INDIAN POWER SECTOR SCENARIO

- Charu Khemani
Sr. Manager (Corporate Planning)

13 October 2008
th

Economic Scenario
GDP Growth
44 4 % .

4% 4 .
4% 4 .

4% 4 . 4% 4 .

9% 9 .

4% 4 .

4% 4 . 4% 4 . 4% 4 .

4% 4 .

4% 4 .

4% 4 . F 4 Y 4 F 4 Y 4 F 9 Y 9 F 4 Y 4 F 9 Y 9 F 4 Y 4 F 9 Y 9

Source: Economic Survey and RBI

Indian Economy on a growth path , broad consensus exists on economic reforms

Economic Scenario
Power intensity (GW / GDP) is related to the dominating sector growth

India - 55% contribution to GDP by Service Sector China 49% contribution to GDP by
Manufacturing 57% contribution to GDP by Japan Sector Service

Projected Capacity Requirement

778 GW

425 GW 132 GW 220 GW

44 44

99 99

44 44

99 99
Source: Integrated Energy Policy GOI

Large Capacity addition required to meet the demand

Under the VIIth Schedule of the Indian Constitution, the power sector is on the concurrent list

Centre

CEA Parliament MOP, GOI Central PSEs BEE CERC

Legislative function

Executive Function

Execution

Regulatory Function

States

State Assemblies

State Govts.

SEBs/State Utilities /IPPs/Lic.

SERCs

Central, State and Private utilities have a complementary role for optimal development of power sector in India.

Central

Under MOP: NTPC, NHPC, NEEPCO,DVC,BBMB Other Ministries: NLC, NPC SEBs/State Gencos NJPC, THDC, NHDC IPPs, Licensees (CESC, BSES, AEC) CTU-Power Grid

Generation

State Joint Private Central State State

Transmission Transmission

STUs- SEBs/State TRANSCOs

STUs- SEBs/State Discoms (Major player)

Distribution Distribution

Private

Pvt Discoms and Licensees

Power Trading: PTC, NVVNL

Financing: PFC, REC

INDIAN POWER SECTOR -- EVOLUTION INDIAN POWER SECTOR EVOLUTION

1947 - Total installed capacity of only 1362 MW. 1948 - Electricity Supply Act leads to formation of SEBs Priority in development through SEBs Development through Five Year Plans Emphasis on hydel power in the first two Plans 1966-67 REBs formed to take care of interstate imbalances Early Seventies - Country faces unprecedented power crisis Capacity: 16,664 MW in 1974 1975 - NTPC and NHPC set up in Central Sector 1991 - Liberalisation; Private participation permitted 1992 - Power Grid Corp. formed to facilitate formation of National Grid 1998 - Regulation through formation of CERC/SERC 2003 - Electricity Act2003

Legislative/administrative Initiatives taken by the Government to improve the health of Power Sector.

One time settlement scheme for outstanding dues of CPSUs National Electricity Policy -2005 Tariff Policy 2006 Integrated Energy Policy 2006 New Hydro Policy 2008 Accelerated Power Development and Reforms Programme - APDRP Rural Electrification RGGVY National Mission for Enhanced Energy Efficiency under National Action Plan for Climate Change

ELECTRICITY ACT 2003

Role of Government
Central Government to prepare (Section 3) National Tariff

Electricity Policy; and non-

Policy

Policy Rural

on development of conventional energy sources. Electrification

Generation
Generation free from licensing. (Section 7) Requirement of TEC for non-hydro generation done away with. (Section 7) Captive Generation is free from controls. Open access to Captive generating plants subject to availability of transmission facility. (Section 9) Clearance of CEA for hydro projects required. Necessary due to concern of dam safety and inter-State issues. (Section 8) Generation from Non-Conventional Sources / Cogeneration to be promoted. Minimum percentage of purchase of power from renewables may be prescribed by Regulatory Commissions. (Section 61(h), 86 (1) (e))

Transmission
There would be Transmission Utility at the Centre and in the States to undertake planning & development of transmission system. (Sections 38 & 39) Load despatch to be in the hands of a govt company/organisation. Flexibility regarding keeping Transmission Utility and load despatch together or separating them. Load Despatch function critical for grid stability and neutrality vis a vis generators and distributors. Instructions to be binding on both. (Sections 26, 27,31, 38, 39) Private transmission companies to be licensed by the Appropriate Commission after giving due consideration to the views of the Transmission Utility. (Sections 15 (5) (b)) The Load Despatch Centre/Transmission Utility / Transmission Licensee not to trade in power. Facilitating genuine competition between generators. (Sections 27, 31, 38, 39,41)

Distribution
Distribution to be licensed by SERCs. Distribution licensee free to take up generation & Generating co. free to take up distribution license . This would facilitate private sector participation without Government guarantee/ Escrow. (Sections 4 , 4) 4 Retai l tariff to be determined by the Regulatory Commission. (Section 44 ) Metering made mandatory. (Section 44 ) Provision for suspension/revocation of licence by Regulatory Commission as it is an essential service which can not be allowed to collapse. (Section s 99 , 9) 9

Open Access
Open access to the transmission lines to be provided to distribution licensees, generating companies. (Sections 38-40) This would generate competitive pressures and lead to gradual cost reduction. Open access in distribution to be allowed by SERC in phases. (Sections 42) In addition to the wheeling charges provision for surcharge if open access is allowed before elimination of cross subsidies, to take care of a)Current level of cross subsidy b)Licensees obligation to supply. (Section 42) This would give choice to customer.

Trading/ Market development

Trading distinct activity licencing. (Section 44 )

permitted

with

Regulatory Commission may fix ceiling on trading margin to avoid artificial price volatility. (Sections 44 ) (b) & 44 ) (b)) (4 (4 The Regulatory development of (Section 44 ) Commission to promote market including trading.

Regulatory Commissions/Appellate Tribunal

State Electricity Regulatory Commission to be constituted within six months. (Section 82) Provision for Joint Commission by more than one State/UT. (Section 83) Provision for constitution of Appellate Tribunal consisting of Chairman and three Members. (Section 110, 112) Appellate Tribunal to hear appeals against the orders of CERC/SERC, and also to exercise general supervision and control over the Central/State Commissions. (Section 111) Appeal against the orders of Appellate Tribunal to lie before the Supreme Court. (Section 125) Appellate Tribunal considered necessary to

Reduce litigation and delay in decisions through High Court. Provide technical expertise in decision on appeals.

Central Electricity Authority

CEA to continue as the main technical Advisor of the Govt. of India/ State Governments with the responsibility of overall planning. (Section 70) CEA to specify the technical standards for electrical plants and electrical lines. (Section 73) CEA to be technical adviser to CERC as well as SERCs. (Section 73) CEA to specify the safety standards. (Section 53)

Tariff Principles

Regulatory Commission to determine tariff for supply of electricity by generating co. on long/medium term contracts. (Section 62) No tariff fixation by regulatory commission if tariff is determined through competitive bidding or where consumers, on being allowed open access enter into agreement with generators/traders.

Consumer tariff should progressively reduce cross subsidies and move towards actual cost of supply. (Section 61 (g)) State Government may provide subsidy in advance through the budget for specified target groups if it requires the tariff to be lower than that determined by the Regulatory Commission. (Section 65) Regulatory Commission to look at the costs of generation, transmission and distribution separately. (Section 62 (2))

National Electricity Policy

Total Village Electrification in 5 years.

By year 2012 :
Per capita availability 1000 units. Installed capacity over 200,000 MW. Spinning reserves 5% . Minimum lifeline consumption of one unit per household per day. Inter-regional transmission capacity 37,000 MW. Quality and reliable power supply.

Tariff Policy
Tariff of all Generation and Transmission Projects in Private Sector through Competitive route - Public sector to complete transition in five years. Reduction of cross subsidy to (+)(-) 20% in next five years. Emphasis on facilitating Open Access in Distribution; clear formulation on cross subsidy surcharge. Transmission Tariff framework sensitive to distance and direction. Strict Implementation of Performance Standards. Agriculture Tariff to leverage sustainable use of Ground Water Resources.

Salient Feature of Hydro Policy 2008

1. Exemption from tariff based bidding up to January 2011 extended to private players provided they obtain CEA concurrence, sign PPA and get Financial Closure by January 2011 2. States to follow transparent procedure for awarding potential site to the private players. 3. Developer to follow ICB process for award of contract for supply of equipment and construction of the project. 4. The tariff of the project be decided by the appropriate Regulatory Commission. However, the cost incurred by the developer for getting the site allotted shall not be part of the project cost. 5. To recover the cost for getting the project allotted, the developer would be allowed merchant sales up to 40% of the saleable energy.
23

Salient Feature of Hydro Policy 2008

6. For this dispensation the requirement is obtaining concurrence from CEA / States, all clearances, financial closure and award of work to be over by January 2011 and completion of project within 4 years thereafter. 7. The delay in commissioning of project by every six months would result in reduction of merchant sales by 5%. 8. Any extension beyond January 2011 if made to CPSUs shall also be applicable to private players. 9. Large storage projects and run-of-the-river projects above 500 MW capacity could be given suitable increase in construction time by appropriate regulator. 10. An additional 1% free power beyond the 12% at present would be earmarked for Local Area Development Fund for regular stream of revenue for welfare schemes sustained over the life of24 the project.

Salient Feature of Hydro Policy 2008

11. It has been recommended to the State Government to contribute 1% from the free power they obtain as contribution towards this fund. 12. From commissioning of the project 100 units of electricity per month would be provided by the developer to each project affected family through relevant distribution company. 13. 12% Free Power plus 1% power for LAD Fund would be allowed for tariff determination, however, any power beyond 13% would be met by the developer and would not be pass through. The cost of unused electricity could be made available to PAF in cash / kind at rates to be determined by SERC. 14. The project authorities would involve in RGGVY implementation within certain radius ( Up to 100 MW: 2Kms, 100-250 MW: 5 Kms, 250-500 MW: 7.5 Kms and above 500 MW:10Kms) and bear the 10% share of states as (RGGVY scheme are given 90% grant and 10% loan) 15. The R&R package can be more liberal than National R&R Policy 2007. 16. Soft loans to the projects up to 25 MW for accelerated development of small 25 Hydel projects.

Accelerated Power Development and Reforms Program (APDRP)

Distribution is the key segment of the electricity chain. APDRP was launched to assist State utilities to reduce the sub transmits & Distribution losses. The restructured APDRP scheme has been approved by GOI to further improve the distribution sector.

Rural Electrification

GOI launched Rajiv Gandhi Gramin Viduytikaran Yojana (RGGVY) in 2005 to provide electricity access to all rural households. RGGVY subsidizes the capital cost by 90% through GOI grants.

Energy Efficiency High Priority

Bureau of Energy Efficiency (BEE) has been created Standards and Labeling of appliances. Energy Conservation Building Code (ECBC) Energy conservation norms for industry performance standards for equipment Public awareness campaign launched. Greater thrust by way of National Mission on Enhanced Energy Efficiency and

Growth of installed capacity in India

44 4 444

(Figures in MW)
99 9 999

44 4 444

NTPC starts adding capacity in 1982

444 44

999 99 44 44 99 99 44 44 44 99 9 44 4 99

44 44

99 99

99 99

44 44

44 44

99 99

44 44

44 44

44 44

J ul-44

Excluding 19509 MW Captive Generating Capacity ( As on 31.3.07) connected to Grid

Growth of installed capacity India vs. China

(Figures in MW)
99 99 9 9 44 44 4 4 44 44 4 4

44 44 4

99 99 9 4 4 4 4 9 9 9 9 44 4 4 99 9 9 9 44 4 4 4

4 4 4 4

9 9 9 9

9 9 9 9

4 4 4 4

4 4 4 4

9 9 9 9

4 4 4 4

44 4 4

44 4 4

Ju l -

4 4

All India Thermal Plant Load Factor

9. 9 9 9 9 9. 9 9 4. 4 4 4. 4 4

4. 4 4

4 4

4 9 9 4 9 9 4 4 9 9 4 9 9 4 4 9 9 4 9 9 4 4 9 9 4 9 9 4 -4 -9 -9 -4 -9 -9 -4 4 9 9 4 9 9 4

Power Infrastructure in India

Fuel wise break-up (MW)
Thermal Coal77199 Gas14716 Diesel1200 Hydro Nuclear Renewable 93115 53.0% 10.1% 0.8% 36159 4,120 12195 24.8% 2.8% 8.4%

Sector wise break-up (MW)

64.0%
Central Sector 4% 4 Private Sector 4% 4 State Sector 4% 4

TOTAL

145588

100.0%

(Excluding captive capacity of 19509 MW connected to grid)

Total generation in 2007-08 704.45

(Source-CEA)

BU

Adverse Generation Mix

Peak Shortages System Unreliability/Grid Instability Frequency Excursions Fast Depleting Fossil Fuel Environmental Issues : CO2 Emissions Frequency Variation Damages Thermal Turbine Parts And Electrical Appliances

A deficit scenario persists

44 4 REQUIREMENT 44 4 44 4 44 4 99 9 44 4 44 4 44 4 44 4 99 9 99 9 99 9 AVAILABILITY 44 4 44 4 44 4

Million Units

9.8%
44 4

9.6%

8.3%
44 4

44 4

7.3%
44 4

7.8%
44 4 44 44

7.5%
99 9 44 44

8.8%
44 4 99 99

7.1%
44 4

44 44

44 44

44 44

44 44

99 99

DURING 2007-08, PEAKING SHORTAGES WERE 16.6%

DEMAND - SUPPLY
Region Requirement (MU) Northern Western Southern Eastern NorthEastern All India
71289 84108 67959 27418 3150 253924

APRIL 2008 JULY 2008 Availability (MU)

64624 70341 64011 25861 2681 227518

Surplus/ Deficit (-) (MU) (%)

-6665 / (-9.3) -13767 (-16.4) -3948 (-5.8) -1557 (-5.7) -469 (-14.9) -26406 (-10.4)

Peak Demand (MW)

32616 37171 26640 11655 1744 106922

Peak Met (MW)

29416 27634 25035 10750 1343 91363

Surplus/ Deficit (-) (MW) (%)

-3200 (-9.8) -9537 (-25.7) -1605 (-6.0) -905 (-7.8) -401 (-23.0) -15559 (-14.6)

Per Capita Consumption of Electricity

NATIONAL ELECTRICITY POLICY TARGETS PER CAPITA AVAILABILITY OF 1000 KWH BY 2012

Kwh
4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
4 -4 4 4 4 4 9 -9 9 9 9 9 9 -9 9 9 9 9 9 -9 9 9 9 9 9 -9 9 9 9 9 9 -9 9 9 9 9

44 4 . 4

9 9 9

99 9 . 9

99 9 . 9

44 4 . 4

99 9 . 9

As per U.N. Methodology

Restructuring the SEBs

Earlier structure (vertically integrated ) New structure (unbundled)

SEB

Generation

Transmission

Distribution

Generation

Transmission

Distribution

A vertically integrated entity responsible for all the activities thereby leading to hidden inefficiencies across the chain

3 separate corporate entities with private participation

Setting up of National Grid

Objectives: Enable transfer of power from surplus to deficit regions. Enable optimal development and utilization of power potential through coal and hydro resources. Improve economy, reliability and quality of power supply.

Setting up of National Grid

Cumulative Inter Regional Transfer Capability (MW)
4,44 44

Present : 16950 MW

4,44 44 99 ,9 9 March '9 9 44 ,4 4

Dec.'44

March '44

March '44
16

DOMESTIC FUEL CONCENTRATION

*Coal
* Lignite

LIGNITE
BJ H
MUMBAI

* Natural Gas * Naptha * Coal Based Methane * Gas Hydrates

e lin

CBM COAL

KOLKATA

NAT.GAS
CHENNAI

LIGNITE

Coal is the only proven source of domestic Coal is the only proven source of domestic fuel for long term power generation fuel for long term power generation
COAL Proven reserves LIGNITE Proven reserves Natural Gas Proven Reserves

: 97.92 Billion Tonne

: 4.5 Billion Tonnes

: 1100 BCM

78% domestic Production is used for Power Generation Coal is going to be the main stay of power generation in the country for at least next 25-30 years

Nuclear Energy Nuclear Energy

Reserve
Uranium-Metal - In PHWR - In Fast Breeders Thorium-Metal (In Breeders) 61,000 -T 2,25,000 T

Electricity Potential GWe-yr

320 42,000

155,000

HYDRO POTENTIAL

Potential assessed (845 Schemes) Ranking Study of un-harnessed 399 schemes

Ranking Study

150,000 MW

107,000 MW

Hydro Initiative (162 schemes)

50,000 MW

The largest potential estimated is 37.91% in the North Eastern Region followed by 35.88% in the Northern Region.

Stepping up Nuclear Generation

Nuclear power is favored in the context of energy security and the absence of Greenhouse Gas emissions. The present nuclear capacity is 4120 MW and accounts for only 2.8 per cent of the installed capacity. 3160 MW is under construction. The Vision 2020 of the Department of Atomic Energy envisages a cumulative installed capacity of 20,000 MW by the year 2020.

Renewable Energy
A viable option to achieve sustainable development. India has abundant renewable energy sources such

as sun, wind, biomass, small hydro etc.

Wind Power
The gross potential of the wind power sector has been assessed as 45,000 MW. The technical potential at 20 per cent grid penetration is estimated at 13,000 MW.

Solar Power
India has one of the highest insolation in the world & has huge potential for solar power generation by way of Solar Photovoltaic and solar thermal.

Solar Energy
INDIAS SOLAR INSOLATION IS AMONGST THE HIGHIEST IN THE WOLRD

Specific annual solar energy yield Kwh / Kwp INDIA, US SPAIN, ITALY AUSTRALIA CHINA JAPAN GERMANY 1700-1900 1500 - 1600 1200 - 1400 1000 - 1200 900 - 1000

Demand Side Management

There has been over emphasis on the supply side management so far in India. However, in order to minimize the overall requirement and cost of power, Demand Side Management (DSM) needs to be pursued. The Planning Commission has estimated over 25,000 MW equivalent of capacity creation through end-use energy efficiency in different sectors of the economy. Energy efficiency combined with load management and shifting of load from peak to off-peak period, the overall benefit could be much more significant. Given huge potential of energy efficiency and DSM, the government have enacted Energy Conservation Act and set up Bureau of Energy Efficiency for Rapid penetration of energy efficiency and DSM in the economy and the power system respectively.

STRENGTHS AND OPPORTUNITIES

Abundant coal reserves (enough to last at least 200 years) Vast hydro-electric potential (150,000 MW out of which only 18 per cent has so far been tapped) A large pool of highly skilled technical personnel. Emergence of strong and globally comparable central utilities like NTPC. Political consensus on reforms. Potentially one of the largest power markets in the world

Plan-wise Capacity Addition

444 44 444 44

Capacity Addition Target Achievement

444 44

999 99

444 44 444 44 444 44 444 44

444 44

444 44 44 44 44 44 99 99 44 44 44 44 44 44
( st 4 ) 4 -4 4 4 4 4 nd 4

444 44

444 44

44 44

44 44

rd 4 ) 4 -4 4 4 4 (4

th 4 ) 4 -4 4 4 4 (4

th 4 ) 4 -4 4 4 4 (4

th 9 ) 9 -9 9 9 9 (9

th 4 ) 4 -4 4 4 4 (4

th 4 ) 4 -4 4 4 4 (4

th 4

) 4 -4 4 4 4 (4 th 4 4 ) 4 4 4 -4 4 4 4 (4

) 4 -4 4 4 4 (4

Learning from 10th Plan

Original Target 41110 MW Actual Addition 21180 MW (Central 13005 MW, State 6245 MW, Private 1930 MW) The major reasons for slippages in the 10th Plan Projects are: 1. Delay in supplies / erection by suppliers / contractors. 1. Delay in award of works mainly in state sector 2. Projects not taken up / Escrow cover not given / financial closure not achieved / funds not tied up 3. Delay in clearances / investment decisions (Hydro Projects) 1. Delay in tie-up of Super Critical Technology 2. Non-availability of Gas 3. Hydro Projects delay in environmental clearances, geological surprises, natural calamities, R&R issues 50

Constraints being faced by Power Sector

Limitations in Project Management Capabilities. Timely availability of raw materials like CRGO, Copper, special piping materials and inputs such as turbine forgings. Limited vendors for Balance of Plant equipment. Availability of adequate number of young and talented manpower in Power Sector. Availability of gas at reasonable prices. Inadequate domestic testing facilities for transformers i.e. open circuit tests. 51

11th Plan Capacity Addition Fuel-wise

Nuclear 4 %

Hydro 4% 4

Therm al 4% 4
MW

THERMAL 59693

HYDRO 15627

NUCLEAR 3380

TOTAL 78700

11th Plan Capacity Addition Sector-wise

Private 4% 4 Central 4% 4

State 4% 4
MW

CENTRAL 36874

STATE 26783

PRIVATE 15043

TOTAL 78700

The Challenges
Areas which could affect target achievement: 1. Power Plant Equipment 2. Timely and Adequate Supply of Key input materials including Fuel 3. Technology 4. Construction and Erection Agencies 5. Infrastructure development 6. Manpower training and development 7. Financial Resources
54

Power Plant Equipment

1. Need to substantially augment equipment manufacturing. 2. Outsourcing of equipment manufacturing on system basis to ancillary units. 3. The supplier and construction agency for the project should be monitored in terms of MW Commissioned. 4. More suppliers for Balance of Plant equipment are essential.

5. Plant wise plans for hiring various construction equipment like Crane etc. 6. New infrastructure leasing arm could be set up.
55

Key Input Materials

1. Shortage of Special materials such as CRGO steel, castings and forgings for Turbine Generators due to international demand. 2. Indigenous manufacturing capacity of CRGO should be created at the earliest. 3. Advance procurement of the material 4. Adequate fuel availability
56

Technology

1. Need to set up efficient power plants in terms of conversion and environment. 2. Transfer and indigenization of super critical technology.

57

Construction & Erection Agencies

More construction and erection agencies to be attracted to the power sector.

58

Infrastructure Development
1. Adequate rail network for coal movement. 2. Development of new rail links; the Railways connectivity with Ports. 3. Augmentation of Port capacity 4. Widening / strengthening of roads for timely / safe transportation of equipment sites.
59

Manpower Training and Development

1. Shortage of Managers. skilled Engineers and

2. Skilled manpower for HP Welding, Aluminum Welding, Cable jointing, Crane Operation etc. 3. Training facilities for Engineers, Projects Managers and other skilled manpower.
60

Funds Requirement
During 11th Plan estimated to be Rs. 10,31,600 crores with following break up:

Particulars Generation (including Nuclear) R&M Transmission Distribution including Rural Electrification Non-Conventional / Captive Merchant Plants Total
Source: CEA

Funds requirement (Rs. Crores) 4,10,896 15,875 1,40,000 2,87,000 1,15,500 40,000 10,09,271
61 Rs. 22,329 Crores required for Distributed Generation, HRD, R&D & Demand Side Management

HIGHER EFFICIENCY UNITS

Sub - critical units Old Unit Size MS Pressure kg/cm2 MS Steam Temp(O C) RH Steam Temp (O C) Gross Efficiency (HHV) % Plant
500 MW (170 bar/537 C/537 C) 660 MW (246 bar/537 C/565 C) 660 MW (246 bar/565 C/593 C)

Super - critical units

Recent 500 MW 170 537 565 38.26 660 MW 247 537 565 38.84 CO2 Emission / MW
BASE 2.6 % 5.1 %

500 MW 170 537 537 38.00

660 MW 247 565 593 39.96 SO2 Emission / MW

BASE 2.6 % 5.1 %

Turbine Heat Rate

BASE 2.6% 5.1%

Higher Size Units of 800 MW with Super / Ultra Super Critical Technologies

Ultra Mega Power Projects (UMPP) initiative

MOP along with CEA and PFC has taken an initiative for the development of Coal based environment friendly Ultra Mega Power Projects as pit head stations and coastal based stations each with a capacity of about 4000 MW using super critical technology. These projects to be awarded to developers on the basis of tariff based competitive bidding guidelines issued by Ministry of Power. The projects are to be developed as per case -2 of the guidelines. The Competitive Bidding process and project development work shall be undertaken by the wholly owned subsidiaries (Shell Companies/SPVs) established by Power Finance Corporation. These projects will be developed by the developers on BOO (Build, Own and Operate) basis.

Ultra Mega Power Projects initiative

The Mega Power benefits shall be available to the Ultra Mega Power Projects. The expenditure incurred by the shell company in developing the project shall be recovered from the selected developer. The responsibilities of Shell companies are as under Appointment of Consultants for DPR & other study reports. Acquisition of land for the project. Obtaining fuel linkage/fuel blocks for pit head projects. Obtaining GR and other related data from CMPDI for the coal blocks. Obtaining clearance for allocation of water by State Governments/Maritime Board. Obtain various approvals and statutory clearances like R&R approval & MoEF clearances. Tie-up for off-take/sale of power

UMPP Projects
Project Sasan (M.P) Status Awarded to Reliance Power Limited with Levellised tariff of Rs 1.196/kWh Awarded to Tata Power Limited with Levellised tariff of Rs 2.264/kWh Reliance has quoted the lowest price of Rs 2.333/ kWh. LOI awarded to Reliance by CAPL. RFQ completed RFP submission date 04.11.08

Mundra (Gujrat)

Krishnapatnam (A.P)

Tilaiya (Jharkhand)

Other UMPPs in Chhattisgarh, Orissa, Maharashtra, Karnataka, Tamil Nadu

Bid Submission for the project

The bid to be submitted in two parts, Financial and Non financial bids. Non-Financial Bid

Board Resolution from bidding company committing 100% equity requirement Bid Bond of Rs. 120 crore Bidder Undertaking along with scheduled CoD date and Contract Capacity of each unit Covering letter Original Power of Attorney Disclosure Statement

Financial Bid

The financial bid shall consist of quote for the capacity charges and energy charges in two parts, Non-Escalable Charges and Escalable Charges. The Bidder has the option to quote firm Quoted Energy Charges and/or firm Quoted Capacity Charges for the term of the PPA

Bid Evaluation for the project

The escalated Quoted Tariffs ( Rs per kWh) of each of the Bidder for each contract year for the term of PPA calculated as per the RFP shall be discounted by the discount factors and such aggregate discounted value for the term of the PPA shall be divided by the sum of such discount factors to calculate the levelised tariff of each Bidder. The Levelised Tariff shall be calculated by assuming uniformly for all Bidders that entire Contracted Capacity has been Commissioned on the date which is sixty nine (69) months from the proposed last date of signing of the RFP Project Documents The Levelised Tariff calculated as above shall be ranked from the lowest to the highest and the Bidder with lowest Levelised Tariff shall be declared as the Successful Bidder.

Tariff Structure
The tariff shall be paid in two parts comprising of Capacity and Energy Charges. For the payment purpose, the tariff will be quoted tariff escalated as per the provisions of PPA. Capacity Charges shall be paid on actual availability and shall be linked to the Normative Availability computed on annual basis. Full Capacity Charges shall be payable based on Contracted Capacity at Normative Availability (80%). Energy Charges shall be paid as per the schedule. Incentive shall be paid for availability beyond normative by 85% at the rate of @ 40% of Quoted Non-Escalable Capacity Charges subject to a maximum of 25 paisa/kWh. In case the Availability is less than 75%, a penalty @20% of the simple average Capacity Charges applied on the energy (in kwh) corresponding to the difference between 75% and the Availability during the year.

Tariff Structure
Tariff in INR only. Multi part tariff to form basis of bidding: i) Capacity Charges Escalable & Non Escalable component (Rs/kWh) ii) Energy Charges Escalable & Non Escalable component a) Fuel Energy Charges (USD/kWh) b) Transportation Energy Charges (USD/kWh) c) Fuel Handling Energy Charges (Rs/kWh)

Oil Proved Reserves -2007

T ta W rld: o l o . 4 4B rre M 4 a ls illio 4 4n
4 4 4 . 4

4 4 4 . 4

M nB r e illio a r ls

4 4 4 . 4

4 4 4 . 4

44 4 . 4

4 4 4 . 4 9 9 9 . 9 4 4 4 . 4 44 4 .

44 4 . 4

44 4 .

44 4 . 44 4 . 44 4 . 4 4 .

44 4 .

4 . 4

S u e: B S tis a R v o rc P ta tic l e iewo W rldE erg (J n f o n y ue

ud Sa iA a bi ra

a di In

n Ira

q Ira

K t ai uw

U A E

a el zu ne Ve

R a si us

a by Li

n ta hs ak az

4 4 4 4

71

Oil Production -2007

W rldP d u n o ro c tio T o 4 dB rre p r D y h4 a 4 u 4 4 ls e a sn a
44 44 4

T o s n B rre P r D y h u a d a ls e a
44 44 4 44 4 4

44 44 4

44 4 4

44 4 4

44 4 4
44 4 4

44 4 4
44 4 4

44 4 4

44 4 4

44 4 4 44 4 4 44 4 4 4 4 4

n a Ir

q a Ir

S u e: B S tistic l R iewo W rldE erg (J n o rc P ta a ev f o n y ue

ia

u a S d i b ra A

K u it a w

n e V

L ib

In

A E

u s s

z a

a y

ia

z e u e la

h k a

ia

s ta

4 4 4 4

Coal Proved Reserves -2007

World Proved Coal Reserves is 444444 MT
444 444
444 444

Million Tonnes
444 444

999 999
44 4 444

444 444
44 4 444

999 99 999 99 444 44 4 4 44 4 4 44 44 44 44 44 44 44 44

444 44

# a di In ia al tr us A

ai kr U

Source: BP Statistical Review of World Energy (June 9999 ) #As Per 44 Plan Docum ent prepaerd by Planning Com m ission India's Proved Coal Reserves as on th 999 9 w as 9 9 9MT . . 99 99

SA U

a si us R

na hi C

u So th

nd la Po n ta hs ak az K

d In

Th nd la ai

ia es on

ne

a ic fr A

Coal Production -2007

W r C a P o u tio in o ld o l r d c n ws a 4T 44 4 M4 4 4 4
44 4 4

Mlo T n e i i n ons l
44 4 4

44 4 4

44 4 4

44 4 4

44 4 4
44 4 4

4 4 4

9 9 9

9 9 9

4 4 4 4 4 4 9 9 4 4
K a

4 4 4

4 4 4

9 9
T n e s ia

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s s ia

C h

in a

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fr ic a #A p r thP 4 o u e t P p re b P n in C m is io , th C a P d u nin s e 4nD c m n re a d y la n g o m s n e o l ro c tio la w s 4M a .4 4 4 T S u e B S tis a R v wo W rldE e y(J n o rc : P ta tic l e ie f o n rg u e ) 4 4 4 4

s tr a li a

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ta n

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NG Proved Reserves -2007

W rldN tu l G sP v dR s rv is o a ra a ro e e e e
44 44 .
44 44 .

T rillio C 4e4 n u M4 . 4 4 te r

T rillio C . M n u eter

44 44 .

44 44 .

44 44 .

44 44 .

44 44 .

44 44 .

44 44 .

44 44 .

44 44 .

99 . 9

99 . 9

44 . 4

99 . 9

44 . 4

44 . 4 44 . 4

44 . 4

44 . 4

n a Ir

S u e : B S tistic l R iew o W rldE erg (J n o rc P ta a ev f o n y ue

R u ia s s

Q ta a r

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In

A E

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A S

lg

a ri e

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a ri e

d i A b ra ia

z e u la e

4 4 4 4

NG Production -2007
W rldN tu l G sP d c nw s o a ra a ro u tio a B nC . M 4in illio u 4 4 eter 4 4 4 4 4
4 4 4 . 4

B nC . M te illio u e r
4 4 4. 4 4 4 4. 4

4 4 4 . 4

4 4 4 . 4

4 4 4 . 4

4 4 4 . 4

4 4 4 . 4

4 4 4. 4
44 4 . 4

44 4 .

44 4 .

99 9 .

44 4 . 44 4 . 44 4 . 44 4 .

4 . 4

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u R ia s s

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A S U

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In d

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a ri e

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a ri e

z e u la e

4 4 4 4

World Hydro Power A Snapshot

Hydro is contributing more than 50% of national electricity supply in about 60 countries. Asia has the greatest amount of hydro development under way. The leading countries in hydro development are China, India Vietnam, Russia and Brazil. Canada, the leading country in North America is producing about 60% of electricity needs from hydropower and was described as, Emerging Energy Superpower, at recent G8 summit

Fuel-wise Generation - Japan

TOTAL GENERATION -4 4 4Twh 4 Hydro 4 % Nuclear 4% 4 RES 4 %

Coal 4% 4

Source: EIA - 2005

Gas 4% 4

Oil 4% 4

Fuel-wise Generation - France

TOTAL GENERATION - 444 Twh

Hydro 9% 9

RES Coal Oil Gas 4 4 4 4 % % % %

Source: EIA - 2005

Nuclear 4% 4

Fuel-wise Generation - Germany

TOTAl GENERATION4 4 4Twh Hydro 4 % Nuclear 9% 9 RES 4 % Coal 4% 4

Source: EIA - 2005

Gas 4% 4

Oil 4 %

Fuel-wise Generation - USA

T O T A L G E NE R A T IO4 4 4 4 T wh N-

N u c le ar 9% 9

H yd ro R E S % 4 % 4 Coal 4% 4

G as 9% 9
Source: EIA - 2005

O il 4 %

Fuel-wise Generation - Brazil

TOTAL GENERATION - 444 Twh

RES Coal Oil 4 % 4 4 % %

GasNuclear 4 % 4 %

Hydro 4% 4
Source: EIA - 2005

Fuel-wise Generation - China

Gas 4 % Nuclear 4 % Oil 4 %
Source: EIA - 2005

TOTAL GENERATION - 4444 Twh

Hydro 4% 4

RES 4 %

Coal 4% 4

Fuel-wise Generation - Russia

TOTAL GENERATION - 444 Twh

Hydro 9% 9

RES 4 %

Coal 4% 4 Oil 4 % Gas 4% 4

Nuclear 9% 9

Source: EIA - 2005

Fuel-wise Generation - World

TOTAL G ENERATION - 4 4 4 4 h 4 Tw

Hydro 9% 9 Nuclear 4% 4 Gas 4% 4

Source: EIA - 2005

RES 4 %

Coal 4% 4

Oil 4 %

CO2 EMISSIONS
Million Tonnes
44 44 99 99 44 44 44 44 44 44

44 44

us s

EU ia

C 4

hi na

In d

ia

In d (4 4 4 ) 4

ia

(C

Source: McKinsey Analysis

ur re nt )

CO2 EMISSIONS - PER CAPITA

4. 44 4. 44

Tonnes / Capita

44 . 44 . 44 . 44 .
In d 4 4 ) 4 ia

US

Ru ss

EU ia

Ch in a

In d

ia

(4

Source: McKinsey Analysis

(C ur re nt )

Distribution Losses
4% 4 4% 4 4% 4 4% 4 4% 4 4% 4 4% 4 4 % 4 %
n pa Ja ce an Fr rm Ge A US a Br i Ch In s Ru ld or W a di

4% 4

4% 4 4% 4 4% 4 4 % 4 % 4 % 4 % 4 %

Source: EIA - 2005

na

zil

sia

y an

Electricity- Per Capita consumption

In d ia Eg yp t C h in a B r a z il R u s s ia Ge rm a n y Japan USA W o r ld A v e r a g e

444 444 4 444 , 4 444 ,

In 2007

9 999 , 4 444 , 4 444 , 4 444 , 99 999 , 4 444 ,

Figures in kwh

Source: UNDP Human Development Report 2007-08 Data for 2004

Electricity Consumption - Japan

Commercial 9% 9

Agriculture & Others 4 %

Industry 9% 9 Transport 4 %

Residential 4% 4
Source: EIA - 2005

Electricity Consumption - France

Agriculture & Others 4 %

Commercial 9% 9

Industry 4% 4

Residential 9% 9

Transport 4 %

Source: EIA - 2005

Electricity Consumption - Germany

Agriculture & O the rs 4 % Industry 4% 4

Comme rcial 4% 4

Re side ntial 4% 4

T ransport 4 %

Source: EIA - 2005

Electricity Consumption - USA

Commercial 4% 4

Agriculture & Others 4 %

Industry 4% 4 Transport 4 % Residential 4% 4

Source: EIA - 2005

Electricity Consumption - Brazil

Agriculture & Others 4 %

Commercial 4% 4

Industry 9% 9

Residential 4% 4
Source: EIA - 2005

Transport 4 %

Electricity Consumption - Russia

Commercial 4% 4

Agriculture & Others 4 %

Residential 9% 9 Transport 4% 4

Industry 4% 4

Source: EIA - 2005

Electricity Consumption - World

Commercial 9% 9

Agriculture & Others 4 % Industry 4% 4

Residential 9% 9
Source: EIA - 2005

Transport 4 %

RECAPTULATE

TOWARDS GREENER TOMORROW POWER PRODUCER OF INTERNATIONAL REPUTE