularly analysed. Periodical survey of respirable dust, illumination, noise and vibration are also being carried out in mines and thermal power stations. M/s. UNIDO has funded a project to establish Lignite Energy Research Institute (LERI) at Neyveli which will be capable of providing technical support to ensure the latest and most appropriate technologies for

●

Utilisation, By-Products Utilisation of various industrial units, Diversification product development etc.

●

1830: General Cullen discovers lignite deposits at the base of the cliffs on the Sea-shore near Cannanore - Later near varkala near Quilon and also at Vaikom in Kerala

●

1840: Captain New Bold discovers Lignite at the foot of the cliffs of laterite on the river banks near Beypore.

●

1870: Peat bogs found in Nilgris (Peat is considered to be the first stage in the formation of Coal from vegetable matter accumulating in swamps) 1877: W. King of the Geological survey of India takes up a study of artesian wells around Pondicherry. He comes across a carbonaceous strata.

●

CARD has also taken up various joint projects in association with CSIR Laboratories, Universitites, other Educational Institutions and other Public Sectors. The joint projects submitted were funded by Ministry of Coal.

1828: Occurrence of "PEAT" a low calo-

●

1948: The first bore holes sunk by Ghose have to be abandoned because of water logging and sand-beds. The third one "September 1951" yields samples.

●

1949: Ghose draws experimental open cut plan and calls for tenders.

●

1951: Sinking 175 borewells in a cluster punctuating the chosen area, Ghose proves the existence of about 2000 Million tonnes of Lignite reserves in the area. State Government's Industries and Commerce Department also sinks over 150 borewells South of

1934: Industries Department of the then Government of Madras drills bore holes for tapping artesian water in the

1935: Borewells sunk in Jambulinga Mudaliyar's land in Neyveli and theBlack particles gushing forth attract the attention of camping Geologists engaged in some other mission in the Neyveli Vriddhachalam area.

●

1943-47: The Geological Survey of India starts drilling operations near Neyveli. Preliminary investigations indicate the existence of Lignite to the extent of about 500 tonnes in that area. H.K.Ghose, Geologist and Mining Engineer deputed by the Government of India arrives in Neyveli and starts his operations

1884: Poilay a French Engineer encounters a Lignite seam in a bore hole at

neighbour hood of Neyveli. Lignite particles encountred are taken as "black clay" by unlettered workmen engaged in drilling.

1941: M/s. Binny & Co., Madras put down four or five bore holes at Aziz Nagar, near Neyveli. Two of them show evidence of Lignite deposits; but for want of casing pipes and drilling equipment, further work is given up.

Bahoor, the then French territory.

●

143

●

rific fuel of coal family near point calimere is reported to the then Madras Government, by the sub-collector of Thanjavur Mr.Nelson

minimising negative environmental effects. CARD is carrying out various R&D works on Waste Land Reclamation, Solid Waste

the Government of Madras for analysis.

Chronology of events

Vriddhachalam ●

1952: The High Power Committee for Lignite Mining recommends the Pilot Quarry project.

●

1954: Pandit Nehru's Visit to the Pilot Quarry.

●

1955-56: Neyveli Lignite project's affairs, hitherto managed by the State Government, get passed on to the Central Government. Formation of NLC. ❑

1937-38: Samples of the black substance taken from the above form well sent to January - 2009

The Private sector contribution towards total Installed Power Generation Capacity is comparatively low, but it is one sector which shows immense promise. Following are the top five states contributing through its private sector. Figures are in MW.

Tamil Nadu

5433.85

Maharashtra

4216.50

Gujarat

3443.40

Andhra Pradesh

2126.43

Karnataka

2014.64

As on Dec 2008

Source: Central Electricity Authority

January - 2009

144

Substantial internal reforms need to and can be done under the ownership of the State Government. However, to make these changes sustainable, privatization is essential. Introduction of private sector in distribution would more importantly bring in private capital, and result in the medium to long term in the supply of better quality power to consumers at reasonable prices. Private entities supervised by independent Board members and shareholders are likely to make more efficient use of their capital. An improvement in the financial health of the power sector will help to eventually reduce tariffs in the long term and enable better electricity services.

ccording to CEA, installed power generation capacity from the pri vate sector in the country is 22246.25 MW. Out of this, 5 states top the list in terms of contribution. But the figure is miniscule when compared to the total target set by the government for the XIth five year plan. The government is still juggling with the idea of the extent to which private sector can be involved in the power sector of the country. Several aspects have been considered since sometime and the result has been a little bit less than encouraging, but

145

all hope is not lost. The states are trying on their own, to attract private investment.

Bankability of generation projects ●

Credit risk of utilities and better informed assessment in line with financial strengthening of state utilities

●

State fiscal and financial management – FRBM , Fiscal Transparency, Expenditure Reforms

In view of the widening electricity demandsupply gap, huge investment requirements and shortfall in investment targets, it is imperative for the government to create an enabling environment to attract greater private participation in the power sector. Key issues in enabling private sector investments in Power sector Attracting capital is driven by Demand growth & Risk perception ●

Transparent and stable regulatory regime

●

Stable law and order

●

Reasonable operational and financial flexibility

●

Level playing field vis -a -vis incumbents

Changing perceptions of the India Power sector ●

High risk perception - on the policy & regulatory regimes.

●

High credit risk of off- taker entities

●

Poor fiscal discipline in states

●

Inadequate regulatory independence

●

Inadequate project preparation – impact on increasing non-commercial risks

●

UMPPs generated substantial interest though results remain to be seen.

Creating competitive markets for generation ●

Will help discover better tariffs

●

Remove political/regulatory risks around the tariff setting process

●

Questions remain with risks associated with selling to state utilities, availability of fuel linkage at affordable prices and so on

To encourage greater private participation in the energy sector, India needs to identify the various entry barriers in its regulatory, institutional and legislative framework and devise mechanisms to eliminate them. It is only when reforms are initiated in this direction that the country can achieve the goal of sustained economic growth, energy access for all and long-term energy security. Growth in the power sector since independence has been primarily accompanied by public investment through economic planning. As a result of this, most of assets in the electricity sectors are owned by government-owned companies or the SEBs. The erstwhile SEBs own about 55% of the generating capacity followed by the central sector generating companies, which are owned by the central government. Since the policy liberalisation in 1991, 39 private projects totalling 7417 MW capacity have been commissioned by December 2005. This includes 1495 MW capacity installed by the existing private distribution licensees. Most of the distribution network is owned by the state utilities. A few urban areas, some of which have been licensed to private companies for nearly a century, and the distribution companies in Orissa and Delhi, are under majority private ownership. The transmission segment is dominated by public ownership with the exception of the upcoming public-private joint venture for importing electricity from the Tala hydroelectric project in Bhutan. Given January - 2009

the limited fiscal space for increasing investment by the central as well as state governments, and requirements for future investment, there is a greater scope for private participation in the sector. A number of private projects have been commissioned since the process of liberalisation began in the early 1990s. However, this is insufficient to address the burgeoning capacity shortage in the country. The risks associated with the poor financial state of state utilities has kept private investors at bay. The Electricity Act 2003 and a number of recent policy initiatives have re-established some faith in the Indian power sector. To facilitate faster project development, a proposal has been made for setting up five ultra mega power projects of 2000 MW each. So far, requests for qualification (RFQ) have been invited for two such projects. The Power Finance Corporation, a domestic financial institution catering to the power sector, is entrusted with the responsibility of initial project development. These projects are to be offered to investors on an internationally competitive basis. Let’s look at the top five states briefly and the current situation in which each is treading

Tamil Nadu Tamil Nadu leads in the renewable source of energy generation, especially Wind en-

state, including the 19 mega watts under public sector, was 3,711 mega watts. The estimated power generation from biomass was 4,087 mega watts.

Maharashtra While the state tops in installed power generation capacity with 10,817.6 MW when it comes to state-wise generation, Maharashtra comes second after Tamil Nadu in the private sector contribution with 4216.5 MW. Its main contribution comes from the renewable sources (MNRE)1942.5 MW, followed by Coal – 1650 MW, Hydro – 444 MW and Gas – 180 MW.

Gujarat Private sector will continue to play significant role in capacity addition in the State. The state has already tied up and signed Power Purchase Agreements for 3200 MW from the private sector through competitive bids (Gujarat is ahead of other states in this regard by a year). Out of approximately 10,000 MW capacity addition for the State during the 11th Plan, more than 5000 MW will come from the private sector.

Andhra Pradesh Andhra Pradesh has always been proactive when in comes to private public partnerships and it has been able to garner a number of successful projects under this mod-

ule. In the power sector, especially in the installed power generation capacity, the state private sector has been contributing 2126.4 MW mainly from Coal (1603.4 MW), renewable sources (486.2 MW) and Diesel (36.8 MW).

Karnataka Karnataka is opening up the power generation sector to private players on a massive scale. In a major effort towards capacity addition to the State power grid, the Government has offered global invitations for Expression of Interest (EoI) from power generating companies to set up three coalbased power plants in Karnataka with a capacity of 1,000 MW each. The generating companies will be asked to set up power plants at Chamalapura in Mysore district, Ghataprabha in Belgaum district and Jewargi in Gulbarga district. These power projects with a total capacity of 3,000 MW will have to be developed on Build-OwnOperate (BOO) basis, according to a notification issued on February 22 regarding invitation of EoI. At present, Karnataka has three independent power producers - Tanir Bavi Power Company Limited, Rayalaseema Power Company and Tata Power Company while the Nagarjuna Power Company is scheduled to set up its plant. ❑ References: iMaCS, ADBI (Asian Development Bank Institute)

ergy. The government plans to establish solar power plants through private sector participation based on guidelines laid down by the Union ministry of new and renewable energy guidelines. The solar plants would have capacities up to 10 mega watts. There were as many as 41 sites where wind power could be generated in Tamil Nadu. The installed capacity of wind mills in the January - 2009

146

an inevitable corollary that the ambitious plan to add 92,000 MW of power in the eleventh plan possibly would end up with 50,000 MW power. Rightly said, an intelligent government will learn from its own mistakes but an inefficient government will learn neither from its own mistakes nor from others’ mistakes. Projecting a hypothetical figure of 92,000 MW of power, the government is sending a

The slogan, “Power for all” , attracts everyone including the have-nots. With the meagre 1713 Mega Watt (MW) power in December 1950, today the country reached 1,46,902.81 MW of installed capacity but still there is a visible gap between demand and supply. The capacity addition of 92,000 MW of power in the 11th plan would probably electrify 1,20,000 villages with an expectation of illuminating India at least with a bulb that lights every house in India . While this is the political agenda, what will be the ground reality of Eleventh Five year plan,

147

when translated into a possible action i.e. 2012 ,is yet to be seen. P.R.Subas Chandran, presents the darker side of the power sector in the country.

robably the demand and supply might have extended its arm creat ing another vacuum in the ambitious

agenda called “Power for all by 2012” by the Government of India. This is not said out of blind imagination . The Eighth Plan (1992-97) target was 40,000 MW and 16730 MW (41.8%) was achieved. The target of Ninth Plan (19972002) 40,245 MW ended up with 19,119 MW (47.5%). Again the Tenth Plan (2002-07) fixed a target of 41,110 MW but could generate only 50% i.e. 20,500 MW. Unfortu-

nately the failure to achieve the target is

wrong signal to the public including entrepreneurs who launch projects expecting that the government will provide power supply to their industries .Alas! The ‘power dream’ remains on paper and this is one of the reasons cited by most of the industries for layoffs. While this is the power scenario, the worst part lies in the management of power sector. Before going into the details of ill-management of power sector, let us see what the Planning Commission says: “The fast growth of the economy in recent years has placed increasing stress on physical infrastructure such as electricity, railways, roads, ports, airports, irrigation, and urban and rural water supply and sanitation, all of which already suffer from a substantial deficit from the past in terms of capacities as well as efficiencies in the delivery of critical infrastructure services. The pattern of inclusive growth of the economy projected for the Eleventh Plan, with GDP growth averaging 9% per year can be achieved only if this infrastructure deficit can be overcome and adequate investment takes place to support higher growth”.

January - 2009

“On the above basis, the aggregate capital formation in infrastructure required to achieve India’s targeted annual average growth in GDP of 9% over the Eleventh Plan period, would have to rise from Rs. 2,59,839 crore in 2007–08 to Rs. 5,74,096 crore in

sector is going to present a gloomy picture in the days to come. Planning commission documentation has

could bring enormous benefits from the savings, which might be pumped to other sectors of the society.

projected that there will be power deficit of 13.8% (peaking) and 9.6% of energy shortage that will loom large over the nation in spite of an ambitious power projection. Hold your breath to read the next shocking contents. Planning commission presents a dismal picture on power sce-

Factors which contribute to such astronomical energy losses are a combination of technical and non-technical issues. Poor metering, lack of investments in distribution networks resulting in overloaded feeders, illmaintained substations with aging transformers, and other technical shortfalls are

“The aggregate investment target derived above is broadly consistent with estimates of investment requirements based on sector specific requirements emerging from reports of the Working Groups constituted by the Planning Commission and by Inter-

nario saying that a whopping 40% of generated power is lost due to Transmission and Distribution (T&D)/ Aggregate Technical & Commercial (AT&C) loss. In other words 58,761.12 MW (40%)of total installed power generation capacity of

further amplified by inefficient billing and inadequate revenue collection as well as simply un-metered supply and wide spread electricity theft. The lack of consumer education in the rural sector, rampant political interference, and inefficient electricity use,

Ministerial Committees under the aegis of the Committee on Infrastructure. Total anticipated investment in power infrastructure in 10th plan including Non Conventional Electricity is Rs 2,91,850 crore, a share of 33.49% in the total budget allocation while

1,46,902.81 MW of power is lost on account of T&D loss. It means a recurring financial loss of Rs.2, 93,805.60 crore every year. This is not the end of the story. The Eleventh Five-Year Plan (2007-12) proposes a capacity addition of 90,000-MW and 40%

among other factors, only further diminish the already weakened power sector.

11th plan is projected at Rs 6,66,525 crore with a share of 32.42% in the total budget of Rs 20,11,521 crore. It means there is a reduction of 1.07% of investment in the power sector amounting to Rs.21,523.27 crore in the 11th plan. The projected invest-

of (T&D)/ (AT&C) loss will be 36,000 MW , costing Rs.1,80,000 crore. In other words the colossal (T&D)/ (AT&C) loss works out to be Rs.4,73,805 crore.(cost per MW @ Rs.5 crore) which is equal to the total annual budgets of Andhra Pradesh, Tamilnadu

ment in power sector during Eleventh five year plan is with Central investment is Rs 2,55,316 ( 38.31%) , states with an investment of Rs. 2,25,697 crore ( 33.86%) while private sector shares 27.83% with an investment of Rs. 18,5512 crore . In a nut-

and Karnataka. Can a poor country like India afford such avoidable astronomical loss? This loss ,in turn, will have a cascading impact in achieving the projected 9% GDP growth, which is certainly going to be a forgotten story.

2011–12 at constant 2006–07 price. Over the Eleventh Plan period, as a whole, this estimate aggregates to Rs 20,11,521 crore.”

shell the overall investment in power sector will be Rs. 6,66,525 crore for the Eleventh five year plan with a massive agenda of powering the nation and the readers would be highly motivated with an expectation of seeing India illuminated anywhere and everywhere. Contrastingly and shockingly the outcome will remain a dream project if you come to know how the hidden or the dark side of ill- managed power

January - 2009

Loot and go scot free

●

dard quality are being used .Serious lapses in their procurement and maintenance are main reasons of poor power scenario . ●

The damage caused to transformers and transmission cables is a result of ‘improper testing’ and ‘lack of protective equipment’.

●

The equipment was ‘poorly calibrated’ and used by ‘untrained staff’.

●

Conditions of transformers in the stores were not up to the mark with evidences of oil leakages.

●

Around 20% transformers do not complete their life-cycle which is ‘abnormally high’ as compared to the national average of 2%.

●

Most of the distribution transformers are in a bad condition with complaints of oil which acts as a coolant being pilfered by miscreants. This causes damage to transformers leading to power failures.

It has been observed that the overall power sector performance in India has been compared to a “leaky bucket”, where the more funds are invested into the system, the more quickly they spill out without considerable benefits. Improving the efficiency of the country's power distribution system

The transformers and cables of substan-

148

theft in India has a significant effect on the Indian economy, as this figure is considerably high. Like western countries, India has also treated this as a criminal offence. However due to difference in electricity theft and other commodity theft that you cannot find it physically after it is stolen makes its detention more difficult. There are certain loop holes still in the establishment of theft that the power thieves are not being booked the way they should have booked. Most of the places the theft is done with Procedure

●

adopted in the curement of ment as well as tion of vendors stallation is

p r o equipthe selecfor their inquestionable.

It is not until power authorities stop compromising with the quality of equipment that the power situation in the state will not improve. The distribution licensee will have to adopt strong ‘equipment monitoring system’ and ‘adherence to safety measures’ to ensure uninterrupted power supply. The basic idea of investigation of State Electricity Regulatory Commission (SERC) was testing the quality of equipment for the requisite specifications, SERC strongly endorsed the people’s grievances on the power front, came down heavily on lackadaisical approach of authorities in preventing breakdowns.

Power theft, a blow to nation We have painted most of the men in public life as corrupt leaving the rest as angels. If one looks at the way consumers at every level contributed their share to the elephantine loss. Electricity theft is at the center of focus all over the world but electricity 149

detection system. Now power theft using the remote sensing devices, tampering of crystal frequency of integrated circuits; theft using armonics, high power electromagnet with capability of effecting the recording of meter etc have been developed. Meters with shunt is a common method of slowing down the meter. In some of the cases it was found that meter readers also record less consumption and accumulate the reading on the meter and when they found large units accumulated, they destroy the display, or burn the meter .

connivance of the licensee’s employees which further makes it difficult to book the actual culprit. Take the following examples –Vigilance team of Government along with checking squad goes to detect a theft on the instructions of the government they find

Recently as per Economic Times, Mumbai edition dated 17th July'08, in a shocking incident in Mumbai, Mahavitaran, the distribution arm of the Maharastra state power utility, has uncovered cases of power

that a dal mill with contracted load of 21 HP is running with a 63 kVA transformer in side its premises, (Strictly the transformer has to be out side the premises). There exists another industrial premises with simple commercial connection of single phase,

pilferage involving companies such as L&T Infotech, GTL (earlier called Global Tele Systems), Pfizer India, Kores and so on, based in and around Navi Mumbai. The amount recovered from them are as follows: Kores (India) (Rs 1.93 lakh), L&T

both meters are installed at a place (despite strict guide lines that two connections for different premises cannot be granted at a single premises) . Further things are more interesting when it was seen that the 21 HP meter is burnt, the consumer is enjoying electricity with 63 kVA transformer

Infotech (Rs 9.68 lakh), GTL (Rs 1.93 lakh) and Pfizer India (Rs 30.66 lakh). All those found involved have been booked under Sections 135 and 126 of the Electricity Act, 2003. They were stealing power from hightension power supply. In another interesting case as published in web site nerve.in a

and shows that its load is in fact more than 35 HP and he has applied for the load extension only 4 days before. The local staff says he is a tough consumer …? Now question is how to book this consumer under theft while it is known that he is involved in

former Bharatiya Janata Party (BJP) Member of Parliament K.D. Jeswani who was earlier chairman of the Gujarat State Fertilisers and Chemicals Ltd (GSFC), has been booked for power theft and a Rs.90,000 fine slapped on him. The theft

theft of course with connivance of the local staff.

was detected by Madhya Gujarat Vij Corporation Company Ltd (MGVCL) vigilance cell. He has been booked under Section 135 of the Indian Electricity Act 2003. He faces criminal prosecution unless he pays the

Further we incorporate more advanced technologies but crooks always have the ability to keep one step ahead of the theft

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fine. This shows that might people and also the law makers indulge in theft of electricity However the Electricity Act 2003 gives full freedom to vigilance engineers in detecting power theft, confiscating machines, papers, document related to production etc. and permits utilities to frame their own rules. But a sincere effort is still missing that is the reason that despite all this the power thieves are not being booked the way they should have been.The staff of the licensee who helps in providing means for the theft should also be booked under theft. While posting the engineers their track record is not the key factor the key factor are the other means and resources..until and unless the whole system is not revamped the power theft drives will go on papers and will yield a substantial result. The Prime Minister, Dr Manmohan Singh, in a day-long meeting on infrastructure, convened by the Planning Commission, stated that the â&#x20AC;&#x153;bane of power sector seems to be the high transmission and distribution (T&D) losses which account for almost 40 per cent of the electricity produced. No civilised society nor a functional commercial entity could sustain losses on such a scale.â&#x20AC;? The latest report of the Expert Committee on Energy headed by Planning Commission member, Dr Kirit S. Parikh, says that at the national level aggregate technical and commercial losses (AT&C) still exceeded 40 per cent . That the overall infrastructure deficit in the country is partly due to the persistent power shortage is well-known. This can be mitigated if effective steps are put in place to end the rampant power theft that is plaguing the sector today. The impression one gets from these figures is that India's power supply system is not only inefficient but also cor-

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rupt and that down the line, transmission and distribution (T&D) losses, or AT&C losses if you will, are heavy.

Positive steps It appears that the government of India plans to set up a National Electricity Fund (NEF) with an investment of Rs 1,00,000 crore to effect power reforms in energy sector to bring down the T&D loss to 15% from 40% . Be that as it may, the situation is not altogether abject, as the Government has taken a series of steps in the recent period. They include metering of 11 kV feeders; energy accounting and auditing;

a licensed activity. Under Section 86(1) of the Act, the State Electricity Regulatory Commissions (SERCs) have been entrusted the task of specifying and enforcing standards concerning quality, continuity and reliability of services by licencees. Experts in the energy sector feel that some urgent steps if initiated could arrest the growing power menace

Energy auditing Free power is the mantra of political bosses; but there must be some mechanism to account it. Shockingly, in the name of free power, virtually, in many States,

strengthening the provisions pertaining to theft of power in the Electricity Act, 2003; upgrading and strengthening the sub-transmission and distribution system under the Accelerated Power Development and Reforms Programme (APDRP); and introducing the High Voltage Distribution System

power supply to the agricultural sector and some categories of domestic consumers are not metered and this poses problems in arriving at reasonably correct estimates of consumption in these categories and .there is a loot by many as there is no system to monitor the free flow. This can be

(HVDS).

achieved by putting in place a system for accurate energy accounting. This system is essentially a tool for energy management and helps in breaking down the total energy consumption into all its components.

It is also worth mentioning that distribution of electricity has been privatised only in the National Capital Territory (NCT) of Delhi, and in Orissa. Elsewhere, the job is done by the state-owned entities unbundled from the State Electricity Boards (SEBs) or, in some cases like Tamil Nadu and Andhra Pradesh, by the SEBs themselves. Now, according to the provisions of the Electricity Act, distribution of electricity is Device wattage

Device

Cogeneration It is the simultaneous production of power/ electricity, hot water, and/or steam from one fuel. Cogeneration plants can reach system efficiencies exceeding 60%. Cogen-

Hours used

kWh

1000 watts

medium window-unit AC

one hour

1 kWh

1500 watts

large window-unit AC

one hour

1.5 kWh

500 watts

small window-unit AC

one hour

0.5 kWh

24 watts

42" ceiling fan on low speed ten hours

0.24 kWh

100 watts

light bulb

73.1 kWh (i.e., all month)

731 hours

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eration, a term originally coined by President Jimmy Carter while he was in office, has also been referred to as: district energy, cogen, combined heating and power, CHP, cooling, heating and power and total energy. Cogeneration is an energy-efficient, environmentally-friendly method of producing electricity (power), steam and/or hot water at the same time, in one process, with

Trigeneration has been hailed the “hat-trick of the energy industry” with system efficiencies approaching and exceeding 90%. Trigeneration plants are very energy efficient, conserve natural resources and reduce fuel consumption as the system oper-

Watts and watt-hours

ates at such high efficiencies.

If your device lists amps instead of watts, then just multiply the amps times the volt-

2.5 amps x 120 volts = 300 watts What the heck is a kilowatt hour?

Fuels used in cogeneration include natural gas, fuel oil, propane, bio-mass, bio-waste,

Before we see how much electricity costs, we have to understand how it's measured. When you buy gas they charge you by the gallon. When you buy electricity they charge you by the kilowatt-hour (kWh).

No More Black-Outs! Trigeneration - with system efficiencies up to 50% greater than “cogeneration”, is the simultaneous production of power/electricity, hot water and/or steam, and chilled water from one fuel. Basically, a trigeneration power plant is a cogeneration power plant that has added absorption chillers for producing chilled water from the heat that woul have been wasted from a cogeneration power plant. Trigeneration plants can reach system efficiencies that exceed 90%. In addition to the economic benefits and advantages, trigeneration plants reduce our dependence on foreign energy supplies and help our environment by dramatically reducing greenhouse gases such as carbon dioxide - when compared to typical power plants.

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How many watts various devices use?

How much electricity costs, age to get the watts. For example: and how they charge you

one fuel.

and renewable energies such as wood, or wood waste. More and more companies are finding cogeneration the best way to provide power and thermal energy for their onsite energy requirements due to the numerous advantages and benefits.

Watts is the measure of the rate of electrical use at any moment. For example, a laptop computer uses about 50 watts.

When you use 1000 watts for 1 hour, that's a kilowatt-hour. For example: When the number is low we sometimes use watthours (Wh) instead of kWh. For example, we might say 500 watt-hours instead of 0.5 kWh.

(If you're outside North America, your country probably uses 220 to 240 volts instead of 120.) Understand the difference between watts and watt-hours: ●

Watts is the rate of use at this instant.

Watt-hours is the total energy used over time.

●

Here's a question frequently asked question: “You say that some device uses 100 watts. What period of time is that for?” It's not for any period of time, because watts is a rate at that instant. One might as well ask: “The speedometer in my car says I'm going 35 miles an hour. What period of time is that for?” It's not for any period of time. You're going 35 miles an hour at that instant. To measure use over a period of time, we use watthours, not watts. The way it works is, watts or kilowatts for the amount at a given instant, and watthours or kilowatt-hours for the amount over a period of time. ❑

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IndianOil’s has been performing well consistently as a major oil & gas player. What are the main factors for this success?

Indian Oil Corporation Ltd. (IOC) registered a Profit of Rs. 2,959 crore for the third quarter of the current financial year ended December 2008 as compared to a Profit of Rs. 2,091 crore for the same quarter of the previous year. Sarthak Behuria, Chairman, IndianOil says that the Corporation sold 48.91 million tonnes of products, including exports, during the period Apr-Dec. 08. The throughput of its refineries and pipelines network was 36.60 million tonnes and 43.86 million tonnes respectively for the same period. He elaborates on Indian Oil’s current position and its future plans.

For almost five decades now, IndianOil has been in the business of fuelling the growth and prosperity of the nation. By virtue of a robust network of supply points, we reach quality petroleum products to millions of customers in every nook and corner, contributing to improving the quality of life and mainstreaming rural India. Essential fuels like Kerosene, Petrol, Diesel and LPG are reached to the farthest corners of the country – from Leh to Lakshadweep & Andaman to Kutch everyday. In the recent years, IndianOil has entered into other verticals – oil exploration & production, natural gas, petrochemicals, biofuels, etc., some of which have started turning in revenues. IndianOil has also charted new territories in marketing petroleum products overseas. The Corporation takes pride in its continuous investments in innovative technologies and solutions to fuel economic growth and in developing technoeconomically viable and environmentfriendly products & services for the benefit of its consumers. What are the main strategies planned by IndianOil for the future preparedness of India? Please provide details on the new horizons that you are looking at for the future, say by 2012. IndianOil is investing Rs. 43,393 crore during the period 2007-12 in augmenting refining and pipeline capacities, expansion of marketing infrastructure and product quality upgradation as well as in integration and diversification projects. We hope that this would have a significant positive ripple effect on the economy. We have stepped up efforts to commercially harness alternative sources of energy such as bio-fuels, wind

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power, Hydrogen and solar energy. At the same time, it is also acquiring oil & gas acreages in India and abroad in order to secure energy supply for the country. This is in addition to expanding business into petrochemicals and natural gas marketing, spanning uses in domestic, transport and industrial sectors. The soon-to-becommissioned Naphtha Cracker and downstream polymer units at Panipat would catalyse plastic processing and allied industries in Northern India. IndianOil has rolled out over 2300 customised, special-format retail outlets (called Kisan Seva Kendra or KSK) in the rural hinterland. By reaching precious fuels and day-to-day essentials to the doorstep of the consumers through the KSK, IndianOil has taken a step forward in improving the quality of life of the rural populace and powering the nation’s prosperity. You have been vociferous about customer first. What are the main strategies applied to make this come true? At IndianOil, customers always get the first priority. New initiatives are launched round-

SERVOXpress has been launched recently as a one-stop shop for auto care services. To safeguard the interest of the valuable customers, interventions like retail automation and vehicle tracking system have been introduced to ensure quality and quantity of petroleum products. Elaborate on IndianOil’s subsidiaries and JVs in India and abroad? Besides two refining subsidiaries in India,

What are the recent recognitions for IndianOil? ●

With a ranking of 116, IndianOil is the leading Indian company in Fortune’s ‘Global 500’ listing for 2008.

nology Ltd. with a vision to evolve into a major technology provider. The R&D JV markets the intellectual property developed by our R&D Centre at Faridabad. In addition, we have 8 active joint ventures in operation with reputed Indian and overseas

●

It was ranked the third most valuable (company) brand in India by Brand Finance, a London-based global valuation firm, and was voted ‘The Most Trusted Brand’ in ET’s Brand Equity annual survey-2008

●

IndianOil has been chosen as the ‘Most Admired Retailer of the Year’ in the category of Rural Retailing at the India Retail Forum during 2008

●

IndianOil was conferred the prestigious BML Munjal Award-2009 for Excellence in Learning & Development, and is the

partners in the areas of aviation refuelling, city gas marketing, LPG and LNG imports and storage, speciality lubricants and additives, terminalling services, etc. Please elaborate on the major on-going projects?

Exclusive XTRACARE petrol & diesel stations

IndianOil continues to lay emphasis on in-

unveiled in select urban and semi-urban markets offer a range of value-added services to enhance customer delight and loyalty. Large format outlets cater to highway motorists, with multiple facilities such as food courts, first aid, rest rooms and dor-

frastructure development. Towards this end, a number of schemes have been initiated with increasing emphasis on project execution in compressed schedules as per world benchmarking standards. Schemes for improvement and increased profitabil-

mitories, spare parts shops, etc. Specially formatted Kisan Seva Kendra offer a variety of products and services such as seeds, fertilisers, pesticides, farm equipment, medicines, spare parts for trucks and tractors, tractor engine oils and pump set oils,

ity through de-bottlenecking / modifications / introduction of value added products are being taken up in addition to grassroots facilities. Project systems have been streamlined in line with ISO standards.

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capacity expansion (Rs. 2,800 crore) at Haldia Refinery by December 2009; and a Naphtha Cracker and Polymer Complex (Rs. 14,440 crore) at Panipat in Haryana by November 2009.

Chennai Petroleum Corporation Ltd. and Bongaigaon Refinery & Petrochemicals Ltd., overseas subsidiaries are operational in Sri Lanka (Lanka IOC Plc.), Mauritius (IndianOil Mauritius Ltd.), and UAE (IOC Middle East FZE). IndianOil has launched IndianOil Tech-

the-year for the convenience of the various customer segments.

besides auto fuels and kerosene.

num grassroots refinery (estimated cost Rs. 30,000 crore) at Paradip on the east coast by the year 2012; residue upgradation and petrol/diesel quality improvement project (Rs. 5,800 crore) at Koyali Refinery by January 2010; improvement in diesel quality and

Among the major ongoing and planned projects are: a 15 million tonnes per an-

sole awardee in the ‘Public Sector’ category ●

IndianOil’s ‘XTRAPOWER’ Fleet Loyalty Card was adjudged the ‘Best Customer Loyalty Programme’ at the Global Retail Excellence Awards-2009 presented at the Asia Retail Congress held at Mumbai recently. Earlier, XTRAPOWER has also won the Best Loyalty Programme award for the second time in a row under the ‘Oil & Gas Sector’ category at the 2nd Loyalty Summit, also held at Mumbai recently. ❑

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ACKNOWLEDGEMENTS Central Electricity Authority KPMG Planning commission TNEB, Chennai Mr. T.R. Chandra Sekharan, Superintendent Engineer, Chairman’s Office Dr. Nagarajan, PS to Mr. Arcot. N. Veraswami, Minister for Electricity NTPC, New Delhi Mr. Nandwani, PS to Mr. R.S. Sharma, CMD, NTPC, New Delhi PFC, New Delhi Mr. Y. Venu Gopal, Manager, CMD Secretariat Energy Ministry, Government of Andhra Pradesh Mr. P. Ravi Srinivas, PA to Minister, Mr. Mohammed Ali Shabber, Mr. Rasheed and Mr. Madhu PRO M S Bhalla’s Transmission and Distribution Losses (Power) Coal Insights Ministry of Power, Capitaline

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