Power Industry - India

8/3/2019 Power Industry - India

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Submitted by10810027 – L Nikhil Reddy10810028 – Laxmi Narasimha

Boddu10810031 – Mayank Jain10810063 – Swagat Patra10810071 – Vema Jagadish



Why study Power Industry?

Electricity supply is a fundamental priority of the central governmentpolicy.

Major objective pertaining to power sector in 11th 5-year plan is“ Power for all” by 2012.

Total requirement of funds estimated in11th 5-year plan is 10,31,600crore rupees.

Indian power industry accounts for 3.4% of global energy

consumption making it 6th

largest consumer in the world.

No other industry’s output is as important as that of Power Industry,because most of the goods or services produced directly orindirectly require power from production to consumption.

Power is utilized to in three key sectors of any country’s economy, –



Indian Power Sector – History

The Indian Power Sector has history over 100 year history

1880s – First electrification – small hydro project in Darjeeling

1889 – Commercial production & Distribution starts in Calcutta

Indian Electricity Act, 1910

1947 – Power generating capacity only 1,362 MW

The Electricity (Supply) Act, 1948 – SEB formation

Creation of central generation companies



Indian Power Sector – History(continued)

Central Electricity Authority (CEA) was established as a statutoryauthority

1956 – Industrial Policy Resolution reserves production of power forpublic sector

1960s and 70s – Impetus for expansion of rural electrification

1975 – NTPC and NHPC set up

1989 – NPTC set up. Renamed POWER GRID in 1992

1991 – Liberalization; amendments in Electricity (Supply) Act

1992 – Ministry of Power was constituted



Indian Power Sector – History(continued)

1995 – Policy for Mega power projects introduced

1998 – CERC and SERCs set up

2001 – Energy Conservation Act

2003 – New Electricity Act

2008 – Re-structuring APDRP (Accelerated Power Development andReforms Programme)

2009 – Amendments in Mega Power Policy

2011 – Installed power capacity of approximately 170,230 MW



History – Fast facts

The US was the first country that generated electricity.

CESC (Calcutta Electric Supply Company ) Limited, pioneer in Indiacommenced power generation and distribution in Kolkata, in 1899.

CESC acquired the license to provide electricity to Calcutta city onJanuary 7, 1897.

The electrification of Kolkata city took place in 1899 India also started hydro electric generation by the end of 19th

century.

The power plant at Darjeeling and Shimsha (Shivanasamudra) wasestablished in 1898 and 1902 respectively and is one of the first inAsia.

The 4.5 megawatt hydroelectric power station near Sivasamudramfalls of the Cauvery in Karnataka was the first major power station inIndia

The Indian power sector has been regulated for almost a century.

The Electricity Act 1910 was the first act that was introduced to

govern the Indian power sector. The Electricity (Supply) Act 1948 was introduced after



Post-independence pre-reformphase (up to 1991)

The development of the electricity sector to respective statesthrough the creation of State Electricity Boards (SEBs).

SEBs expected to develop networks of transmission lines addgeneration capacity.

The low tariffs for agricultural sector were sought to be coveredthrough higher tariffs on industrial and commercial consumers

The distortions of such cross subsidization, resulted in increasing

theft and leakages, loss of accountability of revenue,misreporting.

SEBs fared miserably and by the 70s, many of the SEBs startedincurring losses because of many factors including direct politicalinterference in SEBs operation by their respective governments,

mismanagement, poor industrial relations, etc



Post-independence pre-reformphase (up to 1991) (continued)

Losses of the SEBs mounted this made SEBs increasinglydependent on budgetary allocations from their respectivegovernments reducing their ability to add generating capacity,and most importantly to carry out the periodic maintenanceand upkeep of their distribution assets.

C.E.A. (Central Electricity Authority) was established with theobject of providing Techno economic assistance to the saidState Electricity Boards, N.T.P.C., N.H.P.C. in the matter ofsetting up new power stations.

In 1969 Rural Electric Corporation and in 1975 N.T.P.C.(National Thermal Power Station and N.H.P.C. (NationalHydel Power Corporation) were formed to accelerate thegeneration of electricity in our country



Post-reform phase (after 1991)

The need to control fiscal deficit led toinitiation of reforms in the Electricity Sectorin early 1990s

Investment by the private sector (including foreigncapital) were allowed in electricity generation

Opening of the sector for private IndependentPower Producers (IPPs)

The enactment of the Electricity Act in the year



Post-reform phase (after 1991) (continued)

The Central Government came out with NationalElectricity Policy on 6th February 2005

To encourage greater private participation govt has

undertaken some measures like National Tariff Policy,National Electricity Plan, Competitive BiddingGuidelines, and Ultra Mega Power Projects.

Now 100 percent Foreign Direct Investment (FDI) is

allowed in generation, transmission and distributionsegments.

Incentives are given to the sector through waiver of

duties on capital equipments under the Mega PowerPolicy



Power policy in India ispredominantly controlled by…

Ministry of Power

Ministry of Coal

Ministry of New and Renewable Energy

And administered by

PSUs

Government Departments

Commissions



Indian Power sector

As per our Constitution, power industry is acombined responsibility of the State andCentral Governments.

According to the Electricity Supply Act (ESA)

Power sector comprises of three entities

State Electricity Boards (SEBs) Power Generating Companies

Licensees



Power sector at a glance – All India(Source: Website of Ministry of power)

State Sector

48%

Central Sector

31%

Private Sector21%

Installed capacities across sectors

Total installed power capacity in India approximately by 2011: 170,230 MW



Power sector at a glance – All India(continued) (Source: Website of Ministry of power)

Thermal Nuclear Hydro RESCentral 39122.23 4560 8685.4 0

Private 19755.52 0 1425 13964.66

State 52156.73 0 27257 2822.32

0%

10%

20%

30%

40%

50%

60%70%

80%

90%

100%

P r o p o r t i o

n

Power generation capacities of Public and privatesectors – by energy sources



Current scenario of Indian PowerIndustry

Coal54%

Gas

10%

Hydro22%

RES10%

Nuclear3%

Oil1%

Power produced by variousenergy sources

Fuel Capacity (in MW)

Coal 92418.38

Gas 17706.35

Oil 1199.75

Hydro 37367.40

Nuclear 4780.00

RES 16786.98

Total 170,228.86

Source: 2010-11 Annual report of Ministry of Power RES: Renewable Energy Resources



Source: 2010-11 Annual report of Ministry of Power



Power consumption – Breakup

Agriculture18%Domestic

21%

Industrial46%

Traction2%

Commercial8%

Miscellaneous

5%

Sector wise Power consumption



Growth of Power sector

The power capacity of India has increased approximately124times from 1362MW in the year 1947 to 170228.86MW in2011.

The global energy consumption has grown at a CAGR of

2.5% since 1999, reaching 11 billion tons of oil equivalent in2008.

Between 1980 and 2009, energy consumption increased byalmost seven times from 85,334 GWh to 596,943 GWh,

which corresponds to an average annual growth rate ofapproximately 7.1%.

The strongest increase was in the consumption by privatehouseholds, which increased by almost 14 times since 1980

at an average annual growth rate of 10%.



Growth of Power sector – Powergeneration trend

(1 Unit = 1 kWh)



Power Requirement v/sAvailability



Power sector – Growth potential

The Eleventh Five Year Plan envisaged an additionalcapacity of 78,700 MW of which 19.9 per cent washydro, 75.8 per cent thermal and the rest was nuclear.As of December 31, 2009, 43,282 MW was under

construction.

Public sector power major National Thermal PowerCorporation (NTPC) is planning to scale up its

capacity from the present 30,000 MW to 75,000 MWby 2017.

India has launched its ambitious solar energy missionwhich aims to generate 20,000 MW of solar power by2022.



Major Players of the Industry

Power Plant Name CapacityIn MW

Presence Future plans

National ThermalPower Corporation(NTPC)

33,000 Coal & Gas Plans to increase capacity to75,000 MW by 2017

National Hydro PowerCorporation (NHPC)

5,000 Hydro Planning to Double capacity innext 5 years

Tata Power 3,000 Gas, Hydro,Solar & Wind

Building numerous power plantsand transmission projects in JV

Reliance power 3x4,000 Hydro, Gas &

Coal

Plans of 35GW projects.

Adani Power Limited 1980 Coal (Mainlyimports coal)

Implementing3300MW in Maharashtra1320MW in Rajasthan16500MW in rest of the country

Damodar ValleyCor oration

2889 Hydro – 144MWThermal –

Additional 11000MW by 2012



Major Players of the Industry(continued)

Power Plant Name CapacityIn MW

Presence Future plans

Lanco Infratech 2,000 Coal 18GW under development

SJVN(A Joint Venture of

GoI and Himachal Pradesh)

1500 Hydro Trying to expand but facingproblems like NHPC

Nuclear PowerCorporation of IndiaLimited (NPCIL)

4500 Nuclear India is planning to add 2000MWin next decade

CPL Power PrivateLtd. (Largest foreign

investor in windpower)

450 Wind Plans to develop a 1320MWThermal plant, Which is due for

commissioning in Dec 2011

Neyveli LigniteCorporation (PSU)

2490 Coal It is also in to Lignite mining, Noplans for expansion of powerproduction

Torrent Power 1647.5 - Expanding only in Ahmedabad andUttar Pradesh



Market Share

NTPC, 19.38%

NHPC, 2.94%

Tata Power,1.76%

Reliance power,7.05%

Adani Power,1.16%

DVC, 1.70%

Lanco Infra,

1.17%

SJVN, 0.88%

NPCIL, 2.64%CPL Power Pvt.

Ltd., 0.26%

Neyveli LigniteCorporation ,

1.46%

Torrent Power,0.97%

Others, 58.62%





Suppliers – Another sect of Powerindustry

BHEL BEL

NEPC India Ltd

Suzlon Energy Tata BP Solar Kotak Urja Pvt. Ltd Moser Baer Pvt. Ltd Titan Energy Systems Ltd. Photon Energy Systems IndoSolar WEBEL SL Energy Systems etc.

K i i h i



Key organizations – theirfunctions



Competition

In 1990 nearly all energy sector operations were statecontrolled. The industry was inefficient and highlyunreliable.

But that is rapidly changing. For example, state-

owned oil companies of India had over 80 percent ofIndia’s exploration acreage before 1990.

Thanks to reforms in the 1990’s, that number is downto about 50 percent in 2008 even as the area under

exploration has increased roughly ten-fold. Competition and private capital has reinvigorated the

entire energy industry in India. The new identity ofIndia’s energy policy is marked by a free-marketoriented approach.



Thermal Power Projects – Centre(Source:Wikipedia)

Project Name Operator State Capacity(M

W)Badarpur Thermal power plant NTPC NCT Delhi 705

Singrauli Super Thermal Power Station NTPC Uttar Pradesh 2000

Barsingsar Lignite Power Plant NLC Rajasthan 125

Rihand Thermal Power Station NTPC Uttar Pradesh 2000

NTPC Dadri NTPC Uttar Pradesh 1820

Feroj Gandhi Unchahar Thermal Power

Plant NTPC Uttar Pradesh 1050Tanda Thermal Power Plant NTPC Uttar Pradesh 440

Vindhyachal Super Thermal PowerStation NTPC Madhya Pradesh 3260

Korba Super Thermal Power Plant NTPC Chattisgarh 2100

Sipat Thermal Power Plant NTPC Chattisgarh 1000

Bhilai Expansion Power Plant NTPC-SAIL(JV) Chattisgarh 500

NTPC Ramagundam NTPC Andhra Pradesh 2600Simhadri Super Thermal Power Plant NTPC Andhra Pradesh 1000

Neyveli Thermal Power Station - I NLC Tamilnadu 1020

Neyveli Thermal Power Station - II NLC Tamilnadu 1470

Kahalgaon Super Thermal Power Station NTPC Bihar 2340

Bokaro Thermal Power Station B DVC Jharkhand 630

Chandrapura Thermal Power Station DVC Jharkhand 1250

Farakka Super Thermal Power Station NTPC West Bengal 1600Durgapur Thermal Power Station DVC West Bengal 350



Thermal Power Projects – State(Source:Wikipedia)

Project Name Operator State Capacity(MW)

Panipat Thermal Power Station I HPGCL Haryana 440Panipat Thermal Power Station II HPGCL Haryana 920

Faridabad Thermal Power Station HPGCL Haryana 55

Rajiv Gandhi Thermal Power Station HPGCL Haryana 600

Guru Nanak dev TP PSPCL Punjab 440

Guru Hargobind TP PSPCL Punjab 920

Guru Gobind Singh Super Thermal Power Plant PSPCL Punjab 1260

Suratgarh Super Thermal Power Plant RVUNL Rajasthan 1500

Kota Super Thermal Power Plant RVUNL Rajasthan 1240

Giral Lignite Power Plant RVUNL Rajasthan 250

Chhabra Thermal Power Plant RVUNL Rajasthan 500

Orba Thermal Power Station UPRVUNL Uttar Pradesh 1322

Anpara Thermal Power Station UPRVUNL Uttar Pradesh 1630

Panki Thermal Power Station UPRVUNL Uttar Pradesh 210

Parichha Thermal Power Station UPRVUNL Uttar Pradesh 640

Harduaganj Thermal Power Station UPRVUNL Uttar Pradesh 220Ukai Thermal Power Station GSECL Gujarat 850

Gandhinagar Thermal Power Station GSECL Gujarat 870

Wanakbori Thermal Power Station GSECL Gujarat 1470

Sikka Thermal Power Station GSECL Gujarat 240

Dhuvaran Thermal Power Station GSECL Gujarat 220

Kutch Thermal Power Station GSECL Gujarat 290

Surat Thermal Power Station GIPCL Gujarat 500

Akrimota Thermal Power Station GMDC Gujarat 250

Sat ura Thermal Power Station MPPGCL Madh a Pradesh 1017.5



Thermal Power Projects – State(continued) (Source:Wikipedia)

Project Name Operator State Capacity(MW)

Sanjay Gandhi Thermal Power Station MPPGCL Madhya Pradesh 1340Amarkantak Thermal Power Station MPPGCL Madhya Pradesh 450

Korba East Thermal Power Plant CSPGCL Chattisgarh 440

Dr Shyama Prasad Mukharjee Thermal PowerPlant CSPGCL Chattisgarh 500

Korba West Hasdeo Thermal Power Plant CSPGCL Chattisgarh 840

Koradi Thermal Power Station MAHAGENCO Maharastra 620

Nashik Thermal Power Station MAHAGENCO Maharastra 630

Bhusawal Thermal Power Station MAHAGENCO Maharastra 420Paras Thermal Power Station MAHAGENCO Maharastra 500

Parli Thermal Power Station MAHAGENCO Maharastra 1130

Kaparkheda Thermal Power Station MAHAGENCO Maharastra 840

Chandrapur Super Thermal Power Station MAHAGENCO Maharastra 2340

Ramagundam B Thermal Power Station APGENCO Andhra Pradesh 62.5

Kothagudem Thermal Power Station APGENCO Andhra Pradesh 720

Kothagudem Thermal Power Station V Stage APGENCO Andhra Pradesh 500Dr Narla Tatarao TPS APGENCO Andhra Pradesh 1760

Rayalaseema Thermal Power Station APGENCO Andhra Pradesh 840

Kakatiya Thermal Power Station APGENCO Andhra Pradesh 500

Raichur Thermal Power Station KPCL Karnataka 1720

Kolaghat Thermal Power Station WBPDCL West Bengal 1260

Bakreshwar Thermal Power Station WBPDCL West Bengal 1050

IB Thermal Power Plant OPGCL Orissa 960

Mettur Thermal Power Station TNEB Tamilnadu 840Tuticorin Thermal Power Station TNEB Tamilnadu 1050



Thermal Power Projects – Private(Source:Wikipedia)

Project Name Producer State Capacity(MW)

VS Lignite Power Plant KSK Rajasthan 125

Rosa Thermal Power Plant StageI Reliance Uttar Pradesh 600

Sabarmati Thermal PowerStation Torrent Power Gujarat 400

Mundra Thermal Power Station Adani power Gujarat 1980

Jindal Megha Power Plant Jindal Chattisgarh 1000

Lanco Amarkantak Power Plant Lanco Chattisgarh 600

Trombay Thermal Power Station Tata Maharastra 1400

Dahanu Thermal Power Station Reliance Energy Limited Maharastra 500

Wardha Warora Power Station KSK Maharastra 135

JSW EL-SBU-I Power Plant JSW Karnataka 260JSW EL-SBU-II Power Plant JSW Karnataka 600

Udupi Thermal Power Plant Lanco Karnataka 600

Neyveli Zero Unit STPS Tamilnadu 250

Budge Budge Thermal PowerPlant CESC West Bengal 750

Titagarh Thermal Power Station CESC West Bengal 240CESC Southern Generating



Hydro Power Projects (Source: Wikipedia)

Project Name Operator Location Capacity (MW)

Tehri Dam THDC India Ltd Uttarakhand 2400

Srisailam Dam APGenco Andhra Pradesh 1,670

Nagarjunasagar APGenco Andhra Pradesh 965

Sardar Sarovar SSNNL Gujarat 1,450

Baspa-II JHPL Himachal Pradesh 300Nathpa Jhakri SJVNL Himachal Pradesh 1,500

Bhakra Dam BBMB Punjab 1,325

Dehar BBMB Himachal Pradesh 990

Baira Suil NHPC Himachal Pradesh 180

Chamera-I NHPC Himachal Pradesh 540

Chamera-II NHPC Himachal Pradesh 300Pong BBMB Himachal Pradesh 396

Uri HydroelectricDam NHPC Jammu & Kashmir 480

Dulhasti NHPC Jammu & Kashmir 390

Salal NHPC Jammu & Kashmir 690

Sardar Sarovar 400Sharavathi KPCL Karnataka 1,469



Hydro Power Projects(continued)(Source:Wikipedia)

Project Name Operator Location Capacity(MW)

LinganamakkiDam Karnataka 55

Idukki KSEB Kerala 780

Bansagar Dam Madhya Pradesh 425

Bargi Dam Madhya Pradesh 105Madikheda Dam Madhya Pradesh 60

Omkareshwar NHPC Madhya Pradesh 520

Indira Sagar NHPC Madhya Pradesh 1,000

Loktak NHPC Manipur 105

Khuga Dam Manipur

Koyna MahaGenco Maharashtra 1,920Mulshi Dam Maharashtra 150

Jayakwadi Dam Maharashtra 12

Kolkewadi Dam Maharashtra

Rangeet NHPC Sikkim 60

Teesta-V NHPC Sikkim 510

Tanakpur NHPC Uttarakhand 120-





Solar Power Projects (Source: Wikipedia)

Project Name Peak Power (MW)

Sivaganga Photovoltaic Plant 5

Kolar Photovoltaic Plant 3

Itnal Photovoltaic Plant,Belgaum

3

Azure Power - PhotovoltaicPlant

2

Jamuria Photovoltaic Plant 2

NDPC Photovoltaic Plant 1

Thyagaraj stadium Plant-Delhi

1

Gandhinagar Solar Plant 1



Nuclear Power Projects (Source:

Wikipedia)

Project Operator State Capacity (MW)

Narora Atomic Power Station NPCIL Uttar Pradesh 440

Rajasthan Atomic PowerStation NPCIL Rajasthan 1180

Tarapur Atomic Power Station NPCIL Maharashtra 1400

Kakrapar Atomic Power Station NPCIL Gujarat 440

Kudankulam Nuclear PowerPlant NPCIL Tamilnadu 2000

Madras Atomic Power Station BHAVINI Tamilnadu 500

Kaiga Nuclear Power Plant NPCIL Karnataka 880Madras Atomic Power Station NPCIL Tamil Nadu 440



Mega Power Policy

Introduced in 1995 for providing impetus todevelopment of large size power projects in thecountry and derive benefits form economies ofscale.

Modified in 1998,2002, 2006 and 2009 torationalize the procedure for grant of megacertificates and facilitate quicker addiction ofcapacity.

17 power projects totaling of capacity about27GW have been granted mega power statusform April 2010 to Jan 2011



Ultra Mega Power Projects

Projects above 4000MW capacity

Each UMPP’s estimated investment is $4billion

Operated on Build, Own and Operate (BOO) model

Name of UMPP Developer

Mundra, Gujarat Tata Power Ltd.

Sasan, Madhya Pradhesh Reliance Power Ltd.

Krishnapatnam Reliance Power Ltd.

Tilaiya Reliance Power Ltd.





Coal

India is the third largest producer of coal in theworld, with fourth largest reserves of coal in theworld

Despite this India imports coal to serve its domesticneeds.

Annual coal requirement of India is 700 million tons.

FY 2010-11 Imports increased 70% than expected

84 million tons i.e. 142million tons.



Coal – Hurdles to extraction

Environmental clearances

Rehabilitation

Naxal movements



Coal – A look at history

The first coal mining operation commenced in1774 in the Raniganj coalfield on the banks ofRiver Damodar.

The introduction of steam locomotives andWW-I stimulated demand for coal, and

production peaked at 18 million tons (mts)during the 1920s



Coal - Producing companies

Coal India Limited. (A Maharatna Company with 8 subsidiaries)

Bharat Coking Coal Limited (BCCL)

Central Coalfields Limited (CCL)

Eastern Coalfields Limited (ECL)

Western Coalfields Limited (WCL)

South Eastern Coalfields Limited (SECL) Northern Coalfields Limited (NCL)

Mahanadi Coalfields Limited (MCL)

Central Mine Planning and Design Institute Limited (CMPDIL)

• Singareni Collieries Company Limited (SCCL) – (A jointventure of Government of Andhra Pradesh and Governmentof India sharing SCCL's equity capital in the ratio of 51:49. )

• Minerals and Metals Trading Corp: It is responsible for theconversion of imported coal into coke for metallurgical and

industrial purposes.



1. ECL

2. BCCL

3. CCL

4. NCL0

5. WCL

6. SECL

7. MCL

8. NEC

9. SCCL

10. NLC

Coal M i f P



Coal – Main source of Power

generation

India Currently able to fulfill only 90% of its Energyrequirements.

54% of energy requirements are fulfilled by Coal. (Figures

in 2011)

Coal produced in India is completely utilized fordomestic purposes.

70% of coal produced is used for production ofelectricity

Remaining 30% by Steel, Cement and other heavyindustries





Coal and Lignite (FDI)

Private Indian companies setting up or operating power projects aswell as coal or lignite mines for captive consumption are allowedFDI up to 100%.

100% FDI is allowed for setting up coal processing plants, subject

to the condition that the company shall not do coal mining and shallnot sell washed coal or sized coal from its coal processing plants inthe open market and shall supply the washed or sized coal to thoseparties who are supplying raw coal to coal processing plants forwashing or sizing.

FDI up to 74% is allowed for exploration or mining of coal or lignitefor captive consumption.

In all the above cases, FDI is allowed up to 50% under theautomatic route subject to the condition that such investment shallnot exceed 49% of the equity of a PSU.



Nuclear Power

India has a flourishing and largely indigenous nuclear powerprogram and expects to have 20,000 MWe nuclear capacityon line by 2020 and 63,000 MWe by 2032. It aims to supply25% of electricity from nuclear power by 2050.

Because India is outside the Nuclear Non-Proliferation Treatydue to its weapons program, it was for 34 years largelyexcluded from trade in nuclear plant or materials, which hashampered its development of civil nuclear energy until 2009.

Now, foreign technology and fuel are expected to boostIndia's nuclear power plans considerably. All plants will havehigh indigenous engineering content.



Nuclear Power – Current status

Nuclear power supplied 15.8 billion kWh (2.5%) ofIndia's electricity in 2007 from 3.7 GWe (of 110 GWetotal) capacity.

In the year to March 2010, 22 billion kWh wasforecast, and for the 2010-11 year 24 billion kWh isexpected. For 2011-12, 32 billion kWh is nowforecast.

India's fuel situation, with shortage of fossil fuels, isdriving the nuclear investment for electricity, and 25%nuclear contribution is foreseen by 2050, when 1094GWe of base-load capacity is expected to be required.Almost as much investment in the grid system as in

power plants is necessary.



Nuclear Power - Growth trends

Rose impressively from 60% in 1995 to 85% inthe period 2001-02

Then in 2008-10 the load factors dropped due to

shortage of uranium fuel.

Power reactors in mid 1990’s had some of theworlds lowest capacity factors.

The growth rate was plagued by lack of fuel andtechnical assistance from other countries due toIndia’s nuclear isolation .

N l P G th t d



Nuclear Power – Growth trends(continued)



Nuclear Power – Regulation

Main Policy Body

AEC-Indian Atomic Energy Commission

Regulator

AERB-Atomic Energy Regulator Board

Research Centre

BARC- Bhabha Atomic Research Centre

Commissioning Body

NPCIL-Nuclear Power Corporation Of IndiaLtd



Nuclear Power – Major players

The 1962 Atomic Energy Act prohibits private control of nuclearpower generation.

BHAVINI – Bharatiya Nabhikiya Vidyut Nigam Ltd focuses on fastbreeder reactors.

NTPC- National Thermal Power Corporation

GE - Two Tarapur 150 MWe Boiling Water Reactors on a turnkeycontract.

ATOMSTROYEXPORT – Russian firm is building the country's firstlarge nuclear power plant, comprising two VVER-1000 (V-392)reactors.

ROSATOM - Russian firm which is expected to built 18 larger 1200

MWe AES-2006 versions reactors



Nuclear Energy – Structure

Pl d N l Pl t I I di



Planned Nuclear Plants In India



Nuclear Power – Policies

The NPCIL and the Bharatiya Nabhikiya VidyutNigam Ltd (Bhavini) are the only companiesauthorized to build nuclear reactors in the

country.

Nuclear power plants to be set up at locationsaway from coalmine

Public sector investments to create nucleargeneration capacity to be stepped up.



Wind & Solar

Since 2000, the global renewable energy capacityhas increased by approximately five times toreach 146,073 MW in 2008. This growth hasprimarily been driven by the wind and solar powersegment.

During the period 2000 –08, wind power and solarphotovoltaic (PV) capacity grew at a CAGR of27% and 44%, respectively.

The US now has the largest wind power capacity(25.2 GW, 20.7% of the total world capacity),followed by Germany (23.9 GW, 19.6% share).



Wind & Solar (continued)

Solar power, another key RE focus area globally,recorded a 69% y-o-y growth in generating capacity in2008. Spain (2.7 GW) and Germany (1.5 GW), whichtogether accounted for more than 75% of the growth.

India – fifth largest producer of wind energy in theworld, with a current installed wind capacity of 10,243MW.

The solar PV manufacturing capacity has made Indiaas the seventh largest producer of solar PV cellworldwide, with an installed manufacturing capacity of110MW in 2008.



Wind & Solar - Development

Factors for development1. Massive gap between demand and supply.

2. Relatively lower cost due to technology.

3. Rapid development of domestic manufacturers.

4. Highly supportive government policies like JNNSM

5. Substantial subsidies and incentives for setting upany RES power plant.



Attention needed…

As India moves forward with energy-policyreforms three issues need particular attention

1. Recent energy policies threaten the organizational

stability of state-owned companies.

2. India urgently needs to ramp up energy relatedR&D, which at present is inadequate.

3. India must strive to really understand thefunctioning of the energy systems of other majoreconomies.



Imports & Exports

Coal Despite being the fourth largest reservoir of coal, India

imports coal to serve its domestic needs. Coal imports could jump nearly 70% in next fiscal year to

142 million tons from 2010-11 forecast purchases

Nuclear Major proportion of uranium is imported from other

countries Technology transfer takes place with major foreign players Nuclear fuel is imported from

Russia – Rosatom France – Areva Kazakhstan Brazil South Africa



Imports & Exports (continued)

Solar India has always been a net exporter of solar PV technology,

with about 66% of cumulative domestic PV production till 2009catering to overseas markets.

Germany is the most preferred source for solar PV imports,followed by Taiwan. During 2008-09, about 80% of the total solarPV imports were from Germany and Taiwan. The other countriesfor solar PV imports are Spain, China and Japan.

Year-wise export-import details of solar PV below:

I E



Imports & Exports

Wind Energy

An impressive average annual increase of 40.9% during the2004-2008 period.

Total trade in wind energy - US$ 4.0 bn in 2008, Exports -US$ 1.8 bn

Imports - US$ 2.2 bn, thereby resulting in a negative trade balance.

USA was India’s main export destination of wind energy productsin 2008 with exports amounting to US$ 355 mn (19.6% share).

Other major export markets included Brazil (US$ 156 mn;8.6%share), Australia (US$139mn;7.7%), Spain (US$ 107 mn; 5.9%)and Portugal (US$ 87 mn; 4.8%).

I & E



Imports & Exports

In terms of imports, China and Germany were by far,the two biggest sources with imports amounting toUS$ 639 mn and US$ 600 mn, respectively.

China and Germany accounted for 55.7% of India’stotal imports of wind energy and related componentsin 2008.

China overtook Germany in 2008 to become thelargest source of import for India.

The other major sources of imports in 2008 includedItaly (US$ 129 mn; 5.8% share), USA (US$ 121 mn;

5.4%), and Japan (US$ 106 mn; 4.8%).

Eff F i I



Effect on Foreign Investment

Electricity Act, 2003, made provision for 100% FDI inpower sector.

Despite this only two to three foreign investors turned

up.

The power sector has attracted foreign directinvestment (FDI) worth USD 1.34 billion during April to

February 2009-10.

The cumulative FDI received by the power sectorbetween April 2000 and February 2010 was USD 4.53

billion.

T i i P



Taxation in Power sector

Current Scenario:

As per the existing provisions of the Income TaxAct, 1961, an Undertaking set up in any part of

India for the Generation or Generation andDistribution of power or Reconstruction or revivalof a power generating unit if it begins to generatepower at any time during the period beginning on1st April, 1993 to 31st March, 2011 is eligible forProfit based deduction subject to fulfillment ofother conditions stipulated under the provisions ofthe Income Tax Act, 1961.

T ti i P t



Taxation in Power sector (continued)

Direct Tax Code (DTC) Proposals DTC 2010 would replace the Income Tax Act, 1961 and, hence, it is

provided that the businesses eligible for profit-linked incentives underthe Income Tax Act, 1961 regime as of 31 March 2012, whose taxholiday period has not expired, shall continue to be eligible for profit-linked tax incentives for the unexpired period, subject to the followingconditions

The method of computation of profits shall be as per DTC 2010, exceptthat capital expenditure and pre-commencement business expenses willnot be allowed as a deduction.

The period of deduction shall not include a period for which deductionwas not allowable under the Income Tax Act, 1961. However, questionmay arise as to whether the restriction will apply only during the periodof tax holiday or on a perpetual basis. Question may also arise if thelimitation on grant of capital allowances, including depreciation, will alsoextend to assets acquired prior to March 2012 and which have alreadybecome part of the block of assets.

The taxpayer continues to satisfy the conditions as specified under

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Taxation in Power sector (continued)

Effect on Undertaking set up on or after 1st April, 2012: An Undertaking set up in any part of India for the Generation or

Transmission or Distribution of power and if it begins to generatepower at any time on or after 1st April, 2012 will be eligible forinvestment-based incentives wherein capital expenditure andexpenditure prior to commencement of Business shall be allowed

as Business Expenditure except expenditure incurred onacquisition of any Land including Long Term Lease, Goodwill orFinancial Instrument.

Moreover, the Direct Tax Code has also allowed PowerCompanies to offset Losses against the Profits of other

infrastructure projects or corporate income in the current year aswell as future years which is a welcome measure.

The Direct Tax Code, 2010 has curtailed the some of theprovisions of Income Tax Act, 1961 even though it is positive stepfor the Power Sector and beneficial to Existing as well as New

Power Undertakings.

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Policy and Regulations

To promote renewable energy technologies in thecountry, the government has put in place somesubsidies & fiscal incentives.

• Income tax breaks• Accelerated depreciation

• Custom duty/duty free import concessions

• Capital/Interest subsidy

• Incentives for preparation of Detailed Project Reports(DPR) and feasibility reports

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Policy and Regulations (continued)

100 percent income tax exemption for any continuous block ofpower for 10 years in the first 15 years of operations .

Providers of finance to such projects are exempt from tax on anyincome by way of dividends, interest or long-term capital

Accelerated 100-percent depreciation on specified renewableenergy-based devices or projects.

Accelerated depreciation of 80 percent in the first year of operations

Interest rate subsidies to promote commercialization of newtechnology

Lower customs and excise duties for specified equipment

Exemption or reduced rates of central and state taxes.

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Ministry for Non-Conventional Energy Sources mix of fiscal andfinancial benefits:

2/3rd of the project cost subject to a maximum of Rs. 2.00 crore per100 KW for procurement of modules, structures, power conditioningunits, cabling etc. to the implementing agency. The balance cost onland, extension of grid lines, transformers, civil works, foundation

and erection and commissioning, etc. is met by the implementingagency.

Up to Rs.1.0 lakh for the preparation of Detailed Project Report(DPR) for the grid interactive SPV power projects.

2.5 percent of its share of project cost, subject to a maximum ofRs.5 lakhs for performance evaluation, monitoring, report writing,etc. to the State Nodal Agency.

Interest subsidy of up to 4 percent to Financial Institutions

including IREDA, Nationalized Banks etc. for captive power projectsof maximum ca acit 200 KW b industr .

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Energy Conservation Act –

2001

Focus on energy efficiency

Standards and labeling

Designated consumers requirements Energy conservation building codes

Energy conservation fund

Bureau of Energy Efficiency

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Electricity Act 2003

Combined several existing pieces of legislation

Intended to accelerate growth of power sector

Targets additional 10 percent from renewableby 2012 (1000 MW/year capacity)

Competitive market-based

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Electricity Act 2003

Features include

National Electricity Policy

De-licensing of generation and captive generation Public ownership of transmission companies

Open access in transmission

Freedom for distribution of licenses

Establishment of State Electricity RegulatoryCommissions

License-free generation and distribution in rural areas

Polic and Reg lations




Provisions and activities impacting the powersector:

Elimination of ceiling on foreign equity participation

Streamlining the procedure for clearance of powerprojects

Establishment of the Central Electricity RegulatoryCommission

Formulating an action plan to set up the National

Policy and Regulations




State reforms impacting the power sector: Unbundling the State Electricity Boards (SEB) into

separate generation, transmission and distributioncompanies

Privatizing the generation, transmission and distributioncompanies

Setting up independent state electricity regulatorycommissions

Making subsidy payments for subsidized categories of

customers by state governments Making tariff reforms by state governments

enabling legislation and operational support extended tothe SEB/utility

improving operations of SEBs, particularly with regard to

better management practices, reduction of transmission

Road ahead



Road ahead…

Given the time remaining for exhaustion ofconventional sources, power would majorly beproduced from Renewable sources of energy

– Wind, Water, Sun, Biomass etc.

With huge support from the government,overall production capacity of the RES powerplants is likely to expand exponentially in thenext decade.



Thank You

Power Industry - India

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