Rainbow of Investments: North- Eastern Region

POWER
Tantra Narayan Thakur
PTC India Ltd.
ASSOCHAM
October 2008

Indian Economy
___________________________________
• High Growth +8%

• Sustained past performance

• Resilience –ripple-effect

• Positive future outlook

• Inclusive Growth

• ‘Look East’ Policy

• North-Eastern Region – to play an increasingly important role in

realizing the dream

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Value Proposition : Mr. Lee Kuan Yew
________________________________________
His vision of the route India should take to fast
track its evolution as a global economic power:

Dramatic shift from country-side/rural to urban to

be able to provide: •Need for Nuanced, Innovative,
Out-of Box responses
Education
Health • Look East Policy
Housing
•1995 Full Dialogue partner
A good team of able ministers with integrity
•India-ASEAN US $ 30 Billion
Complete level playing field for citizen •Rich in natural resources
irrespective of caste or race or religion
•Trade &investment in energy
Opening of market

To shed the path of gradualism

Throw open the doors to investment and trade

NER : Development Paradigm

Schools, Roads/ bridges; Internet, communication,
IIT, Medical, Refinery; Industry, Sports
Economic Integration with ASEAN

Infrastructure- Huge Investment Requirement

____________________________________

• As per Planning Commission, total investment required in the

infrastructure sector during 11th Plan is ~ US$ 492 Billion

• Electricity Sector alone will require: > US$ 150 Billion

• Power Sector– needs to grow at minimum 9-10% per annum

• Power has a multiplier effect on the economy

• To maintain sustained growth, India needs to have large power

generation installed capacity

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 Indian Power Sector : Key Statistics
________________________________________
• Indian power sector is the third largest in Asia after China and Japan

– Installed Capacity: 1,45,588 MW (as on 31st March 2008)

– Peak Demand: 108,866 MW

– Demand Met : 90,793 MW

– Peak Deficit: 18,073 MW (16.6%)
– Energy Requirement : ~ 740 BU
– Energy Availability: ~ 666 BU
– Energy Deficit: ~ 74 BU (9.9%)

• The per capita electricity consumption for 2005-06 at 631^ kWh (CEA
General Review 2006), remains far below the world average of 2,429
kWh.

An Overview of Indian Power Sector (1)

________________________________________
• Coal-dominated fuel mix:

– Coal : 53%
– Hydro : 25%
– Gas : 10%
– Renewable : 8%
– Nuclear : 3%
– Oil : 1%

• Share of hydro declining in the generation

mix

• Unmet planned targets in generation

capacity addition
– In last 3 Plan periods, target versus
achievement ~ 50%

• 11th Plan (2007-2012) Target: 78577 MW

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 An Overview of Indian Power Sector (2)
________________________________________

• Regional Demand-Supply Deficit (2007-08)

Deficit
– Northern Region: 9.1%
– Western Region : 23.2%
– Southern Region: 9.0%
– Eastern Region: 11.0%
– North-Eastern Region: 23.0%

• Aims for “Power to All” by the year 2012

• Speedy development of energy resources,

particularly hydro and RES for energy security

Integrated Energy Policy Projections

_____________________________________
_ 1200
960
1000
778
800 685
575
GW

600 488
425

400 306 337

220 233
401 BU
153 155
24 BU 200
11% 375 BU
1%
10%
0
2006-07 2011-12 2016-17 2021-22 2026-27 2031-32

8% GDP Growth 9% GDP growth

2828 BU
78%

Hydro Nuclear Thermal RE India – Installed Capacity

Total 3628 BU Source: Integrated Energy Policy

Generation Mix 2031-32 (8% GDP )

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 North Eastern Power Scenario- At a Glance
_____________________________________
• Key statistics

– Installed Capacity: 2366 MW (as on 31st August 2008)

• Hydro: 1116 MW

• Thermal: 1078 MW ( Coal: 300 MW; Gas/DG: 823 MW)

• RES: 171 MW

– Peak Demand: 1744 MW (Apr-Aug 2008)

– Peak Met: 1343 MW
– Peak Deficit: 401 MW (23 %)
– Energy Requirement : 4075 MUs
– Energy Availability: 3462 MUs
– Energy Deficit: 613 MUs (15 %)

~ 50% Capacity: Central Sector (1235 MW)

Assam: 700 MW; Meghalaya: 185 MW, Mizoram:23 MW; Tripura 142 MW; Nagaland: 16 MW

North Eastern Power Supply Position (1)

_____________________________________
In MW
Year Peak Demand Peak Met Deficit

2005-06 1385 1192 193 (13.9%)

2006-07 1477 1166 311 (21.11%)
2007-08 1742 1347 395 (22.7%)
Apr-Aug08 1744 1343 401 (23%)

In MU
Year Energy Req. Energy Av. Deficit

2005-06 7534 6888 646 (8.6%)

2006-07 7782 7012 770 (9.9%)
2007-08 8799 7713 1086 (12.3%)
Apr-Aug08 4075 3462 613 (15%)

CEA 17th EPS Projections 2008-09

Peak Demand : 1888 MW

Energy Requirement: 10193 MU

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 NER State-wise Energy Shortages (2007-08)
_____________________________________

• Energy shortages:

– Arunachal Pradesh: 22.8% Power Cuts:

– Assam: 8.4 % 2005-06: 110 MW to 260 MW
– Manipur: 5.5% 2006-07: 190 MW to 400 MW
– Mizoram: 14.6% Meghalaya: Up to 175 MW
– Meghalaya: 24.0 % Assam: Up to 160 MW
– Nagaland: 11.4% Tripura: Up to 40 MW
– Tripura: 11.7%
Remarks:
NER experienced shortage of energy instead of projected surplus in 2007-08 due to much
lower availability of energy on account of export of power to the extent of 616 MU

Power Projections 2008-09: Country and NER

_____________________________________
• National Level: (2008-09)
– Estimated Energy Requirement : ~ 799 BU
– Estimated Energy Availability: ~ 729 BU
– Estimated Energy Shortage: ~ 70 BU ( 8.8%)
– Estimated Peak Demand: 120109 MW
– Estimated Peak Availability: 98408 MW
– Estimated Peak Shortage: ~ 21701 MW(18.1%)

• North-Eastern Region: (2008-09)

– Estimated Energy Requirement: 9762 MU Expected shortages:
– Estimated Energy Availability: 10080 MU Meghalaya: 22.3%
– Estimated Energy surplus : ~ 318 MU (3.3%) Manipur: 21.0%
– Estimated Peak Demand: 1885 MW
– Estimated Peak Availability: 1600 MW
– Estimated Peak Shortage: ~ 285 MW(15.1%)

Source: Load-Generation Balance Report, CEA

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Power Projects Planned in NER –XI Plan

• Hydro: 2724 MW
• Thermal: 1537 MW (Coal 750MW, GAS 787 MW)
Total: 4261 MW

1. Lakwa G Assam GENCO 37 MW

2. Myantdu-I H MESEB 84 MW
3. New Umtru H MESEB 40 MW
4. Subansiri L H NHPC 2000 MW
5. Kameng H NEEPCO 600 MW
6. Bongaingaon T NTPC 750 MW
7. Tripura G ILFS JV 750 MW
8. Barak# BHELPTC JV 150 MW#

# Expandable to additional 150 MW

Inter-Regional Transmission System NER

• East-North-East Inter-connector

400kV D/C Malda-Bongaingaon: 1000MW

220kV Birpara-Salakati: 250 MW

• ER-NER synchronized in year 1992

• ER-NER-WR -do- 2003
• ER-NER-WR-NR -do- 2006

• +/- 800kV HVDC Bi-Pole 6000 MW

• Next 15-20 years
– 7-8 No 800kV HVDC Bi-Poles and
– 4-5 No. 400kV D/C Transmission lines

• Reliability and Operating Margin~ 25-30%

to support market-oriented power
exchanges

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National Electricity Policy
___________________________________
Hydro- a thrust area for development

Full development of potential

Harnessing hydro potential speedily will

also facilitate economic development

Massive resource requirement

Public-private partnership

Hydro Development –A Priority Area

________________________________________

• North Eastern region is rich in hydro and

other energy resources-coal, oil and gas

• Facilitating development of hydro-electric

projects in North-Eastern region is a key
government priority

• Brahamaputra Basin:

– 226 Schemes
– Probable Installed Capacity: 66065 MW
– Potential at 60% load factor: 34919 MW

Source: National Electricity Plan, April 2007

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PM’s 50,000 MW Hydro-Power Initiative
________________________________________
• 162 Schemes identified
• 72 Schemes in NER including Sikkim

State No. of Schemes Capacity (MW)

1. Arunachal Pradesh# 42 27293
2. Manipur@ 3 362
3. Meghalaya@ 11 931
4. Mizoram @ 3 1500
5. Nagaland $ 3 370
6. Sikkim* 10 1469
Total 72 31,725 MW

# PFR by NHPC 25,NEEPCO 15, WAPCOS,2

@ PFR by WAPCOS
$ PFR by NEEPCO
* PFR by NHPC

Large Storage Type Projects in NER

________________________________________
Scheme State Capacity (MW)

1. Demwe Ar.Pradesh 3765 MW

2. Passighat -do- 14685 MW
3. Dibang -do- 2355 MW
4. Subansiri -do- 4520 MW
Mega Project
Total 25,325 MW

Other Storage Schemes: Tizu (Nagaland) 365 MW

Lunglag (Mizoram) 690 MW
1. Nagaland 12 916 MW Boiner (Mizoram): 635 MW
2. Assam 9 553 MW Kaldan (Mizoram): 545 MW
3. Meghalaya 11 1157 MW
Tapaimukh (Manipur): 510 MW
4. Mizoram 10 2186 MW
5. Manipur 12 1366 MW
6. Sikkim 1 95 MW

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Major Challenges in hydro power development

Mobilization of Fund

Attracting Private Investment

Payment Security Mechanism

Infrastructure Bottlenecks in remote areas

Skilled Manpower mobilization

Environmental Issues (Climate Change)

Law and Order

Revised Mega Power Policy

__________________________________

GoI has come out with revised policy

guidelines on mega power projects to
encourage development of projects

An inter-state hydro power plant of a

capacity of 350 MW or more located in
NER is eligible for grant of mega power
status

Fiscal concession/benefits available are:

Zero Custom duty on import of capital
equipment
Deemed export benefits
Price preference to domestic bidders

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New Hydro Power Policy
________________________________________

Approved by GOI in January 2008

Provides level playing field

Private hydro projects will be exempted from

tariff-based competitive bidding up to January
2011 (earlier available to public sector only)

Merchant sale up to 40%

An additional 1% over and above 12% as state’s

royalty for local area development

PAF :
Free 100 Units electricity up to 10 years
Housing
ITI
Employment opportunities

Window of Opportunities
North East is rich in hydro potential
> 60,000 MW

Government has set up enabling policies/program for

development of hydro-power projects
Fiscal concession/benefits

Power Market is encouraging market-based returns on

investment-storage projects could provide flexibility

Huge investment opportunities

PPP in generation, transmission and distribution
Supply of labour, materials, equipments
Employment/Tourism

Integration with ASEAN for trade, investment in energy

NER has the potential to become power house of the

country

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We live in a wonderful world that is full of
beauty, charm and adventure. There is
no end to the adventures that we can
have if only we seek them with open
eyes. - Jawahar Lal Nehru

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www.ptcindia.com

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