The power sector in India

8/7/2019 The power sector in India

http://slidepdf.com/reader/full/the-power-sector-in-india 1/12

The power sector in India supplies the world's 6th largest energy consumer, accounting for 3.4% of

global energy consumption by more than 17% of global population.

The power sector in India is mainly controlled by the Government of India¶s Public Sector

Undertakings (PSUs), have about 31.0% of total installed capacity of 171926.40 MW(as on

28/02/2011) in India is being produced by them. Major PSUs involved in the generation of

electricity include National Hydroelectric Power Corporation (NHPC) National Thermal Power

Corporation (NTPC), and Nuclear Power Corporation of India (NPCIL).

Besides PSUs, several state-level corporations are there which accounts for about 49.0% of overall

generation

Other than PSUs and state level corporations, private sector enterprises also play a major role

in generation, transmission and distribution, about 20.0% of total installed capacity is generated

by private sector.

India is the sixth largest in terms of power generation. About 65% of the electricity consumed

in India is generated by thermal power plants, 22% by hydroelectric power plants, 3% by

nuclear power plants and rest by 10% from other alternate sources like solar, wind, biomass etc.

53.7% of India¶s commercial energy demand is met through the country¶s vast coal

reserves. The country has also invested heavily in recent years on renewable sources of energy

such as wind energy. As of Oct 2010, India¶s installed wind power generation capacity stood

at 11632.44 MW . Additionally, India has committed massive amount of funds for the

construction of various nuclear reactors which would generate at least 30,000 MW. In July 2009,

India unveiled a $19 billion plan to produce 20,000 MW of solar power by 2020.

The per capita power consumptionI

ndia : 733.54KWh/y

rGlobal : 2340KWh/yr

Electricity GenerationIndia has the fifth largest generation capacity in the world with an installed capacity of 152 GW as on 30 September 20091, which is about 4 percent of global power generation. The top four countries, viz., US, Japan, Chinaand Russia together consume about 49 percent of the total power generated globally. The average per capita



consumption of electricity in India is estimated to be 704 kWh during 2008-09. However, this is fairly low whencompared to that of some of the developed and emerging nations such US (~15,000 kWh) and China (~1,800 kWh).The world average stands at 2,300 kWh2. The Indian government has set ambitious goals in the 11th plan for power sector owing to which the power sector is poised for significant expansion. In order to provide availability of over 1000 units of per capita electricity by year 2012, it has been estimated that need-based capacity addition of more than 100,000 MW would be required. This has resulted in massive addition plans being proposed in the sub-sectors of Generation Transmission and Distribution.

Thermal Power

Current installed capacity of Thermal Power is 111324.48 MW which is 65.75% of total

installed capacity.

y Current installed base of Coal Based Thermal Power is 92418.38 MW which comes to

53.75% of total installed base.

y Current installed base of Gas Based Thermal Power is 17706.35 MW which is 10.3% of

total installed base.

y Current installed base of Diesel Based Thermal Power is 1199.75 MW which is 0.69% of

total installed base.

The state of Maharashtra is the largest producer of thermal power in the country.

Hydro Power



India was one of the pioneering countries in establishing hydro-electric power plants. The power

plant at Darjeeling and Shimsha(Shivanasamudra) was established in 1898 and 1902 respectively

and is one of the first in Asia. The installed capacity as on (28/02/11) is approximately 37367.4

MW (21.73%) The public sector has a predominant share of 97% in this sector.

Nuclear Power

Currently, seventeen nuclear power reactors produce 4,780.00 MW (2.78% of total installed

base).

Renewable Power(R ES)

Current installed base of Renewable energy is 18454.52 MW which is 10.73% of total installed

base with the southern state of Tamil Nadu contributing nearly a third of it largely through wind

power.

Electricity TransmissionThe current installed transmission capacity is only 13 percent of the total installed generation capacity3. Withfocus on increasing generation capacity over the next 8-10 years, the corresponding investments in the transmissionsector is also expected to augment. The Ministry of Power plans to establish an integrated National Power Grid in thecountry by 2012 with close to 200,000 MW generation capacities and 37,700 MW of inter-regional power transfer capacity. Considering that the current inter-regional power transfer capacity of 20,750 MW 4, this is indeed anambitious objective for the country. Transmission of electricity is defined as bulk transfer of power over a long distance at high

voltage, generally of 132kV and above. In India bulk transmission has increased from 3,708 ckmin 1950 to more than 166000ckm, out of which 75556ckm is transmitted by Power Grid

Corporation of India (as on 30 Sep. 2010 ). The entire country has been divided into five

regions for transmission systems, namely, Northern Region, North Eastern Region, Eastern

Region, Southern Region and Western Region. The Interconnected transmission system

within each region is also called the regional grid.

While the predominant technology for electricity transmission and distribution has been

Alternating Current (AC) technology, High Voltage Direct Current ( H VDC) t echnology hasalso been used for int erconnect i on of all regi onal grid s acr oss t he count ry and for bulk

t r ansmi ssi on of power over long di stances.

El ect rici t y Di st ri but i on



While some progress has been made at reducing the Transmission and Distribution (T&D) losses, these stillremain substantially higher than the global benchmarks, at approximately 33 percent. In order to address some of theissues in this segment, reforms have been undertaken through unbundling the State Electricity Boards intoseparate Generation, Transmission and Distribution units and privatization of power distribution has been initiatedeither through the outright privatization or the franchisee route; results of these initiatives have been somewhatmixed. While there has been a slow and gradual improvement in metering, billing and collection efficiency,the current loss levels still pose a significant challenge for distribution companies going forward.

Rural electrification

Jharkhand, Bihar, Uttar Pradesh, Orissa, Uttranchal, Madhya Pradesh etc are some of the states where

significant number (more than 10%) of villages are yet to be electrified.

y Number of Villages (1991 Census) ± 593,732

y Villages Electrified (31/08/2010) ± 503,924

y Village level Electrification % ± 84.9%

Installed capacity of power utilities

Rank State/Union Territory

Total

Installed

Capacity

Total

Thermo Nuclear Hydro R ES**

² India159968.45 95152 4860 36878 13242

1 Maharashtra 21469.24 14071 852.06 3332.83 2159.21

2 Tamil Nadu 14638.28 6957.77 657.39 2093.95 4379.64

3 Gujarat 14325.47 8104.08 37.41 3572.93 668.66

4 Andhra Pradesh 13920.58 9498.39 825 3772 1397.5

5 Karnataka 10533.54 7034.47 203.72 1605.49 402.98

6 Uttar Pradesh 9,646.73 4057.09 190.9 3518.2 1880.547 Madhya Pradesh 6,780.01 3435.93 151.04 3031.57 161.47

8 West Bengal 8,113.27 4534.01 92.88 3223.67 262.71

9 Punjab 6,426.15 3774.03 469 1456.82 726.3

10 Rajasthan 8,471.69 6470.14 740 1162 99.55

11 Haryana 8,530.29 7054.03 76.16 1331.4 68.7

12 DVC 3386 3190 0 196 0

13 Delhi Territory 3,677.34 3045.2 47.08 585.06 0

15 Kerala 3514.05 1545.82 80.09 1769.1 119.04

12 Orissa 2072.46 865.23 0 1174.93 32.3

19 Jharkhand 2,152.57 1972.52 0 176 4.0521 Himachal Pradesh 1,896.47 156.43 14.08 1540.84 185.12

14 Chhattisgarh 3,607.05 3312.9 0 120 174.15

20 Bihar 1,969.99 1846.59 0 73 50.4

17 Uttarakhand 2,383.03 301.05 16.28 1955.73 109.97

18 Jammu and Kashmir 2,158.95 509.62 68 1469.5 111.83

22 Assam 980.3 522.19 0 431 27.11

23 Goa 357.23 327.18 0 0 30.05



24 Meghalaya 288.08 28.05 0 229 31.03

25 Pondicherry Territory 256.62 239.51 17.09 0 0.02

26 Tripura 243.36 165.35 0 62 16.01

28 Arunachal Pradesh 180.14 36.88 0 98 45.26

29 Manipur 158.86 71.41 0 81 5.45

30 Mizoram 119.33 67.86 0 34 17.47

27 Sikkim 193.09 76.98 0 75 41.11

31 Nagaland 102.67 21 0 53 28.67

32 NLC 100.17 100.17 0 0 0

33 Chandigarh Territory 93.46 41.58 4.84 47.04 0

36Andaman and Nicobar IslandsTerritory 65.4 60.05 0 0 5.35

34 Dadra and Nagar Haveli Territory 80.78 78.8 1.98 0 0

35 Daman and Diu Territory 71.1 69.12 1.98 0 0

37 Lakshadweep Territory 10.73 9.97 0 0 0.76

Power Finance Corporation Ltd.

PFC was declared a public Financial Institution under Section 4(a) of the CompaniesAct, 1956 in August, 1990. The corporation was registered as a nonbankingfinancial company by RBI and has been conferred with the status of Nav-Ratna PSUby Govt. of India on 22nd June, 2007. The authorised capital of PFC is Rs.2000/-crores. The paid up capital as on 31.03.2007 was Rs. 1147.76 crores.

PFC has been providing financial assistance so far for State Power Utilities and Muncipal Run Utilities,

besides playing a catalytic role in bringing about overall improvement in the power sector performance.PFC

has expanded its lending portfolio to cover the joint, central and private sector. The corporation has widened

its range of studies/facilities by introdusing bridge loan, leasing, supplier's credit assistance for

studies/consultancies/trainnings, bill discounting and rediscounting, working capital schemes, bonds, shares,

gurantee services etc.

main objectives

y

To Finance Power Projects in particular Thermal and hydro Projects

y To Finance Power Transmission & Distribution work.

y To Finance Renovation & Modernisation of power plants.

y To Finance System Improvement and Energy Conservation schemes.

y To Finance maintenance and repair of capital equipment etc.



y To Finance survey and investigation.

y To Finance studies, schemes and experiments.

y To Finance other energy sources.

Rural Electrification Corporation(R EC)

REC is a strategic player in financing of entire Power Infrastructure space whichincludes financing for generation, transmission, distribution and rural electrificationprojects, across the country without any limit. Out of every 10 pumpsets in thecountry, 6 have been energized under the schemes financed by REC.

REC is one of the leading Public Financial Institutions operating in PowerInfrastructure space. The financial products primarily include long term loans, debtrefinancing short term and bridge loans. REC's list of clients comprises of publicsector power utilities as well as private sector borrowers.REC has also jointly promoted Energy Efficiency Services Limited with other PSUs toplay a key role in implementation of the National Mission on Enhanced Energy

Efficiency under the Jawahar Lal Nehru National Solar Mission.

Major PSUs in Energy Sector:NTPC :

NTPC Limited (Formerly National Thermal Power Corporation) is the largest state-owned power

generating company in India. Forbes Global 2000 for 2009 ranked it 317th in the world. It is an Indian

public sector company listed on the Bombay Stock Exchange although at present the Government of

India holds 84.5%(after divestment the stake by Indian government on 19october2009) of its equity.

With a current generating capacity of 31134 MW, NTPC has embarked on plans to become a 75,000 MW

company by 2017. It was founded on November 7, 1975.

y Revenue- Rs 50,188.52 crore (US $10.89 billion) (2009-10)

y Net Income- Rs 8,837.65 crore(US $ 1.92 billion) (2009-10)

y Employee- 25,944(2009)

NHPC:

NHPC Limited (FormerlyNational HydroelectricPower Corporation), A Govt. of India Enterprise, was

incorporated in the year 1975 with an authorised capital of Rs. 2000 million and with an objective to

plan, promote and organize an integrated and efficient development of hydroelectric power in all

aspects. Later on NHPC expanded its objects to include other sources of energy like Geothermal, Tidal,

Wind etc.

y Net Income - Rs 2,090 crore (2009-2010)

y Authorised Capital - Rs150000 Million



y Energy Generated - 16960.45 MU

NPCIL:

TheNuclear Power Corporation of India Limited (NPCIL) is a government-owned

corporation of India based in Mumbai. One of the public sector undertakings, it is wholly owned by

the Union Government and is responsible for the generation of nuclear power for electricity. NPCIL is

administered by the Department of Atomic Energy (DAE), part of the Ministry of Science and

Technology. NPCIL is the only power utility company in India which uses nuclear fuel sources.

Net Income - Rs 416.41 crore (US $ 90.36 million)

NLC:

Neyveli Lignite Corporation Limited (NLC) is a government-owned lignite mining company in India. One

of the public sector undertakings, the company is wholly owned by the Union Government (49 percent)

and administered throughMinistry of Coal. NLC operates the largest open-pit lignite mines in India and

mines some 24 million tonnes of lignite per year for fuel, with an installed capacity of 2490 MW

of electricity per year. Of this, the origin state of Tamil Nadu consumes 1167 MW, with the

neighboring states (Kerala, Karnataka, and Andra Pradesh) consuming most of the rest.

DVC:

The Damodar Valley Corporation, popularly known as DVC, is the first multipurpose river valley project

of independent India. The corporation came into being on July 7, 1948 by an Act of theConstituent

Assembly of India (Act No. XIV of 1948). It is modelled on the Tennessee Valley Authority of

the USA. Jawaharlal Nehru, prime minister of India, Dr. B.C.Roy, chief minister of West Bengal and Sri

Krishna Sinha, chief minister of Bihar, took personal interest to ensure early success of the project.

Private Company



Reliance Power Limited-

The company was incorporated in January 1995 as Bawana Power Private Limited and changed its name

to Reliance Delhi Power Private Limited in February 1995. Later, it changed its name to Reliance EGen

Private Limited in January 2004, to Reliance Energy Generation Limited in March 2004, and to Reliance

Power Limited in July 2007.

A part of the Reliance Anil Dhirubhai Ambani Group, was established to develop, construct and

operate power projects in the domestic and international markets. Reliance Energy Limited, an

Indian private sector power utility company along with the Anil Dhirubhai Ambani Group

promotes Reliance Power. It ranks among India µs top listed private companies on all major

financial parameters,including assets,sales,profits and market capitalization.

Suzlon Energy-Conceived in 1995 with just 20 people, Suzlon is now a leading wind

power company with:

y Over 16,000 people in 25 countries

y Operations across the Americas, Asia, Australia and Europe

y Fully integrated supply chain with manufacturing facilities in three continents

y Sophisticated R&D capabilities in Belgium, Denmark, Germany, India and The Netherlands

y Market leader in Asia, S uzlon Market S hare (Combined with REpower)rose to 9.8% thereby

making Suzlon 3rd * largest wind turbine manufacturing company in the world

Tata Power Co. Ltd.

Tata Power started as the Tata Hydroelectric Power Supply Company in 1911, it is an amalgamation of

two entities: Tata Hydroelectric Power Supply Company and Andhra Valley Power Supply Company

(1916). Today Tata Power Company Limited is Indias largest private sector electricity generating

company with an installed generation capacity of over 2977 MW. The Company is a pioneer in the Indian



power sector. Tata Power has a presence in thermal, hydro, solar and wind areas of power generation,

transmission and retail. The founders of Tata Power pioneered the generation of electricity in India with

the commissioning of Indias first large hydro-electric project in 1915 in Bhivpuri and Khopoli, Karjat.

Map of Thermal Power Station inIndia

Electricity Regulation

The Electricity (Supply) Act, 1948

y Mandated creation of SEBs.



y Need for the State to step in (through SEBs) to extend electrification (so far limited to

cities) across the country.

y Main amendments to the Indian Electricity Supply Act

o Amendment in 1975 to enable generation in Central sector.

o Amendment to bring in commercial viability in the functioning SEBs ± Section 59

amended to make the earning of a minimum return of 3% on fixed assets a statutory

requirement (w.e.f 1.4.1985) .

o Amendment in 1991 to open generation to private sector a establishment of

RLDCs.

o Amendment in 1998 to provide for private sector participation transmission,

and also provision relating to Transmission Utilities.

The Electricity Regulatory Commission Act, 1998

y Provision for setting up of Central / State Electricity Regulatory Commission with

powers to determine tariffs.

y Constitution of SERC optional for States.

y Distancing of Government from tariff determination.

The Electricity Act, 2003

The Electricity Bill, 2001 was introduced in Lok Sabha on 30th August, 2001 and was subsequently

referred to the Standing Committee on Energy for examination and report. The Standing Committee

submitted its report on 19th December, 2002. Based on the recommendations of the Standing

Committee on Energy, the Government of India moved certain amendments. The Electricity Bill,

2001 along with these amendments, was passed by Lok Sabha on 9th April, 2003.

The Bill as passed by Lok Sabha was considered and passed by Rajya Sabha on 5th May,

2003. The Electricity Bill, 2003 as passed by both Houses of the Parliament received President¶s

assent on 26th May, 2003 and was notified in the Gazette of India on 2nd June, 2003.The

provisions of the Act except section 121 were brought into force with effect from 10th June 2003.



TheElectricity (Amendment) Bill, 2005

y The Electricity (Amendment) Bill, 2005 was introduced in the Lok Sabha on December 23,2005

to amend the Electricity Act, 2003. The Bill was referred to the Parliamentary Standing

Committee on Energy (Chairperson: Shri Gurudas Kamat), which was scheduled to submit its

report on March 23, 2006.

y The Bill proposes to amend the Act by deleting the provision for µelimination¶ of cross subsidies.

It , however, retains the provision for reduction of cross subsidies. The provision was deleted

taking into concern the fact that it might not be possible to eliminate cross subsidies in the near

future.

y The Bill seeks to provide that both the Central Government and State Government would jointly

attempt to supply electricity to all areas including villages and hamlets through rural electricity

infrastructure and electrification of households. In the Act, the onus of rural electrification was

solely on the State Government.

The offences relating to theft of electricity, electric lines,

Total Installed Capacity

Sector MW %age

State Sector82,452.58 47.96

Central Sector52,712.63 30.66

Private Sector36,761.19 21.38

Total 1,71,926.40

Fuel MW %age

Total Thermal 111324.48 64.75

Coal 92,418.38 53.75

Gas 17,706.35 10.30



Oil 1,199.75 0.70

Hydro (Renewable)37,367.40 21.73

Nuclear 4,780.00 2.78

R ES** (MNRE)18,454.52 10.73

Total 1,71,926.40 100.00

The power sector in India

Documents