OVERVIEW

OF
INDIAN
POWER
SECTOR

POWE
R
2003 onwards
Growth Era
19912003
Liberalisation
Era
19561991
Nationalisatio
n
Stage

Before 1956
Introductory
Stage

Electricity
(Supply) Act
1948
Establishment
of semiautonomous
State Electricity
Boards (SEBs)

Industrial Policy
Resolution (1956)
Generation and
distribution of power
under state
ownership
Power losses,
subsidies,
infrastructure
bottlenecks and
resource constraints

Legislative and policy

initiatives (1991)
Private sector
participation in
generation
Fast-track clearing
mechanism of private
investment proposals
Electricity Regulatory
Commissions Act
(1998) for
establishing Central
and State Electricity
Regulatory
Commissions and
rationalisation of
tariffs

Electricity Act (2003)

National Tariff Policy (2006)
Elimination of licensing for
generation projects
Increased competition through
international competitive bidding
engaged in power generation,
transmission and distribution
Launch of UMPP scheme Various
schemes and initiatives such as
Jawaharlal Nehru National
Solar Mission to promote
renewable
energy
Civil nuclear agreement with the US
for nuclear technology and fuel Fuel
supply agreement of power
companies with Coal India Ltd (CIL)
Private equity investments in the
sector have surged since 2010

Source:; WWW..NPTI.IN

POWE
R
India as a power
Producer and
Consumer globally

With a production of 1,102.9 TWh, India is the third largest producer and fifth largest
consumer of electricity in the world
The per capita electricity consumption in 2012-13 is -917.18 kWh.
As per census, only 55% of rural households have access to electricity.

Large-scale government
initiated expansion
plans

Robust growth in
Renewable sector

The government targets capacity addition of 89 GW under the 12th Five-Year Plan (2012
17) and around 100 GW under the 13th Five-Year Plan (201722)

Investments of around USD223.9 billion are planned for the power sector during the 12th
Plan Five-Year Plan

Renewable energy capacity additions of 30 GW are planned in the next five years to meet
the growing energy demand

Wind energy is estimated to contribute 15 GW, followed by solar power at 10 GW

Source:; WWW..CEA..nic.inC

POWE
R

Thepower sectorin India is mainly governed by the Ministry of Power. There are three
major pillars
of power sector these are Generation, Transmission, and Distribution

PRESENT POWER SCENARIO OF INDIA

INSTALLED
PER CAPITA
ANNUAL
SUPPLY
CAPACITY
CONSUMPTIO
GENERATION DEMAND GAP
N
(248509.63M
(1102.9 TWh) (4.1% PEAK)
W)
(917.18)

PLF
(68.15)

ELECTRIFIED
VILLAGES
(95.60%)

Source:; WWW..CEA..nic.in

POWE
RGENERATIO
N

All India Installed Capacity (MW) as on 31-05-2014 Region -wise

300000

All India Installed Capacity(MW) as on 31-52014(Sector-Wise)

248509.64

250000
200000

171376.09
86962.99

150000

68255.9
CENTRAL
STATE
PRIVATE

100000
50000

39375.36

40661.41

31692.14

93290.7

4780
0
CAPTIVE

TOTAL

RES

THERMAL

NUCLEAR

HYDRO

Source:; WWW..CEA..nic.in

POWE
R
Electricity production in India (TWh)

Electricity production in India (excluding captive generation)

stood at 911.6 TWh in FY13, a 4 per cent growth over
the previous fiscal
Over FY0713, electricity production expanded at a CAGR
of 5.5 per cent

876

CAGR: 5.5%

912

811

The Planning Commissions

Plan projects that total
12th
domestic energy production would reach 669.6 million
tonnes of oil equivalent (MTOE) by 201617 and 844 MTOE
by 202122

772
724

663

FY07

705

FY08

FY09

FY10

FY11

FY12

FY13

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

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

Source:; WWW..CEA..nic.in

POWE
THERMAL POWER
R

Thermal fuel maintains a leading position among the fuel used for power generation
Coal

India has large reserves of coal. As of April 2012, total coal reserves
stood at 293.5 billion tonnes; of this, 118.1 billion tonnes were
proven reserves

Gas

Indias proven natural gas reserves measure about 1,074 billion

cubic metres

68%
Thermal

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

Gas; 22607.95; 13%

Diesel; 1199.75; 1%

HYDRO; 40661.41; 16% RES; 31692.14; 13%

NUCLEAR; 4780; 2%

coal

RES
THERMAL

Gas

NUCLEAR

Diesel

HYDRO
coal; 147568.39; 86%

THERMAL; 171376.09; 69%

Source: Ministry of Coal,

POWE
ISSUES AND CHALLENGES
R
Fuel quality & availability

Coal quality & availability constraints

Coal beneficiation
Power generation technology
Clean coal based technologies
Land accusation Problem
Logistic route Rail/ Road, pipelines, port etc (for fuel, water, ash etc)
Power evacuation route (Electricity Grid)
Water source
Price of Fuel
Volatility of coal price
Environmental clearance.

POWE
HYDRO POWER
R

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

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

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

essment made by CEA, India is endowed with economically exploitable hydro-power potential to the tu
MW of installed capacity. The basin wise assessed potential is as
Basin/Rivers Probable

Installed Capacity (MW)

Indus Basin

33,832

Ganga Basin

20,711

Central Indian River system

4,152

Western Flowing Rivers of southern India

9,430

Eastern Flowing Rivers of southern India

14,511

Brahmaputra Basin

66,065

Total

1,48,701
Source:; WWW..CEA..nic.in

POWE
PROSPECTS OF HYDRO GENERATION
R
Share of Hydropower in Electricity Generation

Initiatives to encourage Hydropower

Hydroelectric projects - Renewable, non-consumptive and environmentally benign source

of energy.

GoI has identified 162 schemes for preliminary feasibility reports under the 50, 000 MW
hydroelectric initiative during the 12th plan period (FY 2012 17).

Till recently, issues like dearth of adequately investigated projects, long clearance and
approval procedures, resettlement and rehabilitation issues, land acquisition problems,
power evacuation problems etc. had contributed to the slow pace of hydropower
development in the country. However, considering the large hydropower potential in the
country and the much required energy security, government is accelerating hydropower
reforms. Some of the recent government initiatives in this space include
Preparation of a shelf of well- investigated projects and streamlining of
statutory clearances and approvals for the same.
Establishment of independent regulatory commissions
Providing for long-term financing for projects,

Govt. of India is also cooperating with Bhutan and Nepal in hydropower development for

120
100

98.8
During Apr il-Feb 2007, shar e of
hydr opow er gene ration in India w as
higher at about 17%

82.8

80
57

60

39.6

40

16.1

20

16.1

12.7

8.8

6.5

India

Japan

USA

0
Norw ay

Brazil

Canada Sw eden

China

World
average

Source: IEA - Key World Energy Statistics 2006, CEA.

over a decade now. Indian companies are setting up hydropower plants in these
countries as both Bhutan and Nepal have huge potential of hydropower generation.

Vast untapped Hydropower potential in India

MW
Identified capacity as per re-assessment
study

%age

Evacuation from North Eastern region and Nepal

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

generation.

North East India is already connected to Northern, Western and Eastern

Grid. PGCIL is further strengthening the capacity to ensure that evacuation
is not a constraint once the planned power plants in North East are
commissioned.

To encourage setting up of hydroelectric plants in Nepal and attract private

investment, Govt. of Nepal has set up a JV with ILFS to develop four 220 kv
double circuit lines from Nepal to India.

148,701

Capacity developed

29,572

19.9%

Capacity under construction

13,286

8.9%

105,843

71.2%

Capacity yet to be developed

10

POWE
ISSUES AND CHALLENGES
R

Geological surprises
Land acquisition
Rehabilitation & Resettlement
Forest clearance
Environment clearance
Agitations
Poor road infrastructure
Lack of access to data e.g. hydrological data
Renewable, but yet not counted as renewable
No RPO/REC
No Feed-in Tariff
No excise/customs duty benefit (except for mega projects)
No accelerated depreciation
Peaking power does not figure in long term power purchase plans of utilities. Nor do regulators insist on it and why
should they, when they can over-draw at will?
No utility ties up power years in advance. Long gestation projects such as hydro suffer
Consequently, hydro has to compete with thermal in power procurement. May suffer if tariff, particularly first year
tariff, is higher than thermal
Invariably, fuel costs rise faster than the indices for comparison
Excise/customs duty exemption only for equipment, but not for civil part
75% of hydro project costs are for civil, whereas only 10- 15%% project costs of thermal projects are for civil
Construction period 4 years for thermal, but 6 to 8 years for hydro. ROE not allowed during construction: Low IRR
Many projects have to pay upfront charges to States, which carry no return
Project preparation longer and more expensive than in thermal (DPR, Land acquisition, R & R etc)

POWE
ISSUES AND CHALLENGES(CONTD)
R

Approach road construction also a heavy initial burden

Tariffs do not reflect peaking benefits

A large part of tariff of a thermal plant is fuel, whereas most of the tariff of a hydro plant is accounted for by capital cost
Longer gestation period adds to the IDC burden
Hydro projects are therefore more sensitive to terms of finance
Lack of long-term finance makes tariff front-loaded, comparing unfavorably with initial tariffs of thermal plants
Allotment of projects done haphazardly
After getting upfront payment no real support from state Govt.
Project developers are expected to provide many basic amenities such as schools as CSR
Next benefit to state accrues only after commercial operation starts and free power is received

POWE
NUCLEAR POWER
R

Nuclear power is the fourth-largest source of electricity in India after thermal, hydroelectric and renewable sources of
electricity. As of 2012, India has 20 Nuclear reactors in operation in six nuclear power plants, having an installed capacity
of 4780 MW and producing a total of 29,664.75 GWh of electricity while seven other reactors are under construction
and are expected to generate an additional 6,100 MW.

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

There are two nuclear corporation in india

1.

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

2.

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

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

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

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

POWE
INDIAN NUCLEAR POWER INDUSTRY
R

Source:www.world-nuclear.org/

POWE
INDIAS OPERATING NUCLEAR POWER REACTORS
R
Reactor

State

Type

MWe net, each

Commercial
operation

Safeguards status*

BWR

150

1969

Item-specific, Oct 2009

Tarapur 1&2

Maharashtra

Kaiga 1&2

Karnataka

PHWR

202

1999-2000

Kaiga 3&4

Karnataka

PHWR

202

2007, (due 2012)

Kakrapar 1&2

Gujarat

PHWR

202

1993-95

Madras 1&2 (MAPS) Tamil Nadu

PHWR

202

1984-86

Narora 1&2

Uttar Pradesh

PHWR

202

1991-92

Due in 2014 under new

agreement

Rajasthan 1

Rajasthan

PHWR

90

1973

Item-specific, Oct 2009

Rajasthan 2

Rajasthan

PHWR

187

1981

Item-specific, Oct 2009

Rajasthan 3&4

Rajasthan

PHWR

202

1999-2000

March 2010 under new

agreement

Rajasthan 5&6

Rajasthan

PHWR

202

Feb & April 2010

Oct 2009 under new

agreement

Tarapur 3&4

Maharashtra

PHWR

490

2006, 05

Due in 2014 under new

agreement

Kudankulam 1

Tamil Nadu

917

(July 2014)

Item-specific, Oct 2009

Total (21)

PWR

5302 MWe

December 2010 under

new agreement

POWE
PROJECTED NUCLEAR POWER IN INDIA
R

Source:www.world-nuclear.org/

POWE
INDIAS NUCLEAR POWER REACTORS UNDER CONSTRUCTION
R
MWe gross,
net,
each

Commercial
operation due

Safeguards
status

Type

Kudankulam 2

PWR (VVER)

1000, 917

NPCIL

July 2002

3/2014

item-specific, Oct
2009

FBR

500, 470

Bhavini

Oct 2004

(9/2014 start-up)
2015

Kakrapar 3

PHWR

700, 630

NPCIL

Nov 2010

June 2015

Kakrapar 4

PHWR

700, 630

NPCIL

March 2011

Dec 2015

Rajasthan 7

PHWR

700, 630

NPCIL

July 2011

June 2016

Rajasthan 8

PHWR

700, 630

NPCIL

Sept 2011

Dec 2016

Kalpakkam PFBR

Total (6)

Project control

Construction
start

Reactor

4300 MWe gross

Source:www.world-nuclear.org/

POWE
INDIAS URANIUM MINES AND MILLS existing and planned
R
District

Mine

Mill

Operating from

tU per year

Jaduguda

Jaduguda

1967 (mine)
1968 (mill)

Bhatin

Jaduguda

1967

Narwapahar

Jaduguda

1995

Bagjata

Jaduguda

2008

Turamdih

Turamdih

2003 (u/g mine)

2008 (mill)

Banduhurang

Turamdih

2007 (open pit)

Mohuldih

Turamdih

2012

Andhra Pradesh, Kadapa/

YSR district

Tummalapalle

Tummalapalle

2012

Andhra Pradesh, Kadapa/

YSR district

Kanampalle

Kanampalle?

2017

Telengana, Nalgonda dist.

Lambapur-Peddagattu

Seripally /Mallapuram

2016?

130

Karnataka, Gulbarga dist.

Gogi

Diggi/ Saidpur

2014

130

Kylleng-Pyndeng-SohiongMawthabah (KPM),
(Domiasiat), Wakhyn

Mawthabah

2017 (open pit)

340

Jharkhand

Jharkhand, East
Singhbum dist.

Meghalaya

200 total from mill

190 total from mill

220 increasing to 330

Source:www.world-nuclear.org/

POWE
ISSUES AND CHALLENGES
R
Economics

Poor management
Low net yield of energy of the nuclear fuel cycle
Safety concerns
Concerns of transporting uranium
Environmental costs not included in market price
Risk of catastrophic accidents
High environmental impact (with major accidents)
Cannot compete economically without huge government subsidies
Spreads knowledge and technology for building nuclear weapons
Subject to terrorist attack

POWE
RENEWABLE POWER
R

India has 150GW of renewable energy potential, about half in the form of small hydropower, biomass, and wind and half in
solar, cogeneration, and waste-to-energy. Developing renewable energy can help India increase its energy security, reduce
the adverse impacts on the local environment, lower its carbon intensity, contribute to more balanced regional development
and realize its aspirations for leadership in high-technology industries.
Since 2005 the energy and climate change agenda has taken center stage in the domestic and international policy arena.
India is well placed to build on this momentum. It has tripled its renewable energy generation capacity in the past five years
now ranking fifth in the world in total installed renewable energy capacity, and it has established a legal and regulatory
framework for sector oversight

Source:; MNRE 2009

POWE
R
As of April 2013, total installed power capacity
from
renewable energy sources (excluding Hydro power) was
27.5 GW. This accounts for 12.3 per cent of the total
installed power capacity and forms 6.5 per cent of the total
electricity mix

India has the sixth largest renewable (eg, hydro

power) power generation capacity (2012)

90

86

Wind energy is the largest source of renewable energy

in
India; it accounts for an estimated 87 per cent of total
installed capacity (18.3 GW). There are plans to
double wind power generation capacity to 20 GW by 2022
Biomass is the second largest source of renewable
energy,
accounting for 12 per cent of total installed capacity in
renewable energy. There is a strong upside potential in
biomass in the coming years

India ranks
sixth in the
world
71

31

China

US

Germany

Spain

29

Italy

24

India

Solar energy accounts for 1 per cent of total renewable

energy installed capacity. The countrys true potential for
solar power stands at an estimated 5,000 TWh per annum
Capacity addition of 30 GW is planned using various
renewable energy technologies during the th Five-Year
12
Plan. Wind Energy is estimated to contribute 15
GW,
followed by solar power at 10 GW and the remaining by
other sources
Source: Renewables 2012 Global Status Report
(REN21),

POWE
RENEWABLE ENERGY IN INDIA
R

Renewal Energy Installed Capacity in India (as of 31 January 2014)

Installed capacity
Type
Technology
(in MW)
Grid Connected Power
Wind

20,298.83

Small Hydel Power Projects

3,774.15
2,208.36; 7%

Bagasse Cogeneration

2,512.88

Solar

2,208.36

Biomass Power &

Gasification

1,285.60

Waste to Power
Total - Grid Connected
Power

1,285.60; 4% 99.08; 0%

2,512.88; 8%

3,774.15; 13%
20,298.83; 67%

99.08
30,177.90

Off-Grid / Captive Power

Bagasse Cogeneration

517.34

SPV Systems (>1 kW)

159.77

Biomass Gasifiers- Industrial

146.40

Waste to Power

119.63

Wind

Small Hydel Power Pro

Bagasse Cogeneration

Solar

Biomass Power & Gasification

Waste to Power

Source:; MNRE

POWE
ECONOMIC POTENTIAL OF RENEWABLE ENERGY
R

India could produce about 62GW90 percent of technically feasible renewable capacity in wind, biomass, and small
hydropowerin an economically feasible manner, if the local and global environmental premiums of coal-based generation
are brought into consideration. About 3GW of renewable energy is economically feasible at the avoided cost of coal-based
generation of Rs 3.08/kWh, all of it from small hydropower. About 59GW of renewable energy in wind, biomass, and small
hydropower is available at an avoided cost of less than Rs 5/kWh. The full capacity of 68GW in these three technologies
can be harnessed at a price of less than Rs 6/kWh.
MW
60000
50000

50000

45000

40000
30000
20000
10000

16000

15000
7000

5000

Potential of renewable energy

Fuel composition
in 2032
Source:; MNRE

POWE
ISSUES AND CHALLENGES
R

The cost plus approach to tariff settingalong with the technology-specific focushas led to incentives that hinder the
economic development of Indias renewable energy resources. India currently offers a wide variety of incentives, including
feed-in tariffs; generation-based incentives; renewable purchase obligations (RPOs); central, state, and regional capital
subsidies; accelerated depreciation; and tax incentives. The lack of coordination between incentives and state programs
makes it difficult to adopt an economics-based least-cost development approach to tapping the countrys renewable energy
potential.
The limited availability of evacuation infrastructure and grid interconnections is one of the biggest obstacles to harnessing
renewable energy potential. Much economically attractive wind and small hydropower potential remains untapped because
of lack of adequate grid evacuation capacity and approach roads. The lack of good-quality data on renewable resources
also remains a problem, despite heavy investment by the MNRE in collecting data on renewable energy. The lack of
support infrastructure in the form of a strong indigenous supply chain remains a major barrier.
Existing mechanismsincluding single-window clearances, facilitation by state nodal agencies, and simplified regulation
for smaller renewable energy projectshave proved to be of limited effectiveness. In some cases multiple bottlenecks have
been replaced by single, larger, and more powerful roadblocks, and significant delays remain the norm. In addition,
speculative blocking of land has become common, leading to unsustainable price increases.

Skewed financial incentives for facilitating investments in renewable energy

Too many incentive programs
Failure to adequately address utilities
long-term financial concerns

POWE
ISSUES AND CHALLENGES(CONTD)
R
Failure to develop least-cost resources first
Inadequate long-term funding sources
Inadequate evacuation and access infrastructure
Lack of good-quality data
Underdeveloped industry value chain
Delays in clearances and approvals and long development cycle
Land and resource acquisition issues

POWE
RTRANSMISSI
ON

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

PGCIL is the premier organization which handles the transmission system of India.

PGCIL
TRANSMISSION
LINES
(108307ckm)

SUBSTATIONS
(186 NOS)

SYSTEM
AVAILABILITY
(99%)

TRANSFORMATI INTERREGIONAL
ON CAPACITY
CAPACITY
(2,09,274 MVA)
(40,050MW)

POWE
CURRENT TRANSMISSION MARKET STRUCTURE
R

Ministry of Power (MoP)

(Perspective planning, policy formulation, processing of projects for investment
decision, monitoring of the implementation of power projects, training and
manpower development and the administration and enactment of legislation in
regard to power generation, transmission and distribution)
Central Electricity Authority of India (CEA)

(Advises the government on matters relating to the National Electricity

Policy and formulates short-term and perspective plans for the
Central Electricity
Regulatory
development
of electricity systems)
Commission
(CERC)

(Regulates tariff; formulates policies

regarding
subsidies, and promotion of efficient
and
environmentally benign policies at
central level)
Central Transmission
Utility(CTU)

State Electricity Regulation Commission

(SERC)
(Regulates tariff; formulates policies
regarding
subsidies, and promotion of efficient
and
environmentally benign policies at
state level)

Private / PPP

State Transmission Utility

(STU)

(Develops transmission lines on

(Ensures development of an
efficient, coordinated and
economical system of
interstate
transmission lines and
undertakes inter-state
transmission)

BOO model and charges for

wheeling electricity within the
tarrifs specified by CERC/SERC)

(Ensures development of an
efficient, coordinated and
economical system of intra-State
transmission lines and
undertakes intra-state
transmission)

POWE
MAJOR MILESTONES IN TRANSMISSION SECTOR
R
1991

Electricity
Laws
(Amendment)
Act

Private
participation
allowed in
generation

Up to 100%
foreign
ownership
allowed

Operators
and SEBs
entered into
power
purchase
agreements
(PPAs)

SEBs to be
responsible for
transmission

1998

2003

2006

The Electricity Act

Electricity Laws
(Amendment)
Act
Private
participation
enabled in
transmission

CTU and STUs

set up

Electricity
Regulatory
Commissions
Act

CERC & SERCs

formed

Regulator to
protect &
promote
consumer
interest, fair

Replaced the
earlier laws,
aiming to enable
reforms &
restructure power
sector
National Electricity
Policy brought
out, mandatory
creation of
SERCs, emphasis
on rural
electrification,
open access in
transmission and
Distribution
Introduced a nondiscriminatory
open access in
the transmission

2011

National Tarif
Policy

National Tarif
Policy
Mandatory
competitive
bidding of all
transmission
projects after Jan
2011
Framework for
determining tariffs
and rate of return
for projects under
generation,
transmission as
well as distribution

(Amendment)
Exemption to
intra-state
transmission
sector from
mandatory
competitive
bidding up to 5th
Jan 2013
Exemption of
select
experimental
works/ urgent/
compressed time
schedule work
from tariff based
competitive
bidding

Source:; www.powergridindia.com

POWE
EVOLUTION OF NATIONAL GRID
R
Regional Grids
with ATS of
Central
Generation
State
Grids by
SEBs

1950-60s
Local

1950s

National
Interconnectin
g Regional
Grids with
HVDC

1990s

Grid

2000 onwards

1970-80s
(Paradigm Shift from self
sufficiency
at
Regional
level concept to National
level)

Source:; www.powergridindia.com

POWE
REGIONAL AND NATIONAL GRID
R

Transmission forms a critical link in the power sector value chain. India's power
generation capacities are unevenly dispersed across the country creating
an imbalance between the distribution of power demand and supply centres.
The country has been demarcated into five electrical Regions:

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

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

POWE
TRANSMISSION LINE NETWORK STRENGTH
R

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

Source:; www.powergridindia.com

POWE
TRANSMISSION NETWORK -PRESENT
R

Transmission network
spread geographically over 3.3million sq
km : Inter-State and Intra-State level

Transmission line : 2,91,336 ckm

(POWERGRID : 1,08,307 ckm)
765kV
: 11,096 ckm
400kV
: 1,25,957 ckm
220kV
: 1,44,851 ckm
HVDC Bipole (500kV) : 9,432 ckms

Transformation capacity (MVA/MW)

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

FSC 33nos., TCSC 6 nos.

Source:; www.powergridindia.com

POWE
TECHNOLOGY BEING ADOPTED
R
High Voltage line

Increase the capacity of trans. corridor through HSIL/re-conductoring with HTLS /Upgradation
Utilization of existing transmission lines upto full thermal capacity Series capacitors, SVC, FACTS
Optimization of Tower design tall tower, multi-ckt. Tower
GIS substation

POWE
PURSUING HIGHER VOLTAGE LEVELS BY PGCIL
R
Worlds longest
multi-terminal
HVDC to harness renewable
Hydro Power from North-east

Voltage
(kV)

Worlds Highest
Voltage level Test
Charged in Oct.12

station

765kV
D/C - AC
1200kV

765kV

800kV
HVDC

500kV
HVDC
220kV

1977

400k
V

1990

2000

2002
Year

2012

2017-18

POWE
ISSUES AND CHALLENGES
R

Issues concerning availability of RoW and same are becoming critical

Resistance of people, terrains in areas of mountains and forest

Sector to grow from 228 GW to 600 GW in next 20 years Even 765kV system may not be good enough.
New methods have to be found out
Challenges to develop Transmission system to meet the requirement of power flow from anywhere to
anywhere.
With increasing magnitude of power transmission, create new challenges of proper O&M
Upgrade to > 50 GW inter-regional evacuation
Creating High Voltage Evacuation Networks
Concept to Commissioning (C2C) time is significantly high
Delay in Commissioning of Projects Under Cost-Plus Regime
Insufficient focus on up gradation of existing transmission lines

POWE
DISTRIBUTI
R
ON
Distribution and Retail Supply is the most critical link in the electricity market, which interfaces with the end customers and
provides revenue for the entire value chain.
Indian electricity distribution caters to nearly 200 million consumers with a connected load of about 400 GW that places the
country among the largest electricity consumer bases in the world
.
The consumers are served by around 73 distribution utilities
13 electricity departments,
17 private distribution companies,
41 corporatized distribution companies
2 State Electricity Boards
Rural distribution segment in India is characterized by wide dispersal of net work in large areas with long lines, high
cost of supply, low paying capacity of the people, large number of subsidized customers, un-metered flat rate supply to
farmers, non metering due to high cost and practical difficulties, low load and low rate of load growth. Consumer mix in
rural areas is mainly agriculture and residential.
Urban distribution is characterized by high consumer density, and higher rate of growth of load. The consumer mix in
urban areas is mostly commercial, residential, and industrial.
Both segments are distinct with different problems and issues.

POWE
CONSUMER MIX IN INDIA
R
Agricultura
l 10%

Industrial
HT 0.05%

Industrial LT
2%

Com m e
rcial
11%

Domestic 77%

Category wise % of No. of

Consumers

POWE
DISTRIBUTION SCENARIO- High Distribution losses
R

POWE
PRESENT DISTRIBUTION SCENARIO
R
High AT&C losses

Frequent power failures due to very old and dilapidated network

Massive load shedding
Low customer satisfaction
Customer service standards are poor
Lengthy and tedious mechanisms for resolving consumer grievances
Uninspiring work culture
Old and obsolete technologies still being used
Unacceptable safety standards

POWE
STATE WISE AT&C LOSSES IN INDIA
R
Less than 20%

Between 20-30%

Between 30-40%

Above 40%

Goa

Andhra Pradesh

Karnataka

Delhi

Tamil Nadu

Gujarat

Kerala

Uttar Pradesh

West Bengal

Assam

Bihar

Himachal Pradesh

Haryana

Jharkhand

Maharashtra

Rajasthan

Madhya Pradesh

Tripura

Meghalaya

Arunachal Pradesh

Punjab

Mizoram

Manipur

Uttaranchal

Chhattisgarh

Nagaland

POWE
DISCOMS MODEL IN INDIA
RS.
No.
1

Ownership/ PPP
State Owned Discom

Private Discom (in joint

venture with the State
Government)

Discom
Jaipur Vidyut Vitran Nigam
Limited (JVVNL)
North Delhi Power Limited
(NDPL)
Noida Power Company Limited
(NPCL)

Private Discom (full

Reliance Infrastructure
ownership with the Private Limited- Mumbai Distribution
Entity)
Operation (R-Infra)

Public Private Partnership

Torrent Power Bhiwandi

Limited (TPBL)-Bhiwandi &
Agra

Ownership
Structure
100% Public

49% State Govt.

27% GNIDA

100% Private

Distribution
Franchisee

POWE
ISSUES IN THE ELECTRICITY DISTRIBUTION SECTOR IN INDIA
R
1.State Government related issues
Uncertain commitment of State Governments is key impediment to the ongoing reform process. This includes delay in unbundling and
restructuring of State Electricity Boards, minimal/no financial support to unbundled utilities during transition period, inadequate
financial support for providing subsidized power to domestic and agricultural consumers, inadequate administrative support in
curbing theft of power etc. Frequently changing policies of the State Governments in regard to subsidies/free power to farmers
adversely affecting the revenue recovery and cost coverage of utilities.
2. Regulatory process related issues
SERCs are inadequately staffed with poor infrastructure. Due to lack of competency and resources in Discoms, tariff filings are often
delayed. In several cases, SERC asks Discoms to revise their filings on account of data gaps or improper information. There is no
central repository of data in electronic form which leads to delay in filing petitions and responding to queries from the regulator.
3. Corporate governance and institutional issues
In many cases, unbundling is limited to operational and technical segregation. Successor companies are highly dependent on their
parent company (i.e. residual SEB or single buyer/trade co or Transco). and therefore, the focus on efficiency improvement from
respective entities is lacking. Due to in- adequate network expansion commensurate with load growth, many power transformers,
distribution transformers, 33kV lines and 11kV feeders are overloaded. Most of the distribution networks in India are quite old which
results in to reduced reliability, increased R&M expenses and poor quality of supply. The consumer awareness about Demand Side
Management (DSM) is limited which results in to higher consumption and increased losses.

POWE
ISSUES IN THE ELECTRICITY DISTRIBUTION SECTOR IN INDIA
R
4.Commercial issues

Commercial losses are primarily due to improper energy accounting and billing processes, faulty metering, under-billing, theft and
pilferage of energy and lack of accountability within the organization. Only 87% of the total consumers in India are metered
(Source: Mop, 2004-05). Many states have undertaken 100% metering programs, but not yet completed. The chart below indicates
consumer metering level in some of the states.
High AT&C losses are due to high T&D losses coupled with low collection efficiency.
Low level of collection is attributable to lack of employees accountability, inadequate collection facilities, limited usage of advanced
systems and technology (e.g. payment through ECS, credit/debit cards, special centres like e-Seva centres), billing errors, political/
administrative interference etc.
5. Operational issues
Due to inadequate metering and data collection system in place, utilities have not been able to conduct energy audit, which is crucial
for any energy business. Discoms do not have proper load monitoring and control mechanisms (e.g. SCADA, Distribution Control
Centre, telecommunications etc.), which results in to haphazard control of the demand and often leads to loss of revenue and
inconvenience to the consumers

POWE
DISTRIBUTION SECTOR REFORMS
R

Power sector reforms were first initiated in India in 1992 by the Ministry of Power (MoP) to invite private investments in power
generation to bridge the demand-supply gap
In the reform process distribution segment was identified as the key area for reform for putting the sector on the right track.
Distribution Reforms involve System up-gradation, Loss reduction, Theft control, Consumer orientation, Commercialization and
adoption of IT. The Government launched the Accelerated Power Development and Reforms Programme (APDRP) during the
10th Five Year Plan (2002-07) for the strengthening of Sub Transmission and Distribution network and reduction in AT&C
Continuing its support for power distribution reforms, the Government launched the Restructured APDRP (R-APDRP) in the 11th
Five Year Plan (2007-12) with revised terms and conditions. Under the Restructured Accelerated Power Development and Reforms
Programmed (R-APDRP), State energy utilities are required to adopt measures for
Reducing Aggregate Technical & Commercial losses,
Strengthen distribution network
Improve commercial viability

R-APDRP
It was in this backdrop that the Restructured APDRP (R-APDRP) was conceived in September 2008.With a total program size of
Rs 500bn, Restructured APDRP-II (R-APRDP) is Government of India s initiative to reform Distribution Sector as part of the 11th Five
Year plan. The program is proposed to cover urban areas towns and cities with population of more than 30,000 (10,000 in case of
special category states). The power reform initiative is spread over two phases of:
Phase 1: Covering IT applications in the distribution sector
Phase 2: Strengthening system improvement.

POWE
EFFICENCY IMPROVEMENT IN DISTRIBUTION SECTOR
R

Models of: PPP

1. Distribution Franchising In Bhiwandi, Maharashtra M/s Torrent Power appointed Distribution Franchisee on energy
input basis in Dec 2006
Customer base of 0.16 million
Area spread over 721 square kilometres.
The estimated demand in the circle is 750 MVA with an annual power consumption of 2400 million units.
Achievements :
15% T&D loss reduction in 9 months (Losses brought down to 30% from 45%).
Improvement in Metering, Billing and Revenue Collection Defective Energy meters (25300 Nos.) replaced.
Approx. capital investment : USD 20 million Enhancement in customer service quality
DT failure reduced by replacement and revamping of DTs

Benefits of Franchise Model

Reduction in technical losses and theft
Improvement in Metering, Billing and Revenue Collection
Capital investments in upgradation of the network
Enhancement in customer service quality

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

POWE
GENESIS OF POWER TRADING IN INDIA
R

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

Facilitate development of Power Projects particularly through private investment

Promote Power Trading to optimally utilize the existing resources

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

Promote exchange of power with neighbouring countries

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

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

Exponential growth established the viability of trading as a business concept

Source :47
www.ptcindia.com

POWE
EVOLUTION OF THE TRADING REGULATIONS
R
2003
Electricity
Act
formalize
d concept
of trading
and
power
market

2010
Procedure,
Terms and
Conditions
for grant of
trading
license and
other related
matters (First
Amendment)

2009
Procedure,
Terms and
Conditions for
grant of trading
license and
other related
matters
(Second
Amendment)

2009
Procedure,
Terms and
Conditions for
grant of trading
license and
other related
matters

2010
Fixation
of
Trading
Margin

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

2012
Procedure, Terms
and Conditions
for grant of
trading license
and other
related matters
(First
Amendment)
Source : www.ptcindia.com

POWE
INDIA POWER MARKET DESIGN
R

Source : www.ptcindia.com

POWE
VOLUME OF ELECTRICITY TRANSACTED THROUGH TRADING
R
LICENSES AND POWER EXCHANGES

Benefits of Trading (1)

POWE
BENEFITS OF TRADING
R

Increasing realization among utilities of power as a source for revenue earning

Improved PLF, particularly of State Power Utilities

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

No backing down

Reduction in load shedding

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

supply gap

Market-based returns
No sovereign/government guarantee

Large merchant capacity is being funded

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

Planned rapid capacity additions have devised policies to become Power Hubs
51

POWE
CHALLENGES IN POWER TRADING
R

Market depth to be increased more players, regional participation

Open Access Implementation
New Segment of prospective participants
Industry
SEZs
HT consumers
Group Captives
Merchant generators
Sufficient transmission capacities required for a vibrant power market
Government to initially support through viability gap funding

POWE
SOME MAJOR PLAYERS IN POWER MARKET
R
Company

Business description
Power Finance Corporation Limited (PFC) is an NBFC engaged in financing and development activities
within the Indian power sector
Major products and services include project term loans, lease financing, direct discounting of bills, shortterm loans and consultancy services
Adani Power is one of Indias largest private thermal power producers, with total capacity of 4,620 MW;
the company aims to generate 20,000 MW of power by 2020
The company is building one of the worlds largest single-location thermal power plants in Mundra, Gujarat
Power Grid Corporation of India Limited (PGCIL) is the single largest transmission utility in India; it
is responsible for planning, co-ordination, supervision and control over inter-state transmission systems

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

SJVN Limited is the second largest hydro power company in India

The company plans to diversify into wind power projects soon

Source: Company websites, News Articles, Aranca Research

POWE
SOME MAJOR PLAYERS IN POWER MARKET
R
Company

Business description
NTPC is Indias largest power producer and the sixth-largest thermal power producer in the world,
with installed capacity of 41,184 MW (including 5,364 MW through JVs). By 2032, NTPC plans to reach
128,000
MW power capacity. Coal-based power accounts for more than 90 per cent of the total capacity
It has also diversified into hydro power, coal mining, power equipment manufacturing, oil and gas
exploration, power trading and distribution
Tata Power is Indias largest integrated power company, with significant presence in solar, hydro, wind and
geothermal energy space. The company accounts for 52 per cent of total generation capacity in the private
sector, with an installed capacity of 8,521 MW
The company has over 35,000 MW of power generation capacity, both operational and under
development.
Reliance Power has an operational power generation capacity of 2,500 MW. FY13 saw the development
of the 3,960 MW Sasan UMPP in Madhya Pradesh
CESC Limited is a vertically integrated player engaged in coal mining, and generation and distribution
of power
NHPC is the largest hydro power utility in India, with an installed capacity of 5,295MW; it has drawn up
a massive capacity expansion plan of adding 6,697 MW by 2017
NHPC is constructing nine projects aggregating to a total installed capacity of 4271 MW. NHPC added 1,970
MW and 1,150 MW during the 10th and 11th Plan periods, respectively

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