Power

India's power market is the fifth largest in the world, 6th largest energy consumer accounting for 3.4% of global energy consumption Offers tremendous potential for investing companies. Vital for a nation to achieve economic stability

British controlled the Indian power industry firmly .

Legal and policy framework was conducive to private ownership, with not much regulation with regard to operational safety. Policy of economic liberalization allowed greater investment by private sector in the power industry.

Almost 55 per cent of this capacity is based on coal, about 10 per cent on gas, 26 per cent on hydro, approximately 5 per cent on renewable sources, about 3 per cent on nuclear and 1 per cent on diesel

Fossil Fuel Coal Oil and Gas

Solar Hydro Hydel Wind Biomass Nuclear

 Critical efficiency parameter in the

power industry is a measure of the actual output of a power plant compared to the maximum output it can produce.

State sector, that has the highest installed capacity is the least efficient.

The private sector utilities have good efficiency rates and the Central utilities have managed to achieve competent efficiency rates.

Private sector would play a greater role in power generation and foreign investments would increase considerable in his sector. The government of Indias Hydrocarbon vision 2025 gives in detail the guidelines for the policies in India for the next 25 years to attract investment in exploration, production, refining and distribution of petroleum products. It aims zero power cuts, reduction in technical losses & easy distribution tariffs

The Ministry of Power, Government of India has launched an initiative for development ofcoal-based UltraMega Power Projects (UMPPs) in India, each with a capacity of 4,000 MW or above. These projects will be awarded to developers on the basis of tariff-based competitive bidding. The projects are to be developed with a view to lower the cost of power to the consumers. These projects, adopting supercritical technology to reduce emissions, would be environment-friendly

Nine sites have been identified in nine States for the proposed UMPPs. These include four pithead sites, one each in Chhattisgarh, Jharkhand, Madhya Pradesh and Orissa, and five coastal sites, one each in Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu.

MPPs are a product of the restructuring of the electricity industry and they fill different niches in the market; some provide steady supplies to a power grid, while others fire up only when demand is at the highest and meet peak loads. Merchant power plants operating competitively help assure that power is produced with efficiency and supplied to locations where it is needed most. MPPs up to a capacity of 1,000 MW would be provided coal linkage, and captive coal blocks may also be provided to merchant power plants in the range of 5001000 MW.

The Ministry of Power is primarily responsible for the development of the Indian power sector.It is concerned with perspective planning and policy formulation in the sector. The State Electricity Boards (SEBs) generate, transmit and distribute electricity in coordination with private/centrally owned generating companies or any other relevant agency. The Central Electricity Authority (CEA) is a body constituted under the Electricity Supply Act,which is responsible for developing a sound, adequate, and uniform policy for the control and utilisation of national power resources. It is also responsible for the techno-economic appraisal of the project reports for the proposed power plants, including those in the private sector. Central Electricity Regulatory Commission (CERC) has been set up for rationalisation of bulk and retail tariff for generation and transmission utilities involved in interstate operations. It also regulates at intra-state level. Each statehas set up a State ElectricityRegulatory Commission.

To bail out Indias crisis-hit power sector, finance minister Pranab Mukherjee proposed scrapping the import duties on coal and liquefied natural gas, increasing the limit on overseas borrowing and reducing withholding tax on foreign investments. This would help meet the growing demand for the fuel in a country where 70% of electricity is generated from it. In addition, a countervailing duty of 1% on thermal coal till March 2014 was also announced in the Union budget, along with customs duty exemption for coal mining projects.

To help the fund-starved sector, Mukherjee proposed to raise Rs. 10,000 crore through state-owned companies such as Power Finance Corp. Ltd and Rural Electrification Corp. Ltd through tax-free infrastructure bonds in FY13. The power ministry estimates that an investment of $400 billion will be required during the five years ending March 2017. Full basic duty exemptions would be extended to power plant fuels such as natural gas and Liquified Natural Gas( LNG), uranium concentrate, sintered uranium dioxide in natural and pellet form.

Permitting power companies to tap External Commercial Borrowing (ECB) route to part re-finance rupee debt on power plants and increasing power sector's tax-free bonds limit to Rs 10,000 crore from Rs 5,000 crore. Further, the last date for power generating projects to seek tax holiday has been extended by one more year till March 31, 2013 These proposals come against the backdrop of severe fuel shortage as well as funding issues hurting the power sector, which is expected to see a capacity addition of over 80,000 MW in the 12th Five-Year Plan (2012-17)