Description
The report describing about comprehensive analysis of indian power sector.
INDIAN POWER SECTOR
A SECTORAL ANANLYSIS
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Table of Contents
Acknowledgements .......................................................................................................................................................... 4 Chapter 1: Introduction ................................................................................................................................................... 5 Overview ...........................................................................................................................................................5 Current Power Demand & Supply Position..................................................................................................6 Growth of the Indian power sector ..............................................................................................................9 Power Setup in India .....................................................................................................................................11 Companies Setup in Power Sector .............................................................................................................12 Organizational Structure of the Power Sector ..........................................................................................13 Two Prong Strategy........................................................................................................................................19 Chapter 2: Generation & Capacity Addition ..................................................................................... .............................20 Overview .........................................................................................................................................................20 Generation mix ..............................................................................................................................................23 Segments in Power Generation ..................................................................................................................25 Thermal........................................................................................................................................................25 Hydropower ...............................................................................................................................................32 Nuclear Power ...........................................................................................................................................38 Wind Power ................................................................................................................................................40 Other Initiative taken by the GOI ...............................................................................................................47 Ultra Mega Power Plant (UMPP) .............................................................................................................47 Merchant Power Plants ............................................................................................................................50 Supercritical Technology .........................................................................................................................53 Case Study: National Thermal Power Corporation..................................................................................55 Chapter 3: TRANSMISSION PLANNING AND NATIONAL GRID......................................................................................56 Overview .........................................................................................................................................................56 Regional Grids ................................................................................................................................................57 Need for National Grid .................................................................................................................................58 National Grid..............................................................................................................................................58 Role of Powergrid Corporation of India Limited (PGCIL)........................................................................60 Achievements............................................................................................................................................60
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Future Plans ................................................................................................................................................61 Private Sector Participation in Transmission...............................................................................................62 Distribution.......................................................................................................................................................63 Aggregate Technical & Commercial Losses........................................................................................63 Accelerated Power Development & Reform Programme................................................................64 Rajiv Gandhi Vidyuti Karan Yogna (RGGVY) .......................................................................................68 Definition of Decentralized Distributed Generation............................................................................69 Physical and Financial outlay for eleventh Five Year Plan ................................................................70 Funding Requirement for Distribution ....................................................................................................71 Transmission & Distribution Programme Beneficiaries..............................................................................71 Key concerns in transmission and distribution ..........................................................................................73 Components of Power losses ..................................................................................................................73 Level of T&D losses ....................................................................................................................................74 Reasons of high technical losses ............................................................................................................74 Reasons for commercial losses ...............................................................................................................75 T&D Losses in restructured SEBs ...............................................................................................................76 Regulatory Concerns................................................................................................................................76 Unmetered Supply ....................................................................................................................................77 Case Studies of T&D Companies ................................................................................................................78 ABB Ltd. .......................................................................................................................................................78 Emco Ltd .....................................................................................................................................................80 Bharat Heavy Electrical Ltd (BHEL).........................................................................................................82 Chapter 4: Consumption Pattern ..................................................................................................................................84 Chapter 5: Demand Side Management ....................................................................................................................... .86 Chapter 6: Findings & Conclusions ...............................................................................................................................91 Power Generation .........................................................................................................................................91 Transmission & Distribution ............................................................................................................................91 Others...............................................................................................................................................................92
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Chapter 1: Introduction
Overview
The Government of India has identified the power sector as a key sector of focus to promote sustained industrial growth. It has embarked on an aggressive mission ?Power for All by 2012? and has undertaken multiple reforms to make the power sector more attractive to private sector investment. According the Eleventh Five Year Plan, the per capita consumption of electricity is to increase to at least 1000 KWh per annum by 2012 from the present 635 KWh. The present per capita power consumption is much below the world average of 2596. According to the estimates the population in 2012 shall be close to 1.21 Billion. This translates into an energy requirement of 1210 BU p.a. This coupled with increasing Demand Supply Gap create a surging demand for power.
Source: Ministry of Power
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Current Power Demand & Supply Position
The overall Energy Demand for power in the country has been growing at a CAGR of 5.56 % since 1997-98 to 2006-07, whereas the overall Energy Supply is increasing only by 5.36%, thereby leaving an energy shortage of 9.6% in the fiscal 2007. The peak demand has also increased substantially from 65435 MW in 97-98 to 100715 MW in 06-07. The peak supply has increased from 58042 MW in 97-98 to 86818 MW in 06-07, thereby resulting in peak shortage of 13.8% in fiscal 2007.
ENERGY DEMAND & SUPPLY:
Source: MoP
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PEAK DEMAND & SUPPLY:
Source: MoP
According to the Tenth Plan approach paper, ?The energy infrastructure will be major constraint on any effort to achieve a significant acceleration on the growth of GDP in Tenth Plan period. This will place heavy demands on the generation and distribution of electric power. Furthermore, in globally competitive environment, the quality of these services in terms of both price and reliability are as important as availability and it is well-known that we face serious problems on both counts.? But fundamental issues such as frequent power cuts, both scheduled and unscheduled, erratic voltage and low or high supply frequency have added to ?power woes‘ of the consumers. The Indian Power industry has since independence faced the demand and supply gap. The said gap is still prevalent even after government initiated the reform process in early nineties. A comparison of GDP & Power Generation growth rate shows that power sector is lagging behind the annual growth rate of the country, and acting as a dampener in its progress. The power sector outlay is 18-20 percent to Gross outlay; therefore performance of power sector has a very significant impact on growth in GDP. According to 17th EPS report, and industrialist, power sector has to grow TAGR of 910%, if GDP growth is to be sustained at present level of around 8%. Therefore,
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power sector should have an elasticity of at least 1, in order to grow in sync with GDP growth.
GDP-POW ER Grow th (%)
12.00% 10.00% GO T AE R W HR T 8.00% 6.00% 4.00% 2.00% 0.00% 200102 200203 200304 200405 Ye ar 200506 200607 200708 GDP Pow er Generation
GDP Power Generation
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 5.22% 3.77% 8.37% 8.28% 9.24% 9.69% 8.50% 3.14% 3.18% 5.02% 5.21% 5.12% 7.29% 6.32%
Since independence, generating capacity has increased from 1362 to over 143,311 MW as on March 31, 2008. However there are widespread shortages of power in almost all parts of the country. Households, farmers, commercial establishments, industries etc. are confronted with frequent power cuts, both scheduled and unscheduled. Power cuts, erratic voltage levels and wide fluctuations in the frequency of supply have added to the 'power woes' of the consumer. The consumers are resorting to captive power supply arrangements of various types ranging from 300 Mega Watts (industry) to 250 Watts (households). Almost every shop in an urban market place has a generator set. Most establishments have battery-operated inverters and diesel generation sets. Most urban households have voltage stabilizers for different appliances. In fact the money spent by the domestic consumer on these standby power supply (DG sets / Inverters) and power conditioning (stabilizers) arrangements could be among the highest in the world. The same money could be more gainfully invested through corporate investments in power generation, transmission and distribution with assured returns on investments. The major reasons for inadequate, erratic and unreliable power supply are: inadequate power generation capacity; lack of optimum utilisation of the existing generation capacity; inadequate inter-regional transmission links; inadequate and ageing sub-transmission & distribution network leading to power cuts and local failures/faults; ¾ large scale theft and skewed tariff structure; ¾ slow pace of rural electrification; ¾ ¾ ¾ ¾
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¾ Inefficient use of electricity by the end consumer.
Growth of the Indian power sector
Power development is the key to the economic development. The power Sector has been receiving adequate priority ever since the process of planned development began in 1950. The Power Sector has been getting 18-20% of the total Public Sector outlay in initial plan periods. Remarkable growth and progress have led to extensive use of electricity in all the sectors of economy in the successive five years plans. Over the years (since 1950) the installed capacity of Power Plants (Utilities) has increased to 143,311 MW in fiscal 2008 from a meager 1713 MW in 1950, registering an 83 fold increase in 56 years. Similarly, the electricity generation increased from about 5.1 billion units to 704.45 Billion units. The per capita consumption of electricity in the country also increased from 15 kWh in 1950 to about 635 kWh in 2007-08, which is about 23 times. In the field of Rural Electrification and pump set energisation, country has made a tremendous progress. About 85% of the villages have been electrified except farflung areas in North Eastern states, where it is difficult to extend the grid supply. The total outlay for the power sector increased from 45590 crores in the Ninth Plan to 143399 crores in the Tenth Plan period, including a gross budgetary support of 25000 crores. The total energy consumption stood at 387.3 MMTOE as of Dec 06. Power generation amounted to 704.45 BU?s (Billion Units) in 2007-2008.
Source-wise, thermal power plants accounted for an overwhelming 64.6 per cent of the total installed capacity. Within this group, coal, gas and oil based thermal power plants accounted for 53.3 per cent, 10.5 per cent and 0.9 per cent, respectively. Hydel power plants come next with an installed capacity of 35,378.76 MW,
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accounting for 24.7 per cent of the total installed electricity generation capacity, following by Nuclear & Renewable sources which consist 3% & 7% respectively. Simultaneously, the total transmission lines network has been growing at a robust pace to expand the transmission network. Total transmission lines have increased from 150642 circuit km (ckm) at the end of 2001-02 to 198089 ckm at the end of 2006-07. Generation capacities and demand points are unevenly distributed across the country due to various natural and historical factors. Furthermore, demand for power (and to some extent, even its supply), is characterized by intra-day and seasonal variations. An integrated power transmission grid helps in evening out supplydemand mismatches. In addition, mechanisms for trading and exchange and open access facility into the grid could help in making the market for electricity more competitive and cost effective. The existing inter-regional transmission capacity of about 17,000 MW that connects the Northern, Western, Eastern and North-Eastern Regions in a synchronous mode (at the same frequency) and the Southern Region asynchronously has enabled interregional energy exchange of about 38 billion kWh (January- November 2007). It is expected that the interregional capacity of more than 37,700 MW would be achieved by the end of the Eleventh Five Year Plan. Proposals are under way to have synchronous integration of Southern Region with the rest of the regions forming an all-India synchronous grid. Electricity consumption in India has more than doubled in the last decade, outpacing economic growth. The primary energy supply in the country is coal-dominant with the power sector accounting for about 40% of primary energy and 70% of coal consumption. It is also the single largest consumer of capital, drawing over one-sixth of all the Indian investments over the past decade. Fuelled by high coal and investment consumption, India?s power sector has grown 80-fold since independence to over 107,000 MW but the per capita power consumption is very low. This number is not precisely known, since a significant fraction of the consumption is unmetered, and there is a large proportion of theft. Ostensibly, transmission and distribution (T&D) losses are about 25%, but only some fraction of the losses are technical losses; the theft is bundled together as ?commercial losses.‘
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Power Setup in India
Source: Areva T&D website Power Generation: This is where it all starts. There are several ways electricity is made: Steam plants those burn fossil fuels, hydroelectric plants that use water and nuclear plants that split atoms. Each of these ways produces steam in a boiler that turns a machine called a turbine. The turbine spins a giant magnet inside a coil of wire. Heat energy in the steam changes to mechanical energy. The mechanical energy produced in the turbine is changed to electrical energy in the generator. Transmission: From the power plant, the electricity flows through the wires to a stepup transformer. The transformer raises the pressure of the electricity so it can travel long distances. Voltage is raised up as high as 765,000 volts. From the transformer, the current then travels through wires to the transmission lines. These high voltage lines can carry large amounts of electricity over long distances. Distribution: From the transmission lines the current now goes to a substation transformer or step down transformer. A substation lowers the pressure between 2,000 and 13,000 volts so the electricity can be used by the community. From the substation the electricity is now ready to be distributed into the community. The current travels from the substation to distribution lines. These lines are sometimes above ground or below ground. From the distribution lines the electricity now travels to a pole transformer. This type of transformer lowers the pressure once again to 120
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to 240 volts for use in your home. In places where the lines are underground, you may see a transformer box instead of a pole. Consumption: From the transformer pole or box, the electricity is now ready to travel to industries, residences, offices into a service box. That's where the electric meter is.
Companies Setup in Power Sector
Power Sector
Generation Companies
Transmission Companies
Distribution Companies
Equipment Manufacturers
Financing Companies
Trading companies
• • • •
NTPC NHPC NPC Private players
• PGCIL (Nodal Agency)
• SEBs‘ • Private Players
• BHEL • Domestic Pvt. Players • Foreign Pvt. Players
P PFC • FC (Nodal Agency) FDI
PTC • PTC (Nodal Agency)
• FDI Sector Private • Private Sector
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Organizational Structure of the Power Sector
In December 1950 about 63% of the installed capacity in the Utilities was in the private sector and about 37% was in the public sector. The Industrial Policy Resolution of 1956 envisaged the generation, transmission and distribution of power almost exclusively in the public sector. As a result of this Resolution and facilitated by the Electricity (Supply) Act, 1948, the electricity industry developed rapidly in the State Sector. In the Constitution of India "Electricity" is a subject that falls within the concurrent jurisdiction of the Centre and the States. The Electricity (Supply) Act, 1948, provides an elaborate institutional frame work and financing norms of the performance of the electricity industry in the country. The Act envisaged creation of State Electricity Boards (SEBs) for planning and implementing the power development programmes in their respective States. The Act also provided for creation of central generation companies for setting up and operating generating facilities in the Central Sector. The Central Electricity Authority constituted under the Act is responsible for power planning at the national level. From, the Fifth Plan onwards i.e. 1974-79, the Government of India got itself involved in a big way in the generation and bulk transmission of power to supplement the efforts at the State level and took upon itself the responsibility of setting up large power projects to develop the coal and hydroelectric resources in the country as a supplementary effort in meeting the country?s power requirements. The National thermal Power Corporation (NTPC) and National Hydro-electric Power Corporation (NHPC) were set up for these purposes in 1975. North-Eastern Electric Power Corporation (NEEPCO) was set up in 1976 to implement the regional power projects in the North-East. Subsequently two more power generation corporations were set up in 1988 viz. Tehri Hydro Development Corporation (THDC) and Nathpa Jhakri Power Corporation (NJPC). To construct, operate and maintain the inter-State and interregional transmission systems the National Power Transmission Corporation (NPTC) was set up in 1989. The corporation was renamed as POWER GRID in 1992.
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Power Sector Structure (based on responsibilities)
Role of Institutional Players
Central Government ¾ Formulate National Electricity Policy and National Tariff Policy ¾ Formulate national policy on stand alone systems ¾ Formulate national policy on Rural Electrification ¾ Make Rules & Procedure for implementing provisions of Electricity Act 2003 ¾ Appoint Chairpersons& other members of CEA State Government ¾ Assist Central Govt. in formulating National Electricity Policy, Tariff Policy, etc ¾ Make Rules & Procedure for implementing provisions of Electricity Act 2003 ¾ Form SLDCs for optimal scheduling & dispatch for the power systems ¾ Make Rules & Procedure for implementing provisions of Electricity Act 2003
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Central Electricity Authority ¾ Advice Central Government on matters relating to National Electricity Policy ¾ Advice appropriate government on technical matters related to electrical systems ¾ Formulate plans for optimal utilization of resources in accordance with National Electricity policy Central Electricity Regulatory Commission ¾ Fix tariff for generating stations either owned by central government or having sales in more than one state ¾ Regulate inter-state transmission tariff & fix trading margin ¾ Grant of licenses for interstate transmission & trading State Electricity Regulatory Commission ¾ Fix tariff for generation, Supply, transmission & wheeling within the state ¾ Fix Cross Subsidy Surcharge when open access is allowed ¾ Fix trading margin for intra-state operations ¾ Grant of licenses for intrastate transmission & trading ¾ Advice the State Govt. on policy matters National Load Despatch Centre ¾ Interface with all the five Regional Load Dispatch Centres (RLDCs) that are operational at present to acquire real-time data to continuously monitor integrated operation of the proposed National Grid ¾ To ensure optimal Scheduling & Dispatch among the RLDCs The existence of huge demand supply gap clearly indicates the inefficiency of the mammoth organizational setup of the Indian Power Sector. On critical analysis of the setup, we find that the inefficiency is caused as most of them have overlapping functions. The involvement of State Government in this sector has further complicated the issue, each state has developed its own electricity policy and pricing based on its own interest rather than thinking of country as a whole. The different
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pricing regimes and distribution policies of state governments further aggravated the power situation. The policy of liberalisation the Government of India announced in 1991 and consequent amendments in Electricity (Supply) Act have opened new vistas to involve private efforts and investments in electricity industry. Considerable emphasis has been placed on attracting private investment and the major policy changes have been announced by the Government in this regard which are enumerated below: ¾ The Electricity (Supply) Act, 1948 was amended in 1991 to provide for creation of private generating companies for setting up power generating facilities and selling the power in bulk to the grid or other persons. ¾ Financial Environment for private sector units modified to allow liberal capital structuring and an attractive return on investment. Up to hundred percent (100%) foreign equity participation can be permitted for projects set up by foreign private investors in the Indian Electricity Sector. ¾ Administrative & Legal environment modified to simplify the procedures for clearances of the projects. ¾ Policy guidelines for private sector participation in the renovation & modernisation of power plants issued in 1995. ¾ In 1995, the policy for Mega power projects of capacity 1000 MW or more and supplying power to more than one state introduced. The Mega projects to be set up in the regions having coal and hydel potential or in the coastal regions based on imported fuel. The Mega policy has since been refined and Power Trading Corporation (PTC) incorporated recently to promote and monitor the Mega Power Projects. PTC would purchase power from the Mega Private Projects and sell it to the identified SEBs. ¾ In 1995 GOI came out with liquid fuel policy permitting liquid fuel based power plants to achieve the quick capacity addition so as to avert a severe power crisis. Liquid fuel linkages (Naphtha) were approved for about 12000 MW Power plant capacity. The non-traditional fuels like condensate and orimulsion have also been permitted for power generation. ¾ GOI has promulgated Electricity Regulatory Commission Act, 1998 for setting up of Independent Regulatory bodies both at the Central level and at the State level viz. The Central Electricity Regulatory Commission (CERC) and the State Electricity Regulatory Commission (SERCs) at the Central and the State levels respectively.
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¾ The Electricity Laws (Amendment) Act, 1998 passed with a view to make transmission as a separate activity for inviting greater participation in investment from public and private sectors. ¾ The Electricity Laws (Amendment) Act, 1998 provides for creation of Central and State Transmission utilities. The function of the Central Transmission Utility shall be to undertake transmission of energy through inter-state transmission system and discharge all functions of planning and coordination relating to inter-state transmission system with State Transmission Utilities, Central Government, State Governments, generating companies etc. Power Grid Corporation of India Limited will be Central Transmission Utility. ¾ The function of the State Transmission Utility shall be to undertake transmission of energy through intra-state transmission system and discharge all functions of planning and coordination relating to intra-state transmission system with Central Transmission Utility, State Governments, generating companies etc. ¾ The latest reform measures have come in the form of the Electricity Act 2003, which aims to bring about a paradigm shift in the reforms to this critical sector. (Detailed report on this Act in the Section “Power Sector Reforms”)
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Two Prong Strategy
The GOI devised a twin pronged stratergy to meet the increasing gap between Demand & Supply. It decided to bridge the gap by working both on demand & supply side. On the supply side they devised a demand side management which focuses on weeding out the anomalies that increase the demand. This process is called Demand Side Manangement, whereas on the other hand the GOI is focusing on increasing vehemently to meet the gap.
Demand Side Management
Focus on energy conservation. Set out guidelines for various consumers, on efficient usage of electricity Encourage industries & buildings using clean & green technology. Collection of Data regarding energy consumption, & emissions from various consumption sources. ¾ Customized solution for each category of consumer, on energy usage & preservation. ¾ ¾ ¾ ¾
Supply Side Management
¾ Focus on increasing the electricity generation in the country ¾ Aggressive plans to increase the generation capacity in all segments ¾ Improvement in the Plant Load Factor, by Renovation & Modernization Programmes ¾ Setting up of Transmission & Distribution lines to evacuate & distribute power. ¾ Focus on reducing the T&D losses.
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Chapter 2: Generation & Capacity Addition
Overview
With regards to increasing gap between Demand & Supply of power, and GOI‘s target to increase the per capita consumption of power from present levels to 1000 KWh, has resulted in huge generation needs for the economy. In 2007-08 the power generated was 704.45 BU. According to the Working Group Report on Power, the estimated requirement till year 2012 shall be 1038 BU. This translates in a CAGR of 10.2% p.a. Presently, the generation is growing at a CAGR of 5.8%. In order to achieve the set target, huge capacity additions are required to be installed in all the sectors. The installed capacity at the beginning of 10th plan was 105 GW. In the 10th Plan, as against the target of 44,185 MW (NRES + RES), actual capacity addtion has been 27284 MW. The MoP has proposed a capacity addition of 80 GW in the 11th Plan. The present installed capacity is 143.3 GW.
Growth In Generation Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 CAGR Billion Units 531.60 558.30 587.40 617.50 662.52 704.45 Growth 3.22% 5.02% 5.21% 5.12% 7.29% 6.33% 5.79%
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Table 1.1
Summary of Installed Capacity at the Beginning of 10th Plan (1.4.2002)
Sector State Private Central ALL INDIA Hydro 22,639 581 3,049 26,269 Nuclear RES (Figures in MW) Total Thermal Coal Gas Diesel Total 36,722 2,662 558 39,941 0 61 62,642 3,991 4,082 577 8,651 0 1,567 10,799 21,418 4,419 0 25,837 2,720 0 31,605 62,131 11,163 1,135 74,429 2,720 1,628 1,05,046
Sector THERMAL HYDRO NUCLEAR RES TOTAL
Table 1.2 10th Plan Capacity Addition Actual-Sector Wise Target Addtion Actual Addition Success Ratio Units (%) Units (%) (%) 25417 58% 11586 42% 46% 14393 33% 8385 31% 58% 1300 3% 1180 4% 91% 3075 7% 6133 22% 199% 44185 100% 27284 100% 62%
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Table 1.4 Sl. Major Reasons of Under Recovery 1 Projects Dropped Projects Slipped to 11th FYP Delay in super critical technology tie up by BHEL Geological Surprises Natural Calamity Delay in award of works Delay in MoE&F clearance Delay in clearance/ Investment decision / Funds tie up constraints/delay in financial closure Delay in Preparation of DPR & sign up of MOU between HP&SJVNL ESCROW cover (Private Sector) R&R issues Court Cases Law & Order problem Sub Total Capacity slipped (MW) Thermal Hydro 2,528 481
1 2 3 4 5 6 7 8 9 10 11
3,960 998 1,500 500 500 7,458 400 675 5,058 510 450 823 400 1,400 400
Other Projects likely to slip due to constraints on 1 BHEL side Total
5109 15,095
618 6,157
Table 1.6 11th Plan Capacity Addition Target-Sector Wise (in MW) Sector Central State Private Total Hydro 9685 3605 3263 16553 (18%) Thermal Nuclear 26800 24347 7497 58644 (63.7%) 3380 RES Total
3380 (3.7%) 13500(14.7 )
92077 (100%)
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Generation mix
The Indian Power sector is predominantly based on fossil fuels, with about 53.3 percent of the country?s power generation capacity being dependent on vast indigenous reserves of coal. Natural gas based generation capacity, that has grown very rapidly in the last decade due to lower capital requirements, shorter construction periods, and higher efficiencies has a 10.5 percent share in the overall capacity. Nuclear capacity remains restricted at about 2.9 percent of the total. Generation based on large hydropower has continued to grow very slowly due to a number of socio-environmental barriers and has a 24.7 percent share in capacity at present. Renewable technology projects, (renewable here refer to small hydro, wind, cogeneration and biomass-based power generation, and solar technologies and exclude large hydropower), aggregating 10,855.24 MW as on February 2008, has a 7.7 percent share in the overall generation capacity.
Plant Load Factor
The thermal power plants are compared on the basis on plant load factor. The overall plant load factor (PLF) of thermal plants of India as on 31st March, 2008 was 78.6%. Plant load factor is an indicator of capacity utilization. A plant is said to have 100% PLF if the plant operates at its rated capacity without break 24 hours a day throughout the year. PLF is affected by several factors such as adequate maintenance of generating units, troubles faced in the operation, quality and quantity of fuel supplied to power stations. The all India Thermal PLF which was as low as 27% at the beginning of First Plan progressively increased to 47% by the year 196364 and then declined to around 42% by early seventies. During one year in the seventies i.e. during 1976-77, the PLF touched 55.4% but this could not be sustained during subsequent years. Several factors such as inadequate maintenance of generating units, the teething troubles faced in the operation of the newly introduced 200/210 MW units and the deterioration in the quality of coal supplied to power stations led to a gradual erosion in the PLF of the thermal power plants during 5th plan period. During the 6th Plan, Department of Power and Central Electricity Authority undertook a comprehensive programmed to renovate and modernize old units located in different States. The performance of 200/210 MW units also begin to stabilize. Concerted efforts were made by Ministry of Coal to monitor quality of coal supplies to power plants. As a result of all these measures the PLF of thermal plants registered a gradual improvement during the 7th plan period.
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The plant load factor of thermal power stations in the country, which was only 44.2% in 1980-81, increased to 56.5% by the end of the 7th Plan. The all India Average PLF of the Thermal Power Plants has further increased to 64.4% by the end of eighth plan. By the 2005-06 period the all India PLF stood at 73.6% increasing to just over 77% by 2007. The PLF in each of these sectors as well as in every region has improved over time. However, there is a marked variation across the regions One of the major achievements of the power sector has been a significant increase in availability and plant load factor of thermal power stations especially over the last few years. The table below shows the PLF of thermal plants under central, state and private sector and also the overall PLF over last few years. As one can notice from the table the PLF of thermal plants under private and central sector is quite good but poor capacity utilization of thermal plants under state (which has 57% of the total fossil fuel based installed capacity) results in lowering of the overall PLF. The low PLF of the thermal plants under state could be attributed to ¾ Poor operation and maintenance, ¾ Poor quality of coal and ¾ Lack of timely availability of fuel. Lack of timely availability of coal not only decreases the quantum of generation but also increase per unit cost of power generation because the plants have to switch to oil in case of non-availability of coal.
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Thermal plants have various advantages and disadvantages depending upon the fossil fuel they are based on. For instance in case of gas based generation the capital cost, gestation period and fuel cost for per unit power generation is lower than that for coal based generation, however uncertainty about availability and period of availability of gas discourages higher capacity addition based on gas as fuel. The capital cost, gestation period, fuel cost, application and so forth are listed below for different fuel based generation.
Segments in Power Generation
Thermal
Overview
At the end of 10th Five Year Plan the share of thermal power plant stood at 65% of the overall installed power generation capacity. And in the light of the capacity addition envisaged under 11th Five Year Plan this share would further increase to 68.6%. Thermal power plants are based on fossil fuels namely, coal, gas or lignite. At present nearly 83% of the thermal plants are dependent on coal. Whereas those based on natural gas and oil are around 16% and 1% respectively. Also more than 90% of the capacity addition in the thermal segment during the 11th Plan would be based on coal. This is in view of the relatively large reserves of coal in the country.
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Basic Cost Structure
Coal Gas Naphtha Capital Cost(Rs million per * 30-45 30-40 25-30 MW) Gestation period (months) 48-52 24-30 18-30 124 115 517 Fuel cost (paise per kwh) Application Base load Intermediate load Peak load Emissions High Low Low Indigenous availability High Low Medium Indigenous quality Poor Good Good Fuel Price Outlook Deregulation Underpriced in relation Domestic prices will result in a to international prices. W to move in line faster price ith increased proportion with the increase international of deregulated gas prices. Price will flowing into the market, continue to prices are expected to be volatileand will rise in the future move in line with crude oil price. Technology
Thermal power plants burn coal or fossil fuels to produce heat which in turn gets converted into electricity. Fuels such as diesel and furnace oil are also used, although to a lesser extent.
The choice of fuel for thermal power plants depends on the plant size, and the cost and availability of various fuels at the location. Coal-based plants are usually located near coal mines or near coastal areas where it is economically feasible to transport coal. Gas-based plants are located either near a gas pipeline or near ports to
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facilitate the easy import of gas. Thermal power plants are often designed to operate with more than one fuel so that the non-availability of a particular fuel would not disrupt operations. In general, only relatively smaller power plants (with a capacity of under 200 MW) use diesel and furnace oil.
Steam-cycle power plants (Type I)
In a steam-cycle power plant, pulverised coal or lignite is burnt to boil water in a boiler to generate steam at high temperature and pressure. This steam is used to run a steam turbine, coupled with an electric generator. Some of the heat generated is lost owing to radiation from pipelines, leakage from various equipments and through heat carried by the exhaust from the turbine. The ratio of the heat converted into electricity to the total heat generated by burning the fuel is referred to as the thermal efficiency of the plant. Typically, the thermal efficiency of conventional steam-cycle power plants ranges between 33% and 38%. Recent developments in technology have helped increase the thermal efficiency of steam-cycle power plants to nearly 45%. These developments include: ¾ The use of fluidised bed combustion boilers, which also reduces the emission of sulphur oxides, ¾ The use of super-critical steam boilers (with respect to temperature and pressure parameters), and ¾ The use of coal gasification technology in combination with cycle technology.
Combined-cycle power plants (Type II)
In a combined-cycle power plant, high temperature and high-pressure gases, produced by burning natural gas/naphtha, are used to run a gas turbine in the opencycle mode. The exhaust gases from the gas turbine carry significant amounts of heat. In the combined-cycle mode, the heat content of the exhaust gases is utilised to generate steam in a heat-recovery steam generator. The steam is used to run a steam turbine. Although the thermal efficiency of a plant in the open-cycle mode (about 30%) is lower than that of a coal-based plant, the total thermal efficiency of the plant in the combined-cycle mode is significantly higher (at 42%-48% ). Technological developments have enabled combined-cycle power plants to achieve thermal efficiency of up to 60%. The most important development that has helped increase efficiency is the use of higher temperature gases at the turbine inlet.
Integrated gasification combined-cycle plants (Type III)
Integrated gasification combined cycle (IGCC) technology is used to increase the thermal efficiency of coal-based power plants and reduce emissions. In IGCC plants, 27
coal is gasified using a gasifier. The gaseous coal is purified to remove pollutants such as sulphur. The purified coal is subsequently burned to generate hot gases, which are used to run a gas turbine. The exhaust gases, containing waste heat, are used to boil water and generate steam; this steam is used to run a steam turbine. IGCC technology can deliver thermal efficiency of up to 48%-50%. In addition, it can also be used with other heavy fuels such as refinery residues and petroleum coke.
Present & Future Status:
Sector (Figure In MW) XI th Plan XII th Plan 2001-02 2006-07 Target PUC CP (IX th Plan) (X th Plan) Target 62131 11163 1202 74,496 71121 13692 1202 86,015 48010 2114 50,124 98435 15240 32770 15583 1014 1100 114,018 16,254 33,870
Coal & Lignite (Type I & III Technology) Gas (Type II Technology) Diesel Thermal PUC: Project under Construction CP: Committed Projects
Major Challenges
Fuel availability and pricing are the major challenges to the thermal power generation. Uncertainty about availability, period of availability and price of gas are the major constraints in increasing power generation dependent on it. Moreover although India has large reserves of coal but current production levels are simply not enough to meet the growing demand. The demand exceeds the supply as can be noticed from the data below:
DESCRIPTION Total Generation (BU) (^) Total Coal Requirement (MT) including Transit Loss @1% Coal Availability From CIL (MT) # From SCCL (MT) $ From Captive Mines Total Availability (MT) Gap between Supply & Demand (MT) Net Imports
2007-08 2008-09 2009-10 2010-11 2011-12 499.5 536.0 587.9 660.8 764.5 354.9 380.4 417.6 470.0 544.5
287.3 27.0 9.8 324.0 -30.9
311.6 27.2 23.6 362.3 -18.1
343.8 27.7 36.5 408.0 -9.6
376.7 28.4 41.5 446.6 -23.4
405.8 29.0 47.3 482.1 -62.4
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CIL: COAL INDIA LIMITED, SCCL: Singareni Collieries Company Limited (^) Generation is projected (as projected by CEA), assuming PLF of 76% in 2006-07 & 200708 and 77% in subsequent years existing units and 85% for new capacity additions, with due consideration of initial commissioning period for new units. # Coal India Limited (CIL) projection of Coal Production including their emergency production plan, considered here, is provided by Working Gr. member from CIL. Distribution of around 72% of CIL coal to Power Sector (except CPPs) considered here based on historical supply figures and as considered by CEA for their computation & analysis purpose. $ SCCL?s projection of Coal Production, considered here, is provided by SCCL. Distribution of around 71% of SCCL coal to Power Sector (except CPPs) considered here based on historical supply figures and as considered by CEA for their computation & analysis purpose.
Precautions taken by companies
To meet the above mention challenges various initiatives have been taken by the government and the players of the power sector some of them are as follows: ¾ Domestic power companies acquire coal mines abroad – Many power generation companies are acquiring stakes in coal mines abroad. For instance, ™ Recently GMR Energy acquired 5% stake in a South Africa based coal firm (Homeland Mining and Energy), ™ Tata Power has acquired 30% stake Indonesia based coal firm (PT Kaltim Prima Coal & PT Arutmin), ™ Reliance Power has acquired three coal mines in Indonesia have extractable deposited of 2 Btn., ™ NTPC, the biggest player of India?s power sector, is also looking at Indonesia, Mozambique and South Africa. ¾ Power companies can import under the open general licence ¾ Adoption of super critical technology for it increases the energy efficiency of the power plants which in turn decrease the quantity of coal needed per unit of power generation. Currently the energy efficiency of coal based plants is 31%, this is expected to increase to increase to 33% at the end of 11th Plan and further to 40% at the end of 12th Plan. Besides helping to lessen the demand-supply gap this technology also lower the emission level.
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Future Outlook
For meeting future electricity demand, coal would necessarily continue to remain the primary fuel. ¾ Imported coal based thermal power stations, particularly at coastal locations, would be encouraged based on their economic viability. ¾ Generating companies may enter into medium to long-term fuel supply agreements especially with respect to imported fuels for commercial viability and security of supply. ¾ Moreover reform in mining sector is expected which would help to overcome problems like lack of timely availability of fuel to the power plants. Incorporation of new technologies like super critical technology and use of low ash content coal would also help in reducing the problem of emissions. Use of gas as a fuel for power generation would depend upon its availability at reasonable prices. ¾ Natural gas is being used in Gas Turbine /Combined Cycle Gas Turbine (GT/CCGT) stations, which currently accounts for about 10 % of total capacity. ¾ Power sector consumes about 40% of the total gas in the country. New power generation capacity could come up based on indigenous gas findings, which can emerge as a major source of power generation if prices are reasonable. ¾ A national gas grid covering various parts of the country could facilitate development of such capacities. ¾ Imported LNG based power plants are also a potential source of electricity and the pace of their development would depend on their commercial viability. ¾ The existing power plants using liquid fuels might shift to use of Natural Gas/LNG to reduce the cost of generation. ¾ The overall PLF of thermal plants which increased during the tenth Five Year Plan at a CAGR of 1.9% will further increase during the eleventh Plan although at a lower CAGR due to fuel shortage which power sector might face during this period. ¾ Initiatives taken by GoI in increasing level of participation of private sector and adoption of new technologies will lead to considerable improvement in the PLF of the thermal plants in future.
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Funding Requirements
Thermal Power Plants for 2017-2012 Type Sector PUC MW Central State Private Total 7200 5852 3202 16254 Rs. Crore 16917 7959 6818 31694 CP MW 15110 16000 2760 33870 Rs. Crore 57865 60970 11040 129875
PUC: Project Under Construction, CP: Committed projects
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Hydropower
Overview
Hydropower is a renewable, economical, non-polluting and environmentally benign source of energy. Developing hydropower enhances energy security and there is no fuel cost during the life of the project. Its generation is unaffected by issues concerning fuel supply, particularly the volatile prices fluctuations which affect imported fuels. Hydropower stations are capable of instantaneous starting and stopping and are able to accommodate various loading alternatives. They help in improving the reliability of power systems and are ideal for meeting demand during peak times. Despite the benefits of hydroelectric projects, hydropower?s share of the Indian market for power has steadily declined. At the time of independence (late 1940?s), hydropower constituted 37% of the total installed capacity in the power sector, and rose to more than 50% by the year 1963. Until the late 1970?s, hydropower continued to represent more than 40% of India?s power supply. This was considered at the time to be the ideal hydrothermal mix for meeting demand in an efficient manner. However, in the 1980?s, hydropower?s share began declining sharply and at present hydropower constitutes only about 25% of the overall installed capacity of the country. SHARE OF HYDROPOWER IN INDIA‘S INSTALLED CAPACITY
YEAR 1962-63 1969-70 1979-80 1989-90 1991-92 1993-94 1997-98 2007-08 INSTALLED CAPACITY (MW) 5801 14102 28448 63636 69070 76718 89090 141499 HYDROPOWER CAPACITY (MW) 2936 6135 11384 18308 19189 20366 21891 35378 %AGE SHARE 50.6 43.5 40 28.8 27.8 26.6 24.6 24.7
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To meet the present demand for peaking and non-peaking power, it is estimated that a hydro-thermal mix of 40:60 would be ideal mix. However as a result of the decreasing share of hydropower, thermal generation, which should ideally be used only for base load operations, is also being used to meet peak requirements. This has lead to sub-optimal utilization of economic and perishable resources.
As per the CEA, in terms of hydroelectric generation installed capacity as on Feb 28, 2008, India has only utilized approximately 23.8% of its estimated hydroelectric potential of 148,701 MW. India, therefore, is lagging behind other countries, such as Norway, Canada and Brazil, which all utilize more than 30% of their hydro potential.
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Technology
Hydroelectric energy is a clean, renewable and a sustainable energy source. In a hydroelectric power station, energy is harnessed from water by running it from a higher height to a lower height and in the process, driving a hydro-turbine, which rotates an alternator to produce electricity.
The principal classifications for the various types of hydro development are: Run-of-the-river scheme: In this type of scheme electricity is generated from the water flow of a river or other moving water source. This type of project generally has no reservoir to store water inflow from the catchment area. Storage ponds can be constructed to divert water in a run-of-the river scheme; however these storage ponds do not have an impact on the flow of the water source. Storage ponds on runof-the-river schemes (pondage schemes) are used to mitigate the impact of shortterm variations in the water flow. The gestation period for these projects is lowest compared to other type of Hydro projects. These projects are generally constructed on a perinial river, to get un-iterrupted supply of water. The flip side is that the wear & tear of hydro turbine is faster in this scheme due to silt congestion. Therefore the scheme requires high O&M cost and replacement time for the turbine is earlier. Storage schemes: These schemes include a reservoir is which seasonal surplus of water in excess of demand is stored for use of generating electricity in seasons of lower flows when demand exceeds inflow. In a storage scheme there is much greater flexibility for modulation of inflows. It can have annual or even carry-over capacity from one year to the next. Tidal plant Schemes: In a tidal plant scheme, electric power is generated by virtue of the daily differences in tidal levels. The tidal range, or amplitude, is given by the difference between the high tide level and the subsequent low tide level. The tidal
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range is not constant even at one site but fluctuates to a smaller or larger extent around a local mean value depending on geographical position. Pumped storage schemes: In these schemes water generates power during peak demand, while the same water is pumped back in the reservoir during lean demand period. A pumped storage plant operates on the principle that the same machines are used for generation of power during peak hours when power is given to the network and for pumping back water into the reservoir during off peak hours, utilizing power from the system. The provision is based on economics of operation and the availability of enough spare capacity in the grid to operate the machines as pumps in the low load period. This scheme is ideal for the last leg project on the river.
Status:
Sector XI th Plan Target 8981 4929 1675 15,585 (Figure In MW) PUC 6727 4529 675 11,931 CP 2254 400 1000 3,654
Run Of River Scheme Storage Scheme Pumped Storage Scheme Hydro PUC: Project under Construction CP: Committed Projects
Growth Drivers
¾ A renewable, economical, non-polluting and environmentally benign source of energy. ¾ No fuel cost during the life of the project. ¾ Its generation is unaffected by issues concerning fuel supply, particularly the volatile prices fluctuations which affect imported fuels. ¾ Hydropower stations are capable of instantaneous starting and stopping and are able to accommodate various loading alternatives. They are ideal for meeting demand during peak times.
Major challenges
¾ Impact on Environment: Hydroelectric projects do create environmental issues emanating from submergence of large areas also involving forest. ¾ Rehabilitation & Resettlement (R&R) of Project Affected People ¾ Safety of dams ¾ Construction time is another area of concern, which needs to be compressed. Large projects have taken inordinately long time.
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Govt. of India Initiative on Hydro Power Development
¾ Additional budgetary financial support for ongoing and new hydro projects under Central Public Sector Undertakings. ¾ The government has allowed private companies to develop hydropower projects on cost-plus basis, instead of tariff-based bidding, bringing private power players on a par with public sector peers. This will encourage private companies to develop hydro projects which otherwise involves high risk due to higher uncertainties involved. ¾ In order to enable the project developer to recover the costs incurred by him in obtaining the projects site, merchant sale of up to a maximum of 40 percent of the sale-able energy has been allowed ¾ State Government to follow a transparent procedure for potential sites to the private sector ¾ Resolution of inter-state issues on sharing of water and power. ¾ Renovation, Modernization & Up rating (RM&U) of existing hydro stations ¾ Promoting small and mini hydel projects – 25 MW and below now fall into category of ?non conventional‘ qualifying for benefits. ¾ Simplified procedures for clearances by Central Electricity Authority; Electricity Act 2003 further liberalises this. ¾ Promoting hydel projects in joint venture ¾ Government support for land acquisition, resettlement and rehabilitation, catchment area development, etc.
Future Outlook
Hydroelectricity is a clean and renewable source of energy. Maximum emphasis would be laid on the full development of the feasible hydro potential in the country. The 50,000 MW hydro initiatives have been already launched and is being vigorously pursued with Detailed Project Reports for projects of 33,000 MW capacity already under preparation. The hydro capacity additions envisaged under various Five Year Plans are given in the table below.
Plan Period Hydro Capacity Total Hydro Addition (MW) Capacity at the end of plan 16553 (MW) 51207 30000 81207 31000 112207 36494 148701
11th Plan (2007-08 to 2011-12) 12th Plan (2012-13 to 2016-17) 13th Plan (2017-18 to 2021-22) 14th Plan (2022-23 to 2026-27)
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As is evident from the table India plans to harness its total estimated hydroelectric potential (i.e. 148701 MW) by the end of year 2027. It will also facilitate economic development of States, particularly North-Eastern States, Sikkim, Uttaranchal, Himachal Pradesh and J&K, since a large proportion of our hydro power potential is located in these States. The Central Government will support the State Governments for expeditious development of their hydroelectric projects. Proper implementation of National Policy on Rehabilitation and Resettlement (R&R) would be essential in this regard so as to ensure that the concerns of project-affected families are addressed adequately.
Funding Requirement
Hydro Power Plants for 2017-2012 Type Sector PUC MW Central State Private Total 7633 2107 2191 11931 Rs. Crore 18929 1935 8835 29699 CP MW 2052 530 1072 3654 Rs. Crore 8301 2414 4399 15114
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Nuclear Power
Overview:
Nuclear is environmentally benign source of energy and over a period of time, its proportion in total capacity should increase. the installed capacity at the end of the 10th Plan was 3900 MW (3% of total). Keeping in view the availability of fuel, a moderate capacity addition of 3,160 MW nuclear plants has been programmed during the 11th Plan by the Nuclear Power Corporation. All projects are presently under construction. However, in view of the recent developments in the Nuclear Sector, capacity addition in nuclear plants during 12th Plan is expected to be much higher.
Technology
Light Water Reactor (LWR)
A light water reactor or LWR is a thermal nuclear reactor that uses ordinary water, also called light water, as its neutron moderator. This differentiates it from a heavy water reactor, which uses heavy water as a neutron moderator. In practice all LWRs are also water cooled. While ordinary water has some heavy water molecules in it, it is not enough to be important in most applications.
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Pressurised Heavy Water Heater (PHWR)
A pressurised heavy water reactor (PHWR) is a nuclear power reactor that uses unenriched natural uranium as its fuel and heavy water as its moderator (deuterium oxide D2O). The heavy water is kept under pressure in order to raise its boiling point, allowing it to be heated to higher temperatures and thereby carry more heat out of the reactor core. While heavy water is expensive, the reactor can operate without expensive fuel enrichment facilities thus balancing the costs.
Fast Breeder Reactor (FBR)
A fast Breeder reactor or simply a fast reactor is a category of nuclear reactor in which the fission chain reaction is sustained by fast neutrons. Such a reactor needs no neutron moderator, but must use fuel that is relatively rich in fissile material when compared to that required for a thermal reactor. On average, more neutrons per fission are produced from fissions caused by fast neutrons than from those caused by thermal neutrons. Therefore, there is a much larger excess of neutrons not required to sustain the chain reaction. These neutrons can be used to produce fuel. Status:
XI th Plan 660 2000 500 (Figure In MW) PUC 660 2000 500 CP -
Sector PHWR LWR FBR
Nuclear 3,160 3,160 PUC: Project under Construction
Financing: Nuclear Power Plants for 2017-2012 Type Sector Central Total PUC MW 3160 3160 Rs. Crore 8970 897 0 CP MW Rs. Crore -
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Wind Power
Overview
Global Wind 2006 Report has noted that the global wind energy industry has been growing at the staggering rate of nearly 30 % per year for the last 10 years, and experts predict that there is no end in sight for this boom. While a large proportion of this development is happening in Europe, other markets, especially Asia and North America are catching up fast. And the strongest market in Asia is India which is the new ?Wind Superpower‘. Wind, with declining trend of cost and increase in the scale of wind turbine manufacturing, promises to become a major power source globally in the first few decades of this millennium. India is now the fourth largest wind power generator in the world after Germany, Spain and USA. Five nations – Germany, USA, Denmark, India and Spain account for 80% of the world?s installed wind energy capacity. Wind energy continues to be the fastest growing renewable energy source with worldwide wind power installed capacity reaching 93,849 MW in December 2007, up from 74,153 MW in 2006. (Source: www.wwindea.org). Today, the capital cost of wind power projects in India range between Rs. 4.5 to 5.5 crores per MW. This gives a low levelized cost of energy generation taking into consideration the fiscal benefits extended by the Government. Moreover the Indian government has introduced a package of incentives, some of which include tax concessions such as 80% accelerated depreciation, tax holidays for power income, soft loans, customs & excise duty relief and liberalized foreign direct investment procedures.
Various financial incentives & benefits:
¾ ¾ ¾ ¾ ¾ ¾ 80% depreciation in the first year. Operation and maintenance costs are low. Zero input fuel cost. Pay back in shorter duration. Cost of generation very low after payback period. Zero import duty on certain parts. 40
¾ Tax holidays for newer power projects for 10 years. ¾ Wheeling to SEB grid is easy and so no marketing problems. The Indian Renewable Energy Development Agency (IREDA) is playing a significant role in promoting Renewable Energy Projects, in general and Wind Energy Projects in particular. Renewable energy is expected to create maximum impact in the production of electricity. Projections indicate that by the end of the first decade of the new century, it would be cost effective to generate and supply renewable electricity, aggregating to several thousand megawatts, as the efficiencies in the power generation through wind energy are increasing and costs are decreasing, while the costs of conventional electricity are increasing. Besides grid supply augmentation, renewable electric technologies offer possibilities of distributed generation at or near points of use, which can reduce peaking loads and save on costly up-gradation and maintenance of transmission and distribution networks growing demand. There are no major technical barriers for large scale penetration of wind power.
Wind energy contribution in India‘s power generation capacity
The Government of India identified the importance and potential of wind power generation as early as 1983, when it commenced a national wind power program to tap the then estimated potential of 45,000 MW. The Government of India?s marketoriented approach subsequently led to the commercial development of wind power technology in India. The broad based national program concentrates on wind resource assessment activities, research and development support, implementation of demonstration projects to create awareness, establishment of new sites, involvement of utilities and industry, growth of infrastructure capability and capacity for manufacture, installation, operation and maintenance of WTGs and policy support. India has made steady progress in the development of wind power since the inception of the national wind power program and in 2005 it was the fourth largest country in the world with installations of 4201 MW. It has been estimated that the cumulative installed MW capacity for wind power in India will grow from 3,000 MW in 2004 to 8,300 MW in 2009, representing a CAGR of 22.6%. The installed capacity as on 31st Dec, 2007 is as follows:
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State Andhra Pradesh Gujarat Karnataka Kerala Madhya Pradesh Maharashtra Rajasthan Tamil Nadu W est Bengal Others Total (All India)
Gross Potential (MW )
Technical Potential (MW )
1750 1780 1120 605 825 3020 895 1750 450 12875
Installed Capacity (MW ) 31stDec, 2007
122.4 874.8 917.2 2 70.3 1646.3 495.7 3711.5 1.1 3.2 7844.5
8275 9675 6620 875 5500 3650 5400 3050 450 2990 45195
Technology
The state of art technology of wind turbine generator converts the kinetic energy of the wind into mechanical energy. The kinetic energy of wind is transferred though blades of wind generator into mechanical energy and drives the shaft of the generator. This mechanism transfers the rotary movement to the generator through gears and mechanical energy is converted into the electrical energy. The electrical energy is then supplied into the grid after stepping-up to a required electrical voltage. The wind turbine system consisting of blades, shafts, gears and generator, is controlled by the sophisticated computer controlled system installed at the base of the tower, which also have sensors to sense the wind speed and its directions to switch on and off the wind turbine generator. A modern wind turbine is designed to generate high quality, network compatible electricity for more than 20 years, with remote monitoring and relatively low maintenance.
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There have been three major trends in the development of wind turbines in recent years: ¾ Larger capacity and taller turbines: Increase in individual turbine power output capacity over the last 25 years, from 30 kW machines in 1980 to prototypes of 5,000 kW machines in 2005. ¾ Increased efficiency: An overall efficiency increase of 2-3% annually over the last 15 years ¾ Investment costs have decreased: Significant technological developments including size, together with economies of scale in production, have reduced the cost of wind energy generation by approximately 80 % over the past 25 years. Currently design efforts are focused on addressing grid compatibility, further improvements to acoustic performance and the emerging offshore market.
Growth Drivers
The TERI Report cites the following as the key drivers for the growth of the wind energy industry in India: ¾ Wind power is a renewable based power generation technology which has demonstrated sufficiently low risk to gain the attention of the financial community and independent power developers for near-term projects. Significant technology advances have occurred since the first wind power plant was installed in the country in early eighties. ¾ The short gestation period (approximately 4-6 months for a wind energy project to begin generating electricity) offers wind energy as a viable alternative to conventional forms of power generation. ¾ Industrial learning curve theory suggests that costs decrease by about 20% each time the number of units produced doubles. ¾ In so far as impacts on the power systems are concerned, it is an established fact that addition of wind power results in (a) Reduction in technical losses, and (b) Strengthening of voltage levels. Detailed studies have shown that the levelized annual cost of wind power is less than that of a new thermal power station. While the cost of energy from a thermal power station is initially low, it continues to increase with increases in the cost of fuel. On the other hand, the cost of wind energy is initially high and reduces as loans are repaid as no variable cost is involved. Therefore, the initiatives taken by the Government of India and the various State Governments in relation to the establishment of a supportive and stable policy framework for investment in wind power have contributed to the recent growth of the Indian wind power industry. As a result, India today has among the world's largest sustainable programs for renewable energy such as wind.
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This protocol and new European Union Emission rules (EUR) have created a market in which companies and Governments that reduce GHG emission levels can sell the ensuing emission reduction / carbon credits to Countries that are exceeding their GHG emission quotas. According to Mr. R.K. Jain, CEA member (Thermal) global carbon market is to the tune of 450 million tons per annum, of which India can capture about 100 million tons per annum (approx. 22% market share) during 200812, the first time line under the Kyoto Protocol to reduce carbon emissions
Ministry for Non-Conventional Energy Sources
The Ministry for Non-Conventional Energy Sources (MNES) was conceived in 1992 as a result of the Government of India?s recognition of the potential of wind energy and other forms of renewable for the purposes of national development. The MNES has revised its estimate for gross wind power potential in India from 20,000 MW to 45,000 MW. The MNES estimates the technical potential at approximately 13,000 MW (assuming 20% grid penetration), which is expected to increase with the augmentation of grid capacity. The MNES continues to encourage State Governments to implement national policy guidelines set for wind power projects. The MNES has been working closely with the various State Governments, as a result of which States with wind power potential have introduced policies pertaining to the purchase of power, wheeling and banking in order to provide a framework for investment in wind power. For example, the Maharashtra Energy Regulatory Commission intends to make 750 MW of new wind power available for sale to utilities by March 2007 and has imposed a Rs. 0.04 per unit green power cess on commercial and industrial users in order to promote non conventional renewable energy projects. Recent National regulatory and legislative initiatives in India further support the expansion and development of the wind energy industry: The new Electricity Act 2003, for example, dictates that all State-level Energy Regulatory Commissions must ensure that electricity distributors procure a specified minimum percentage of power generation from renewable energy sources. As a result of the Government of India?s strong emphasis on the development of the wind energy sector, the MNES projects that 10% of India?s 2,40,000 MW installed capacity requirement by 2012 will derive from renewable sources and that 50% of this capacity will come from wind power.
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Wind Energy potential in India
India has a high potential for wind energy. The adjoining figure shows the wind resources in 10 states in India. Exhaustive wind resource assessment carried out in more than 483 stations spread over 20 States As on date 498 Wind Monitoring stations have indicated wind power density > 200 W/m2 at 50 m above GL. Micro Survey of Wind Resource for 211 Wind Monitoring Stations have been completed to understand the zone of influence and Wind Power Potential around the stations. Wind farms have been installed in more than 10 States.
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Major Challenges
¾ Difficulties in getting suitable land ¾ Grid connections – intra state and inter state ¾ Reliable data on wind resources. As is evident from the table showing the installed capacity as on 31st Dec, 2007 the installed capacity in Tamil Nadu (3711.5 MW) exceeds both the technical (1750MW) and gross potential (3050MW).This cast apprehension about the actual potential. Moreover lack of reliable data discourages investment in this segment. ¾ Small wind turbines
Future Outlook
As per projections made by Ministry of Non-Conventional Energy Sources, 2,40,000 MW has been the estimated total installed capacity of power projects by the year end 2012. Out of the total, 10% of the 2,40,000 MW (i.e. 24,000MW) installed capacity requirement will come from renewable sources of the energy. Further, it is envisaged that 50% of this capacity or 12,000MW may come from wind power. India has now gained sufficient technical and operational experience, and is now on the threshold of "taking off" in wind power. It offers a viable option in the energy supply mix, particularly in the context of the present constraints on conventional sources. It also offers an attractive investment option to the private sector, in the context of the recently announced policies and drive towards private sector generation. Therefore, the potential for growth is not confined to only conventional sources of power supply/generation but is present in the renewable segment as well.
Source/System Estimated Potential Achievement (as on 31 December 2007)
Wind Power 45,195 7844.52 Small Hydro Power 15,000 2045.61 Bio Power 16,881 605.8 Total Grid-interactive 84,776 11,273.13 renewable power Source: Ministry of New and Renewable Energy, India.
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Other Initiative taken by the GOI
Ultra Mega Power Plant (UMPP)
Background:
Ministry of Power, Central Electricity Authority and PFC are working together to facilitate development of Nine Ultra Mega Power Projects with the capacity of about 4,000 MW each under Tariff based competitive bidding route. Being large in size, these projects will meet the power needs of number of states through transmission of power on regional and national grids. Each project shall cost close to Rs. 16000 crores, and shall be awarded on Build Own Operate basis, through International Tariff Based Competition bidding route. The projects shall make use of super critical technology in generation of power, which shall lead to higher efficiencies, and low emission of green house gases. Guidelines for determination of tariff for procurement of power by distribution licences have been notified in January 2005 under the provisions of the Electricity Act, 2003. The Power Finance Corporation (PFC), a PSU under the Ministry of Power, has been identified as the nodal agency for this initiative.
Bidding Process:
Bidding is a two stage selection process. The first stage of bidding involves Request for Qualification (RfQ) containing qualifying criteria for selection of bidders. The documents submitted by the bidders are evaluated to identify those bidders who will be eligible to participate in the second stage of the process. After identifying the qualified bidder, the second stage of the bidding process invites Request for Proposals (RfP) from these bidders. After evaluation of the documents, the successful bidder is identified on the basis of the lowest levellised tariff.
Selection of Site for UMPP
Nine such projects had been identified to be taken up, 4 at pithead and 5 at coastal locations. The nine sites for the UMPPs identified by the Central Electricity Authority (CEA) in consultation with the States are as follows:¾ Five coastal sites at: Mundra in Gujarat, Krishnapatnam in Andhra Pradesh, Tadri in Karnataka, Girye in Maharashtra, and Cheyyur in Tamil Nadu.
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¾ Four pithead sites at: Sasan in Madhya Pradesh, Tilaiya in Jharkhand, Sundergarh District in Orissa, and Akaltara in Chhattisgarh. In addition Tamil Nadu has identified additional site at Marakanam. Further, more Karnataka has also suggested an additional site at Ghataprabha in Belgaum District. The Central Electricity Authority is examining the preliminary feasibility of these sites for development of UMPPs.
Role of the Ministry of Power
The Ministry of Power is playing an important role for the development of the UMPP‘s by coordinating between various concerned Ministries/Agencies of the Central Government, and with various State Governments/Agencies. Some of the key areas requiring the Ministry of Power‘s intervention include – ¾ Coordination with Central Ministries/Agencies for ensuring Coal blocks allotment/coal linkage, Environment/forest clearances & Water linkage. ¾ Working out allocation of power to different States from UMPPs in consultation with the States. ¾ Facilitating Power Purchase Agreement and proper payment security mechanism with State. ¾ Monitoring the progress of Shell companies with respect to predetermined timelines.
Role of Power Finance Corporation
PFC is the nodal agency in awarding the projects. It has set up separate Special Purpose Vehicles (SPVs) for each of the 9 UMPPs identified so far to act as authorized representatives of the procurers (distribution companies of the power procuring States). These SPVs are 100% owned subsidiaries of the PFC. The names of the SPVs are: Sasan Power Limited for the project at Sasan, Madhya Pradesh. Coastal Gujarat Power Limited for the project at Mundra (Gujarat). Coastal Karnataka Power Limited for the project at Tadri, Karnataka. Coastal Andhra Power Limited for the project at Krishnapatnam, Andhra Pradesh. Coastal Tamil Nadu Power Limited for the project at Cheyyur in Tamil Nadu. Coastal Maharashtra Mega Power Limited for the project at Girye, Maharashtra. Orissa Integrated Power Limited for the project in Sundergarh District in Orissa. Jharkhand Integrated Power Limited for the project near Tilaiya dam, in Jharkhand. ¾ Akaltara Power Limited for the project at Akaltara in Chhattisgarh. ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾
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Role of SPVs
The SPVs are responsible for carrying out various activities on behalf of the procurers. Completion of these activities prior to award of the project is considered necessary to enhance the investor‘s confidence, reduce risk perception and get a good response to the competitive bidding process. Some of the main activities undertaken by the SPVs are:¾ Appointment of Consultants for preparation of Project Report, Rapid Environment Impact Assessment Report, and International Competitive Bidding (ICB), document preparation & evaluation. ¾ Finalise RfQ/ RfP documents in consultation with States/bidders, carry out RfQ/ RfP process, and award of project. ¾ Acquisition of land for the project ¾ Obtaining Coal blocks for pit-head projects ¾ Getting various clearances regarding use of water, and other amenities by the State Govt. for pithead locations ¾ Tie up the off-take/ sale of power
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Status of Projects
PROJECT TYPE SUCCESSFUL BIDDER
MUNDRA, SASAN, M.P. GUJARAT COASTAL PIT HEAD TATA POWER LTD. RELIANCE POWER LTD.
LLT (RS./KWh) SPV
PPA DATE EQ. ORDER
BOILER TURBINE GENERATOR
COAL LINKAGE
KRISHNAPATNAM, A.P. TILAIYA, JHARKHAND COASTAL PIT HEAD RELIANCE POWER LTD. RfQ has been recived by 13 cos, 10 cos qualified for RfP 2.26 1.196 2.333 Jharkhand Coastal Gujarat SASAN POER Coastal Andhra Power Integrated Power Power Limited LTD. Limited Limited (CGPL) 22.04.07 07.08.07 23.03.08 TOSHIBA CORP., FIVE GLOBAL EQ. NEGOTIATION WITH BHEL NA JAPAN MAJORS FOR EPC CONTRACT. Ltd Korea Doosan Heavy SHORLIST ORDER SIZE Rs. Industries & ED 8000Construction Co. 10000 CRORES IMPORT, Moher, MoherIMPORT, INDONESIA TENTATIVELY Amlori Extension AUSTRALIA, and Chhtrasal INDONESIA, coal blocks SOUTH AFRICA reserves of about 800 million 17000 20000 30/70 Sep-11 SEVEN PRODUCERS NA May-13 NA RAJ,DELHI,HAR,U A.P.,T.N,KR,MAH. TTARKHAND 17000
OTHER UMPP
VARIOU S STAGES OF PRE BIDDING WORK
COST (Rs. CRORES) FINANCING COMMISIONING SALE EQUITY/DEBT 25/75
Merchant Power Plants
Overview
A merchant power plant is funded by investors and sells electricity in the competitive wholesale power market. Since a merchant plant is not required to serve any specific retail consumers, consumers are not obligated to pay for the construction, operations or maintenance of the plant. The merchant power plants are not tied up with longterm power purchase agreements (PPA). Independent power producers (IPPs) who opt for this route will have to do so at their own risk. Setting up a merchant plant would necessarily mean balance sheet financing by he developer, as financial institutions/lenders may as a rule, may not be comfortable with projects that don‘t have long-term PPAs. Given considerable demand-supply mismatch, sale of competitively – priced power
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should not pose a problem. Consider that in between April and Jan‘08, against a demand of 107010 MW, only 90793 MW power was available – a peak shortage of 15.2%. This situation is likely to persist. The ministry of power intends to add 10,000 MW capacity additions through Merchant Power Route in 11th Plan. In its guidelines for the allocation of coal blocks and coal linkages for the power sector, the ministry of power said, ?merchant power plants fill different niches in the market; some provide steady supplies to a power grid, while others fire up only when demand is highest and meet peak loads.? Merchant power plants operating competitively help assure that power is produces with efficiency and supplied to locations where it is needed most?. The government has set the plant size between 500 MW and 1,000mw. This is not merely because the national tariff policy mandates all new private sector projects to come through the competitive bidding process. There are transmission constraints as well. The transmission system will not be able to support evacuation of power from large sized merchant plants.
To ensure that large volumes of power can be evacuated, dedicated transmission systems would be required. This would mean that customers for power produced by these plants have been tied up. Such projects would require transmission systems that are planned and executed in tandem with the generating plant. So that when the plant begins producing power, the transmission lines are in place to evacuate power from the plant to the consumer. Merchant plants, by definition, do not have pre-identified customers. This would mean that these plants would have to depend on redundancies in the existing transmission system to evacuate power. The ministry is working on a via media where the merchant plant of capacity 500 mw to 1000 mw can be accommodated in the national grid, which would have redundancies. The ministry of power believes that a limited number of merchant plants will enable the development of an electricity market. ?A few merchant plants of 500 mw to 1000 mw could be easily handled through the transmission system and it is an option for creating a market as it would promote power trading on short-term, medium –term and spot market basis.?
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Key Issues:
Hitch in Coal
The Ministry wants to encourage coal-based Merchant Power Plants and allocate coal blocks to them. These plants cannot be switched on and off at will. They will require an eight- to ten-hour cycle time to stop and start, and even then the fuel loss is very high. There role is of a ?GAP FILLER‘, i.e. they typically have to supply whenever there is demand. Peaking stations are to operate only in the peak hours. This being so, coal is not a recommended fuel at all for Merhant Power. Natural gas is the only option. Given the pricing and availability, natural gas-based stations are not feasible unless supplies are assured.
Financing
With so much uncertainty, financing them would be a major concern. While NTPC, BHEL, etc., alone can put up their balance sheet for these projects; no other private operator is capable of exposing their books for such ventures. Even in the case of NTPC or BHEL, they may set up a few peaking stations near the gas pipelines and but would not go for capacities such as 1000MW. Thus, given the complexity of the Indian market, the scheme for Merchant Power Plants may remain a dream unless the market reforms totally and free access is made available to the consumer for creation of a competitive market.
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Supercritical Technology
Supercritical generation means power plants are able to operate at higher boiler temperatures and pressures, resulting in an improved thermal efficiency of around 40-45%. Supercritical coal fired power plants have much lower emissions than subcritical plants for a given power output. These include the turbine-generator set, the once-through boiler and operational issues such as load change, fuel flexibility and water. Worldwide, more than 400 supercritical plants are in operation. The GOI felt the need to bring this technology in India due to two main reasons ¾ To meet the huge surging demand of power ¾ Generation of power through efficient & clean technology. In the 11th Plan approximately 18-20% of the power project commissioned shall be based on super critical technology, whereas in 12th plan, 50-60% of the power project shall be based on this technology.
Key Issues for units set up under this Technology:
¾ ¾ ¾ ¾ Huge amount of Coal & Water requirement. Setting up of Extra High Voltage Transmission lines for power evacuation Land Clearance & Rehabilitation issues Huge Capital Investment for domestic equipment cos. to develop this technology
In the First Phase of Super Critical Technology developed by NTPC six projects were awarded, apart from this, all the Ultra Mega Power Plants developed in the country shall also run on super critical technology Projects 3x660 MW 3x660 MW 5x800 MW Power Plant SIPAT-1 BARH-1 Mundra LTD) (TATA Equipment Order Doosan (Korea) Power Machines (Russia) POWER Toshiba (JAPAN)
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In the Second Phase of the projects development by NTPC, 13 Projects are in the Pipelines, wherein BHEL has been committed equipment order for at least 5 projects Projects in Pipeline 7x660 MW 6x800 Mw BHEL 3x660 MW 2X800 MW
Domestic Development of Supercritical Technology
BHEL: Bharat Heavy Electrical Limited had entered in a technical alliance with Alstom, France & Siemens, Germany to development this technology domestically. The above committed projects, is an endeavour by GOI to develop the expertise of domestic firm in this area. Larsen & Tubro Ltd.: Larsen & Tubro Ltd. is the first and only private player to enter into supercritical technology. It has formed a 51:49 JV with Mitsubishi Heavy Industries (MHI) to develop Super Critical technology. It has earmarked expansion plans of 4000 MW to develop this technology.
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Case Study: National Thermal Power Corporation
NTPC is country biggest power producer. It accounts for 20% of the country total installed capacity, and 28% of energy generation.
Present Status:
¾ 20% of total power generation capacity (27904 MW). During 10th Plan, Company added 7155 MW. ¾ it is the Central Generation Utility, along with NHPC. ¾ Capacity Break Up: Coal based: ¾ 22895 MW, ¾ Gas Based: 3955 MW ¾ JVs ¾ Sail (Coal): 314 MW ¾ Ratnagiri (Gas): 740 MW
Future Plans
• • • • Out of 78000 MW of total power capacity to be added in 11th Plan, NTPC would be adding 22000 MW (28%), and further 25000 MW by 2017, thereby taking total installed capacity to 75000 MW. Main Plant orders have been placed to the tune of 13360 MW & remaining orders for 9000 MW are to be placed within a year. Initialed a model long term coal supply agreement for a period of twenty years with Coal India Limited to ensure adequacy, reliability, quality and appropriate pricing of coal supplies to our power stations. Moving ahead to become an integrated power major, with presence across entire energy value-chain through backward and forward integration into areas such as coal mining in India and abroad, gas and oil exploration, LNG Value-Chain, power trading, distribution, etc. Taking steps to add 1,000 MW of capacity based on non-conventional energy sources by 2017 Has signed a Business Collaboration and Shareholders‘ Agreement with Transformers and Electricals Kerala Limited (TELK) for synergy in the field of manufacturing and repair of power transformers and has decided to acquire 44.6% of stake which would enable your Company to acquire management control of TELK. NTPC to foray into nuclear technology by in the 12th Plan.
• •
•
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Chapter 3: TRANSMISSION PLANNING AND NATIONAL GRID
Overview
A reliable transmission and distribution system is important for the proper and efficient transfer of power from generating stations to load centres and beyond. In India, the transmission and distribution system is a three-tier structure comprising: ¾ regional grids, ¾ state grids, and ¾ distribution networks The distribution network and the state grids are mostly owned and operated by SEBs or licensed private players. Most of the inter-state transmission links are owned and operated by Power Grid Corporation of India Ltd. The transmission network has increased from 3,078 ckm in 1950 to more than 265,000 ckm at present.
CUMLATIVE GROWTH IN TRANSMISSION SECTOR
Target Upto Xth Actual upto Target XI Xth Plan Plan Plan 2153 1704 7132 5876 5876 11078 162 162 162 77554 75772 125000 119604 114629 150000 205349 198143 293372 3000 5700 8700 3000 93040 157469 270909 3000 5200 8200 2000 92942 156497 251439 3000 11200 14200 53000 145000 230000 428000
TRANSMISSION LINES 765 kV HVDC +/- 500kV HVDC 200kV Monopole 400kV 230kV/220kV Total Transmission Line SUBSTATIONS HVDC BTB HVDC Bipole+Monopole Total-HVDC Terminal Capacity 765kV 400kV 230/220kV Total- AC Subtation Capacity
Unit ckm ckm ckm ckm ckm ckm MW MW MW MVA MVA MVA MVA
IX Plan 971 3138 162 49378 96993 150642 2000 3200 5200 0 60380 116363 176743
In order to facilitate the transfer of power between neighbouring states, state grids are interconnected to form five regional grids. These regional grids facilitate transfer of power from a power-surplus state to a power-deficit state and it is anticipated that these grids will be gradually integrated to form a national grid. At present, the national grid has a capacity of 17,000 MW and Eleventh Five Year Plan aims to achieve national grid capacity of 37,150 MW by fiscal 2012.
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Regional Grids
In order to facilitate the transfer of power between neighbouring states, state grids are interconnected through high-voltage transmission links to form a regional grid. At present in India there are five regional grids: ¾ Northern region(NR) grid which comprises Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Rajasthan, Uttaranchal and Uttar Pradesh; ¾ Eastern region(ER) grid which comprises Bihar, Orissa Jharkhand, Sikkim and West Bengal; ¾ Western region(WR) grid which comprises Dadra and Nagar Haveli, Daman and Diu, Chhattisgarh, Goa, Gujarat, Madhya Pradesh and Maharashtra; ¾ Southern region(SR) grid which comprises Andhra Pradesh, Karnataka, Kerala, Pondicherry and Tamil Nadu; ¾ North eastern region (NER) grid which comprises of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.
Situations do arise in which there is surplus availability in one state and deficit in another. Optimal scheduling of power and co-ordination between the power plants at the state level is done by the state load dispatch centre while power control and scheduling for interstate flow is operated and controlled by the regional load dispatch centres.
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By 2012 these regional grids will be gradually integrated to form a national grid, so that surplus power from a region could be transferred to a deficit region, resulting in a more optimal utilization of the generating capacity in India.
Need for National Grid
The generation resources in the country are unevenly located, the hydro in the northern and north-eastern states and coal being mainly in the eastern part of the country. The transmission system facilities had earlier been planned on regional basis with provision of inter-regional link to transfer regional surplus power arising out of diversity in demand & supply. Development of strong National Grid has become necessity to ensure reliable supply of power to all. A strong All India Grid would enable exploitation of unevenly distributed generation resources in the country to their optimum potential by providing enhanced margins in inter-regional transmission system.
National Grid
The Government of India in 1981 approved a plan for setting up a national grid. The process of setting up the national grid was initiated with the formation of the central sector power generating and transmission companies, NTPC, NHPC and Power Grid. Power Grid was made the nodal agency, responsible for planning, constructing, operating and maintaining all inter-regional links and taking care of the integrated operation of national and regional grids. The national grid, when fully operational, is expected to have a total inter-regional transmission capacity of 37,150 MW. It is expected to be fully operational by around 2012. Setting up a national grid requires the gradual strengthening and improvement of regional grids and their progressive integration through extra high voltage and HVDC transmission lines.
Name of the Scheme
East-North East-West West-North East-South West-South East-North East North East-North Other 132Kv I-R links Total
2006-07
3700 1850 2100 3100 1700 1250 0 400 14100
XIth Plan Target
7800 4650 5500 500 1000 1000 3000 23450
2011-2012E
11500 6500 7600 3600 2700 2250 3000 400 37550
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Name of the Scheme
East-North East-West West-North East-South West-South East-North East Other 132Kv I-R links Total
2007-08
5850 1850 2300 3650 1700 1250 400 17000
An investment of Rs. 1,40,000 Crores has been planned in the transmission sector in the Eleventh Five Year Plan. As given below:
Based on the updated Eleventh Five Year Plan, the projected power exchange requirement load flows among various regions for Fiscal 2012 is as set forth below: Load Flows for year Fiscal 2012 for peak demand and availability (surplus/deficit)
Load Flows for year Fiscal 2012 for off-peak demand and availability (surplus/deficit)
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Role of Powergrid Corporation of India Limited (PGCIL)
Powergrid Corporation of India Limited was set up as a Central Transmission utility to create a strong transmission network for evacuation of power generated. It is the nodal agency for transmission in India, and under takes all the transmission activities. Though it has a monopoly in transmission network, it is very efficient in its working.
Achievements
¾ During the 10th Plan, your company added 25,127 MVA of transformation capacity and 36 sub-stations at Rs. 18,865 crore. ¾ The inter-regional power transfer capacity of the national grid has increased from 5,000 MW at the end of the Ninth Plan to 14,100 MW at the end of 10th Plan. ¾ The year 2006-07 has also witnessed the successful commissioning of first public-private Joint Venture project between POWERGRID and TATA Power, namely, Tala Transmission System. ¾ Transmission network of 59,461 ckt. kms. of EHV AC & HVDC systems – along with 104 sub-stations – carries 40-45 per cent of total power generated in the country. ¾ About 1/3rd of Rajiv Gandhi Grameen Vidyutikaran Yojana are being implemented by POWERGRID. ¾ The company uptill year end 2006-07 have developed transformation capacity of 59,417 MVA. ¾ During 2006-07, we have added about 4,343 Ckt. Km. of transmission lines, 11 new sub-stations and transformation capacity of 5,040 MVA. ¾ During 2006-07, 19 new projects worth about Rs. 8,900 Crore, involving 10,250 Ckt Kms of transmission lines, 8 new sub-stations and transformation capacity of about 5,850 MVA, were approved and taken up for implementation. ¾ As on fiscal end 2007, a total of 54 transmission projects, costing about Rs. 30,000 Crore are under implementation.
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¾ Commissioning of Muzaffarpur-Gorakhpur high capacity 400 kV D/C line during the year, resulting in four regional grids, i.e. Northern, Western, ¾ Eastern and North-Eastern Regions now operating as one synchronous grid with total installed capacity of about 90,000 MW.
Future Plans
POWERGRID plans to introduce state-of-the-art technologies such as +800kV, 6000 MW, HVDC Bipole; 1200 kV AC Transmission System; High Surge Impedance Loading (HSIL) Line; Large Scale Automation of Substations; Use of Helicopter in construction & maintenance; etc. Extensive planning and studies are being carried out to implement these technologies during XI plan. The working group report on power for XIth plan, proposed an investment of Rs. 75000 crore on setting up transmission lines for inter state transfer, to increase the same from present 17000 Mw to 37500 Mw. PGCIL plans to invest Rs. 55000 crores from its own kitty, and raise the rest Rs. 20000 crore through the participation of the private sector, via JV route or 100% private participation. POWERGRID shall be able to mobilize resources for meeting the above capital investment. Loans to the tune of about Rs.15,520 Crore are proposed to be mobilized from multilateral funding agencies/ supplier‘s credit and about Rs. 22,980 Crore from domestic sources on yearly basis as per requirement. Equity requirement of about Rs.16,500 Crore would be met through internal resources expected to be generated from the company‘s operations, proposed Initial Public Offering (IPO) and enhanced business activities in Consultancy & Telecom, additional short term loans for meeting working capital requirement, sale of securitized bonds, etc.
Funding M ix
16500, 30%
38500, 70%
Debt
Equity
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Private Sector Participation in Transmission
POWERGRID has been successful in facilitating private investment in transmission sector. POWERGRID‘s first Joint Venture project, Transmission System associated with Tala Hydroelectric Project in Bhutan, East-North Interconnector and Northern India Transmission System, with M/s Tata Power was commissioned successfully in August, 2006. The project, commissioned by Powerlinks Transmission Limited, a 49:51 joint venture between Tata Power and Power Grid Corporation Limited (PGCIL), would benefit West Bengal, Bihar, Jharkhand and Sikkim. Transmission system associated with Koldam & Parbati-II is the second project proposed to be executed on JV route. The total estimated cost of the project is Rs. 660 Crore. All agreements related to formation of JV have been finalized and are expected to be signed, after receiving necessary clearances from Govt. of India. POWERGRID‘s equity in this project shall be 26% and balance 74% would be of Joint Venture partner POWERGRID is extending helping hand to Independent Power Producers (IPPs) for development of their dedicated transmission systems on consultancy basis or through Joint Ventures. In this direction, POWERGRID has signed MoUs with following five private producers for formation of Joint Ventures for implementation of transmission schemes worth about Rs. 5,000 Crore. ¾ 740 MW gas based combined cycle power project at Pallatana, Tripura (M/s IL&FS / ONGC) ¾ 1500 MW gas based power plant at Hazira, Gujarat (M/s Essar Power Ltd.) ¾ 1200 MW Teesta-III Hydro Electric Project in Sikkim (M/s TEESTA Urja Ltd.) ¾ 1000 MW Karcham-Wangtoo Hydro project (M/s Jaiprakash Hydro Ltd.) ¾ 1100 MW generation project at Surat (M/s Torrent Power AEC Ltd.) Out of above, two Joint-Venture Companies namely, M/s Torrent Power Transmission Private Limited (now known as M/s Torrent POWERGRID Limited) and M/s Jaypee POWERGRID Limited have been established.
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Besides, POWERGRID is also facilitating implementation of transmission lines under Western Region Strengthening scheme- II (Sets B&C) at an estimated cost of Rs. 1600 Crore through 100% private sector participation (IPTC route) in line with CERC directive.
Distribution
Distribution is the most critical segment of the electricity business chain. The distribution sector caters to rural and urban areas.
Rural distribution segment is characterized by:
ƒ Wide dispersal of net work in large areas with long lines, ƒ High cost of supply, ƒ Low paying capacity of the people, ƒ Large number of subsidized customers, ƒ Un-metered flat rate supply to farmers, ƒ Non metering due to high cost and practical difficulties, ƒ Low load and low rate of load growth, ƒ Consumer mix is mainly agriculture and residential
Urban distribution is characterized by:
ƒ High consumer density, ƒ Higher rate of growth of load, ƒ Consumer mix is mostly commercial, residential, and industrial
Aggregate Technical & Commercial Losses
The AT&C losses are presently in the range of 18% to 62% in various states, with average AT&C loss in the country at 34%. The major portion of losses are due to theft and pilferage, which is estimated at about Rs.20, 000 crore annually. Apart from rampant theft, the distribution sector is beset with poor billing (only 55%) and collection (only 41%) efficiency in almost in all States. More than 75- 80% of the total technical loss and almost the entire commercial loss occur at the distribution stage. It is estimated that 1% reduction in T&D losses would
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generate savings of over Rs.700 to Rs.800 crores. Reduction of T&D loss to around 10% will release energy equivalent to an additional capacity of 10,000-12,000 MW.
The Ministry of Power has been undertaking various initiatives and policy measures for bringing about improvement in the power distribution network of the country.
Accelerated Power Development & Reform Programme
?Accelerated Power Development and Reforms Programme (APDRP)‘ has been launched with the following objectives:¾ Improve financial viability of State Power Utilities; ¾ Improve commercial viability of State Electricity Boards; ¾ Reduce aggregate technical and commercial (AT&C) losses to around 10%; ¾ Improve customer satisfaction; and ¾ Increase reliability and quality of power supply. GoI provides funds under the programme as additional central assistance over and above the normal central plan allocation to those states who commit to a time bound programme of reforms as elaborated in the Memorandum of Understanding (MoU) and Memorandum of Agreement (MoA). The total fund planned under APDRP in the 10th Plan is around Rs. 40,000 crores with investment component estimated to be around Rs 20,000 Crores and incentive for cash loss reduction at Rs.20, 000 crores
The funds under the programme are provided under two components:
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Investment component - States have been categorized as special category states and non-special category states. 100% of the project cost in special category states (all North Eastern States, Sikkim, Uttaranchal, Himachal Pradesh and Jammu & Kashmir) is financed by the GoI in the ratio of 90% grant and 10% loan. In respect of other states (non-special category) the GoI finances 50% of the project cost in the form of grant and loan in the ratio of 1:1. SEBs and utilities have to arrange balance funds from other financial institutions or from their own resources as counter-part funds. As per the revised APDRP Guidelines of the GoI dated November 7, 2005, the financial assistance from the GoI will be restricted to 25% of the project cost as grant only for non special category states. For special category states the GoI will finance 90% of the project cost as grant.
Upto 2005-06 Category
Special Category Non Special Category
Investment Component Grant Loan
(%) 90 25 (%) 10 25
Counter Part Component
(%) NIL 50
From 2005-06 Category
Special Category Non Special Category
Investment Component Grant Loan
(%) 90 25 (%) -
Counter Part Component
(%) 10 75
Incentive component - This component has been introduced to motivate SEBs and utilities to reduce their cash losses that are incentivised through grant up to 50% of the actual cash loss reduction by them. Funds under incentive components are provided as 100% grant to all the states (special category and non-special category) as additional plan assistance.
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The status as on 31st October 2007:
No of projects sanctioned Total project Cost APDRP (GOI) Component Total fund released by GOI C/Part drawn from FIs Total fund utilized 571 Rs. 17,033.58 Crore Rs. 8,720.07 Crore Rs. 7,124.61 Crore Rs. 4,836.49 Crore Rs. 11,279.50 Crore
In order to increase accountability and attract private sector investments in the distribution sector, the Government has decided to focus on metering at all levels of transmission and distribution, and also for all categories of consumers. This will enable accounting and auditing of electricity supplied at all levels in the T&D system and make available reliable and accurate information on T&D losses and the consumption pattern of consumer categories in different geographical areas, while helping to identify and prevent the theft of electricity. Modern electronic energy meters can record the consumption pattern of various consumers over a time period. This can be used to implement time-of-day metering (wherein consumption is recorded at frequent intervals along with the actual time of consumption), multiple tariff plans (depending on consumption pattern). Time-of-day metering and multiple tariff plans can be used to manage demand, as consumers would shift non-essential consumption to periods of low tariffs. Electronic meters with advanced features also provide the facility of remote reading with the help of wireless or other telecommunication technologies.
The expected benefits from the programme are as follows:
¾ Reduction of AT&C losses from the existing around 60% to around 15% in five years to begin with in the urban areas and high density/ consumption areas. ¾ Significant improvement in revenue realization by reduction of commercial losses leading to realization of an additional Rs.20, 000 Crore approximately over a period of 4-5 years.
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¾ Reduction of technical losses would result in additional energy equivalent to nearly 6,000 – 7,000 MW to the system, avoiding the need of 9,000 to 11,000 MW of fresh capacity addition besides avoiding investments to the tune of Rs.40,000 to Rs.60,000 Crore ¾ Quality of supply and reliable, interruption- free power will encourage usage of energy efficient equipments / appliances, which will further lead to improvement in availability of energy. ¾ Reduction in cash losses on a permanent basis to the tune of Rs.15, 000 Crore. ¾ Distribution reform as envisaged above will help States to avoid heavy subsidies, which are given to SEBs / State Utilities by State Governments.
Achievements Under APDRP
Reduction in AT&C losses:
Although at national level the AT&C loss of state power utilities has not shown much improvement over the past three years, the loss has come down in towns where APDRP has been implemented. AT&C losses have been bought down below 20% in 215 APDRP towns in the country, of which 163 towns have been brought below 15%.
Progress of Metering:
¾ 11 kV feeders metering: At national level 98% feeders have been metered during 2006-07, as against 81% metered during 2001-02. 100% feeder metering has been achieved in 18 states & 3 UTs. ¾ Consumer Metering: During 2001-02 the consumer metering was at 78%. It has now increased to 88% during 2006-07, 100% consumer metering has been achieved in the states of Delhi, Himachal Pradesh and Kerala. Union Territories of Chandigarh, Daman & Diu, and Pondicherry have also completed 100% consumer metering
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Rajiv Gandhi Vidyuti Karan Yogna (RGGVY)
Central Govt. has launched a new scheme ?Rajiv Gandhi Grameen Vidyutikaran Yojana of Rural Electricity Infrastructure and Household Electrification? on 4th April, 2005 for the attainment of the National Common Minimum Programme (NCMP) goal, for providing access to electricity to all households in the country in five years.
Objective:
¾ Rural Electrification Corporation (REC) is the nodal agency for the scheme. ¾ Under the scheme 90% capital subsidy would be provided for overall cost of the project for provision of: ¾ Rural Electricity Distribution Backbone (REDB) with at least one 33/11 kV (or 66/11kV) substation in each block ¾ Village Electrification Infrastructure (VEl) with at least one distribution transformer in each village/habitation. ¾ Decentralized Distribution Generation (DDG) Systems where grid supply is either not feasible or not cost-effective.
Achievements:
¾ Since April, 2005, till 25th January, 2008, 45,602 villages have been electrified under RGGVY, ¾ 25,087 villages have been intensively electrified, ¾ 22, 87,016 rural households (including 18, 76,216 BPL households) have been released connections. ¾ Installation of Franchisee System to make rural electricity distribution business revenue sustainable is mandatory under the scheme. Franchisees' are in place in 14 states in 73,422 villages.
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Definition of Decentralized Distributed Generation
The GOI has proposed setting up of Decentralized Distributed Generation (DDG) to meet the power needs of the remote villages which cannot be covered by national or regional grid due to unviable economic and financial constaints. DDG is defined as installation and operation of small modular power generating technologies that can be combined with energy management and storage systems, and used to improve the operations of the electricity delivery systems at or near the end user. These technologies can be utilized for off-grid as well as grid based.
Potential for DDG
There is a potential to add 10,000 to 15,000 MW capacity through decentralized distributed generation in 11th and 12th plan. The DDG projects would help both in electrifying the villages and households and also in generating local employment. Approximately 2000 substations can be linked with 2 -5 MW DDG projects, adding a capacity of 4000- 5000 MW during 11th plan. The total cost involved will be Rs. 25000 crore approximately.
Challenges for DDG Projects
DDG is yet to be tried on a large scale in rural electrification projects. There are still many barriers—technical, financial, regulatory, and institutional—that need to be addressed adequately. In other words, a clear and well-established framework is required to design, implement, and encourage DDGs as these are expected to be aligned to the following policy/programme guidelines: ¾ Universal access to electricity in India. ¾ All BPL families to be provided single point free connection. ¾ Revenue sustainability through SEBs /franchisees. ¾ Affordable power to remote areas through cost effective DG projects. ¾ Utilization of locally available, environmentally benign renewable energy
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¾ Sources for providing power either to the grid nearer the load or on standalone basis. ¾ Facilitate development of rural load at an accelerated pace. ¾ Creation of viable and sustainable franchisee development. ¾ Availability of low cost funds and International acceptance of REC standards.
Physical and Financial outlay for eleventh Five Year Plan
Physical Financial 2007-12 2007-12 (Rs. Crores)
150000 675000 675000 8,100 20,250 15,188
Sl. Name of Segment I Lines (i) 33 KV (ii) 11 KV (iii) LV Sub-Station (i) 33/11 KV (ii) 11/0.4 KV Capacitors Service Connections to (i) Domestic Installations (ii) Commercial Installations (iii) Industrial Installations (a) HT (b) LT (iv) Public Light (v) Agriculture Total (I to IV) A. Re-conductoring of Lines (i) 33 KV (ii) 11 KV (iii) LV Total V (A) B. Augmentation of S/Ss (i) 33/11 KV (ii) 11/0.4 KV Total V (B) Total (V) Grand Total
Units Ckt Kms Ckt Kms Ckt Kms MVA MVA MVAR Nos. Nos. Nos. Nos. Nos. Nos.
II
130000 162000 15565
26,000 51,840 778
III IV
70000000 3500000 500000 50000 750000 3500000
11,620 665 900 20 188 1,400 136,950
V
Ckt. Kms Ckt. Kms Ckt. Kms
100000 2200000 700000
3,780 46,200 11,060 61,040 14,080 25,300 39,380 100,420 237,370
MVA MVA
88000 110000
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Funding Requirement for Distribution
Rs. Crore
1 Sub Transmission & Distribution for Urban & Rural areas RGGVY 2 APDRP & Other Schemes (pumpsets etc.) 3 Decentralised Distributed Generation 4 Others TOTAL
1, 97,000
40,000 2, 37,000 40,000 20, 000 10,000 3,07,000
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Transmission & Distribution Programme Beneficiaries
The implementation of T&D Programme shall result in huge no. of orders for the ancillary industries. The rapid expansion of transmission & Distribution network shall result in direct benefit to:
¾ Generator, Power T&D transformer manufacturer Major Players:
Segment >800Kv 500Kv - 800Kv 220Kv - 500 Kv Upto 220 Kv Players Areva T&D Areva T&D, ABB, Crompton Greeves, Kalpataru Power Areva T&D, ABB, Crompton Greeves, Emco, Bharat Emco, Bijlee, Voltamp, KEC Int.
¾ Meter manufacturing companies Major Players: BHEL, Areva T&D, ABB, Emco, Easun Reyrolle, Accurate Meter Co., Alstom
¾ Tansmission Lines & Tower construction contract companies
Major Players: Areva T&D, Siemens Ltd, L&T Ltd, Jyoti Strucutres, KEC International, RPG Transmission Ltd, Tata Projects Ltd.
¾ Power Project Based Companies: Sub Station, Switching Station
Major Players: BHEL, Areva T&D, ABB, Emco, Tata Projects Ltd, Siemens Ltd.
¾ Wires manufacturers
Major Players: Cable Corporation of India Ltd., Uniflex Cables Ltd., Hindustan Vidyut Products Ltd., KEI Industries.
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Capacity (units)
EHV HVDC HV LV Turnkey Basic SubStation Auxillary SubStation Meters SCADA transformers Transformers Transformers Tranformers Projects EPC Project Projects 800kv 500kv 400kv-132kv 66kv-11kv
ABB Bharat Biljee Voltamp Kalpataru Power Jyoti Structures Siemens Crompton Greeves Areva T&D Emco Ltd. KEC International L&T
12000 MVA 8000 MVA** NA 84000 Mtn* 96000 Mtn NA NA 17760 MVA^ 20000 MVA / 20000 Mtn 103000 Mtn 40000 Mtn
*Capacity to increase to 108000 Mtn by nextcompany‘s presence in the respective Cells Marked indicates qtr *capacity to increase to 11000 MVA by next qtr ^vadodra plant to be the first in India to manufacture EHV transformers ranging 800kv -1200 kv
segment
Key concerns in transmission and distribution
In India, average Aggregate technical & commercial Losses (ATC) losses have been officially indicated as 23 percent of the electricity generated. However, as per sample studies carried out by independent agencies including The Energy & Resource Institute, these losses have been estimated to be as high as 50 percent in some states. In a recent study carried out by SBI Capital Markets for DVB, the T&D losses have been estimated as 58%. With the setting up of State Regulatory Commissions in the country, accurate estimation of T&D Losses has gained importance as the level of losses directly affects the sales and power purchase requirements and hence has a bearing on the determination of electricity tariff of a utility by the commission.
Components of Power losses
Energy losses occur in the process of supplying electricity to consumers due to technical and commercial losses. The technical losses are due to energy dissipated in the conductors and equipment used for transmission, transformation, subtransmission and distribution of power. These technical losses are inherent in a system and can be reduced to an optimum level. The losses can be further sub
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grouped depending upon the stage of power transformation & transmission system as: ¾ Transmission Losses (400kV/220kV/132kV/66kV), ¾ Sub transmission losses (33kV /11kV), and ¾ Distribution losses (11kV/0.4kv) The commercial losses are caused by pilferage, defective meters, and errors in meter reading and in estimating unmetered supply of energy.
Level of T&D losses
The officially declared transmission and distribution losses in India have gradually risen from about 15 percent up to the year 1966-67 to about 23 percent in 1998-99. The continued rising trend in the losses is a matter of serious concern and all out efforts are required to contain them. The losses in any system would, however, depend on the pattern of energy use, intensity of load demand, load density, and capability and configuration of the transmission and distribution system that vary for various system elements. According to CEA vide its publication (July 1991) Guidelines for Reduction of Transmission and Distribution Losses it should be reasonable to aim for total energy losses in the range of 10-15% in the different states in India.
Reasons of high technical losses
The following are the major reasons for high technical losses in our country: Inadequate investment on transmission and distribution, particularly in subtransmission distribution. While the desired investment ratio between generation and T&D should be 1:1, during the period 1956 -97 it decreased to 1:0.45. Low investment has resulted in overloading of the distribution system without commensurate strengthening and augmentation Haphazard growths of sub-transmission and distribution system with the short-term objective of extension of power supply to new areas. ¾ Large scale rural electrification through long 11kV and LT lines.
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¾ Too many stages of transformations. ¾ Improper load management. ¾ Inadequate reactive compensation ¾ Poor quality of equipment used in agricultural pumping in rural areas
Reasons for commercial losses
Theft and pilferage account for a substantial part of the high transmission and distribution losses in India. Theft/pilferage of energy is mainly committed by two categories of consumers i.e. non-consumers and bonafide consumers. Antisocial elements avail unauthorized/unrecorded supply by hooking or tapping the bare conductors of L.T. feeder or tampered service wires. Some of the bonafide consumers wilfully commit the pilferage by way of damaging and / or creating disturbances to measuring equipment installed at their premises. Some of the modes for illegal abstraction or consumption of electricity are given below: ¾ Making unauthorized extensions of loads, especially those having ?Horse power Tariff. ¾ Tampering the meter readings by mechanical jerks, placement of powerful magnets or disturbing the disc rotation with foreign matters. ¾ Stopping the meters by remote control. ¾ Willful burning of meters. ¾ Changing the sequence of terminal wiring. ¾ Bypassing the meter. ¾ Changing C.T. ratio and reducing the recording. ¾ Errors in meter reading and recording. ¾ Improper testing and calibration of meters.
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T&D Losses in restructured SEBs
Some states have embarked on programs of power sector reforms and have taken steps to restructure their SEBs (State Electricity Boards). The reforming states that were reporting T&D losses of around twenty percent before restructuring process suddenly reported higher losses after carrying out detailed studies of their system. For example, before restructuring its power sector, Orissa reported 23 percent loss, after restructuring, T&D loss were shown to be 51 percent. In AP where these losses were of the order of about 25 percent before restructuring, it is now estimated to be around 45 percent after restructuring. Haryana has now estimated its losses at 40 percent and Rajasthan at 43 percent against earlier level of 32 percent and 26 percent respectively
Regulatory Concerns
In the absence of a realistic estimate of T&D losses, it is not possible for the regulatory commissions to correctly estimate the revenue requirements and also avoid the situation where the consumers pay for the inefficiencies of the utilities. In order to determine an appropriate tariff, the first step is to determine the justified cost incurred by the entity. This would provide an indication of the revenue requirement, which in turn is the basis of any tariff design. The regulator has therefore to be very careful about how losses are worked out. The aim of the regulator must be to encourage the utility to make every effort to reduce losses while at the same time ensuring that those conditions applied which threaten the viability of the utility are not applied.
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Unmetered Supply
Unmetered supply to agricultural pumps and single point connections to small domestic consumers of weaker sections of the society is one of the major reasons for commercial losses. ¾ The agricultural tariff is based on the unit horsepower (H.P.) of the motors. Such power loads get sanctioned at the low load declarations, and once the connections are released, the consumers increase their connected loads, without obtaining necessary sanction. ¾ Further most of the utilities deliberately overestimate the un-metered agricultural consumption to get higher subsidy from the State Govt. and also project reduction in losses. ¾ Correct estimation of un-metered consumption by the agricultural sector greatly depends upon the cropping pattern, ground water level, seasonal variation, hours of operation etc. ¾ To increase the food output, almost all the State Governments show benevolence to farmers and arrange supply of electric power for irrigation to the farmers at a nominal rate, and in some States, without charges at all. ¾ Most Electricity Boards supply power to agriculture sector and claim subsidy from the State Govt. based on energy consumption. ¾ Since the energy supplied to the agriculture sector is a generous gesture by the State Govt., all the electricity boards have eliminated energy meters for agriculture sector services. ¾ The absence of energy meters provides ample opportunities to SEBs to estimate average consumption in agriculture sector at a much higher value than the actual to include not only the under estimated T&D Losses but also energy theft from their system. Most of the methods being employed by SEBs for estimating the un-metered energy consumption are as follows: ¾ Load factor based estimation. ¾ Estimation based on feeder wise theoretical calculation of losses. ¾ Estimation based on readings of meters installed at all the Distribution ¾ Transformers located on a feeder.
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However, none of these methods provide correct estimation of unmetered consumption.
Case Studies of T&D Companies
ABB Ltd.
ABB Ltd. is a well estabilished player in the power secotr, and has presence in diversified segment across sector. The main businesses of ABB include ¾ ¾ ¾ ¾ ¾ ¾ ¾ BTG Equipments Transformers Meters Electrical Balance of Plant Substation Automation Systems Control Systems SCADA
The Revenues of the companies for the fiscal 2008, was Rs. 6283.8 Crores. The sales Mix was: Segments Power Systems Power Products Process Automation Automation Products MIX 36% 26% 17% 21%
The Order book backlog for the fiscal 2008, was Rs. 5217.7 Crores. The Order Backlog Mix: Segments Power Systems Power Products Process Automation Automation Products MIX 45% 26% 21% 8%
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The transformer division has an installed capacity of 12000 MVA, and houses a vast range of transformers. It produces both generator and Power T&D transformers. The company had also recently upgraded its production facility to manufacture 765 kV transformers and also commissioned a new plant to make a foray into small transformers. The company remains focused on its power business is evident from the capital expenditure of $100 million been planned primarily for its power and industrial transformers.
ABB to be a key beneficiary with regard to the following:
Transformer Division: Huge potential order from Powergrid for transmission lines for range of Voltages. The company is focusing to grab a share for the EHV segment is prevalent from the fact that it has upgraded the facility. The LV segment shall also benefit as there shall be huge demand for step down transformers, from Distribution segment. Meter Division: The meter division is also a potential beneficiary from APDRP program of the government. Huge demand for meter shall arise, as more & more of 11Kv feeder & consumers are being metered. Sub Station Automation & SCADA: With huge demand for sub station automation and SCADA systems in order to collect real time information, the company stands to be huge beneficiary. In this segment the only existing competition is from Siemens ltd.
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Emco Ltd
Emco Ltd. is a well established player in the power T&D sector, and has presence in diversified segment. The main businesses of Emco include ¾ ¾ ¾ ¾ Transformers Meters Turn Key Projects Tower Construction
The Revenues of the companies for the March 2008, was Rs. 1039 Crores. The sales Mix was: Segments Transformer Projects Meter MIX 30 65 05
The Order book backlog for the March 2008, was Rs. 1100 Crores. The Order Backlog Mix: Segments Transformer Projects Meter MIX 40 58 02
The current installed capacities of various divisions are: Segments Transformer Tower Meter Capacity 20000 MVA 20000 Mtn 1.7 Mn.
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Future Outlook:
¾ The company expects FY09 sales to be around Rs. 1510-1560 Crores. The sales shall be driven from projects & transformer division which shall constitute 95% of there sales. The meter division shall constitute 5 %. ¾ The company plans to increase the sale of transformers from present levels of 11000 MVA to at least 15000 MVA. This shows that the company is determined to be a huge beneficiary from the growing demand. ¾ The company has recently acquired 37% equity stake in PT Bina, an Indonesian firm to import coal for trading purpose. ¾ The company has also forayed in to generation segment, as it is developing a coal based thermal power plant of 540Mw (4x135Mw) capacity expected to be commissioned by 2011. The coal linkage has already been awarded. ¾ It is also planning to develop a 1000 Mw plant in Jharkhand. ¾ The company is also planning to foray in Hydel Power project, and is scouting for location in Northern region.
Emco to be a key beneficiary with regard to the following:
Transformer Division: Huge potential order from Powergrid for transmission lines for range of Voltages. The company is focusing to grab a share for the EHV segment is as it has entered into a technical collaboration with an Indonesian company to develop 400 KV trnaformers. The LV segment shall also benefit as there shall be huge demand for step down transformers, from Distribution segment. Meter Division: The meter division is also a potential beneficiary from APDRP program of the government. Huge demand for meter shall arise, as more & more of 11Kv feeder & consumers are being metered. Turnkey Project: Agrressive plans of the governemtn to setup a good T&D network has resulted in huge orders for turn key projects. These projects required setting up to T&D lines, building sub stations, etc. Coal Trading: The Company has recently acquired a major stake in Indonesian coal mining company, and plans to import coal to India for trading purpose. This is a lucrative business, as GOI is planning to develop a no. of coastal power plants relying on imported coal.
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Bharat Heavy Electrical Ltd (BHEL)
BHEL is a biggest domestic manufacturer of Power generation, T&D equipments. It is a Government organization, and has presence in every segment of power equipment sector. ¾ ¾ ¾ ¾ BTG Equipments Transformers Meters Switch Gears
The Revenues of the companies for the March 2007, was Rs. 18739 Crores. The Order book backlog for the March 2007 was Rs. 55000 Crores. The Order Backlog Mix: Segments Power Industrial International MIX 78% 16% 06%
The installed capacity as on March 2007 was approximately 8000 MW. BHEL sets account
for nearly 65% of the total installed power generating company in India. These sets contribute 73% of the total power generated in the country.
The company has entered into a technical collaboration with Alstom, France & Siemens, Germany for development of supercritical technology. The Company has recently increased the authorized capital from Rs. 325 Crores to Rs. 2000 Crores
Future Outlook:
¾ The Company is planning to form a JV with NTPC, which shall provide end to end solutions. ¾ It is in a process to increase its capacity from 8000 MW, to 15000 Mw by September 2009. ¾ It has formed a JV with Tamil Nadu Electricity Board, to development power plants in the State. It is scouting for more such JVs. ¾ BHEL may come out with a FPO, as it has increased into authorized capital recently.
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BHEL to be a key beneficiary with regard to the following:
BTG Equipments: BHEL is the market leader in generation equipments. To further strengthen its grip on this segment, it has developed supercritical technology. This scope for implementation of this technology is huge in India. The GOI has plans to add 50-60% of capacity in 12th plan based on this technology. Further all the UMPP shall also adopt this technology. In this regard BHEL is also upgrading the installed capacity. The only domestic competitor is Larsen & Tubro, which has developed the same by forming a JV with Mitsubishi Heavy Industries Ltd. there are number of foreign players which are presently competing with BHEL in this segment. Meter Division: The meter division is also a potential beneficiary from APDRP program of the government. Huge demand for meter shall arise, as more & more of 11Kv feeder & consumers are being metered.
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Chapter 4: Consumption Pattern
Geographically, India‘s electricity market is divided into five regions and 29 states. A regional electricity board serves each region. The size of each regional power market correlates with the size of the economy of each region. The west of the country accounts for 28.0 percent of India?s GDP and 30.0 percent of its capacity, while north & south of the country each account for 27.0 percent of GDP and 26.0 percent of its capacity respectively. There is a significant variation in the consumption pattern among the various states depending upon industrial investments, extent of rural electrification and income levels etc. A heavy element of cross-subsidy also exists in the Indian power sector in terms of lower rates charged to agricultural and domestic consumers and higher rates charged for industrial and commercial consumers. The burden of cross-subsidy in tariffs, coupled with low collections from agricultural consumers due to inadequate metering, has resulted in a number of industrial consumers shifting to captive power over the last few years. The end users of power can be broadly classified into domestic, industrial, commercial, agricultural consumers, traction and others consuming approximately 24.3%, 37.8%, 8.7%, 21.9%, 2.3% and 5% of the power respectively.
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State-wise Gross Annual Per Capita Consumption Of Electricity During The Year 2005-06 (Utilities & NonUtilities)
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Chapter 5: Demand Side Management
The planning process so far has been leaning heavily towards the supply side strategies. Efforts made to implement DSM, energy conservation and energy efficiency measures were symbolic, lacked continuity due to absence of a well knit institutional mechanism at the national and state levels. The 10thplan period (2002-07) is marked by enactment of the Energy Conservation Act, 2001 and setting up of the Bureau of Energy Efficiency (BEE) at the national level. The Act has given mandate to BEE to implement the provisions of the Act, and spearhead the improvement in energy efficiency of the economy through various regulatory and promotional measures.
Some key activities that BEE is pursuing include:
¾ The development of energy efficiency labels for refrigerators and other mass produced equipment, ¾ Certification of energy managers and auditors, ¾ Assisting industry in the benchmarking of their energy use, and ¾ Energy audits of prominent government buildings.
A beginning has been made by the State Governments in designating agencies to oversee implementation of the Energy Conservation Act and deliver energy efficiency services including, through public-private partnership. BEE was provided with a one-time grant of Rs.50 Crores and it utilizes the interest earned on the same to institutionalize energy conservation activities by the Government of India.
ENERGY SAVING –TARGET AND ACHIEVEMENT OF 10TH PLAN
The 10th Five Year Plan (2002-07) targeted energy savings of 95 BU (13% of estimated demand) in the industrial, agricultural, domestic and commercial sectors against the expected electricity demand of 719 BU in the terminal year of the Plan i.e. 2006-07. The 10th Plan highlighted the need for institutional arrangement to coordinate different programmes on energy conservation. It also stressed the mobilization of resources for funding the energy conservation programs. The 10th Plan however did not provide any specific budget allocation to meet and validate the energy saving targets.
Energy Conservation in the 10th Plan
Authentic and updated database is not available due to which it is difficult to assess the potential and achievements made. A rough attempt to assess energy savings achieved during 2002-05, puts this figure at 1170MW comprising of 508 MW from electric power savings achieved in industrial sector (participating units of National Energy Conservation
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Award for the years 2002-03, 03-04 and 04-05), 181 MW from supply side in Power Sector and 481 MW due to penetration of energy efficient CFL & 36W tube light
ENERGY CONSERVATION STRATEGY IN THE 11TH FIVE-YEAR PLAN
The basic aim of the energy conservation strategy in the 11th Five Year Plan will be to prioritize and implement the provisions under the Energy Conservation Act 2001 by decentralizing the energy conservation programmes at the State level. The strategy will strengthen the existing institutional linkages, and pursue the task of consolidating the energy conservation information, trends and achievements and create a market for energy conservation and for energy efficient goods and services. Keeping in view the provisions of the Act, an appropriate institutional mechanism and energy database will be developed in the 11th Plan by BEE. As a part of the mechanism, a fully dedicated ?Energy Conservation Information Centre‘ (ECIC) with Information Technology facilities will be set up within BEE and Central Energy Conservation Fund as mandated under EC Act will be established by the Government of India. Information/ database availability on sectoral/ sub-sectoral trends on energy consumption and energy conservation potential is not readily available at a centralized place for all the sectors of Indian economy. As mentioned earlier, this can be mainly attributed to the absence of any institutional mechanism that enables collection of the information from various users and then to undertake detailed analysis that can feed into decision-making processes at the policy level. Substantial resources (manpower, infrastructure, funds and time) will be required if the information on energy conservation related activities is to be made available at national level from a single source. Collection of such information is a mammoth task and requires systematic handling and coordination of efforts of various agencies.
Strengthening of BEE
In the 11th Five Year Plan, BEE will be strengthened as a nodal organization at the national level, and will be empowered to provide direction to the energy conservation programmes in the States. An appropriate institutional mechanism and a fully dedicated ?Energy Conservation Information Centre‘ (ECIC) will be set up within BEE to analyze energy consumption trends and monitor energy conservation achievements in the country on the basis of data received from the states through State Development Agencies. Funding support proposed is Rs. 320 Crores (for BEE Rs 150 Crores and for SDAs Rs. 170 Crores). In the 11th Five Year Plan, BEE will focus energy conservation programmes in the following targeted sectors:
Industrial Sector (Energy Intensive Industries)
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Industry sector offers maximum potential for energy conservation. The Government of India has recognized this when a number of energy intensive industries have been included as designated consumers in the EC Act. To bridge the efficiency gaps in the various units within the same industrial sub sector, BEE in association with SDAs, industry associations and research institutions, will develop 15 industry specific energy efficiency manuals/guides for the following sectors: Aluminum, Fertilizers, Iron & Steel, Cement, Pulp & Paper, Chlor Alkali, sugar, textile, chemicals, Railways, Port trust, Transport Sector ( industries and services), Petrochemical & Petroleum Refineries, Thermal Power Stations &hydel power stations, electricity transmission companies & distribution companies. The manuals will cover Specific energy consumption norms as required to be established under the EC Act,
¾ energy efficient process and technologies, ¾ best practices, case studies etc. ¾ Follow up activities will be undertaken in the States by SDAs. and manuals will be disseminated to all the concerned units in the industries.
Funding support proposed is Rs.21.8 Crores (BEE Rs.15 Crores and SDAs Rs. 6.8 Crores).
Small and Medium Enterprises (SMEs)
Many of the energy intensive SMEs clusters located in various states of the country are said to have large potential for energy savings. SDAs in consultation with BEE will initiate diagnostic studies in 25 number of SMEs clusters in the country, including 4-5 priority clusters in North East Region, and develop cluster specific energy efficiency manuals/booklets, and other documents to enhance energy conservation in SMEs. Clusters tentatively proposed for these activities are: Warangal (AP) rice mills, Bhimavaram (AP) rice plants, Surat (Gujarat) textile, Jamnagar ( Gujarat) Brass, Jagadhri (Haryana) Plywood, Sambalpur (Orissa) rice mills, Bhubneshwar (Orissa) utensils, Pali (Rajsathan) textile, Jodhpur (Rajsathan) textile, Balhotra (Rajasthan) textile, Kota (Rajasthan) textile, Jaipur (Rajasthan) textile, Tripur (TN) textile, West Coast (TN) rice mill, Coimbatore (TN) foundry, Kanur (UP) textile, Bhadoi (UP) carpet, Bundre (UP) khandsari, Dehradun (Utranchal) Plywood, Howrah (WB) foundry , Agra (UP) foundry , Ferozabad (UP) Glass, Bodhjungnagar (Tripura) agriprocessing, Kamrup (Assam) forest/agro based industry, Dibrugarh (Assam) light engineering , Dimapur (Nagaland) Timber-bamboo products. Funding support proposed is Rs.19.3 Crores (BEE Rs.12.5 Crores and SDAs Rs. 6.8 Crores).
Commercial Buildings and Establishments
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Government and public buildings constitute a very large sub-sector but so far very little organized efforts have been put in to save energy in the same. In the 11th Plan, BEE will initiate comprehensive studies in selected buildings/establishments such as office buildings, hotels, hospitals and shopping malls to prepare building specific energy efficiency manuals covering Specific energy consumption norms, energy efficient technologies, best practices, case studies, model energy performance contracts, model monitoring and verification protocol for implementation of ESCO projects etc. As a follow up, SDAs in association would initiate energy audits and their implementation in 10 Government buildings in each state and 1-2 buildings at UT level. BEE will also assist SDAs in the establishment and promulgation of energy conservation building codes (ECBC) in the States, and facilitate SDAs to adapt ECBC to the local conditions and make them ready for implementation at municipal levels. In addition, BEE will also strengthen a few test laboratories for testing of building materials and building utility systems for ECBC compliance. Funding support proposed is Rs.41 Crores (BEE Rs.14 Crores and SDAs Rs. 27Crores).
Residential/Domestic sector
BEE has been working to introduce energy efficiency standards and labeling programme to facilitate consumers in selecting energy efficient domestic appliances. For promoting energy efficiency programmes in this sector, SDAs will actively involve Electric Utilities/ Distribution Companies. Emphasis would be to encourage the consumers to adopt energy efficient lighting systems, air conditioners, refrigerators, water heating systems and other domestic appliances. BEE will enlarge its on-going energy labeling programme for ?frost free refrigerators‘ and ?tubular fluorescent lamps‘ to 10 other appliances - Air conditioners , Ceiling Fans , Agricultural pump-sets, Electric motors (general purpose) , CFLs, FTL – 61cm (2ft) , Television sets , Microwave ovens, Set top boxes , DVD players , Desk top monitors. To facilitate this, 10 testing laboratories will be strengthened, and consumer awareness will be enhanced nation wide. Funding support proposed is Rs. 84 Crores (BEE Rs. 50 Crores and SDAs Rs. 34 Crores).
Street Lighting & Municipal Water Pumping
Street lighting and municipal water pumping put excessive pressure on electric utilities. Quite a few of studies/projects have been successfully demonstrated in some states. In the 11th Plan, such projects will be identified, documented and disseminated nation wide. Further, to promote such projects in various states, SDAs in association with State utilities will initiate pilot energy conservation projects in selected municipal water pumping systems and street lighting to provide basis for designing state level programmes. Funding support proposed is Rs.10.5 Crores (BEE Rs.2.0 Crores and SDAs Rs. 8.5 Crores).
Agriculture Sector
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Increasing energy consumption trend is being seen in irrigation systems in the sector. Due to low power tariff for the sector in majority of the States, it is not in the farmers‘ financial interest to buy efficient pumps, but it may be in the utility‘s interest to promote their use. In the 11th Plan, SDAs will collect, document and disseminate information on successful projects implemented by some states, launch awareness campaign in all regional languages in print and electronic media and follow up work in initiating state level programmes along with utilities. SDAs with assistance of concerned institutions will also develop suitable energy conservation models which will take into consideration measures like:
¾ Introduction of subsidy in replacement of inefficient pump sets with efficient ones, ¾ Power factor improvement by installation of capacitor banks, ¾ Rebate for optimum usage of pumps, ¾ Energy efficiency labeling of pumps, etc.
These models will be subsequently promoted through the electricity utilities/distribution companies and SDAs with involvement of State Regulatory Commissions. Funding support proposed is Rs. 10 Crores (BEE Rs.5.0 Crores and SDAs Rs 5.0 Crores).
Transport Sector
The sector is mainly dependent on the petroleum products. In the 11th Five-Year Plan, SDAs will develop linkages with State Road Transport Undertakings and private enterprises owning large fleet of trucks/buses to establish the status of energy consumption and conservation in the sector. SDAs with assistance of concerned institutions/agencies will conduct diagnostic studies to support urban bodies and transport research organizations in adopting multi modal public transport system which shall shift demand from personalized to public transport. SDAs will develop linkages with the state transport undertakings to establish the status of energy consumption and conservation potential and support studies to promote public transportation systems. BEE will also set up norms for specific fuel consumption for a few automobile and Transport models (Services/ Public transport). Funding support proposed is Rs 10.5 Crores (BEE Rs. 2.0 Crores and SDAs Rs 8.5 Crores).
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Chapter 6: Findings & Conclusions
Power Generation
¾ Boiler (B) Turbine (T) Generator (G) are the major components. BHEL is the biggest manufacturer of BTG equipments in India. The current BTG capacity of BHEL is 10,000 MW & it is expanding the same to 15,000 MW by Dec‘09.
¾ Other manufacturers of BTG in India are Siemens, Thermax, L&T and other players in the organized & unorganized segments. ¾ Foreign Players in the BTG segment are GE, Mitsubishi. ¾ Most of the BTG‘s are supplied by BHEL in India however those of smaller sizes (especially for CPP) are supplied by other players.
¾ If the order book of domestic companies is over-loaded power plants also go in for
imports of BTG components.
Transmission & Distribution
¾ The transmission industry in India (Total installed capacity of transformers is approximately 1,20, 000 MVA). ¾ Transmission projects are mainly given on EPC basis & sometimes it is given on equipment tender & monitoring basis but such orders are very rare. ¾ It takes about 18-24 months for executing an EPC transmission – Distribution contracts. ¾ Of every Rs 100 creation of Power Generating capacity approx 30-35% (Value) of T&D capacity is created which Transmission & Distribution is further broken into 50:50. This ought to be Rs 100. ¾ Approx 1 MW of power generation creates evacuation capacity of 7 MVA for transformers. ¾ Installed capacity of transmission towers is 140000+ Mtn.
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Others
¾ Government has proposed Profit making Central/ State Utilities in generation, transmission & distribution to be encouraged for supply of PSUs stock in the market by way of IPOs/ FPOs (Follow-on Public Offer)/ Offer for sale. ¾ Government proposes development of a Venture Capital / PE fund to invest in equity of power projects.
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doc_908526896.pdf
The report describing about comprehensive analysis of indian power sector.
INDIAN POWER SECTOR
A SECTORAL ANANLYSIS
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Table of Contents
Acknowledgements .......................................................................................................................................................... 4 Chapter 1: Introduction ................................................................................................................................................... 5 Overview ...........................................................................................................................................................5 Current Power Demand & Supply Position..................................................................................................6 Growth of the Indian power sector ..............................................................................................................9 Power Setup in India .....................................................................................................................................11 Companies Setup in Power Sector .............................................................................................................12 Organizational Structure of the Power Sector ..........................................................................................13 Two Prong Strategy........................................................................................................................................19 Chapter 2: Generation & Capacity Addition ..................................................................................... .............................20 Overview .........................................................................................................................................................20 Generation mix ..............................................................................................................................................23 Segments in Power Generation ..................................................................................................................25 Thermal........................................................................................................................................................25 Hydropower ...............................................................................................................................................32 Nuclear Power ...........................................................................................................................................38 Wind Power ................................................................................................................................................40 Other Initiative taken by the GOI ...............................................................................................................47 Ultra Mega Power Plant (UMPP) .............................................................................................................47 Merchant Power Plants ............................................................................................................................50 Supercritical Technology .........................................................................................................................53 Case Study: National Thermal Power Corporation..................................................................................55 Chapter 3: TRANSMISSION PLANNING AND NATIONAL GRID......................................................................................56 Overview .........................................................................................................................................................56 Regional Grids ................................................................................................................................................57 Need for National Grid .................................................................................................................................58 National Grid..............................................................................................................................................58 Role of Powergrid Corporation of India Limited (PGCIL)........................................................................60 Achievements............................................................................................................................................60
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Future Plans ................................................................................................................................................61 Private Sector Participation in Transmission...............................................................................................62 Distribution.......................................................................................................................................................63 Aggregate Technical & Commercial Losses........................................................................................63 Accelerated Power Development & Reform Programme................................................................64 Rajiv Gandhi Vidyuti Karan Yogna (RGGVY) .......................................................................................68 Definition of Decentralized Distributed Generation............................................................................69 Physical and Financial outlay for eleventh Five Year Plan ................................................................70 Funding Requirement for Distribution ....................................................................................................71 Transmission & Distribution Programme Beneficiaries..............................................................................71 Key concerns in transmission and distribution ..........................................................................................73 Components of Power losses ..................................................................................................................73 Level of T&D losses ....................................................................................................................................74 Reasons of high technical losses ............................................................................................................74 Reasons for commercial losses ...............................................................................................................75 T&D Losses in restructured SEBs ...............................................................................................................76 Regulatory Concerns................................................................................................................................76 Unmetered Supply ....................................................................................................................................77 Case Studies of T&D Companies ................................................................................................................78 ABB Ltd. .......................................................................................................................................................78 Emco Ltd .....................................................................................................................................................80 Bharat Heavy Electrical Ltd (BHEL).........................................................................................................82 Chapter 4: Consumption Pattern ..................................................................................................................................84 Chapter 5: Demand Side Management ....................................................................................................................... .86 Chapter 6: Findings & Conclusions ...............................................................................................................................91 Power Generation .........................................................................................................................................91 Transmission & Distribution ............................................................................................................................91 Others...............................................................................................................................................................92
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Chapter 1: Introduction
Overview
The Government of India has identified the power sector as a key sector of focus to promote sustained industrial growth. It has embarked on an aggressive mission ?Power for All by 2012? and has undertaken multiple reforms to make the power sector more attractive to private sector investment. According the Eleventh Five Year Plan, the per capita consumption of electricity is to increase to at least 1000 KWh per annum by 2012 from the present 635 KWh. The present per capita power consumption is much below the world average of 2596. According to the estimates the population in 2012 shall be close to 1.21 Billion. This translates into an energy requirement of 1210 BU p.a. This coupled with increasing Demand Supply Gap create a surging demand for power.
Source: Ministry of Power
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Current Power Demand & Supply Position
The overall Energy Demand for power in the country has been growing at a CAGR of 5.56 % since 1997-98 to 2006-07, whereas the overall Energy Supply is increasing only by 5.36%, thereby leaving an energy shortage of 9.6% in the fiscal 2007. The peak demand has also increased substantially from 65435 MW in 97-98 to 100715 MW in 06-07. The peak supply has increased from 58042 MW in 97-98 to 86818 MW in 06-07, thereby resulting in peak shortage of 13.8% in fiscal 2007.
ENERGY DEMAND & SUPPLY:
Source: MoP
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PEAK DEMAND & SUPPLY:
Source: MoP
According to the Tenth Plan approach paper, ?The energy infrastructure will be major constraint on any effort to achieve a significant acceleration on the growth of GDP in Tenth Plan period. This will place heavy demands on the generation and distribution of electric power. Furthermore, in globally competitive environment, the quality of these services in terms of both price and reliability are as important as availability and it is well-known that we face serious problems on both counts.? But fundamental issues such as frequent power cuts, both scheduled and unscheduled, erratic voltage and low or high supply frequency have added to ?power woes‘ of the consumers. The Indian Power industry has since independence faced the demand and supply gap. The said gap is still prevalent even after government initiated the reform process in early nineties. A comparison of GDP & Power Generation growth rate shows that power sector is lagging behind the annual growth rate of the country, and acting as a dampener in its progress. The power sector outlay is 18-20 percent to Gross outlay; therefore performance of power sector has a very significant impact on growth in GDP. According to 17th EPS report, and industrialist, power sector has to grow TAGR of 910%, if GDP growth is to be sustained at present level of around 8%. Therefore,
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power sector should have an elasticity of at least 1, in order to grow in sync with GDP growth.
GDP-POW ER Grow th (%)
12.00% 10.00% GO T AE R W HR T 8.00% 6.00% 4.00% 2.00% 0.00% 200102 200203 200304 200405 Ye ar 200506 200607 200708 GDP Pow er Generation
GDP Power Generation
2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 5.22% 3.77% 8.37% 8.28% 9.24% 9.69% 8.50% 3.14% 3.18% 5.02% 5.21% 5.12% 7.29% 6.32%
Since independence, generating capacity has increased from 1362 to over 143,311 MW as on March 31, 2008. However there are widespread shortages of power in almost all parts of the country. Households, farmers, commercial establishments, industries etc. are confronted with frequent power cuts, both scheduled and unscheduled. Power cuts, erratic voltage levels and wide fluctuations in the frequency of supply have added to the 'power woes' of the consumer. The consumers are resorting to captive power supply arrangements of various types ranging from 300 Mega Watts (industry) to 250 Watts (households). Almost every shop in an urban market place has a generator set. Most establishments have battery-operated inverters and diesel generation sets. Most urban households have voltage stabilizers for different appliances. In fact the money spent by the domestic consumer on these standby power supply (DG sets / Inverters) and power conditioning (stabilizers) arrangements could be among the highest in the world. The same money could be more gainfully invested through corporate investments in power generation, transmission and distribution with assured returns on investments. The major reasons for inadequate, erratic and unreliable power supply are: inadequate power generation capacity; lack of optimum utilisation of the existing generation capacity; inadequate inter-regional transmission links; inadequate and ageing sub-transmission & distribution network leading to power cuts and local failures/faults; ¾ large scale theft and skewed tariff structure; ¾ slow pace of rural electrification; ¾ ¾ ¾ ¾
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¾ Inefficient use of electricity by the end consumer.
Growth of the Indian power sector
Power development is the key to the economic development. The power Sector has been receiving adequate priority ever since the process of planned development began in 1950. The Power Sector has been getting 18-20% of the total Public Sector outlay in initial plan periods. Remarkable growth and progress have led to extensive use of electricity in all the sectors of economy in the successive five years plans. Over the years (since 1950) the installed capacity of Power Plants (Utilities) has increased to 143,311 MW in fiscal 2008 from a meager 1713 MW in 1950, registering an 83 fold increase in 56 years. Similarly, the electricity generation increased from about 5.1 billion units to 704.45 Billion units. The per capita consumption of electricity in the country also increased from 15 kWh in 1950 to about 635 kWh in 2007-08, which is about 23 times. In the field of Rural Electrification and pump set energisation, country has made a tremendous progress. About 85% of the villages have been electrified except farflung areas in North Eastern states, where it is difficult to extend the grid supply. The total outlay for the power sector increased from 45590 crores in the Ninth Plan to 143399 crores in the Tenth Plan period, including a gross budgetary support of 25000 crores. The total energy consumption stood at 387.3 MMTOE as of Dec 06. Power generation amounted to 704.45 BU?s (Billion Units) in 2007-2008.
Source-wise, thermal power plants accounted for an overwhelming 64.6 per cent of the total installed capacity. Within this group, coal, gas and oil based thermal power plants accounted for 53.3 per cent, 10.5 per cent and 0.9 per cent, respectively. Hydel power plants come next with an installed capacity of 35,378.76 MW,
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accounting for 24.7 per cent of the total installed electricity generation capacity, following by Nuclear & Renewable sources which consist 3% & 7% respectively. Simultaneously, the total transmission lines network has been growing at a robust pace to expand the transmission network. Total transmission lines have increased from 150642 circuit km (ckm) at the end of 2001-02 to 198089 ckm at the end of 2006-07. Generation capacities and demand points are unevenly distributed across the country due to various natural and historical factors. Furthermore, demand for power (and to some extent, even its supply), is characterized by intra-day and seasonal variations. An integrated power transmission grid helps in evening out supplydemand mismatches. In addition, mechanisms for trading and exchange and open access facility into the grid could help in making the market for electricity more competitive and cost effective. The existing inter-regional transmission capacity of about 17,000 MW that connects the Northern, Western, Eastern and North-Eastern Regions in a synchronous mode (at the same frequency) and the Southern Region asynchronously has enabled interregional energy exchange of about 38 billion kWh (January- November 2007). It is expected that the interregional capacity of more than 37,700 MW would be achieved by the end of the Eleventh Five Year Plan. Proposals are under way to have synchronous integration of Southern Region with the rest of the regions forming an all-India synchronous grid. Electricity consumption in India has more than doubled in the last decade, outpacing economic growth. The primary energy supply in the country is coal-dominant with the power sector accounting for about 40% of primary energy and 70% of coal consumption. It is also the single largest consumer of capital, drawing over one-sixth of all the Indian investments over the past decade. Fuelled by high coal and investment consumption, India?s power sector has grown 80-fold since independence to over 107,000 MW but the per capita power consumption is very low. This number is not precisely known, since a significant fraction of the consumption is unmetered, and there is a large proportion of theft. Ostensibly, transmission and distribution (T&D) losses are about 25%, but only some fraction of the losses are technical losses; the theft is bundled together as ?commercial losses.‘
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Power Setup in India
Source: Areva T&D website Power Generation: This is where it all starts. There are several ways electricity is made: Steam plants those burn fossil fuels, hydroelectric plants that use water and nuclear plants that split atoms. Each of these ways produces steam in a boiler that turns a machine called a turbine. The turbine spins a giant magnet inside a coil of wire. Heat energy in the steam changes to mechanical energy. The mechanical energy produced in the turbine is changed to electrical energy in the generator. Transmission: From the power plant, the electricity flows through the wires to a stepup transformer. The transformer raises the pressure of the electricity so it can travel long distances. Voltage is raised up as high as 765,000 volts. From the transformer, the current then travels through wires to the transmission lines. These high voltage lines can carry large amounts of electricity over long distances. Distribution: From the transmission lines the current now goes to a substation transformer or step down transformer. A substation lowers the pressure between 2,000 and 13,000 volts so the electricity can be used by the community. From the substation the electricity is now ready to be distributed into the community. The current travels from the substation to distribution lines. These lines are sometimes above ground or below ground. From the distribution lines the electricity now travels to a pole transformer. This type of transformer lowers the pressure once again to 120
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to 240 volts for use in your home. In places where the lines are underground, you may see a transformer box instead of a pole. Consumption: From the transformer pole or box, the electricity is now ready to travel to industries, residences, offices into a service box. That's where the electric meter is.
Companies Setup in Power Sector
Power Sector
Generation Companies
Transmission Companies
Distribution Companies
Equipment Manufacturers
Financing Companies
Trading companies
• • • •
NTPC NHPC NPC Private players
• PGCIL (Nodal Agency)
• SEBs‘ • Private Players
• BHEL • Domestic Pvt. Players • Foreign Pvt. Players
P PFC • FC (Nodal Agency) FDI
PTC • PTC (Nodal Agency)
• FDI Sector Private • Private Sector
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Organizational Structure of the Power Sector
In December 1950 about 63% of the installed capacity in the Utilities was in the private sector and about 37% was in the public sector. The Industrial Policy Resolution of 1956 envisaged the generation, transmission and distribution of power almost exclusively in the public sector. As a result of this Resolution and facilitated by the Electricity (Supply) Act, 1948, the electricity industry developed rapidly in the State Sector. In the Constitution of India "Electricity" is a subject that falls within the concurrent jurisdiction of the Centre and the States. The Electricity (Supply) Act, 1948, provides an elaborate institutional frame work and financing norms of the performance of the electricity industry in the country. The Act envisaged creation of State Electricity Boards (SEBs) for planning and implementing the power development programmes in their respective States. The Act also provided for creation of central generation companies for setting up and operating generating facilities in the Central Sector. The Central Electricity Authority constituted under the Act is responsible for power planning at the national level. From, the Fifth Plan onwards i.e. 1974-79, the Government of India got itself involved in a big way in the generation and bulk transmission of power to supplement the efforts at the State level and took upon itself the responsibility of setting up large power projects to develop the coal and hydroelectric resources in the country as a supplementary effort in meeting the country?s power requirements. The National thermal Power Corporation (NTPC) and National Hydro-electric Power Corporation (NHPC) were set up for these purposes in 1975. North-Eastern Electric Power Corporation (NEEPCO) was set up in 1976 to implement the regional power projects in the North-East. Subsequently two more power generation corporations were set up in 1988 viz. Tehri Hydro Development Corporation (THDC) and Nathpa Jhakri Power Corporation (NJPC). To construct, operate and maintain the inter-State and interregional transmission systems the National Power Transmission Corporation (NPTC) was set up in 1989. The corporation was renamed as POWER GRID in 1992.
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Power Sector Structure (based on responsibilities)
Role of Institutional Players
Central Government ¾ Formulate National Electricity Policy and National Tariff Policy ¾ Formulate national policy on stand alone systems ¾ Formulate national policy on Rural Electrification ¾ Make Rules & Procedure for implementing provisions of Electricity Act 2003 ¾ Appoint Chairpersons& other members of CEA State Government ¾ Assist Central Govt. in formulating National Electricity Policy, Tariff Policy, etc ¾ Make Rules & Procedure for implementing provisions of Electricity Act 2003 ¾ Form SLDCs for optimal scheduling & dispatch for the power systems ¾ Make Rules & Procedure for implementing provisions of Electricity Act 2003
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Central Electricity Authority ¾ Advice Central Government on matters relating to National Electricity Policy ¾ Advice appropriate government on technical matters related to electrical systems ¾ Formulate plans for optimal utilization of resources in accordance with National Electricity policy Central Electricity Regulatory Commission ¾ Fix tariff for generating stations either owned by central government or having sales in more than one state ¾ Regulate inter-state transmission tariff & fix trading margin ¾ Grant of licenses for interstate transmission & trading State Electricity Regulatory Commission ¾ Fix tariff for generation, Supply, transmission & wheeling within the state ¾ Fix Cross Subsidy Surcharge when open access is allowed ¾ Fix trading margin for intra-state operations ¾ Grant of licenses for intrastate transmission & trading ¾ Advice the State Govt. on policy matters National Load Despatch Centre ¾ Interface with all the five Regional Load Dispatch Centres (RLDCs) that are operational at present to acquire real-time data to continuously monitor integrated operation of the proposed National Grid ¾ To ensure optimal Scheduling & Dispatch among the RLDCs The existence of huge demand supply gap clearly indicates the inefficiency of the mammoth organizational setup of the Indian Power Sector. On critical analysis of the setup, we find that the inefficiency is caused as most of them have overlapping functions. The involvement of State Government in this sector has further complicated the issue, each state has developed its own electricity policy and pricing based on its own interest rather than thinking of country as a whole. The different
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pricing regimes and distribution policies of state governments further aggravated the power situation. The policy of liberalisation the Government of India announced in 1991 and consequent amendments in Electricity (Supply) Act have opened new vistas to involve private efforts and investments in electricity industry. Considerable emphasis has been placed on attracting private investment and the major policy changes have been announced by the Government in this regard which are enumerated below: ¾ The Electricity (Supply) Act, 1948 was amended in 1991 to provide for creation of private generating companies for setting up power generating facilities and selling the power in bulk to the grid or other persons. ¾ Financial Environment for private sector units modified to allow liberal capital structuring and an attractive return on investment. Up to hundred percent (100%) foreign equity participation can be permitted for projects set up by foreign private investors in the Indian Electricity Sector. ¾ Administrative & Legal environment modified to simplify the procedures for clearances of the projects. ¾ Policy guidelines for private sector participation in the renovation & modernisation of power plants issued in 1995. ¾ In 1995, the policy for Mega power projects of capacity 1000 MW or more and supplying power to more than one state introduced. The Mega projects to be set up in the regions having coal and hydel potential or in the coastal regions based on imported fuel. The Mega policy has since been refined and Power Trading Corporation (PTC) incorporated recently to promote and monitor the Mega Power Projects. PTC would purchase power from the Mega Private Projects and sell it to the identified SEBs. ¾ In 1995 GOI came out with liquid fuel policy permitting liquid fuel based power plants to achieve the quick capacity addition so as to avert a severe power crisis. Liquid fuel linkages (Naphtha) were approved for about 12000 MW Power plant capacity. The non-traditional fuels like condensate and orimulsion have also been permitted for power generation. ¾ GOI has promulgated Electricity Regulatory Commission Act, 1998 for setting up of Independent Regulatory bodies both at the Central level and at the State level viz. The Central Electricity Regulatory Commission (CERC) and the State Electricity Regulatory Commission (SERCs) at the Central and the State levels respectively.
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¾ The Electricity Laws (Amendment) Act, 1998 passed with a view to make transmission as a separate activity for inviting greater participation in investment from public and private sectors. ¾ The Electricity Laws (Amendment) Act, 1998 provides for creation of Central and State Transmission utilities. The function of the Central Transmission Utility shall be to undertake transmission of energy through inter-state transmission system and discharge all functions of planning and coordination relating to inter-state transmission system with State Transmission Utilities, Central Government, State Governments, generating companies etc. Power Grid Corporation of India Limited will be Central Transmission Utility. ¾ The function of the State Transmission Utility shall be to undertake transmission of energy through intra-state transmission system and discharge all functions of planning and coordination relating to intra-state transmission system with Central Transmission Utility, State Governments, generating companies etc. ¾ The latest reform measures have come in the form of the Electricity Act 2003, which aims to bring about a paradigm shift in the reforms to this critical sector. (Detailed report on this Act in the Section “Power Sector Reforms”)
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Two Prong Strategy
The GOI devised a twin pronged stratergy to meet the increasing gap between Demand & Supply. It decided to bridge the gap by working both on demand & supply side. On the supply side they devised a demand side management which focuses on weeding out the anomalies that increase the demand. This process is called Demand Side Manangement, whereas on the other hand the GOI is focusing on increasing vehemently to meet the gap.
Demand Side Management
Focus on energy conservation. Set out guidelines for various consumers, on efficient usage of electricity Encourage industries & buildings using clean & green technology. Collection of Data regarding energy consumption, & emissions from various consumption sources. ¾ Customized solution for each category of consumer, on energy usage & preservation. ¾ ¾ ¾ ¾
Supply Side Management
¾ Focus on increasing the electricity generation in the country ¾ Aggressive plans to increase the generation capacity in all segments ¾ Improvement in the Plant Load Factor, by Renovation & Modernization Programmes ¾ Setting up of Transmission & Distribution lines to evacuate & distribute power. ¾ Focus on reducing the T&D losses.
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Chapter 2: Generation & Capacity Addition
Overview
With regards to increasing gap between Demand & Supply of power, and GOI‘s target to increase the per capita consumption of power from present levels to 1000 KWh, has resulted in huge generation needs for the economy. In 2007-08 the power generated was 704.45 BU. According to the Working Group Report on Power, the estimated requirement till year 2012 shall be 1038 BU. This translates in a CAGR of 10.2% p.a. Presently, the generation is growing at a CAGR of 5.8%. In order to achieve the set target, huge capacity additions are required to be installed in all the sectors. The installed capacity at the beginning of 10th plan was 105 GW. In the 10th Plan, as against the target of 44,185 MW (NRES + RES), actual capacity addtion has been 27284 MW. The MoP has proposed a capacity addition of 80 GW in the 11th Plan. The present installed capacity is 143.3 GW.
Growth In Generation Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 CAGR Billion Units 531.60 558.30 587.40 617.50 662.52 704.45 Growth 3.22% 5.02% 5.21% 5.12% 7.29% 6.33% 5.79%
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Table 1.1
Summary of Installed Capacity at the Beginning of 10th Plan (1.4.2002)
Sector State Private Central ALL INDIA Hydro 22,639 581 3,049 26,269 Nuclear RES (Figures in MW) Total Thermal Coal Gas Diesel Total 36,722 2,662 558 39,941 0 61 62,642 3,991 4,082 577 8,651 0 1,567 10,799 21,418 4,419 0 25,837 2,720 0 31,605 62,131 11,163 1,135 74,429 2,720 1,628 1,05,046
Sector THERMAL HYDRO NUCLEAR RES TOTAL
Table 1.2 10th Plan Capacity Addition Actual-Sector Wise Target Addtion Actual Addition Success Ratio Units (%) Units (%) (%) 25417 58% 11586 42% 46% 14393 33% 8385 31% 58% 1300 3% 1180 4% 91% 3075 7% 6133 22% 199% 44185 100% 27284 100% 62%
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Table 1.4 Sl. Major Reasons of Under Recovery 1 Projects Dropped Projects Slipped to 11th FYP Delay in super critical technology tie up by BHEL Geological Surprises Natural Calamity Delay in award of works Delay in MoE&F clearance Delay in clearance/ Investment decision / Funds tie up constraints/delay in financial closure Delay in Preparation of DPR & sign up of MOU between HP&SJVNL ESCROW cover (Private Sector) R&R issues Court Cases Law & Order problem Sub Total Capacity slipped (MW) Thermal Hydro 2,528 481
1 2 3 4 5 6 7 8 9 10 11
3,960 998 1,500 500 500 7,458 400 675 5,058 510 450 823 400 1,400 400
Other Projects likely to slip due to constraints on 1 BHEL side Total
5109 15,095
618 6,157
Table 1.6 11th Plan Capacity Addition Target-Sector Wise (in MW) Sector Central State Private Total Hydro 9685 3605 3263 16553 (18%) Thermal Nuclear 26800 24347 7497 58644 (63.7%) 3380 RES Total
3380 (3.7%) 13500(14.7 )
92077 (100%)
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Generation mix
The Indian Power sector is predominantly based on fossil fuels, with about 53.3 percent of the country?s power generation capacity being dependent on vast indigenous reserves of coal. Natural gas based generation capacity, that has grown very rapidly in the last decade due to lower capital requirements, shorter construction periods, and higher efficiencies has a 10.5 percent share in the overall capacity. Nuclear capacity remains restricted at about 2.9 percent of the total. Generation based on large hydropower has continued to grow very slowly due to a number of socio-environmental barriers and has a 24.7 percent share in capacity at present. Renewable technology projects, (renewable here refer to small hydro, wind, cogeneration and biomass-based power generation, and solar technologies and exclude large hydropower), aggregating 10,855.24 MW as on February 2008, has a 7.7 percent share in the overall generation capacity.
Plant Load Factor
The thermal power plants are compared on the basis on plant load factor. The overall plant load factor (PLF) of thermal plants of India as on 31st March, 2008 was 78.6%. Plant load factor is an indicator of capacity utilization. A plant is said to have 100% PLF if the plant operates at its rated capacity without break 24 hours a day throughout the year. PLF is affected by several factors such as adequate maintenance of generating units, troubles faced in the operation, quality and quantity of fuel supplied to power stations. The all India Thermal PLF which was as low as 27% at the beginning of First Plan progressively increased to 47% by the year 196364 and then declined to around 42% by early seventies. During one year in the seventies i.e. during 1976-77, the PLF touched 55.4% but this could not be sustained during subsequent years. Several factors such as inadequate maintenance of generating units, the teething troubles faced in the operation of the newly introduced 200/210 MW units and the deterioration in the quality of coal supplied to power stations led to a gradual erosion in the PLF of the thermal power plants during 5th plan period. During the 6th Plan, Department of Power and Central Electricity Authority undertook a comprehensive programmed to renovate and modernize old units located in different States. The performance of 200/210 MW units also begin to stabilize. Concerted efforts were made by Ministry of Coal to monitor quality of coal supplies to power plants. As a result of all these measures the PLF of thermal plants registered a gradual improvement during the 7th plan period.
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The plant load factor of thermal power stations in the country, which was only 44.2% in 1980-81, increased to 56.5% by the end of the 7th Plan. The all India Average PLF of the Thermal Power Plants has further increased to 64.4% by the end of eighth plan. By the 2005-06 period the all India PLF stood at 73.6% increasing to just over 77% by 2007. The PLF in each of these sectors as well as in every region has improved over time. However, there is a marked variation across the regions One of the major achievements of the power sector has been a significant increase in availability and plant load factor of thermal power stations especially over the last few years. The table below shows the PLF of thermal plants under central, state and private sector and also the overall PLF over last few years. As one can notice from the table the PLF of thermal plants under private and central sector is quite good but poor capacity utilization of thermal plants under state (which has 57% of the total fossil fuel based installed capacity) results in lowering of the overall PLF. The low PLF of the thermal plants under state could be attributed to ¾ Poor operation and maintenance, ¾ Poor quality of coal and ¾ Lack of timely availability of fuel. Lack of timely availability of coal not only decreases the quantum of generation but also increase per unit cost of power generation because the plants have to switch to oil in case of non-availability of coal.
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Thermal plants have various advantages and disadvantages depending upon the fossil fuel they are based on. For instance in case of gas based generation the capital cost, gestation period and fuel cost for per unit power generation is lower than that for coal based generation, however uncertainty about availability and period of availability of gas discourages higher capacity addition based on gas as fuel. The capital cost, gestation period, fuel cost, application and so forth are listed below for different fuel based generation.
Segments in Power Generation
Thermal
Overview
At the end of 10th Five Year Plan the share of thermal power plant stood at 65% of the overall installed power generation capacity. And in the light of the capacity addition envisaged under 11th Five Year Plan this share would further increase to 68.6%. Thermal power plants are based on fossil fuels namely, coal, gas or lignite. At present nearly 83% of the thermal plants are dependent on coal. Whereas those based on natural gas and oil are around 16% and 1% respectively. Also more than 90% of the capacity addition in the thermal segment during the 11th Plan would be based on coal. This is in view of the relatively large reserves of coal in the country.
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Basic Cost Structure
Coal Gas Naphtha Capital Cost(Rs million per * 30-45 30-40 25-30 MW) Gestation period (months) 48-52 24-30 18-30 124 115 517 Fuel cost (paise per kwh) Application Base load Intermediate load Peak load Emissions High Low Low Indigenous availability High Low Medium Indigenous quality Poor Good Good Fuel Price Outlook Deregulation Underpriced in relation Domestic prices will result in a to international prices. W to move in line faster price ith increased proportion with the increase international of deregulated gas prices. Price will flowing into the market, continue to prices are expected to be volatileand will rise in the future move in line with crude oil price. Technology
Thermal power plants burn coal or fossil fuels to produce heat which in turn gets converted into electricity. Fuels such as diesel and furnace oil are also used, although to a lesser extent.
The choice of fuel for thermal power plants depends on the plant size, and the cost and availability of various fuels at the location. Coal-based plants are usually located near coal mines or near coastal areas where it is economically feasible to transport coal. Gas-based plants are located either near a gas pipeline or near ports to
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facilitate the easy import of gas. Thermal power plants are often designed to operate with more than one fuel so that the non-availability of a particular fuel would not disrupt operations. In general, only relatively smaller power plants (with a capacity of under 200 MW) use diesel and furnace oil.
Steam-cycle power plants (Type I)
In a steam-cycle power plant, pulverised coal or lignite is burnt to boil water in a boiler to generate steam at high temperature and pressure. This steam is used to run a steam turbine, coupled with an electric generator. Some of the heat generated is lost owing to radiation from pipelines, leakage from various equipments and through heat carried by the exhaust from the turbine. The ratio of the heat converted into electricity to the total heat generated by burning the fuel is referred to as the thermal efficiency of the plant. Typically, the thermal efficiency of conventional steam-cycle power plants ranges between 33% and 38%. Recent developments in technology have helped increase the thermal efficiency of steam-cycle power plants to nearly 45%. These developments include: ¾ The use of fluidised bed combustion boilers, which also reduces the emission of sulphur oxides, ¾ The use of super-critical steam boilers (with respect to temperature and pressure parameters), and ¾ The use of coal gasification technology in combination with cycle technology.
Combined-cycle power plants (Type II)
In a combined-cycle power plant, high temperature and high-pressure gases, produced by burning natural gas/naphtha, are used to run a gas turbine in the opencycle mode. The exhaust gases from the gas turbine carry significant amounts of heat. In the combined-cycle mode, the heat content of the exhaust gases is utilised to generate steam in a heat-recovery steam generator. The steam is used to run a steam turbine. Although the thermal efficiency of a plant in the open-cycle mode (about 30%) is lower than that of a coal-based plant, the total thermal efficiency of the plant in the combined-cycle mode is significantly higher (at 42%-48% ). Technological developments have enabled combined-cycle power plants to achieve thermal efficiency of up to 60%. The most important development that has helped increase efficiency is the use of higher temperature gases at the turbine inlet.
Integrated gasification combined-cycle plants (Type III)
Integrated gasification combined cycle (IGCC) technology is used to increase the thermal efficiency of coal-based power plants and reduce emissions. In IGCC plants, 27
coal is gasified using a gasifier. The gaseous coal is purified to remove pollutants such as sulphur. The purified coal is subsequently burned to generate hot gases, which are used to run a gas turbine. The exhaust gases, containing waste heat, are used to boil water and generate steam; this steam is used to run a steam turbine. IGCC technology can deliver thermal efficiency of up to 48%-50%. In addition, it can also be used with other heavy fuels such as refinery residues and petroleum coke.
Present & Future Status:
Sector (Figure In MW) XI th Plan XII th Plan 2001-02 2006-07 Target PUC CP (IX th Plan) (X th Plan) Target 62131 11163 1202 74,496 71121 13692 1202 86,015 48010 2114 50,124 98435 15240 32770 15583 1014 1100 114,018 16,254 33,870
Coal & Lignite (Type I & III Technology) Gas (Type II Technology) Diesel Thermal PUC: Project under Construction CP: Committed Projects
Major Challenges
Fuel availability and pricing are the major challenges to the thermal power generation. Uncertainty about availability, period of availability and price of gas are the major constraints in increasing power generation dependent on it. Moreover although India has large reserves of coal but current production levels are simply not enough to meet the growing demand. The demand exceeds the supply as can be noticed from the data below:
DESCRIPTION Total Generation (BU) (^) Total Coal Requirement (MT) including Transit Loss @1% Coal Availability From CIL (MT) # From SCCL (MT) $ From Captive Mines Total Availability (MT) Gap between Supply & Demand (MT) Net Imports
2007-08 2008-09 2009-10 2010-11 2011-12 499.5 536.0 587.9 660.8 764.5 354.9 380.4 417.6 470.0 544.5
287.3 27.0 9.8 324.0 -30.9
311.6 27.2 23.6 362.3 -18.1
343.8 27.7 36.5 408.0 -9.6
376.7 28.4 41.5 446.6 -23.4
405.8 29.0 47.3 482.1 -62.4
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CIL: COAL INDIA LIMITED, SCCL: Singareni Collieries Company Limited (^) Generation is projected (as projected by CEA), assuming PLF of 76% in 2006-07 & 200708 and 77% in subsequent years existing units and 85% for new capacity additions, with due consideration of initial commissioning period for new units. # Coal India Limited (CIL) projection of Coal Production including their emergency production plan, considered here, is provided by Working Gr. member from CIL. Distribution of around 72% of CIL coal to Power Sector (except CPPs) considered here based on historical supply figures and as considered by CEA for their computation & analysis purpose. $ SCCL?s projection of Coal Production, considered here, is provided by SCCL. Distribution of around 71% of SCCL coal to Power Sector (except CPPs) considered here based on historical supply figures and as considered by CEA for their computation & analysis purpose.
Precautions taken by companies
To meet the above mention challenges various initiatives have been taken by the government and the players of the power sector some of them are as follows: ¾ Domestic power companies acquire coal mines abroad – Many power generation companies are acquiring stakes in coal mines abroad. For instance, ™ Recently GMR Energy acquired 5% stake in a South Africa based coal firm (Homeland Mining and Energy), ™ Tata Power has acquired 30% stake Indonesia based coal firm (PT Kaltim Prima Coal & PT Arutmin), ™ Reliance Power has acquired three coal mines in Indonesia have extractable deposited of 2 Btn., ™ NTPC, the biggest player of India?s power sector, is also looking at Indonesia, Mozambique and South Africa. ¾ Power companies can import under the open general licence ¾ Adoption of super critical technology for it increases the energy efficiency of the power plants which in turn decrease the quantity of coal needed per unit of power generation. Currently the energy efficiency of coal based plants is 31%, this is expected to increase to increase to 33% at the end of 11th Plan and further to 40% at the end of 12th Plan. Besides helping to lessen the demand-supply gap this technology also lower the emission level.
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Future Outlook
For meeting future electricity demand, coal would necessarily continue to remain the primary fuel. ¾ Imported coal based thermal power stations, particularly at coastal locations, would be encouraged based on their economic viability. ¾ Generating companies may enter into medium to long-term fuel supply agreements especially with respect to imported fuels for commercial viability and security of supply. ¾ Moreover reform in mining sector is expected which would help to overcome problems like lack of timely availability of fuel to the power plants. Incorporation of new technologies like super critical technology and use of low ash content coal would also help in reducing the problem of emissions. Use of gas as a fuel for power generation would depend upon its availability at reasonable prices. ¾ Natural gas is being used in Gas Turbine /Combined Cycle Gas Turbine (GT/CCGT) stations, which currently accounts for about 10 % of total capacity. ¾ Power sector consumes about 40% of the total gas in the country. New power generation capacity could come up based on indigenous gas findings, which can emerge as a major source of power generation if prices are reasonable. ¾ A national gas grid covering various parts of the country could facilitate development of such capacities. ¾ Imported LNG based power plants are also a potential source of electricity and the pace of their development would depend on their commercial viability. ¾ The existing power plants using liquid fuels might shift to use of Natural Gas/LNG to reduce the cost of generation. ¾ The overall PLF of thermal plants which increased during the tenth Five Year Plan at a CAGR of 1.9% will further increase during the eleventh Plan although at a lower CAGR due to fuel shortage which power sector might face during this period. ¾ Initiatives taken by GoI in increasing level of participation of private sector and adoption of new technologies will lead to considerable improvement in the PLF of the thermal plants in future.
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Funding Requirements
Thermal Power Plants for 2017-2012 Type Sector PUC MW Central State Private Total 7200 5852 3202 16254 Rs. Crore 16917 7959 6818 31694 CP MW 15110 16000 2760 33870 Rs. Crore 57865 60970 11040 129875
PUC: Project Under Construction, CP: Committed projects
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Hydropower
Overview
Hydropower is a renewable, economical, non-polluting and environmentally benign source of energy. Developing hydropower enhances energy security and there is no fuel cost during the life of the project. Its generation is unaffected by issues concerning fuel supply, particularly the volatile prices fluctuations which affect imported fuels. Hydropower stations are capable of instantaneous starting and stopping and are able to accommodate various loading alternatives. They help in improving the reliability of power systems and are ideal for meeting demand during peak times. Despite the benefits of hydroelectric projects, hydropower?s share of the Indian market for power has steadily declined. At the time of independence (late 1940?s), hydropower constituted 37% of the total installed capacity in the power sector, and rose to more than 50% by the year 1963. Until the late 1970?s, hydropower continued to represent more than 40% of India?s power supply. This was considered at the time to be the ideal hydrothermal mix for meeting demand in an efficient manner. However, in the 1980?s, hydropower?s share began declining sharply and at present hydropower constitutes only about 25% of the overall installed capacity of the country. SHARE OF HYDROPOWER IN INDIA‘S INSTALLED CAPACITY
YEAR 1962-63 1969-70 1979-80 1989-90 1991-92 1993-94 1997-98 2007-08 INSTALLED CAPACITY (MW) 5801 14102 28448 63636 69070 76718 89090 141499 HYDROPOWER CAPACITY (MW) 2936 6135 11384 18308 19189 20366 21891 35378 %AGE SHARE 50.6 43.5 40 28.8 27.8 26.6 24.6 24.7
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To meet the present demand for peaking and non-peaking power, it is estimated that a hydro-thermal mix of 40:60 would be ideal mix. However as a result of the decreasing share of hydropower, thermal generation, which should ideally be used only for base load operations, is also being used to meet peak requirements. This has lead to sub-optimal utilization of economic and perishable resources.
As per the CEA, in terms of hydroelectric generation installed capacity as on Feb 28, 2008, India has only utilized approximately 23.8% of its estimated hydroelectric potential of 148,701 MW. India, therefore, is lagging behind other countries, such as Norway, Canada and Brazil, which all utilize more than 30% of their hydro potential.
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Technology
Hydroelectric energy is a clean, renewable and a sustainable energy source. In a hydroelectric power station, energy is harnessed from water by running it from a higher height to a lower height and in the process, driving a hydro-turbine, which rotates an alternator to produce electricity.
The principal classifications for the various types of hydro development are: Run-of-the-river scheme: In this type of scheme electricity is generated from the water flow of a river or other moving water source. This type of project generally has no reservoir to store water inflow from the catchment area. Storage ponds can be constructed to divert water in a run-of-the river scheme; however these storage ponds do not have an impact on the flow of the water source. Storage ponds on runof-the-river schemes (pondage schemes) are used to mitigate the impact of shortterm variations in the water flow. The gestation period for these projects is lowest compared to other type of Hydro projects. These projects are generally constructed on a perinial river, to get un-iterrupted supply of water. The flip side is that the wear & tear of hydro turbine is faster in this scheme due to silt congestion. Therefore the scheme requires high O&M cost and replacement time for the turbine is earlier. Storage schemes: These schemes include a reservoir is which seasonal surplus of water in excess of demand is stored for use of generating electricity in seasons of lower flows when demand exceeds inflow. In a storage scheme there is much greater flexibility for modulation of inflows. It can have annual or even carry-over capacity from one year to the next. Tidal plant Schemes: In a tidal plant scheme, electric power is generated by virtue of the daily differences in tidal levels. The tidal range, or amplitude, is given by the difference between the high tide level and the subsequent low tide level. The tidal
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range is not constant even at one site but fluctuates to a smaller or larger extent around a local mean value depending on geographical position. Pumped storage schemes: In these schemes water generates power during peak demand, while the same water is pumped back in the reservoir during lean demand period. A pumped storage plant operates on the principle that the same machines are used for generation of power during peak hours when power is given to the network and for pumping back water into the reservoir during off peak hours, utilizing power from the system. The provision is based on economics of operation and the availability of enough spare capacity in the grid to operate the machines as pumps in the low load period. This scheme is ideal for the last leg project on the river.
Status:
Sector XI th Plan Target 8981 4929 1675 15,585 (Figure In MW) PUC 6727 4529 675 11,931 CP 2254 400 1000 3,654
Run Of River Scheme Storage Scheme Pumped Storage Scheme Hydro PUC: Project under Construction CP: Committed Projects
Growth Drivers
¾ A renewable, economical, non-polluting and environmentally benign source of energy. ¾ No fuel cost during the life of the project. ¾ Its generation is unaffected by issues concerning fuel supply, particularly the volatile prices fluctuations which affect imported fuels. ¾ Hydropower stations are capable of instantaneous starting and stopping and are able to accommodate various loading alternatives. They are ideal for meeting demand during peak times.
Major challenges
¾ Impact on Environment: Hydroelectric projects do create environmental issues emanating from submergence of large areas also involving forest. ¾ Rehabilitation & Resettlement (R&R) of Project Affected People ¾ Safety of dams ¾ Construction time is another area of concern, which needs to be compressed. Large projects have taken inordinately long time.
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Govt. of India Initiative on Hydro Power Development
¾ Additional budgetary financial support for ongoing and new hydro projects under Central Public Sector Undertakings. ¾ The government has allowed private companies to develop hydropower projects on cost-plus basis, instead of tariff-based bidding, bringing private power players on a par with public sector peers. This will encourage private companies to develop hydro projects which otherwise involves high risk due to higher uncertainties involved. ¾ In order to enable the project developer to recover the costs incurred by him in obtaining the projects site, merchant sale of up to a maximum of 40 percent of the sale-able energy has been allowed ¾ State Government to follow a transparent procedure for potential sites to the private sector ¾ Resolution of inter-state issues on sharing of water and power. ¾ Renovation, Modernization & Up rating (RM&U) of existing hydro stations ¾ Promoting small and mini hydel projects – 25 MW and below now fall into category of ?non conventional‘ qualifying for benefits. ¾ Simplified procedures for clearances by Central Electricity Authority; Electricity Act 2003 further liberalises this. ¾ Promoting hydel projects in joint venture ¾ Government support for land acquisition, resettlement and rehabilitation, catchment area development, etc.
Future Outlook
Hydroelectricity is a clean and renewable source of energy. Maximum emphasis would be laid on the full development of the feasible hydro potential in the country. The 50,000 MW hydro initiatives have been already launched and is being vigorously pursued with Detailed Project Reports for projects of 33,000 MW capacity already under preparation. The hydro capacity additions envisaged under various Five Year Plans are given in the table below.
Plan Period Hydro Capacity Total Hydro Addition (MW) Capacity at the end of plan 16553 (MW) 51207 30000 81207 31000 112207 36494 148701
11th Plan (2007-08 to 2011-12) 12th Plan (2012-13 to 2016-17) 13th Plan (2017-18 to 2021-22) 14th Plan (2022-23 to 2026-27)
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As is evident from the table India plans to harness its total estimated hydroelectric potential (i.e. 148701 MW) by the end of year 2027. It will also facilitate economic development of States, particularly North-Eastern States, Sikkim, Uttaranchal, Himachal Pradesh and J&K, since a large proportion of our hydro power potential is located in these States. The Central Government will support the State Governments for expeditious development of their hydroelectric projects. Proper implementation of National Policy on Rehabilitation and Resettlement (R&R) would be essential in this regard so as to ensure that the concerns of project-affected families are addressed adequately.
Funding Requirement
Hydro Power Plants for 2017-2012 Type Sector PUC MW Central State Private Total 7633 2107 2191 11931 Rs. Crore 18929 1935 8835 29699 CP MW 2052 530 1072 3654 Rs. Crore 8301 2414 4399 15114
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Nuclear Power
Overview:
Nuclear is environmentally benign source of energy and over a period of time, its proportion in total capacity should increase. the installed capacity at the end of the 10th Plan was 3900 MW (3% of total). Keeping in view the availability of fuel, a moderate capacity addition of 3,160 MW nuclear plants has been programmed during the 11th Plan by the Nuclear Power Corporation. All projects are presently under construction. However, in view of the recent developments in the Nuclear Sector, capacity addition in nuclear plants during 12th Plan is expected to be much higher.
Technology
Light Water Reactor (LWR)
A light water reactor or LWR is a thermal nuclear reactor that uses ordinary water, also called light water, as its neutron moderator. This differentiates it from a heavy water reactor, which uses heavy water as a neutron moderator. In practice all LWRs are also water cooled. While ordinary water has some heavy water molecules in it, it is not enough to be important in most applications.
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Pressurised Heavy Water Heater (PHWR)
A pressurised heavy water reactor (PHWR) is a nuclear power reactor that uses unenriched natural uranium as its fuel and heavy water as its moderator (deuterium oxide D2O). The heavy water is kept under pressure in order to raise its boiling point, allowing it to be heated to higher temperatures and thereby carry more heat out of the reactor core. While heavy water is expensive, the reactor can operate without expensive fuel enrichment facilities thus balancing the costs.
Fast Breeder Reactor (FBR)
A fast Breeder reactor or simply a fast reactor is a category of nuclear reactor in which the fission chain reaction is sustained by fast neutrons. Such a reactor needs no neutron moderator, but must use fuel that is relatively rich in fissile material when compared to that required for a thermal reactor. On average, more neutrons per fission are produced from fissions caused by fast neutrons than from those caused by thermal neutrons. Therefore, there is a much larger excess of neutrons not required to sustain the chain reaction. These neutrons can be used to produce fuel. Status:
XI th Plan 660 2000 500 (Figure In MW) PUC 660 2000 500 CP -
Sector PHWR LWR FBR
Nuclear 3,160 3,160 PUC: Project under Construction
Financing: Nuclear Power Plants for 2017-2012 Type Sector Central Total PUC MW 3160 3160 Rs. Crore 8970 897 0 CP MW Rs. Crore -
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Wind Power
Overview
Global Wind 2006 Report has noted that the global wind energy industry has been growing at the staggering rate of nearly 30 % per year for the last 10 years, and experts predict that there is no end in sight for this boom. While a large proportion of this development is happening in Europe, other markets, especially Asia and North America are catching up fast. And the strongest market in Asia is India which is the new ?Wind Superpower‘. Wind, with declining trend of cost and increase in the scale of wind turbine manufacturing, promises to become a major power source globally in the first few decades of this millennium. India is now the fourth largest wind power generator in the world after Germany, Spain and USA. Five nations – Germany, USA, Denmark, India and Spain account for 80% of the world?s installed wind energy capacity. Wind energy continues to be the fastest growing renewable energy source with worldwide wind power installed capacity reaching 93,849 MW in December 2007, up from 74,153 MW in 2006. (Source: www.wwindea.org). Today, the capital cost of wind power projects in India range between Rs. 4.5 to 5.5 crores per MW. This gives a low levelized cost of energy generation taking into consideration the fiscal benefits extended by the Government. Moreover the Indian government has introduced a package of incentives, some of which include tax concessions such as 80% accelerated depreciation, tax holidays for power income, soft loans, customs & excise duty relief and liberalized foreign direct investment procedures.
Various financial incentives & benefits:
¾ ¾ ¾ ¾ ¾ ¾ 80% depreciation in the first year. Operation and maintenance costs are low. Zero input fuel cost. Pay back in shorter duration. Cost of generation very low after payback period. Zero import duty on certain parts. 40
¾ Tax holidays for newer power projects for 10 years. ¾ Wheeling to SEB grid is easy and so no marketing problems. The Indian Renewable Energy Development Agency (IREDA) is playing a significant role in promoting Renewable Energy Projects, in general and Wind Energy Projects in particular. Renewable energy is expected to create maximum impact in the production of electricity. Projections indicate that by the end of the first decade of the new century, it would be cost effective to generate and supply renewable electricity, aggregating to several thousand megawatts, as the efficiencies in the power generation through wind energy are increasing and costs are decreasing, while the costs of conventional electricity are increasing. Besides grid supply augmentation, renewable electric technologies offer possibilities of distributed generation at or near points of use, which can reduce peaking loads and save on costly up-gradation and maintenance of transmission and distribution networks growing demand. There are no major technical barriers for large scale penetration of wind power.
Wind energy contribution in India‘s power generation capacity
The Government of India identified the importance and potential of wind power generation as early as 1983, when it commenced a national wind power program to tap the then estimated potential of 45,000 MW. The Government of India?s marketoriented approach subsequently led to the commercial development of wind power technology in India. The broad based national program concentrates on wind resource assessment activities, research and development support, implementation of demonstration projects to create awareness, establishment of new sites, involvement of utilities and industry, growth of infrastructure capability and capacity for manufacture, installation, operation and maintenance of WTGs and policy support. India has made steady progress in the development of wind power since the inception of the national wind power program and in 2005 it was the fourth largest country in the world with installations of 4201 MW. It has been estimated that the cumulative installed MW capacity for wind power in India will grow from 3,000 MW in 2004 to 8,300 MW in 2009, representing a CAGR of 22.6%. The installed capacity as on 31st Dec, 2007 is as follows:
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State Andhra Pradesh Gujarat Karnataka Kerala Madhya Pradesh Maharashtra Rajasthan Tamil Nadu W est Bengal Others Total (All India)
Gross Potential (MW )
Technical Potential (MW )
1750 1780 1120 605 825 3020 895 1750 450 12875
Installed Capacity (MW ) 31stDec, 2007
122.4 874.8 917.2 2 70.3 1646.3 495.7 3711.5 1.1 3.2 7844.5
8275 9675 6620 875 5500 3650 5400 3050 450 2990 45195
Technology
The state of art technology of wind turbine generator converts the kinetic energy of the wind into mechanical energy. The kinetic energy of wind is transferred though blades of wind generator into mechanical energy and drives the shaft of the generator. This mechanism transfers the rotary movement to the generator through gears and mechanical energy is converted into the electrical energy. The electrical energy is then supplied into the grid after stepping-up to a required electrical voltage. The wind turbine system consisting of blades, shafts, gears and generator, is controlled by the sophisticated computer controlled system installed at the base of the tower, which also have sensors to sense the wind speed and its directions to switch on and off the wind turbine generator. A modern wind turbine is designed to generate high quality, network compatible electricity for more than 20 years, with remote monitoring and relatively low maintenance.
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There have been three major trends in the development of wind turbines in recent years: ¾ Larger capacity and taller turbines: Increase in individual turbine power output capacity over the last 25 years, from 30 kW machines in 1980 to prototypes of 5,000 kW machines in 2005. ¾ Increased efficiency: An overall efficiency increase of 2-3% annually over the last 15 years ¾ Investment costs have decreased: Significant technological developments including size, together with economies of scale in production, have reduced the cost of wind energy generation by approximately 80 % over the past 25 years. Currently design efforts are focused on addressing grid compatibility, further improvements to acoustic performance and the emerging offshore market.
Growth Drivers
The TERI Report cites the following as the key drivers for the growth of the wind energy industry in India: ¾ Wind power is a renewable based power generation technology which has demonstrated sufficiently low risk to gain the attention of the financial community and independent power developers for near-term projects. Significant technology advances have occurred since the first wind power plant was installed in the country in early eighties. ¾ The short gestation period (approximately 4-6 months for a wind energy project to begin generating electricity) offers wind energy as a viable alternative to conventional forms of power generation. ¾ Industrial learning curve theory suggests that costs decrease by about 20% each time the number of units produced doubles. ¾ In so far as impacts on the power systems are concerned, it is an established fact that addition of wind power results in (a) Reduction in technical losses, and (b) Strengthening of voltage levels. Detailed studies have shown that the levelized annual cost of wind power is less than that of a new thermal power station. While the cost of energy from a thermal power station is initially low, it continues to increase with increases in the cost of fuel. On the other hand, the cost of wind energy is initially high and reduces as loans are repaid as no variable cost is involved. Therefore, the initiatives taken by the Government of India and the various State Governments in relation to the establishment of a supportive and stable policy framework for investment in wind power have contributed to the recent growth of the Indian wind power industry. As a result, India today has among the world's largest sustainable programs for renewable energy such as wind.
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This protocol and new European Union Emission rules (EUR) have created a market in which companies and Governments that reduce GHG emission levels can sell the ensuing emission reduction / carbon credits to Countries that are exceeding their GHG emission quotas. According to Mr. R.K. Jain, CEA member (Thermal) global carbon market is to the tune of 450 million tons per annum, of which India can capture about 100 million tons per annum (approx. 22% market share) during 200812, the first time line under the Kyoto Protocol to reduce carbon emissions
Ministry for Non-Conventional Energy Sources
The Ministry for Non-Conventional Energy Sources (MNES) was conceived in 1992 as a result of the Government of India?s recognition of the potential of wind energy and other forms of renewable for the purposes of national development. The MNES has revised its estimate for gross wind power potential in India from 20,000 MW to 45,000 MW. The MNES estimates the technical potential at approximately 13,000 MW (assuming 20% grid penetration), which is expected to increase with the augmentation of grid capacity. The MNES continues to encourage State Governments to implement national policy guidelines set for wind power projects. The MNES has been working closely with the various State Governments, as a result of which States with wind power potential have introduced policies pertaining to the purchase of power, wheeling and banking in order to provide a framework for investment in wind power. For example, the Maharashtra Energy Regulatory Commission intends to make 750 MW of new wind power available for sale to utilities by March 2007 and has imposed a Rs. 0.04 per unit green power cess on commercial and industrial users in order to promote non conventional renewable energy projects. Recent National regulatory and legislative initiatives in India further support the expansion and development of the wind energy industry: The new Electricity Act 2003, for example, dictates that all State-level Energy Regulatory Commissions must ensure that electricity distributors procure a specified minimum percentage of power generation from renewable energy sources. As a result of the Government of India?s strong emphasis on the development of the wind energy sector, the MNES projects that 10% of India?s 2,40,000 MW installed capacity requirement by 2012 will derive from renewable sources and that 50% of this capacity will come from wind power.
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Wind Energy potential in India
India has a high potential for wind energy. The adjoining figure shows the wind resources in 10 states in India. Exhaustive wind resource assessment carried out in more than 483 stations spread over 20 States As on date 498 Wind Monitoring stations have indicated wind power density > 200 W/m2 at 50 m above GL. Micro Survey of Wind Resource for 211 Wind Monitoring Stations have been completed to understand the zone of influence and Wind Power Potential around the stations. Wind farms have been installed in more than 10 States.
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Major Challenges
¾ Difficulties in getting suitable land ¾ Grid connections – intra state and inter state ¾ Reliable data on wind resources. As is evident from the table showing the installed capacity as on 31st Dec, 2007 the installed capacity in Tamil Nadu (3711.5 MW) exceeds both the technical (1750MW) and gross potential (3050MW).This cast apprehension about the actual potential. Moreover lack of reliable data discourages investment in this segment. ¾ Small wind turbines
Future Outlook
As per projections made by Ministry of Non-Conventional Energy Sources, 2,40,000 MW has been the estimated total installed capacity of power projects by the year end 2012. Out of the total, 10% of the 2,40,000 MW (i.e. 24,000MW) installed capacity requirement will come from renewable sources of the energy. Further, it is envisaged that 50% of this capacity or 12,000MW may come from wind power. India has now gained sufficient technical and operational experience, and is now on the threshold of "taking off" in wind power. It offers a viable option in the energy supply mix, particularly in the context of the present constraints on conventional sources. It also offers an attractive investment option to the private sector, in the context of the recently announced policies and drive towards private sector generation. Therefore, the potential for growth is not confined to only conventional sources of power supply/generation but is present in the renewable segment as well.
Source/System Estimated Potential Achievement (as on 31 December 2007)
Wind Power 45,195 7844.52 Small Hydro Power 15,000 2045.61 Bio Power 16,881 605.8 Total Grid-interactive 84,776 11,273.13 renewable power Source: Ministry of New and Renewable Energy, India.
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Other Initiative taken by the GOI
Ultra Mega Power Plant (UMPP)
Background:
Ministry of Power, Central Electricity Authority and PFC are working together to facilitate development of Nine Ultra Mega Power Projects with the capacity of about 4,000 MW each under Tariff based competitive bidding route. Being large in size, these projects will meet the power needs of number of states through transmission of power on regional and national grids. Each project shall cost close to Rs. 16000 crores, and shall be awarded on Build Own Operate basis, through International Tariff Based Competition bidding route. The projects shall make use of super critical technology in generation of power, which shall lead to higher efficiencies, and low emission of green house gases. Guidelines for determination of tariff for procurement of power by distribution licences have been notified in January 2005 under the provisions of the Electricity Act, 2003. The Power Finance Corporation (PFC), a PSU under the Ministry of Power, has been identified as the nodal agency for this initiative.
Bidding Process:
Bidding is a two stage selection process. The first stage of bidding involves Request for Qualification (RfQ) containing qualifying criteria for selection of bidders. The documents submitted by the bidders are evaluated to identify those bidders who will be eligible to participate in the second stage of the process. After identifying the qualified bidder, the second stage of the bidding process invites Request for Proposals (RfP) from these bidders. After evaluation of the documents, the successful bidder is identified on the basis of the lowest levellised tariff.
Selection of Site for UMPP
Nine such projects had been identified to be taken up, 4 at pithead and 5 at coastal locations. The nine sites for the UMPPs identified by the Central Electricity Authority (CEA) in consultation with the States are as follows:¾ Five coastal sites at: Mundra in Gujarat, Krishnapatnam in Andhra Pradesh, Tadri in Karnataka, Girye in Maharashtra, and Cheyyur in Tamil Nadu.
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¾ Four pithead sites at: Sasan in Madhya Pradesh, Tilaiya in Jharkhand, Sundergarh District in Orissa, and Akaltara in Chhattisgarh. In addition Tamil Nadu has identified additional site at Marakanam. Further, more Karnataka has also suggested an additional site at Ghataprabha in Belgaum District. The Central Electricity Authority is examining the preliminary feasibility of these sites for development of UMPPs.
Role of the Ministry of Power
The Ministry of Power is playing an important role for the development of the UMPP‘s by coordinating between various concerned Ministries/Agencies of the Central Government, and with various State Governments/Agencies. Some of the key areas requiring the Ministry of Power‘s intervention include – ¾ Coordination with Central Ministries/Agencies for ensuring Coal blocks allotment/coal linkage, Environment/forest clearances & Water linkage. ¾ Working out allocation of power to different States from UMPPs in consultation with the States. ¾ Facilitating Power Purchase Agreement and proper payment security mechanism with State. ¾ Monitoring the progress of Shell companies with respect to predetermined timelines.
Role of Power Finance Corporation
PFC is the nodal agency in awarding the projects. It has set up separate Special Purpose Vehicles (SPVs) for each of the 9 UMPPs identified so far to act as authorized representatives of the procurers (distribution companies of the power procuring States). These SPVs are 100% owned subsidiaries of the PFC. The names of the SPVs are: Sasan Power Limited for the project at Sasan, Madhya Pradesh. Coastal Gujarat Power Limited for the project at Mundra (Gujarat). Coastal Karnataka Power Limited for the project at Tadri, Karnataka. Coastal Andhra Power Limited for the project at Krishnapatnam, Andhra Pradesh. Coastal Tamil Nadu Power Limited for the project at Cheyyur in Tamil Nadu. Coastal Maharashtra Mega Power Limited for the project at Girye, Maharashtra. Orissa Integrated Power Limited for the project in Sundergarh District in Orissa. Jharkhand Integrated Power Limited for the project near Tilaiya dam, in Jharkhand. ¾ Akaltara Power Limited for the project at Akaltara in Chhattisgarh. ¾ ¾ ¾ ¾ ¾ ¾ ¾ ¾
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Role of SPVs
The SPVs are responsible for carrying out various activities on behalf of the procurers. Completion of these activities prior to award of the project is considered necessary to enhance the investor‘s confidence, reduce risk perception and get a good response to the competitive bidding process. Some of the main activities undertaken by the SPVs are:¾ Appointment of Consultants for preparation of Project Report, Rapid Environment Impact Assessment Report, and International Competitive Bidding (ICB), document preparation & evaluation. ¾ Finalise RfQ/ RfP documents in consultation with States/bidders, carry out RfQ/ RfP process, and award of project. ¾ Acquisition of land for the project ¾ Obtaining Coal blocks for pit-head projects ¾ Getting various clearances regarding use of water, and other amenities by the State Govt. for pithead locations ¾ Tie up the off-take/ sale of power
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Status of Projects
PROJECT TYPE SUCCESSFUL BIDDER
MUNDRA, SASAN, M.P. GUJARAT COASTAL PIT HEAD TATA POWER LTD. RELIANCE POWER LTD.
LLT (RS./KWh) SPV
PPA DATE EQ. ORDER
BOILER TURBINE GENERATOR
COAL LINKAGE
KRISHNAPATNAM, A.P. TILAIYA, JHARKHAND COASTAL PIT HEAD RELIANCE POWER LTD. RfQ has been recived by 13 cos, 10 cos qualified for RfP 2.26 1.196 2.333 Jharkhand Coastal Gujarat SASAN POER Coastal Andhra Power Integrated Power Power Limited LTD. Limited Limited (CGPL) 22.04.07 07.08.07 23.03.08 TOSHIBA CORP., FIVE GLOBAL EQ. NEGOTIATION WITH BHEL NA JAPAN MAJORS FOR EPC CONTRACT. Ltd Korea Doosan Heavy SHORLIST ORDER SIZE Rs. Industries & ED 8000Construction Co. 10000 CRORES IMPORT, Moher, MoherIMPORT, INDONESIA TENTATIVELY Amlori Extension AUSTRALIA, and Chhtrasal INDONESIA, coal blocks SOUTH AFRICA reserves of about 800 million 17000 20000 30/70 Sep-11 SEVEN PRODUCERS NA May-13 NA RAJ,DELHI,HAR,U A.P.,T.N,KR,MAH. TTARKHAND 17000
OTHER UMPP
VARIOU S STAGES OF PRE BIDDING WORK
COST (Rs. CRORES) FINANCING COMMISIONING SALE EQUITY/DEBT 25/75
Merchant Power Plants
Overview
A merchant power plant is funded by investors and sells electricity in the competitive wholesale power market. Since a merchant plant is not required to serve any specific retail consumers, consumers are not obligated to pay for the construction, operations or maintenance of the plant. The merchant power plants are not tied up with longterm power purchase agreements (PPA). Independent power producers (IPPs) who opt for this route will have to do so at their own risk. Setting up a merchant plant would necessarily mean balance sheet financing by he developer, as financial institutions/lenders may as a rule, may not be comfortable with projects that don‘t have long-term PPAs. Given considerable demand-supply mismatch, sale of competitively – priced power
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should not pose a problem. Consider that in between April and Jan‘08, against a demand of 107010 MW, only 90793 MW power was available – a peak shortage of 15.2%. This situation is likely to persist. The ministry of power intends to add 10,000 MW capacity additions through Merchant Power Route in 11th Plan. In its guidelines for the allocation of coal blocks and coal linkages for the power sector, the ministry of power said, ?merchant power plants fill different niches in the market; some provide steady supplies to a power grid, while others fire up only when demand is highest and meet peak loads.? Merchant power plants operating competitively help assure that power is produces with efficiency and supplied to locations where it is needed most?. The government has set the plant size between 500 MW and 1,000mw. This is not merely because the national tariff policy mandates all new private sector projects to come through the competitive bidding process. There are transmission constraints as well. The transmission system will not be able to support evacuation of power from large sized merchant plants.
To ensure that large volumes of power can be evacuated, dedicated transmission systems would be required. This would mean that customers for power produced by these plants have been tied up. Such projects would require transmission systems that are planned and executed in tandem with the generating plant. So that when the plant begins producing power, the transmission lines are in place to evacuate power from the plant to the consumer. Merchant plants, by definition, do not have pre-identified customers. This would mean that these plants would have to depend on redundancies in the existing transmission system to evacuate power. The ministry is working on a via media where the merchant plant of capacity 500 mw to 1000 mw can be accommodated in the national grid, which would have redundancies. The ministry of power believes that a limited number of merchant plants will enable the development of an electricity market. ?A few merchant plants of 500 mw to 1000 mw could be easily handled through the transmission system and it is an option for creating a market as it would promote power trading on short-term, medium –term and spot market basis.?
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Key Issues:
Hitch in Coal
The Ministry wants to encourage coal-based Merchant Power Plants and allocate coal blocks to them. These plants cannot be switched on and off at will. They will require an eight- to ten-hour cycle time to stop and start, and even then the fuel loss is very high. There role is of a ?GAP FILLER‘, i.e. they typically have to supply whenever there is demand. Peaking stations are to operate only in the peak hours. This being so, coal is not a recommended fuel at all for Merhant Power. Natural gas is the only option. Given the pricing and availability, natural gas-based stations are not feasible unless supplies are assured.
Financing
With so much uncertainty, financing them would be a major concern. While NTPC, BHEL, etc., alone can put up their balance sheet for these projects; no other private operator is capable of exposing their books for such ventures. Even in the case of NTPC or BHEL, they may set up a few peaking stations near the gas pipelines and but would not go for capacities such as 1000MW. Thus, given the complexity of the Indian market, the scheme for Merchant Power Plants may remain a dream unless the market reforms totally and free access is made available to the consumer for creation of a competitive market.
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Supercritical Technology
Supercritical generation means power plants are able to operate at higher boiler temperatures and pressures, resulting in an improved thermal efficiency of around 40-45%. Supercritical coal fired power plants have much lower emissions than subcritical plants for a given power output. These include the turbine-generator set, the once-through boiler and operational issues such as load change, fuel flexibility and water. Worldwide, more than 400 supercritical plants are in operation. The GOI felt the need to bring this technology in India due to two main reasons ¾ To meet the huge surging demand of power ¾ Generation of power through efficient & clean technology. In the 11th Plan approximately 18-20% of the power project commissioned shall be based on super critical technology, whereas in 12th plan, 50-60% of the power project shall be based on this technology.
Key Issues for units set up under this Technology:
¾ ¾ ¾ ¾ Huge amount of Coal & Water requirement. Setting up of Extra High Voltage Transmission lines for power evacuation Land Clearance & Rehabilitation issues Huge Capital Investment for domestic equipment cos. to develop this technology
In the First Phase of Super Critical Technology developed by NTPC six projects were awarded, apart from this, all the Ultra Mega Power Plants developed in the country shall also run on super critical technology Projects 3x660 MW 3x660 MW 5x800 MW Power Plant SIPAT-1 BARH-1 Mundra LTD) (TATA Equipment Order Doosan (Korea) Power Machines (Russia) POWER Toshiba (JAPAN)
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In the Second Phase of the projects development by NTPC, 13 Projects are in the Pipelines, wherein BHEL has been committed equipment order for at least 5 projects Projects in Pipeline 7x660 MW 6x800 Mw BHEL 3x660 MW 2X800 MW
Domestic Development of Supercritical Technology
BHEL: Bharat Heavy Electrical Limited had entered in a technical alliance with Alstom, France & Siemens, Germany to development this technology domestically. The above committed projects, is an endeavour by GOI to develop the expertise of domestic firm in this area. Larsen & Tubro Ltd.: Larsen & Tubro Ltd. is the first and only private player to enter into supercritical technology. It has formed a 51:49 JV with Mitsubishi Heavy Industries (MHI) to develop Super Critical technology. It has earmarked expansion plans of 4000 MW to develop this technology.
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Case Study: National Thermal Power Corporation
NTPC is country biggest power producer. It accounts for 20% of the country total installed capacity, and 28% of energy generation.
Present Status:
¾ 20% of total power generation capacity (27904 MW). During 10th Plan, Company added 7155 MW. ¾ it is the Central Generation Utility, along with NHPC. ¾ Capacity Break Up: Coal based: ¾ 22895 MW, ¾ Gas Based: 3955 MW ¾ JVs ¾ Sail (Coal): 314 MW ¾ Ratnagiri (Gas): 740 MW
Future Plans
• • • • Out of 78000 MW of total power capacity to be added in 11th Plan, NTPC would be adding 22000 MW (28%), and further 25000 MW by 2017, thereby taking total installed capacity to 75000 MW. Main Plant orders have been placed to the tune of 13360 MW & remaining orders for 9000 MW are to be placed within a year. Initialed a model long term coal supply agreement for a period of twenty years with Coal India Limited to ensure adequacy, reliability, quality and appropriate pricing of coal supplies to our power stations. Moving ahead to become an integrated power major, with presence across entire energy value-chain through backward and forward integration into areas such as coal mining in India and abroad, gas and oil exploration, LNG Value-Chain, power trading, distribution, etc. Taking steps to add 1,000 MW of capacity based on non-conventional energy sources by 2017 Has signed a Business Collaboration and Shareholders‘ Agreement with Transformers and Electricals Kerala Limited (TELK) for synergy in the field of manufacturing and repair of power transformers and has decided to acquire 44.6% of stake which would enable your Company to acquire management control of TELK. NTPC to foray into nuclear technology by in the 12th Plan.
• •
•
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Chapter 3: TRANSMISSION PLANNING AND NATIONAL GRID
Overview
A reliable transmission and distribution system is important for the proper and efficient transfer of power from generating stations to load centres and beyond. In India, the transmission and distribution system is a three-tier structure comprising: ¾ regional grids, ¾ state grids, and ¾ distribution networks The distribution network and the state grids are mostly owned and operated by SEBs or licensed private players. Most of the inter-state transmission links are owned and operated by Power Grid Corporation of India Ltd. The transmission network has increased from 3,078 ckm in 1950 to more than 265,000 ckm at present.
CUMLATIVE GROWTH IN TRANSMISSION SECTOR
Target Upto Xth Actual upto Target XI Xth Plan Plan Plan 2153 1704 7132 5876 5876 11078 162 162 162 77554 75772 125000 119604 114629 150000 205349 198143 293372 3000 5700 8700 3000 93040 157469 270909 3000 5200 8200 2000 92942 156497 251439 3000 11200 14200 53000 145000 230000 428000
TRANSMISSION LINES 765 kV HVDC +/- 500kV HVDC 200kV Monopole 400kV 230kV/220kV Total Transmission Line SUBSTATIONS HVDC BTB HVDC Bipole+Monopole Total-HVDC Terminal Capacity 765kV 400kV 230/220kV Total- AC Subtation Capacity
Unit ckm ckm ckm ckm ckm ckm MW MW MW MVA MVA MVA MVA
IX Plan 971 3138 162 49378 96993 150642 2000 3200 5200 0 60380 116363 176743
In order to facilitate the transfer of power between neighbouring states, state grids are interconnected to form five regional grids. These regional grids facilitate transfer of power from a power-surplus state to a power-deficit state and it is anticipated that these grids will be gradually integrated to form a national grid. At present, the national grid has a capacity of 17,000 MW and Eleventh Five Year Plan aims to achieve national grid capacity of 37,150 MW by fiscal 2012.
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Regional Grids
In order to facilitate the transfer of power between neighbouring states, state grids are interconnected through high-voltage transmission links to form a regional grid. At present in India there are five regional grids: ¾ Northern region(NR) grid which comprises Delhi, Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Rajasthan, Uttaranchal and Uttar Pradesh; ¾ Eastern region(ER) grid which comprises Bihar, Orissa Jharkhand, Sikkim and West Bengal; ¾ Western region(WR) grid which comprises Dadra and Nagar Haveli, Daman and Diu, Chhattisgarh, Goa, Gujarat, Madhya Pradesh and Maharashtra; ¾ Southern region(SR) grid which comprises Andhra Pradesh, Karnataka, Kerala, Pondicherry and Tamil Nadu; ¾ North eastern region (NER) grid which comprises of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland and Tripura.
Situations do arise in which there is surplus availability in one state and deficit in another. Optimal scheduling of power and co-ordination between the power plants at the state level is done by the state load dispatch centre while power control and scheduling for interstate flow is operated and controlled by the regional load dispatch centres.
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By 2012 these regional grids will be gradually integrated to form a national grid, so that surplus power from a region could be transferred to a deficit region, resulting in a more optimal utilization of the generating capacity in India.
Need for National Grid
The generation resources in the country are unevenly located, the hydro in the northern and north-eastern states and coal being mainly in the eastern part of the country. The transmission system facilities had earlier been planned on regional basis with provision of inter-regional link to transfer regional surplus power arising out of diversity in demand & supply. Development of strong National Grid has become necessity to ensure reliable supply of power to all. A strong All India Grid would enable exploitation of unevenly distributed generation resources in the country to their optimum potential by providing enhanced margins in inter-regional transmission system.
National Grid
The Government of India in 1981 approved a plan for setting up a national grid. The process of setting up the national grid was initiated with the formation of the central sector power generating and transmission companies, NTPC, NHPC and Power Grid. Power Grid was made the nodal agency, responsible for planning, constructing, operating and maintaining all inter-regional links and taking care of the integrated operation of national and regional grids. The national grid, when fully operational, is expected to have a total inter-regional transmission capacity of 37,150 MW. It is expected to be fully operational by around 2012. Setting up a national grid requires the gradual strengthening and improvement of regional grids and their progressive integration through extra high voltage and HVDC transmission lines.
Name of the Scheme
East-North East-West West-North East-South West-South East-North East North East-North Other 132Kv I-R links Total
2006-07
3700 1850 2100 3100 1700 1250 0 400 14100
XIth Plan Target
7800 4650 5500 500 1000 1000 3000 23450
2011-2012E
11500 6500 7600 3600 2700 2250 3000 400 37550
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Name of the Scheme
East-North East-West West-North East-South West-South East-North East Other 132Kv I-R links Total
2007-08
5850 1850 2300 3650 1700 1250 400 17000
An investment of Rs. 1,40,000 Crores has been planned in the transmission sector in the Eleventh Five Year Plan. As given below:
Based on the updated Eleventh Five Year Plan, the projected power exchange requirement load flows among various regions for Fiscal 2012 is as set forth below: Load Flows for year Fiscal 2012 for peak demand and availability (surplus/deficit)
Load Flows for year Fiscal 2012 for off-peak demand and availability (surplus/deficit)
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Role of Powergrid Corporation of India Limited (PGCIL)
Powergrid Corporation of India Limited was set up as a Central Transmission utility to create a strong transmission network for evacuation of power generated. It is the nodal agency for transmission in India, and under takes all the transmission activities. Though it has a monopoly in transmission network, it is very efficient in its working.
Achievements
¾ During the 10th Plan, your company added 25,127 MVA of transformation capacity and 36 sub-stations at Rs. 18,865 crore. ¾ The inter-regional power transfer capacity of the national grid has increased from 5,000 MW at the end of the Ninth Plan to 14,100 MW at the end of 10th Plan. ¾ The year 2006-07 has also witnessed the successful commissioning of first public-private Joint Venture project between POWERGRID and TATA Power, namely, Tala Transmission System. ¾ Transmission network of 59,461 ckt. kms. of EHV AC & HVDC systems – along with 104 sub-stations – carries 40-45 per cent of total power generated in the country. ¾ About 1/3rd of Rajiv Gandhi Grameen Vidyutikaran Yojana are being implemented by POWERGRID. ¾ The company uptill year end 2006-07 have developed transformation capacity of 59,417 MVA. ¾ During 2006-07, we have added about 4,343 Ckt. Km. of transmission lines, 11 new sub-stations and transformation capacity of 5,040 MVA. ¾ During 2006-07, 19 new projects worth about Rs. 8,900 Crore, involving 10,250 Ckt Kms of transmission lines, 8 new sub-stations and transformation capacity of about 5,850 MVA, were approved and taken up for implementation. ¾ As on fiscal end 2007, a total of 54 transmission projects, costing about Rs. 30,000 Crore are under implementation.
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¾ Commissioning of Muzaffarpur-Gorakhpur high capacity 400 kV D/C line during the year, resulting in four regional grids, i.e. Northern, Western, ¾ Eastern and North-Eastern Regions now operating as one synchronous grid with total installed capacity of about 90,000 MW.
Future Plans
POWERGRID plans to introduce state-of-the-art technologies such as +800kV, 6000 MW, HVDC Bipole; 1200 kV AC Transmission System; High Surge Impedance Loading (HSIL) Line; Large Scale Automation of Substations; Use of Helicopter in construction & maintenance; etc. Extensive planning and studies are being carried out to implement these technologies during XI plan. The working group report on power for XIth plan, proposed an investment of Rs. 75000 crore on setting up transmission lines for inter state transfer, to increase the same from present 17000 Mw to 37500 Mw. PGCIL plans to invest Rs. 55000 crores from its own kitty, and raise the rest Rs. 20000 crore through the participation of the private sector, via JV route or 100% private participation. POWERGRID shall be able to mobilize resources for meeting the above capital investment. Loans to the tune of about Rs.15,520 Crore are proposed to be mobilized from multilateral funding agencies/ supplier‘s credit and about Rs. 22,980 Crore from domestic sources on yearly basis as per requirement. Equity requirement of about Rs.16,500 Crore would be met through internal resources expected to be generated from the company‘s operations, proposed Initial Public Offering (IPO) and enhanced business activities in Consultancy & Telecom, additional short term loans for meeting working capital requirement, sale of securitized bonds, etc.
Funding M ix
16500, 30%
38500, 70%
Debt
Equity
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Private Sector Participation in Transmission
POWERGRID has been successful in facilitating private investment in transmission sector. POWERGRID‘s first Joint Venture project, Transmission System associated with Tala Hydroelectric Project in Bhutan, East-North Interconnector and Northern India Transmission System, with M/s Tata Power was commissioned successfully in August, 2006. The project, commissioned by Powerlinks Transmission Limited, a 49:51 joint venture between Tata Power and Power Grid Corporation Limited (PGCIL), would benefit West Bengal, Bihar, Jharkhand and Sikkim. Transmission system associated with Koldam & Parbati-II is the second project proposed to be executed on JV route. The total estimated cost of the project is Rs. 660 Crore. All agreements related to formation of JV have been finalized and are expected to be signed, after receiving necessary clearances from Govt. of India. POWERGRID‘s equity in this project shall be 26% and balance 74% would be of Joint Venture partner POWERGRID is extending helping hand to Independent Power Producers (IPPs) for development of their dedicated transmission systems on consultancy basis or through Joint Ventures. In this direction, POWERGRID has signed MoUs with following five private producers for formation of Joint Ventures for implementation of transmission schemes worth about Rs. 5,000 Crore. ¾ 740 MW gas based combined cycle power project at Pallatana, Tripura (M/s IL&FS / ONGC) ¾ 1500 MW gas based power plant at Hazira, Gujarat (M/s Essar Power Ltd.) ¾ 1200 MW Teesta-III Hydro Electric Project in Sikkim (M/s TEESTA Urja Ltd.) ¾ 1000 MW Karcham-Wangtoo Hydro project (M/s Jaiprakash Hydro Ltd.) ¾ 1100 MW generation project at Surat (M/s Torrent Power AEC Ltd.) Out of above, two Joint-Venture Companies namely, M/s Torrent Power Transmission Private Limited (now known as M/s Torrent POWERGRID Limited) and M/s Jaypee POWERGRID Limited have been established.
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Besides, POWERGRID is also facilitating implementation of transmission lines under Western Region Strengthening scheme- II (Sets B&C) at an estimated cost of Rs. 1600 Crore through 100% private sector participation (IPTC route) in line with CERC directive.
Distribution
Distribution is the most critical segment of the electricity business chain. The distribution sector caters to rural and urban areas.
Rural distribution segment is characterized by:
ƒ Wide dispersal of net work in large areas with long lines, ƒ High cost of supply, ƒ Low paying capacity of the people, ƒ Large number of subsidized customers, ƒ Un-metered flat rate supply to farmers, ƒ Non metering due to high cost and practical difficulties, ƒ Low load and low rate of load growth, ƒ Consumer mix is mainly agriculture and residential
Urban distribution is characterized by:
ƒ High consumer density, ƒ Higher rate of growth of load, ƒ Consumer mix is mostly commercial, residential, and industrial
Aggregate Technical & Commercial Losses
The AT&C losses are presently in the range of 18% to 62% in various states, with average AT&C loss in the country at 34%. The major portion of losses are due to theft and pilferage, which is estimated at about Rs.20, 000 crore annually. Apart from rampant theft, the distribution sector is beset with poor billing (only 55%) and collection (only 41%) efficiency in almost in all States. More than 75- 80% of the total technical loss and almost the entire commercial loss occur at the distribution stage. It is estimated that 1% reduction in T&D losses would
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generate savings of over Rs.700 to Rs.800 crores. Reduction of T&D loss to around 10% will release energy equivalent to an additional capacity of 10,000-12,000 MW.
The Ministry of Power has been undertaking various initiatives and policy measures for bringing about improvement in the power distribution network of the country.
Accelerated Power Development & Reform Programme
?Accelerated Power Development and Reforms Programme (APDRP)‘ has been launched with the following objectives:¾ Improve financial viability of State Power Utilities; ¾ Improve commercial viability of State Electricity Boards; ¾ Reduce aggregate technical and commercial (AT&C) losses to around 10%; ¾ Improve customer satisfaction; and ¾ Increase reliability and quality of power supply. GoI provides funds under the programme as additional central assistance over and above the normal central plan allocation to those states who commit to a time bound programme of reforms as elaborated in the Memorandum of Understanding (MoU) and Memorandum of Agreement (MoA). The total fund planned under APDRP in the 10th Plan is around Rs. 40,000 crores with investment component estimated to be around Rs 20,000 Crores and incentive for cash loss reduction at Rs.20, 000 crores
The funds under the programme are provided under two components:
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Investment component - States have been categorized as special category states and non-special category states. 100% of the project cost in special category states (all North Eastern States, Sikkim, Uttaranchal, Himachal Pradesh and Jammu & Kashmir) is financed by the GoI in the ratio of 90% grant and 10% loan. In respect of other states (non-special category) the GoI finances 50% of the project cost in the form of grant and loan in the ratio of 1:1. SEBs and utilities have to arrange balance funds from other financial institutions or from their own resources as counter-part funds. As per the revised APDRP Guidelines of the GoI dated November 7, 2005, the financial assistance from the GoI will be restricted to 25% of the project cost as grant only for non special category states. For special category states the GoI will finance 90% of the project cost as grant.
Upto 2005-06 Category
Special Category Non Special Category
Investment Component Grant Loan
(%) 90 25 (%) 10 25
Counter Part Component
(%) NIL 50
From 2005-06 Category
Special Category Non Special Category
Investment Component Grant Loan
(%) 90 25 (%) -
Counter Part Component
(%) 10 75
Incentive component - This component has been introduced to motivate SEBs and utilities to reduce their cash losses that are incentivised through grant up to 50% of the actual cash loss reduction by them. Funds under incentive components are provided as 100% grant to all the states (special category and non-special category) as additional plan assistance.
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The status as on 31st October 2007:
No of projects sanctioned Total project Cost APDRP (GOI) Component Total fund released by GOI C/Part drawn from FIs Total fund utilized 571 Rs. 17,033.58 Crore Rs. 8,720.07 Crore Rs. 7,124.61 Crore Rs. 4,836.49 Crore Rs. 11,279.50 Crore
In order to increase accountability and attract private sector investments in the distribution sector, the Government has decided to focus on metering at all levels of transmission and distribution, and also for all categories of consumers. This will enable accounting and auditing of electricity supplied at all levels in the T&D system and make available reliable and accurate information on T&D losses and the consumption pattern of consumer categories in different geographical areas, while helping to identify and prevent the theft of electricity. Modern electronic energy meters can record the consumption pattern of various consumers over a time period. This can be used to implement time-of-day metering (wherein consumption is recorded at frequent intervals along with the actual time of consumption), multiple tariff plans (depending on consumption pattern). Time-of-day metering and multiple tariff plans can be used to manage demand, as consumers would shift non-essential consumption to periods of low tariffs. Electronic meters with advanced features also provide the facility of remote reading with the help of wireless or other telecommunication technologies.
The expected benefits from the programme are as follows:
¾ Reduction of AT&C losses from the existing around 60% to around 15% in five years to begin with in the urban areas and high density/ consumption areas. ¾ Significant improvement in revenue realization by reduction of commercial losses leading to realization of an additional Rs.20, 000 Crore approximately over a period of 4-5 years.
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¾ Reduction of technical losses would result in additional energy equivalent to nearly 6,000 – 7,000 MW to the system, avoiding the need of 9,000 to 11,000 MW of fresh capacity addition besides avoiding investments to the tune of Rs.40,000 to Rs.60,000 Crore ¾ Quality of supply and reliable, interruption- free power will encourage usage of energy efficient equipments / appliances, which will further lead to improvement in availability of energy. ¾ Reduction in cash losses on a permanent basis to the tune of Rs.15, 000 Crore. ¾ Distribution reform as envisaged above will help States to avoid heavy subsidies, which are given to SEBs / State Utilities by State Governments.
Achievements Under APDRP
Reduction in AT&C losses:
Although at national level the AT&C loss of state power utilities has not shown much improvement over the past three years, the loss has come down in towns where APDRP has been implemented. AT&C losses have been bought down below 20% in 215 APDRP towns in the country, of which 163 towns have been brought below 15%.
Progress of Metering:
¾ 11 kV feeders metering: At national level 98% feeders have been metered during 2006-07, as against 81% metered during 2001-02. 100% feeder metering has been achieved in 18 states & 3 UTs. ¾ Consumer Metering: During 2001-02 the consumer metering was at 78%. It has now increased to 88% during 2006-07, 100% consumer metering has been achieved in the states of Delhi, Himachal Pradesh and Kerala. Union Territories of Chandigarh, Daman & Diu, and Pondicherry have also completed 100% consumer metering
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Rajiv Gandhi Vidyuti Karan Yogna (RGGVY)
Central Govt. has launched a new scheme ?Rajiv Gandhi Grameen Vidyutikaran Yojana of Rural Electricity Infrastructure and Household Electrification? on 4th April, 2005 for the attainment of the National Common Minimum Programme (NCMP) goal, for providing access to electricity to all households in the country in five years.
Objective:
¾ Rural Electrification Corporation (REC) is the nodal agency for the scheme. ¾ Under the scheme 90% capital subsidy would be provided for overall cost of the project for provision of: ¾ Rural Electricity Distribution Backbone (REDB) with at least one 33/11 kV (or 66/11kV) substation in each block ¾ Village Electrification Infrastructure (VEl) with at least one distribution transformer in each village/habitation. ¾ Decentralized Distribution Generation (DDG) Systems where grid supply is either not feasible or not cost-effective.
Achievements:
¾ Since April, 2005, till 25th January, 2008, 45,602 villages have been electrified under RGGVY, ¾ 25,087 villages have been intensively electrified, ¾ 22, 87,016 rural households (including 18, 76,216 BPL households) have been released connections. ¾ Installation of Franchisee System to make rural electricity distribution business revenue sustainable is mandatory under the scheme. Franchisees' are in place in 14 states in 73,422 villages.
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Definition of Decentralized Distributed Generation
The GOI has proposed setting up of Decentralized Distributed Generation (DDG) to meet the power needs of the remote villages which cannot be covered by national or regional grid due to unviable economic and financial constaints. DDG is defined as installation and operation of small modular power generating technologies that can be combined with energy management and storage systems, and used to improve the operations of the electricity delivery systems at or near the end user. These technologies can be utilized for off-grid as well as grid based.
Potential for DDG
There is a potential to add 10,000 to 15,000 MW capacity through decentralized distributed generation in 11th and 12th plan. The DDG projects would help both in electrifying the villages and households and also in generating local employment. Approximately 2000 substations can be linked with 2 -5 MW DDG projects, adding a capacity of 4000- 5000 MW during 11th plan. The total cost involved will be Rs. 25000 crore approximately.
Challenges for DDG Projects
DDG is yet to be tried on a large scale in rural electrification projects. There are still many barriers—technical, financial, regulatory, and institutional—that need to be addressed adequately. In other words, a clear and well-established framework is required to design, implement, and encourage DDGs as these are expected to be aligned to the following policy/programme guidelines: ¾ Universal access to electricity in India. ¾ All BPL families to be provided single point free connection. ¾ Revenue sustainability through SEBs /franchisees. ¾ Affordable power to remote areas through cost effective DG projects. ¾ Utilization of locally available, environmentally benign renewable energy
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¾ Sources for providing power either to the grid nearer the load or on standalone basis. ¾ Facilitate development of rural load at an accelerated pace. ¾ Creation of viable and sustainable franchisee development. ¾ Availability of low cost funds and International acceptance of REC standards.
Physical and Financial outlay for eleventh Five Year Plan
Physical Financial 2007-12 2007-12 (Rs. Crores)
150000 675000 675000 8,100 20,250 15,188
Sl. Name of Segment I Lines (i) 33 KV (ii) 11 KV (iii) LV Sub-Station (i) 33/11 KV (ii) 11/0.4 KV Capacitors Service Connections to (i) Domestic Installations (ii) Commercial Installations (iii) Industrial Installations (a) HT (b) LT (iv) Public Light (v) Agriculture Total (I to IV) A. Re-conductoring of Lines (i) 33 KV (ii) 11 KV (iii) LV Total V (A) B. Augmentation of S/Ss (i) 33/11 KV (ii) 11/0.4 KV Total V (B) Total (V) Grand Total
Units Ckt Kms Ckt Kms Ckt Kms MVA MVA MVAR Nos. Nos. Nos. Nos. Nos. Nos.
II
130000 162000 15565
26,000 51,840 778
III IV
70000000 3500000 500000 50000 750000 3500000
11,620 665 900 20 188 1,400 136,950
V
Ckt. Kms Ckt. Kms Ckt. Kms
100000 2200000 700000
3,780 46,200 11,060 61,040 14,080 25,300 39,380 100,420 237,370
MVA MVA
88000 110000
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Funding Requirement for Distribution
Rs. Crore
1 Sub Transmission & Distribution for Urban & Rural areas RGGVY 2 APDRP & Other Schemes (pumpsets etc.) 3 Decentralised Distributed Generation 4 Others TOTAL
1, 97,000
40,000 2, 37,000 40,000 20, 000 10,000 3,07,000
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Transmission & Distribution Programme Beneficiaries
The implementation of T&D Programme shall result in huge no. of orders for the ancillary industries. The rapid expansion of transmission & Distribution network shall result in direct benefit to:
¾ Generator, Power T&D transformer manufacturer Major Players:
Segment >800Kv 500Kv - 800Kv 220Kv - 500 Kv Upto 220 Kv Players Areva T&D Areva T&D, ABB, Crompton Greeves, Kalpataru Power Areva T&D, ABB, Crompton Greeves, Emco, Bharat Emco, Bijlee, Voltamp, KEC Int.
¾ Meter manufacturing companies Major Players: BHEL, Areva T&D, ABB, Emco, Easun Reyrolle, Accurate Meter Co., Alstom
¾ Tansmission Lines & Tower construction contract companies
Major Players: Areva T&D, Siemens Ltd, L&T Ltd, Jyoti Strucutres, KEC International, RPG Transmission Ltd, Tata Projects Ltd.
¾ Power Project Based Companies: Sub Station, Switching Station
Major Players: BHEL, Areva T&D, ABB, Emco, Tata Projects Ltd, Siemens Ltd.
¾ Wires manufacturers
Major Players: Cable Corporation of India Ltd., Uniflex Cables Ltd., Hindustan Vidyut Products Ltd., KEI Industries.
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Capacity (units)
EHV HVDC HV LV Turnkey Basic SubStation Auxillary SubStation Meters SCADA transformers Transformers Transformers Tranformers Projects EPC Project Projects 800kv 500kv 400kv-132kv 66kv-11kv
ABB Bharat Biljee Voltamp Kalpataru Power Jyoti Structures Siemens Crompton Greeves Areva T&D Emco Ltd. KEC International L&T
12000 MVA 8000 MVA** NA 84000 Mtn* 96000 Mtn NA NA 17760 MVA^ 20000 MVA / 20000 Mtn 103000 Mtn 40000 Mtn
*Capacity to increase to 108000 Mtn by nextcompany‘s presence in the respective Cells Marked indicates qtr *capacity to increase to 11000 MVA by next qtr ^vadodra plant to be the first in India to manufacture EHV transformers ranging 800kv -1200 kv
segment
Key concerns in transmission and distribution
In India, average Aggregate technical & commercial Losses (ATC) losses have been officially indicated as 23 percent of the electricity generated. However, as per sample studies carried out by independent agencies including The Energy & Resource Institute, these losses have been estimated to be as high as 50 percent in some states. In a recent study carried out by SBI Capital Markets for DVB, the T&D losses have been estimated as 58%. With the setting up of State Regulatory Commissions in the country, accurate estimation of T&D Losses has gained importance as the level of losses directly affects the sales and power purchase requirements and hence has a bearing on the determination of electricity tariff of a utility by the commission.
Components of Power losses
Energy losses occur in the process of supplying electricity to consumers due to technical and commercial losses. The technical losses are due to energy dissipated in the conductors and equipment used for transmission, transformation, subtransmission and distribution of power. These technical losses are inherent in a system and can be reduced to an optimum level. The losses can be further sub
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grouped depending upon the stage of power transformation & transmission system as: ¾ Transmission Losses (400kV/220kV/132kV/66kV), ¾ Sub transmission losses (33kV /11kV), and ¾ Distribution losses (11kV/0.4kv) The commercial losses are caused by pilferage, defective meters, and errors in meter reading and in estimating unmetered supply of energy.
Level of T&D losses
The officially declared transmission and distribution losses in India have gradually risen from about 15 percent up to the year 1966-67 to about 23 percent in 1998-99. The continued rising trend in the losses is a matter of serious concern and all out efforts are required to contain them. The losses in any system would, however, depend on the pattern of energy use, intensity of load demand, load density, and capability and configuration of the transmission and distribution system that vary for various system elements. According to CEA vide its publication (July 1991) Guidelines for Reduction of Transmission and Distribution Losses it should be reasonable to aim for total energy losses in the range of 10-15% in the different states in India.
Reasons of high technical losses
The following are the major reasons for high technical losses in our country: Inadequate investment on transmission and distribution, particularly in subtransmission distribution. While the desired investment ratio between generation and T&D should be 1:1, during the period 1956 -97 it decreased to 1:0.45. Low investment has resulted in overloading of the distribution system without commensurate strengthening and augmentation Haphazard growths of sub-transmission and distribution system with the short-term objective of extension of power supply to new areas. ¾ Large scale rural electrification through long 11kV and LT lines.
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¾ Too many stages of transformations. ¾ Improper load management. ¾ Inadequate reactive compensation ¾ Poor quality of equipment used in agricultural pumping in rural areas
Reasons for commercial losses
Theft and pilferage account for a substantial part of the high transmission and distribution losses in India. Theft/pilferage of energy is mainly committed by two categories of consumers i.e. non-consumers and bonafide consumers. Antisocial elements avail unauthorized/unrecorded supply by hooking or tapping the bare conductors of L.T. feeder or tampered service wires. Some of the bonafide consumers wilfully commit the pilferage by way of damaging and / or creating disturbances to measuring equipment installed at their premises. Some of the modes for illegal abstraction or consumption of electricity are given below: ¾ Making unauthorized extensions of loads, especially those having ?Horse power Tariff. ¾ Tampering the meter readings by mechanical jerks, placement of powerful magnets or disturbing the disc rotation with foreign matters. ¾ Stopping the meters by remote control. ¾ Willful burning of meters. ¾ Changing the sequence of terminal wiring. ¾ Bypassing the meter. ¾ Changing C.T. ratio and reducing the recording. ¾ Errors in meter reading and recording. ¾ Improper testing and calibration of meters.
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T&D Losses in restructured SEBs
Some states have embarked on programs of power sector reforms and have taken steps to restructure their SEBs (State Electricity Boards). The reforming states that were reporting T&D losses of around twenty percent before restructuring process suddenly reported higher losses after carrying out detailed studies of their system. For example, before restructuring its power sector, Orissa reported 23 percent loss, after restructuring, T&D loss were shown to be 51 percent. In AP where these losses were of the order of about 25 percent before restructuring, it is now estimated to be around 45 percent after restructuring. Haryana has now estimated its losses at 40 percent and Rajasthan at 43 percent against earlier level of 32 percent and 26 percent respectively
Regulatory Concerns
In the absence of a realistic estimate of T&D losses, it is not possible for the regulatory commissions to correctly estimate the revenue requirements and also avoid the situation where the consumers pay for the inefficiencies of the utilities. In order to determine an appropriate tariff, the first step is to determine the justified cost incurred by the entity. This would provide an indication of the revenue requirement, which in turn is the basis of any tariff design. The regulator has therefore to be very careful about how losses are worked out. The aim of the regulator must be to encourage the utility to make every effort to reduce losses while at the same time ensuring that those conditions applied which threaten the viability of the utility are not applied.
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Unmetered Supply
Unmetered supply to agricultural pumps and single point connections to small domestic consumers of weaker sections of the society is one of the major reasons for commercial losses. ¾ The agricultural tariff is based on the unit horsepower (H.P.) of the motors. Such power loads get sanctioned at the low load declarations, and once the connections are released, the consumers increase their connected loads, without obtaining necessary sanction. ¾ Further most of the utilities deliberately overestimate the un-metered agricultural consumption to get higher subsidy from the State Govt. and also project reduction in losses. ¾ Correct estimation of un-metered consumption by the agricultural sector greatly depends upon the cropping pattern, ground water level, seasonal variation, hours of operation etc. ¾ To increase the food output, almost all the State Governments show benevolence to farmers and arrange supply of electric power for irrigation to the farmers at a nominal rate, and in some States, without charges at all. ¾ Most Electricity Boards supply power to agriculture sector and claim subsidy from the State Govt. based on energy consumption. ¾ Since the energy supplied to the agriculture sector is a generous gesture by the State Govt., all the electricity boards have eliminated energy meters for agriculture sector services. ¾ The absence of energy meters provides ample opportunities to SEBs to estimate average consumption in agriculture sector at a much higher value than the actual to include not only the under estimated T&D Losses but also energy theft from their system. Most of the methods being employed by SEBs for estimating the un-metered energy consumption are as follows: ¾ Load factor based estimation. ¾ Estimation based on feeder wise theoretical calculation of losses. ¾ Estimation based on readings of meters installed at all the Distribution ¾ Transformers located on a feeder.
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However, none of these methods provide correct estimation of unmetered consumption.
Case Studies of T&D Companies
ABB Ltd.
ABB Ltd. is a well estabilished player in the power secotr, and has presence in diversified segment across sector. The main businesses of ABB include ¾ ¾ ¾ ¾ ¾ ¾ ¾ BTG Equipments Transformers Meters Electrical Balance of Plant Substation Automation Systems Control Systems SCADA
The Revenues of the companies for the fiscal 2008, was Rs. 6283.8 Crores. The sales Mix was: Segments Power Systems Power Products Process Automation Automation Products MIX 36% 26% 17% 21%
The Order book backlog for the fiscal 2008, was Rs. 5217.7 Crores. The Order Backlog Mix: Segments Power Systems Power Products Process Automation Automation Products MIX 45% 26% 21% 8%
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The transformer division has an installed capacity of 12000 MVA, and houses a vast range of transformers. It produces both generator and Power T&D transformers. The company had also recently upgraded its production facility to manufacture 765 kV transformers and also commissioned a new plant to make a foray into small transformers. The company remains focused on its power business is evident from the capital expenditure of $100 million been planned primarily for its power and industrial transformers.
ABB to be a key beneficiary with regard to the following:
Transformer Division: Huge potential order from Powergrid for transmission lines for range of Voltages. The company is focusing to grab a share for the EHV segment is prevalent from the fact that it has upgraded the facility. The LV segment shall also benefit as there shall be huge demand for step down transformers, from Distribution segment. Meter Division: The meter division is also a potential beneficiary from APDRP program of the government. Huge demand for meter shall arise, as more & more of 11Kv feeder & consumers are being metered. Sub Station Automation & SCADA: With huge demand for sub station automation and SCADA systems in order to collect real time information, the company stands to be huge beneficiary. In this segment the only existing competition is from Siemens ltd.
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Emco Ltd
Emco Ltd. is a well established player in the power T&D sector, and has presence in diversified segment. The main businesses of Emco include ¾ ¾ ¾ ¾ Transformers Meters Turn Key Projects Tower Construction
The Revenues of the companies for the March 2008, was Rs. 1039 Crores. The sales Mix was: Segments Transformer Projects Meter MIX 30 65 05
The Order book backlog for the March 2008, was Rs. 1100 Crores. The Order Backlog Mix: Segments Transformer Projects Meter MIX 40 58 02
The current installed capacities of various divisions are: Segments Transformer Tower Meter Capacity 20000 MVA 20000 Mtn 1.7 Mn.
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Future Outlook:
¾ The company expects FY09 sales to be around Rs. 1510-1560 Crores. The sales shall be driven from projects & transformer division which shall constitute 95% of there sales. The meter division shall constitute 5 %. ¾ The company plans to increase the sale of transformers from present levels of 11000 MVA to at least 15000 MVA. This shows that the company is determined to be a huge beneficiary from the growing demand. ¾ The company has recently acquired 37% equity stake in PT Bina, an Indonesian firm to import coal for trading purpose. ¾ The company has also forayed in to generation segment, as it is developing a coal based thermal power plant of 540Mw (4x135Mw) capacity expected to be commissioned by 2011. The coal linkage has already been awarded. ¾ It is also planning to develop a 1000 Mw plant in Jharkhand. ¾ The company is also planning to foray in Hydel Power project, and is scouting for location in Northern region.
Emco to be a key beneficiary with regard to the following:
Transformer Division: Huge potential order from Powergrid for transmission lines for range of Voltages. The company is focusing to grab a share for the EHV segment is as it has entered into a technical collaboration with an Indonesian company to develop 400 KV trnaformers. The LV segment shall also benefit as there shall be huge demand for step down transformers, from Distribution segment. Meter Division: The meter division is also a potential beneficiary from APDRP program of the government. Huge demand for meter shall arise, as more & more of 11Kv feeder & consumers are being metered. Turnkey Project: Agrressive plans of the governemtn to setup a good T&D network has resulted in huge orders for turn key projects. These projects required setting up to T&D lines, building sub stations, etc. Coal Trading: The Company has recently acquired a major stake in Indonesian coal mining company, and plans to import coal to India for trading purpose. This is a lucrative business, as GOI is planning to develop a no. of coastal power plants relying on imported coal.
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Bharat Heavy Electrical Ltd (BHEL)
BHEL is a biggest domestic manufacturer of Power generation, T&D equipments. It is a Government organization, and has presence in every segment of power equipment sector. ¾ ¾ ¾ ¾ BTG Equipments Transformers Meters Switch Gears
The Revenues of the companies for the March 2007, was Rs. 18739 Crores. The Order book backlog for the March 2007 was Rs. 55000 Crores. The Order Backlog Mix: Segments Power Industrial International MIX 78% 16% 06%
The installed capacity as on March 2007 was approximately 8000 MW. BHEL sets account
for nearly 65% of the total installed power generating company in India. These sets contribute 73% of the total power generated in the country.
The company has entered into a technical collaboration with Alstom, France & Siemens, Germany for development of supercritical technology. The Company has recently increased the authorized capital from Rs. 325 Crores to Rs. 2000 Crores
Future Outlook:
¾ The Company is planning to form a JV with NTPC, which shall provide end to end solutions. ¾ It is in a process to increase its capacity from 8000 MW, to 15000 Mw by September 2009. ¾ It has formed a JV with Tamil Nadu Electricity Board, to development power plants in the State. It is scouting for more such JVs. ¾ BHEL may come out with a FPO, as it has increased into authorized capital recently.
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BHEL to be a key beneficiary with regard to the following:
BTG Equipments: BHEL is the market leader in generation equipments. To further strengthen its grip on this segment, it has developed supercritical technology. This scope for implementation of this technology is huge in India. The GOI has plans to add 50-60% of capacity in 12th plan based on this technology. Further all the UMPP shall also adopt this technology. In this regard BHEL is also upgrading the installed capacity. The only domestic competitor is Larsen & Tubro, which has developed the same by forming a JV with Mitsubishi Heavy Industries Ltd. there are number of foreign players which are presently competing with BHEL in this segment. Meter Division: The meter division is also a potential beneficiary from APDRP program of the government. Huge demand for meter shall arise, as more & more of 11Kv feeder & consumers are being metered.
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Chapter 4: Consumption Pattern
Geographically, India‘s electricity market is divided into five regions and 29 states. A regional electricity board serves each region. The size of each regional power market correlates with the size of the economy of each region. The west of the country accounts for 28.0 percent of India?s GDP and 30.0 percent of its capacity, while north & south of the country each account for 27.0 percent of GDP and 26.0 percent of its capacity respectively. There is a significant variation in the consumption pattern among the various states depending upon industrial investments, extent of rural electrification and income levels etc. A heavy element of cross-subsidy also exists in the Indian power sector in terms of lower rates charged to agricultural and domestic consumers and higher rates charged for industrial and commercial consumers. The burden of cross-subsidy in tariffs, coupled with low collections from agricultural consumers due to inadequate metering, has resulted in a number of industrial consumers shifting to captive power over the last few years. The end users of power can be broadly classified into domestic, industrial, commercial, agricultural consumers, traction and others consuming approximately 24.3%, 37.8%, 8.7%, 21.9%, 2.3% and 5% of the power respectively.
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State-wise Gross Annual Per Capita Consumption Of Electricity During The Year 2005-06 (Utilities & NonUtilities)
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Chapter 5: Demand Side Management
The planning process so far has been leaning heavily towards the supply side strategies. Efforts made to implement DSM, energy conservation and energy efficiency measures were symbolic, lacked continuity due to absence of a well knit institutional mechanism at the national and state levels. The 10thplan period (2002-07) is marked by enactment of the Energy Conservation Act, 2001 and setting up of the Bureau of Energy Efficiency (BEE) at the national level. The Act has given mandate to BEE to implement the provisions of the Act, and spearhead the improvement in energy efficiency of the economy through various regulatory and promotional measures.
Some key activities that BEE is pursuing include:
¾ The development of energy efficiency labels for refrigerators and other mass produced equipment, ¾ Certification of energy managers and auditors, ¾ Assisting industry in the benchmarking of their energy use, and ¾ Energy audits of prominent government buildings.
A beginning has been made by the State Governments in designating agencies to oversee implementation of the Energy Conservation Act and deliver energy efficiency services including, through public-private partnership. BEE was provided with a one-time grant of Rs.50 Crores and it utilizes the interest earned on the same to institutionalize energy conservation activities by the Government of India.
ENERGY SAVING –TARGET AND ACHIEVEMENT OF 10TH PLAN
The 10th Five Year Plan (2002-07) targeted energy savings of 95 BU (13% of estimated demand) in the industrial, agricultural, domestic and commercial sectors against the expected electricity demand of 719 BU in the terminal year of the Plan i.e. 2006-07. The 10th Plan highlighted the need for institutional arrangement to coordinate different programmes on energy conservation. It also stressed the mobilization of resources for funding the energy conservation programs. The 10th Plan however did not provide any specific budget allocation to meet and validate the energy saving targets.
Energy Conservation in the 10th Plan
Authentic and updated database is not available due to which it is difficult to assess the potential and achievements made. A rough attempt to assess energy savings achieved during 2002-05, puts this figure at 1170MW comprising of 508 MW from electric power savings achieved in industrial sector (participating units of National Energy Conservation
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Award for the years 2002-03, 03-04 and 04-05), 181 MW from supply side in Power Sector and 481 MW due to penetration of energy efficient CFL & 36W tube light
ENERGY CONSERVATION STRATEGY IN THE 11TH FIVE-YEAR PLAN
The basic aim of the energy conservation strategy in the 11th Five Year Plan will be to prioritize and implement the provisions under the Energy Conservation Act 2001 by decentralizing the energy conservation programmes at the State level. The strategy will strengthen the existing institutional linkages, and pursue the task of consolidating the energy conservation information, trends and achievements and create a market for energy conservation and for energy efficient goods and services. Keeping in view the provisions of the Act, an appropriate institutional mechanism and energy database will be developed in the 11th Plan by BEE. As a part of the mechanism, a fully dedicated ?Energy Conservation Information Centre‘ (ECIC) with Information Technology facilities will be set up within BEE and Central Energy Conservation Fund as mandated under EC Act will be established by the Government of India. Information/ database availability on sectoral/ sub-sectoral trends on energy consumption and energy conservation potential is not readily available at a centralized place for all the sectors of Indian economy. As mentioned earlier, this can be mainly attributed to the absence of any institutional mechanism that enables collection of the information from various users and then to undertake detailed analysis that can feed into decision-making processes at the policy level. Substantial resources (manpower, infrastructure, funds and time) will be required if the information on energy conservation related activities is to be made available at national level from a single source. Collection of such information is a mammoth task and requires systematic handling and coordination of efforts of various agencies.
Strengthening of BEE
In the 11th Five Year Plan, BEE will be strengthened as a nodal organization at the national level, and will be empowered to provide direction to the energy conservation programmes in the States. An appropriate institutional mechanism and a fully dedicated ?Energy Conservation Information Centre‘ (ECIC) will be set up within BEE to analyze energy consumption trends and monitor energy conservation achievements in the country on the basis of data received from the states through State Development Agencies. Funding support proposed is Rs. 320 Crores (for BEE Rs 150 Crores and for SDAs Rs. 170 Crores). In the 11th Five Year Plan, BEE will focus energy conservation programmes in the following targeted sectors:
Industrial Sector (Energy Intensive Industries)
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Industry sector offers maximum potential for energy conservation. The Government of India has recognized this when a number of energy intensive industries have been included as designated consumers in the EC Act. To bridge the efficiency gaps in the various units within the same industrial sub sector, BEE in association with SDAs, industry associations and research institutions, will develop 15 industry specific energy efficiency manuals/guides for the following sectors: Aluminum, Fertilizers, Iron & Steel, Cement, Pulp & Paper, Chlor Alkali, sugar, textile, chemicals, Railways, Port trust, Transport Sector ( industries and services), Petrochemical & Petroleum Refineries, Thermal Power Stations &hydel power stations, electricity transmission companies & distribution companies. The manuals will cover Specific energy consumption norms as required to be established under the EC Act,
¾ energy efficient process and technologies, ¾ best practices, case studies etc. ¾ Follow up activities will be undertaken in the States by SDAs. and manuals will be disseminated to all the concerned units in the industries.
Funding support proposed is Rs.21.8 Crores (BEE Rs.15 Crores and SDAs Rs. 6.8 Crores).
Small and Medium Enterprises (SMEs)
Many of the energy intensive SMEs clusters located in various states of the country are said to have large potential for energy savings. SDAs in consultation with BEE will initiate diagnostic studies in 25 number of SMEs clusters in the country, including 4-5 priority clusters in North East Region, and develop cluster specific energy efficiency manuals/booklets, and other documents to enhance energy conservation in SMEs. Clusters tentatively proposed for these activities are: Warangal (AP) rice mills, Bhimavaram (AP) rice plants, Surat (Gujarat) textile, Jamnagar ( Gujarat) Brass, Jagadhri (Haryana) Plywood, Sambalpur (Orissa) rice mills, Bhubneshwar (Orissa) utensils, Pali (Rajsathan) textile, Jodhpur (Rajsathan) textile, Balhotra (Rajasthan) textile, Kota (Rajasthan) textile, Jaipur (Rajasthan) textile, Tripur (TN) textile, West Coast (TN) rice mill, Coimbatore (TN) foundry, Kanur (UP) textile, Bhadoi (UP) carpet, Bundre (UP) khandsari, Dehradun (Utranchal) Plywood, Howrah (WB) foundry , Agra (UP) foundry , Ferozabad (UP) Glass, Bodhjungnagar (Tripura) agriprocessing, Kamrup (Assam) forest/agro based industry, Dibrugarh (Assam) light engineering , Dimapur (Nagaland) Timber-bamboo products. Funding support proposed is Rs.19.3 Crores (BEE Rs.12.5 Crores and SDAs Rs. 6.8 Crores).
Commercial Buildings and Establishments
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Government and public buildings constitute a very large sub-sector but so far very little organized efforts have been put in to save energy in the same. In the 11th Plan, BEE will initiate comprehensive studies in selected buildings/establishments such as office buildings, hotels, hospitals and shopping malls to prepare building specific energy efficiency manuals covering Specific energy consumption norms, energy efficient technologies, best practices, case studies, model energy performance contracts, model monitoring and verification protocol for implementation of ESCO projects etc. As a follow up, SDAs in association would initiate energy audits and their implementation in 10 Government buildings in each state and 1-2 buildings at UT level. BEE will also assist SDAs in the establishment and promulgation of energy conservation building codes (ECBC) in the States, and facilitate SDAs to adapt ECBC to the local conditions and make them ready for implementation at municipal levels. In addition, BEE will also strengthen a few test laboratories for testing of building materials and building utility systems for ECBC compliance. Funding support proposed is Rs.41 Crores (BEE Rs.14 Crores and SDAs Rs. 27Crores).
Residential/Domestic sector
BEE has been working to introduce energy efficiency standards and labeling programme to facilitate consumers in selecting energy efficient domestic appliances. For promoting energy efficiency programmes in this sector, SDAs will actively involve Electric Utilities/ Distribution Companies. Emphasis would be to encourage the consumers to adopt energy efficient lighting systems, air conditioners, refrigerators, water heating systems and other domestic appliances. BEE will enlarge its on-going energy labeling programme for ?frost free refrigerators‘ and ?tubular fluorescent lamps‘ to 10 other appliances - Air conditioners , Ceiling Fans , Agricultural pump-sets, Electric motors (general purpose) , CFLs, FTL – 61cm (2ft) , Television sets , Microwave ovens, Set top boxes , DVD players , Desk top monitors. To facilitate this, 10 testing laboratories will be strengthened, and consumer awareness will be enhanced nation wide. Funding support proposed is Rs. 84 Crores (BEE Rs. 50 Crores and SDAs Rs. 34 Crores).
Street Lighting & Municipal Water Pumping
Street lighting and municipal water pumping put excessive pressure on electric utilities. Quite a few of studies/projects have been successfully demonstrated in some states. In the 11th Plan, such projects will be identified, documented and disseminated nation wide. Further, to promote such projects in various states, SDAs in association with State utilities will initiate pilot energy conservation projects in selected municipal water pumping systems and street lighting to provide basis for designing state level programmes. Funding support proposed is Rs.10.5 Crores (BEE Rs.2.0 Crores and SDAs Rs. 8.5 Crores).
Agriculture Sector
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Increasing energy consumption trend is being seen in irrigation systems in the sector. Due to low power tariff for the sector in majority of the States, it is not in the farmers‘ financial interest to buy efficient pumps, but it may be in the utility‘s interest to promote their use. In the 11th Plan, SDAs will collect, document and disseminate information on successful projects implemented by some states, launch awareness campaign in all regional languages in print and electronic media and follow up work in initiating state level programmes along with utilities. SDAs with assistance of concerned institutions will also develop suitable energy conservation models which will take into consideration measures like:
¾ Introduction of subsidy in replacement of inefficient pump sets with efficient ones, ¾ Power factor improvement by installation of capacitor banks, ¾ Rebate for optimum usage of pumps, ¾ Energy efficiency labeling of pumps, etc.
These models will be subsequently promoted through the electricity utilities/distribution companies and SDAs with involvement of State Regulatory Commissions. Funding support proposed is Rs. 10 Crores (BEE Rs.5.0 Crores and SDAs Rs 5.0 Crores).
Transport Sector
The sector is mainly dependent on the petroleum products. In the 11th Five-Year Plan, SDAs will develop linkages with State Road Transport Undertakings and private enterprises owning large fleet of trucks/buses to establish the status of energy consumption and conservation in the sector. SDAs with assistance of concerned institutions/agencies will conduct diagnostic studies to support urban bodies and transport research organizations in adopting multi modal public transport system which shall shift demand from personalized to public transport. SDAs will develop linkages with the state transport undertakings to establish the status of energy consumption and conservation potential and support studies to promote public transportation systems. BEE will also set up norms for specific fuel consumption for a few automobile and Transport models (Services/ Public transport). Funding support proposed is Rs 10.5 Crores (BEE Rs. 2.0 Crores and SDAs Rs 8.5 Crores).
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Chapter 6: Findings & Conclusions
Power Generation
¾ Boiler (B) Turbine (T) Generator (G) are the major components. BHEL is the biggest manufacturer of BTG equipments in India. The current BTG capacity of BHEL is 10,000 MW & it is expanding the same to 15,000 MW by Dec‘09.
¾ Other manufacturers of BTG in India are Siemens, Thermax, L&T and other players in the organized & unorganized segments. ¾ Foreign Players in the BTG segment are GE, Mitsubishi. ¾ Most of the BTG‘s are supplied by BHEL in India however those of smaller sizes (especially for CPP) are supplied by other players.
¾ If the order book of domestic companies is over-loaded power plants also go in for
imports of BTG components.
Transmission & Distribution
¾ The transmission industry in India (Total installed capacity of transformers is approximately 1,20, 000 MVA). ¾ Transmission projects are mainly given on EPC basis & sometimes it is given on equipment tender & monitoring basis but such orders are very rare. ¾ It takes about 18-24 months for executing an EPC transmission – Distribution contracts. ¾ Of every Rs 100 creation of Power Generating capacity approx 30-35% (Value) of T&D capacity is created which Transmission & Distribution is further broken into 50:50. This ought to be Rs 100. ¾ Approx 1 MW of power generation creates evacuation capacity of 7 MVA for transformers. ¾ Installed capacity of transmission towers is 140000+ Mtn.
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Others
¾ Government has proposed Profit making Central/ State Utilities in generation, transmission & distribution to be encouraged for supply of PSUs stock in the market by way of IPOs/ FPOs (Follow-on Public Offer)/ Offer for sale. ¾ Government proposes development of a Venture Capital / PE fund to invest in equity of power projects.
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