You are on page 1of 5

POWER OVERVIEW

1. India has the fifth largest generation capacity in the world with an installed capacity of 185.5 Gigawatt (GW) as of November 2011. 2. Thermal power plants constitute 65% of the installed capacity, hydroelectric about 21% and rest being a combination of wind, small hydro, biomass, waste-to-electricity, and nuclear. 3. The per capita average annual domestic electricity consumption in India in 2009 was 96 kWh in rural areas and 288 kWh in urban areas for those with access to electricity, 4. 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. 5. Aided by the ambitious plan to add around 78.7 GW of additional generation capacity in the 11th plan by the year 2012, according to CRISIL Research estimates, about INR 7, 50,000 crores is likely to be invested in the power sector over the next five years by 2013-14. 6. Of this, INR 4, 80,000 crores is expected to be invested in the power generation space. Nearly half of the investments in the power generation space are likely to be made by the private sector8. 7. The country's annual electricity generation capacity has increased in last 20 years by about 120 GW, from about 66 GW in 1991[37] to over 100 GW in 2001,[38] to over 185 GW in 2011.[39] 8. India's Power Finance Corporation Limited projects that current and approved electricity capacity addition projects in India are expected to add about 100 GW of installed capacity between 2012 and 2017. This growth makes India one the fastest growing markets for electricity infrastructure equipment

Hydro-Power
9. The share of thermal power as a proportion of total power generated has decreased from 71 per cent to 66.3 per cent in the last decade. The share of hydro has increased to 26 per cent from 25.7 per cent. 10. India is endowed with economically exploitable and viable hydro potential about 84,000 MW at 60% load factor.

11. In addition, 6,780 MW in terms of installed capacity from Small, Mini, and Micro Hydel schemes have been assessed. 12. Also, 56 sites for pumped storage schemes with an aggregate installed capacity of 94,000 MW have been identified. 13. The present installed capacity as of 30 June 2011 is approximately 37,367.4 MW which is 21.53% of total electricity generation in India 14. The 50,000 MW hydro initiatives have been already launched and are being vigorously pursued with DPRs for projects of 33,000 MW capacities already under preparation. 15. Hydel projects call for comparatively larger capital investment. Therefore, debt financing of longer tenure would need to be made available for hydro projects. Type Micro Mini Small Station Capacity Up to 100 KW 101 KW to 2000 KW 2001 KW to 25000 KW Unit rating Up to 100 KW 101 KW to 1000 KW 1001 KW to 5000 KW

Demand Trends
16. During the year 201011, demand for electricity in India far outstripped availability, both in terms of base load energy and peak availability. Base load requirement Availability Deficit 861,591 (MU) 788,355 MU 8.5% Peak loads 122 GW 110 GW 9.8% 17. In a May 2011 report, India's Central Electricity Authority anticipated, for 201112 year, a base load energy deficit and peaking shortage to be 10.3% and 12.9% respectively. 18. The peaking shortage would prevail in all regions of the country, varying from 5.9% in the NorthEastern region to 14.5% in the Southern Region. 19. India also expects all regions to face energy shortage varying from 0.3% in the North-Eastern region to 11.0% in the Western region. 20. India's Central Electricity Authority expects a surplus output in some of the states of Northern India, those with predominantly hydropower capacity, but only during the monsoon months. In these states, shortage conditions would prevail during winter season.[22] According to this report, the five states with largest power demand and availability, as of May 2011, were Maharashtra, Andhra Pradesh, Tamil Nadu, Uttar Pradesh and Gujarat. 21. Gujarat was declared a power surplus state, with about 23 GW more power available than its internal demand. 22. The 17th electric power survey of India report claims: Over 201011, India's industrial demand -35% of electrical power requirement, Domestic household -28%, Agriculture- 21% Commercial- 9% Public lighting and other miscellaneous applications -rest.

The electrical energy demand for 201617 is expected to be at least 1392 Tera Watt Hours, with a peak electric demand of 218 GW. The electrical energy demand for 202122 is expected to be at least 1915 Tera Watt Hours, with a peak electric demand of 298 GW. 23. McKinsey claims that India's demand for electricity may cross 300 GW, earlier than most estimates. To explain their estimates, they point to four reasons: India's manufacturing sector is likely to grow faster than in the past Domestic demand will increase more rapidly as the quality of life for more Indians improve About 125,000 villages are likely to get connected to India's electricity grid Currently blackouts and load shedding artificially suppresses demand; this demand will be sought as revenue potential by power distribution companies 24. A demand of 300GW will require about 400 GW of installed capacity, McKinsey notes. The extra capacity is necessary to account for plant availability, infrastructure maintenance, spinning reserve and losses.

Access to Electricity
25. Despite an ambitious rural electrification program some 400 million Indians lose electricity access during blackouts. 26. While 80% of Indian villages have at least an electricity line, just 52.5% of rural households have access to electricity. 27. In urban areas, the access to electricity is 93.1% in 2008. 28. The overall electrification rate in India is 64.5% while 35.5% of the population still lives without access to electricity. 29. According to a sample of 97,882 households in 2002, electricity was the main source of lighting for 53% of rural households compared to 36% in 1993. T & D Losses 30. If current average transmission and distribution average losses remain same (32%), India needs to add about 135 GW of power generation capacity, before 2017, to satisfy the projected demand after losses. 31. In 2010, electricity losses in India during transmission and distribution were about 24%, while losses because of consumer theft or billing deficiencies added another 1015%.[31] 32. According to two studies published in 2004, theft of electricity in India, amounted to a nationwide loss of $4.5 billion.[32][33] This led several states of India to enact and implement regulatory, and institutional framework; develop a new industry and market structure; and privatize distribution. Monthly billing has increased substantially, and the collection rate reached more than 98%. Transmission and distribution losses were reduced by 8%.

Policies and Regulations


33. The Electricity Act 2003 has put in place a highly liberal framework for generation. a. There is no requirement of licensing for generation. b. The requirement of techno-economic clearance of CEA for thermal generation project is no longer there.

34.

35.

36.

37. 38.

c. For hydroelectric generation also, the limit of capital expenditure, above which concurrence of CEA is required, would be raised suitably from the present level. d. Captive generation has been freed from all controls. e. Section 63 of the Electricity Act provides for development of projects on the basis of competitive bidding for tariff. f. Sections 61 and 62 allow such projects developed on the basis of tariff to be fixed by the Regulator on the basis of capital cost and norms. The Electricity Tariff Policy notified in January 2006 also allows a special dispensation for project development by State and Central PSUs on the basis of capital cost and norm-based tariff to be determined by the Regulatory Commission. This dispensation, allowed for PSUs, is now proposed to be made available for the same period of 5 years to promote hydro-power development even through the private sector route. The State would be required to follow a transparent process for selection of the developer. While the initiative for allocation of the project would remain with the State Government (subject to the requirement of transparency in the allocation), the scrutiny of the regulator and the CEA would ensure that the project is being designed and built in the most optimal and economic manner, and that the interest of the consumers is adequately protected. From the point of view of the developer, this procedure would reduce numerous risks associated with the construction and operation and maintenance (O&M) of hydro projects. New Hydel Policy announced with an objective of making investment in hydro projects more attractive. The government has prepared plan for creation of National Grid by 2012 and infrastructure to facilitate inter-regional exchange of 30,000 MW of electricity by 2012.

Equipment Shortage
39. Equipment shortages have been a significant reason for India missing its capacity addition targets for the 10th five year plan. 40. While the shortage has been primarily in the core components of Boilers, Turbines and Generators, there has been lack of adequate supply of Balance of Plant (BOP) equipment as well. These include coal-handling, ash handling plants, etc. 41. Apart from these, there is shortage of construction equipment as well. The Working Group on Power for 11th Plan has outlined the requirement for construction equipment for Hydro power plants Particulars of Equipment Hydraulic Drill Jumbos (1 to 3 boom) Hydraulic Excavators (0.2 to 5.2 cum) Loaders Dozers Dumpers Road rollers Raise Borer/Climber Concrete Batching plant (30 to 360 cum/hr.) Estimated Requirement 210 520 540 420 730 55 45 210 Available 85 210 220 165 290 20 20 85 Augmentation Required 125 310 320 225 440 35 25 125

Aggregate Processing Plant (50 to 600 TPH) Tower Crane (6.5 to 10 T) Shutter with travelers Dry Shot Crete machines Wet Shot Crete machines Cranes (5 T to 60T) EOT/ Gantry Cranes (10T to 20T)

110 120 470 440 130 405 175

40 45 190 180 50 160 70

70 75 280 260 80 245 105

42. To alleviate supply shortage of equipment two measures are being adopted Enhancement of domestic equipment manufacturing capability by establishing JVs between Indian and foreign suppliers and Procuring equipment directly from international markets. 43. In both cases equipment sourcing needs to be managed effectively throughout the procurement cycle. For instance, it may be a challenge for new project owners to select a reliable supplier, monitor its performance and ensure the quality of supply on a sustained basis. 44. Also, the timelines for availability of additional domestic equipment supply has not been clearly defined.

Manpower Shortage
45. The profile of manpower shortage at supervisory staff level in hydro power sector is outlined below: Category Senior level Executive Middle level Executives Junior level Executives Non executives Total Estimated requirement 550 2000 4300 1700 8550 Available Augmentation 330 1200 2600 1000 5130 Required 220 800 1700 700 3420

The main buckets under which all the challenges of the power sector can be addressed are: a. Project Strategy, Organization & Administration b. Cost and Financial Management c. Procurement Management d. Project Controls, Quality & Risk Management e. Schedule Management By tracking each of the aspects in a well-defined framework, the reporting on project execution becomes focused.

You might also like