SEC TOR PROFILE: POWER

Welcome to Karnataka - The Knowledge Hub of Asia

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SRI B. S. YEDDYURAPPA
Hon'ble Chief Minister

MESSAGE
Welcome to Karnataka, the Knowledge Hub of Asia. It gives me immense pleasure and pride to
showcase Karnataka’s potential at the Global Investors Meet 2010. The State’s entrepreneurial spirit in
innovations and R&D has given us recognition world over. Our rich natural resources, proactive
Government policies, talented workforce and a strong economy have propelled the State to become a
preferred investment destination.

I have a dream, a vision for this one State with many opportunities. Vision 2020 for Karnataka seeks to
propel a holistic growth by promoting equitable development of sectors and districts, by providing
employment to all sections of people and regions of the State. It will also focus on ensuring excellent
infrastructure, quality education, decent living conditions and life security for all our citizens. This vision,
combined with our passion for excellence will drive the economy to greater heights.

Karnataka is a State of action. We have witnessed rapid and unparalleled growth across our
knowledge-based sectors. Each of our 30 districts is unique in its own right, offering investment
potential like no other State in the country. Over 700 MNCs are already reaping the advantages of
making Karnataka their home. One new global company moves into our State every week and a new
industrial unit is approved every day. Supported by rich natural resources and progressive policies, the
State presents its investors with the right blend of strengths and opportunities.

“Karnataka’s capital Bangalore is a brand the world identifies
India with. It is also the single biggest reason why India has
become such a hot investment destination.”
Manmohan Singh
Prime Minister of India
We would like to assure all investors that the State Government would extend the fullest cooperation
and support for the timely implementation of their projects.
I would like to congratulate the investors for choosing our State and wish them grand success
in their ventures.
With best wishes,

B. S. Yeddyurappa
Chief Minister of Karnataka
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CONTENTS

KARNATAKA: LAND OF PLENTY

Snapshot 06

Economic growth 07

Agriculture 07

Manufacturing 08

Services 08

Karnataka’s contribution to India’s economy 08

Infrastructure and resources 09

Skilled manpower 11

Karnataka Policies: Calling investors 12

FUELLING GROWTH

The global scenario 14

The Indian scenario 15

Advantage Karnataka 16

Transmission 18

Distribution 18

Skilled manpower 19

POLICY AND INVESTMENT

Suvarna Karnataka Development Corridor Initiative 22

Innovative schemes 26

Karnataka Industrial Policy 2009-14 29

Strengths and opportunities 33

Powered by success 34

Shelf of Projects 35

LAND BANK 36

APPENDIX

Contact us 37

Websites 37

References 37
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Karnataka: Land of Plenty

Gold and Renewable Energy. The entrepreneurs here have

‘Industrialise or perish’ already ventured into these sectors, the result of which has seen
60000 Per Capita Income (Rs.) at Current Prices
50974
– Sir M Visvesvaraya, 50000
Karnataka
46731
the emergence of Karnataka as the ‘Knowledge Hub of Asia’. India 41902 42749
Karnataka’s world-famous engineer 37969
Further, salubrious climate, vast natural resources, proactive and 40000 36327
33684
32825
growth-intensive Government policies lend the State an edge. 29678
30000
Industrial Revolution alone can spur economic growth of India.
This, in turn, will impact literacy rate, lifestyle and income 20000
• Eighth-largest State in the Union of India.
levels for our future generatrion. The Government of • Located in the South-Western part of the country; shoreline 10000
Karnataka, therefore, has organised the Global Investors Meet along the Arabian Sea.
0
in Bangalore on June 3-4, 2010, showcasing the investment • Situated on the convergence of the Western and Eastern 2005-06 2006-07 2007-08 2008-09 2009-10

opportunities in the State. Ghat ranges, between 74° E and 78° E longitudes, and 11° N Source: CSO Directorate of Economics and Statistics, Bangalore

and 18° N latitudes.

Kar nataka is one of India’s fastest-growing States, with a vast and • Area: 191,976 km2.
diversified industrial base. Apart from nurturing the globally • 5.8% of India’s land area and is home to 5.1% of the
recognised Silicon Valley of India – Bangalore – the State has population (around 52 million).
emerged a prized destination for not only Information • Borders Goa (N-W), Maharashtra (North), Andhra Pradesh
Technology, but also Aerospace, Biotechnology, Heavy Construction (East), Tamil Nadu (S-E) and Kerala (S-W).
Machinery and Equipment, Sericulture and Floriculture.
Economic growth
Karnataka: Snapshot • One of India’s fastest-growing States, Karnataka has a strong
Capital Bangalore industrial base and a vibrant service sector.
• Software is State’s star performer; software exports form 35%
Area 191,791 sq. km.
plus of country’s software exports.
Population (Census 2001) 52,850,562
• Secondary sector contributes more than a quarter of GSDP
Population density (per sq. km.) 276 • State contributes 5% of national income.
Per capita income Rs. 40,309 • Since 2003-04, the State growth has pushed the levels of per
Percentage of urban population 35% capita income higher than the national average.
Literacy rate 66.6%
Agriculture
Number of districts 30
• Sustains about 63% of the population.
Number of towns 270 • The State is pushing to diversify agricultural activity;
Number of villages 27,028 horticulture and agro-processing are important activities being
Prominent cities Ankola, Bangalore, Bagalkot, encouraged by State Government.
Belgaum, Bidar, Bijapur, • Karnataka is one of the country’s largest producers of fruits
Chikmagalur, Chitradurga, and vegetables and No. 2 in floriculture.
Dandeli, Hubli-Dharwad,
• Karnataka is the second-largest producer of milk in India.
Davangere, Gadad-Betageri,
Gulbarga, Harihar, Kolar, Mandya, • The State has the largest sericulture in the country.
Mangalore, Mysore, Raichur,
Shimoga, Tumkur and Udupi
Prominent airports Bangalore, Mangalore
Prominent ports New Mangalore, Karwar

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Manufacturing • Second in area and third in production of plantation crops in

• It is well-diversified. the country.
• Main industries are engineering, chemicals, electrical, • Second-largest producer of tobacco in the country.
automobilie, textile, aeronautics and food processing. • Largest producer of spices, aromatic and medicinal crops.
• Industrial growth up from 6.2% in the Nineties to 8.9% per • Fourth among States in foreign technology transfer approvals. Karnataka: Third Highest FDI Inflows
annum since 2000. • Third-highest FDI inflows among States in India with 6.5% of (in USD million)
5369.62
all FDI inflows into the country.
Services
Sectoral Composition Of Income • Capital Bangalore is the world’s fourth-largest technology cluster. 6397.63
• The engine of growth in the State.
• Popular tourist destination, has second-largest number of 6850.95
38% • Bangalore, the State Capital, the powerhouse of IT in
56% the country. protected monuments in India.
22101.96
• State was the first in India to set up a Software Technology
25%
1993-1994 Park in 1991. Infrastructure and resources 38476.33
28% 2008-2009
• Karnataka is the first State to bring the private sector into It’s the goal of State to double investment from the present 4.5%
36% higher education. of GSDP in infrastructure to meet the needs of a fast growing
Source: DIPP (inflow from April 2000 to February 2010)
16% • State has the highest number of medical colleges in the economy. Private sector partnership actively sought by an
country and is a hub of medical tourism. investor-friendly Government – more than 88 projects worth
• Karnataka leads in biotechnology and nanotechnology. Rs. 87,000 crore are in various stages of implementation.
Source: CSO

The Karnataka Government’s Vision 2020 seeks to remove the Status of Infrastructure Projects (as on May 2010)
sectoral and regional disparities by encouraging diversified Sector Number Value
economic activity in all regions of the State, and by raising of Projects (Rs. Cr)
upgrading skills in the labour force through vocational training.
Transport logistics 52 35,432
Urban and Municipal Infrastructure 6 253
State’s contribution to India’s economy
Tourism 8 1,224
• No. 1 Investment Destination.
Energy 4 8,400
• One of India’s most progressive states.
• Contributes 8% to India’s industrial income. Industrial Infrastructure 10 41,231
• Contributes 9.8% of India’s product exports. Agri-Infrastructure 8 854
• More than a third of India’s software exports from State.
Total 88 87,394
• State has the second-largest iron ore reserves in India.
Share Of Employment
• More than half of India’s biotech companies in State. Source: IDD, Govt. of Karnataka
23%
1993-1994
• State’s Hutti mines are the only primary-gold producing
26.3% 2006-2007 source in the country. Power
• Third-largest producer of steel in the country. Karnataka’s three areas of concentration are: Energy Sufficiency;
10.6%

17.9%
• Seventh-largest producer of cement in the country, 6.5 % of Energy Efficiency; Green and Clean Power. The first hydel power
India’s production. station in India was set up in Sivasamudram in 1902 and the
66% • Third-largest producer of fruits and fifth-largest producer of longest transmission line at the then highest voltage in the world,
55.9% vegetables in the country, produces 12% of fruits and 8% of
was constructed to meet the needs of Kolar Gold Fields. With a
vegetables grown in India.
• Contributes 70% of India’s coffee production. transmission network of 36,542 CKMs and 1205 stations, the
Source: NSSO
• Largest area under horticulture, third-largest production in State distributes power to 1.7 crore consumers. As the demand
the country. for power rises with the groth of the economy, Karnataka intends
to meet the projected demand and make the State power-surplus
by 2014 through a rapid expansion of power schemes.

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Water
Karnataka is well connected with rest of the world; while the • Seven river systems – Krishna, Godavari, Cauvery and their
existing air, road, rail and sea connections already cater to high tributaries, North Pennar, South Pennar, Palar and the West
volumes of traffic in passengers and freight, they are in the flowing rivers in the Western Ghats: Kali, Gangavali (Bedthi),
process of expansion and upgradation. Aganashini, Sharavathy & Netravati.
• River systems together yield on an average 3475 TMC.
Air traffic • About 50% of this water is available to the State.
• International airports at Bangalore and Mangalore. • Hydel constitutes one-third power generation of the State.
• Bangalore International Airport Limited can handle 3,000
passengers per hour and is the first private airport in the country. Mineral resources
• Airports at Hubli and Belgaum cater to North Karnataka. • Geological setting for the State from Precambrian to recent
• Mysore airport has been upgraded for commercial traffic. formations provide 40,000 sq.km. of green stone belts.
• Hubli, Belgaum and Mangalore airports being upgraded. • Minerals found: Gold, silver, copper, iron, manganese, limestone,
• Airports planned at Hassan, Shimoga, Bellary, Bijapur & Gulbarga. dolomite, chromite, magnesite, granite etc.
• Karwar and Bidar defence airports being opened for civil traffic. • 174 mining leases have been issued by the Government for
• A helipad each is planed for all 30 districts. iron ore covering 18,670 hectares.
• A progressive State with a forward-looking mineral policy since
Shipping 2000, which was later revamped in 2008.
• Long shoreline of 300 km. • Policy emphasis on modern technology, transparency in
• Major port in New Mangalore handled more than 36.02 MT. granting mineral concessions, emphasis on value addition,
traffic in 2007-08 or 7% of the country’s total traffic in major ports. sustainable development in eco-sensitive areas, like the
• 10 minor ports in Karwar, Belekeri, Tadri, Honnavar, Bhatkal, Western Ghats.
Kundapur, Hangarkatta, Malpe, Padubidri and Old Mangalore;
handled 8,893.64 MT of cargo in 2007-08 or 4% of India’s Skilled manpower
traffic in minor ports. • Third-largest pool of engineering graduates; Karnataka’s share
• Tadadi and Haldipur ports set for expansion on PPP basis. of engineering degree and diploma holders is 10% in the
country after Andhra Pradesh and Maharashtra.
Roadways • Globally recognised higher-education centres.
• More than 150,000 km road network in State.
• Leading hub of research and development institutes.
• Targetted to add another 10,000 km.
• Low-cost skilled manpower makes value-added manufacturing
• 96 projects, under various stages of implementation.
almost 60% cheaper than in Western Europe and the USA.
• Monorail projects in Bangalore.
• Educational atmosphere in the State enhanced by institutes like
the only 100-year-old Indian Institute of Science (IISc) and the
Railways
Indian Space Research Organisation (ISRO).
• 3,300 km railway line across State.
• With 1,162 ITIs, Karnataka has 15% or the largest number of
• Konkan Railway links Mangalore with Financial Capital of India,
such institutes in the country.
Mumbai, and Northern States.
• High-speed rail link to the Bangalore airport on the cards.
Karnataka Technical Skill Development
• Two mono rail projects in State Capital to decongest city traffic. Karnataka Non-Technical Skill Development
Number of
institutions Number of
Communication institutions
Engineering Colleges 172
• 27.7 million wireless subscribers in the State, adds more than a Universities 22
million new subscribers each year. Medical, Dental, Ayurvedic
114
and Unani Colleges National Institutes 25
• State possesses the fourth largest Internet subscriber base in
the country. Polytechnics 273 International Schools 13
• Mobile towers in the State will go up from 3,000 to 6,000 Pharmacy Colleges 69 Law Colleges 83
towers by September. Industrial Training Institutes 1162 Foreign Language Training 9
• 3G services mean greater convergence between mobile and R&D Centres 103 Nursing Schools/ Colleges 350
Internet services in the future, ushering mobile TV, online gaming,
video call, movie on demand, faster downloads and other services.

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KARNATAKA POLICIES: CALLING INVESTORS
The Government has targeted a balanced regional growth by
creating development corridors in the State, linking major industrial
areas by national highways and rail links, and matching natural
resource capabilities. Every part of the State is set to be supported
with infrastructure projects to boost growth and employment.
Steel Zone: Bellary, Koppal, Bagalkot, Haveri, Gadag & Raichur
Cement Zone: Gulbarga, Bagalkot, Chitradurga, Belgaum & Others
Food Processing Zone: Bangalore Rural, Kolar, Belgaum, Gadag,
Koppal, Shimoga, Bagalkot, Bijapur, Davangere, Mandya & Dharwad
IT/BT Zone: Mysore, Mangalore, Hubli-Dharwad, Belgaum,
Shimoga, Gulbarga, Kolar & Mandya
Automobile Zone: Ramanagara, Shimoga, Dharwad & Kolar
Readymade Garments Zone: Bangalore Rural, Tumkur, Kolar,
Mandya, Belgaum, Bidar, Dharwad & Others
Sugar and Co-gen, Power Zone: Bidar, Belgaum, Bagalkot,
Shimoga & Mandya
Pharmaceutical/BT Zone: Bangalore, Mysore & Hassan
Power Generation Zone: Raichur, Bellary, Bijapur & Chitradurga
Media & Entertainment Zone: Bangalore Rural & Ramanagara
Karnataka State Government Policy 2009-14
Karnataka’s investor-friendly and responsive administration has
worked towards easing administrative procedures and implementing
policy measures for faster and smoother industrial growth.
• An investor-friendly responsive administration includes the
Karnataka Udyog Mitra, set up more than a decade ago.
KUM is a single contact point for all investors – from receiving
a proposal to ensuring its implementation.
• The State-level Single Window Clearance Committee and the
State High Level Clearance Committee facilitate clearance of
proposals in a speedy manner.
• Karnataka State Industrial Policy 2009-14 enhance all such
previous policies for a comprehensive, investor-friendly
approach.
• Land Bank – More than 3,000 acres in each district acquired by
the Karnataka Industries Areas Development Board (KIADB)
for industrial development, ironing out difficulties in creating the
basic infrastructure before operationalising production facilities.
• Suvarna Karnataka Development Corridor programme
connects most of the Tier II cities through a network of
highways, with cluster development in designated zones.
• Under the SKDC programme, 25 km on both sides of the
corridor will be developed for industrial clusters, townships,
satellite towns and sector-specific industrial zones.
12
• The planned four major industrial corridors, connected by
eight-lane roads, are:
* Bidar-Bangalore via Chitradurga
* Tumkur-Honnavar via Shimoga
* Chitradurga-Mangalore via Shimoga-Udupi
* Bangalore-Belgaum along National Highway 4
* Bidar-Gulbarga-Bellary-Hiriyur
* Chitradurga-Hospet-Bagalkot-Bijapur Yadgir
• Sector-specific industrial zones and SEZs that match the natural
resources and capabilities of a region with the industry
requirements.
• Special focus on skill development to enhance generation of
technical manpower.
• Creation of world-class ready-to-use infrastructure through
investments in power, roads, water, warehouse and logistic
facilities, connectivity through rails and ports etc.
• The State Government’s packages of incentives and
concessions for new industrial investments, include:
- 75% to 100% stamp duty exemption on land sale deeds
and loan documents registration.
- Land-conversion fine reimbursement of 75% to 100% for
converting agricultural land to industrial use.
- 100% exemption on entry tax on plant and machineries for
3 years during implementation of the project.
- 100% 5-year exemption on entry tax on raw materials,
inputs, components etc. during operation period.
- 50% limited to Rs.1 crore subsidy for effluent treatment plants.
- Interest-free loan to an extent of 50% of the value of fixed
assets at 25% of the assessed gross VAT for a period of
7 years extendable to 12 years.
- A State Policy for Special Economic Zones formulated as
per Central SEZ Act 2005 & Rules 2006, with a view to
provide a hassle-free environment for export production
and to attract FDI. The objectives of this policy are to set
up a single-point clearance to SEZ developers and units, to
facilitate and expedite establishing of SEZs, to delegate the
powers of the Labour Commissioner to the Development
Commissioner of SEZs and to extend incentives as below:
• Exemption from State Taxes for all purchases from
Domestic Tariff Area
• Exemption from Stamp Duty
• Exemption from Electricity Duty
• Capital subsidy for common effluent treatment plant
(maximum Rs. 1crore per SEZ)
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Fuelling growth

The Global Scenario The Indian Scenario

With electricity consumption rising in response to demands from
the growing population and economic activity, provision of
sufficient, reliable and cheap electricity is a priority for all
developing countries. Choice of technology in generation of
electricity therefore becomes an extremely critical input towards
a sustainable growth and development model. Currently, almost
60% of the world electricity is generated by the conventional
thermal source of coal-based plants, hydroelectric plants
compose 19% and nuclear power 9%. Other sources -
geothermal, solar, wind, wood and waste make up a small 3% of
total electricity generated in the world.
India has an installed generation capacity of 153694.09
megawatts of electricity, of which 65 % is accounted for by
thermal power, the hydro sector contributes 24 % and rest
comes from other sources of renewable energy such as solar,
wind and biomass. The overall power generation in India has
increased from 704.469 BU during 2007-08 to 723.794 during
the year 2008-09.
• Thermal power generation improved by 5.57%.
• Hydro power improved by 8.38%.
• Nuclear power generation improved by 12.3%.

However, technology in each country varies with local resource

FUEL TOTAL THERMAL POWER HYDRO NUCLEAR MINI HYDEL TOTAL
availability. For example, in the OECD countries, nuclear power
COAL GAS OIL RENEWABLE BIOMASS,
makes up the second-most important source of electricity,
contributing 22% to the total output. Developing countries rely WIND ETC
more on hydel and thermal sources for power. Yet, in the OECD MW 100599 82,343 17,056 1,200 36,863 4,340 15,427 1,57,229
countries, geothermal, wind and solar sources, which together
compose just 3% of the total, showed the highest growth in 2009, SHARE % 64.6 53.3 10.5 0.9 24.7 2.9 7.7
with output 18.6% higher than the previous year. With climate
change negotiations working towards the use of less Source: Ministry of Power, Government of India
carbon-intensive technology, the world is changing towards
With demand surpassing supply, India has a deficit of 12% in the
World Electricity Generation By Type cleaner, greener energy, and developing countries need to weigh
power sector, that is constraining economic growth by not
in their costs and benefits effectively to fit into this new world. allowing full utilisation of the country’s resources and potential.
9%
The International Energy Authority’s report on the cost of Recognising the urgent need to raise power generation capacity All-India Power Generation
19% Thermal

Nuclear electricity generation in 2009 reports that, when financing costs the Government of India implimented the National Electricity
Sector MW Share%
3%
Hydroelectric are low, nuclear energy followed by coal with carbon capture are Policy in 2005 with the objective of providing access to electricity
69% to all the households in India and raising per capita availability of State 78,378 52.5
Geothermal, Solar, Wind, the most competitive solutions. However, with higher financing
Wood and Waste electricity to over 1000 units by 2012.
costs, coal-fired generation followed by coal with carbon capture Sector
and gas-fired combined cycle turbines are the cheapest sources • Licence not required for generation and captive generation Central 50,523 34
Source: Energy Information Administration, USA of electricity. Apart from interest rates, generation costs of allowed.
Sector
renewables are heavily dependent on local resources and • Private sector permitted to set up coal, gas or liquid based
technological improvement. Where local conditions are thermal projects, hydel projects and wind or solar projects of Private 28,329 13.5
favourable, hydro and wind are competitive generation any size. Sector
technologies. Many renewable technologies are still in the nascent • Foreign equity participation upto 100% in the power sector
allowed under the automatic route. Total 1,57,229 100
technology stage, though their capital costs can be expected to
• Role of the Central Government is minimal and the State
decline over the next decade. Government and State Electricity Boards (SEBs) have been
As the IEA notes, governments play a key role when it comes to empowered to negotiate directly with developers, facilitating
the costs of raising financial capital and the price of carbon. The speedy clearances for the investor.
cost of capital is essentially a function of the risk faced by each • Ancillary sectors such as coal have been significantly
option for generating electricity - market risk, technology risk, deregulated.
construction and regulatory risk. With their high capital costs,
low-carbon technologies such as nuclear, renewables and carbon
capture and storage are particularly vulnerable. Smart
government action, however, can do much to reduce these risks.

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ADVANTAGE KARNATAKA Progress in Power Sector 2007-08 to 2009-10

Units 2007-08 2008-09 2009-10A*
Karnataka state has a long and enviable history in power genera-
tion - Asia’s first major hydro-electric generating station was set I. Installed capacity (cumulative)
up at Sivasamudram as early as 1902 for commercial operation, Public sector
at a time when technology was still in its infancy, even in the a) Hydel KPC Plants MW 3,407.35 3,637.35 3,637.35
advanced countries. The longest transmission line, at the highest
b) Wind Energy MW 5 5 5
voltage in the world, was constructed to meet the power needs
of mining operations at Kolar Gold Fields. c) Thermal (KPC) MW 1,470 1,970 1,970
d) Diesel Plants MW 128 128 128
At present, power sector generation in Karnataka is spear headed e) Solar PV Plant MW - - 6
by the Karnataka Power Corporation Limited (KPCL). Karnataka
Power Transmission Corporation Limited (KPTCL) is the sole Total MW 5,010 5,740 5,746
transmission utility which handles power from the grid to the Private sector
distribution level. Power is then distributed to the customers a) Hydel MW 412 422 544
through five Distribution Companies namely, BESCOM,
b) Wind MW 936 1,366 1,429
MESCOM, HESCOM, GESCOM & CESC, and one co-operative
Society i.e. Hukkeri Rural Co-operative Society. c) Co-generation & Biomass MW 421 618 629
Total - 1 MW 1,769 2,406 2,602
Karnataka has maintained its tradition of being at the forefront of Total installed capacity MW 7,279 8,146 8,616
technology and the Government of Karnataka has always
emphasised development of renewable energy, with Karnataka II. Electricity generation
Renewable Energy Development Corporation Ltd. (KREDL) as its a) Hydel KPC generation Mu 14,510 12,898 12,248
nodal agency championing the green agenda in the energy sector. b) Thermal (KPC) Mu 10,875 11,717 13,363
c) Diesel (KPC) Mu 214 451 205
In order to facilitate private investment in development of
conventional energy resources, Power Company of Karnataka Ltd. d) Private generation Mu 4,731 2,500 3,000
(PCKL) was formed in the year 2007. PCKL facilitates the entry of e) Wind (KPC) Mu 14 14 14*
private players in power projects in the state and also takes up Total - 2 Mu 30,344 27,580 29,161
energy trading on behalf of all distribution companies.
III. Electricity imported from
The main source of energy in Karnataka is thermal with the two a) Central projects Mu 10,992 11,600 10,495
main power plants at Raichur and Bellary. Hydel power projects b) Other states Mu 646 Nil Nil
on the rivers of Sharavathi, Kalinadi, Varahi, Ghataprabha, Almatti
Total - 3 Mu 11,638 11,600 10,495
and Shivanasamudram form the second most important source,
contributing 37% to total power generation in the state. The state IV. Pumpsets electrified (Cumulative) Lakh 17 18 18
has also been successful in harnessing wind energy, that makes up V. Hamlets electrified Nos. 561 883 436
6% of power generation. Kaiga Generating Station in Uttar
Kannada district is one of India’s six atomic power plants; in Source: KPC and KPTCL *Solar 2.95MW
operation since 2000, the plant has four units and in November
2009, approval was granted by National Power Corporation for
expansion in the Second Phase that will generate 1400 MW of
power when completed.

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Transmission: Skilled manpower

The power requirements of the State are met through drawing Karnataka has a large pool of skilled human resources -
power from the grid and is handled entirely by Karnataka power with the third largest strength of engineering graduates, the
transmission corporation limited (KPTCL) which transmits this state also has many reputed higher education centres and
Voltage wise Sub-stations & Transmission Lines
power from 400 KV and below up to 66 KV. Beyond 66 KV research institutes creating the capabilities required by the
66 kV 220 kV distribution companies handle the transmitted power and power industry.
110 kV 400 kV
distribute to the consumers. KPTCL has the least transmission
Voltage Level No. of Stations loss in the country. One of the reasons why global companies approach India is for
400kV 4
220kV 82
the highly skilled and low-cost manpower. India has a large pool
110kV 310 Distribution: of skilled engineers capable of matching international standards,
66kV 508
Total 904
with a capacity to generate more than a million graduates every
* End of March 2010
Karnataka was one of the first States in the country to separate year. Karnataka’s share of engineering degree and diploma
distribution from transmission and 4 distribution companies holders is 10%, the third highest in the country after Andhra
namely BESCOM, MESCOM, HESCOM & MESCOM were Pradesh and Maharashtra.
started and later CESC was started. The power transmitted to
the distribution companies are distributed to 1.7 crore Visvesvaraya Technology University (VTU) in Belgaum is leading
consumers across various categories. centre for engineering excellence, providing high-quality
Tariff wise Energy Consumption graduates. The 50-year-old National Institute of Technology
The distribution companies have 346 number of 33 kV Karnataka (NITK) at Suratkal is another house of technical
20%
Tariff
Percentage of
energy handled
sub-stations, 2,09,573.48 km of HT lines, 4,57,491.96 km of LT knowledge. The educational atmosphere in the State is enhanced
29%

5%
Domestic 20.65 lines and 3,56,504 distribution transformers. Over the years, by the presence of Indian Institute of Science (IISc), the
Commercial 5.00
Industrial 9.75
Karnataka has built up an efficient and robust distribution in the countries premier institution in research and post-graduation
10%
36%
IP 35.55 state which is considered one of the best in the country. education in science and engineering in Bangalore.
HT 29.5
Total 100
Dabhol - Bangalore Pipeline There are currently three training centres approved or in the
HT IP Industrial Commercial Domestic
process of being approved by the Central Electricity Authority for
• Phase I - 2011-12 training engineers and ITI graduates to meet the specialised
Length (Trunk line) - 730 km (30” diameter) needs of the power industry:
• Spurline - 242 km (18” diameter)
• Capacity - 14.31MMSCMD • Jindal Power’s JSW Energy Centre for Excellence at
• CAPEX - 4058 crores Toranagallu, Bellary.
• Phase II - 2012-13 • NPTI’s Power System Training Institute at Bangalore.
Spurline - 417 km (8“/10”/18” diameter) • GMR Energy Limited’s GMR Training Centre at Panambur in
• Capacity - 1.69 MMSCMD Mangalore is in the process of being granted approval.
• CAPEX - Rs. 486 crore
• Demand centres - Chikodi, Belgaum, Bijapur, Dharwad, JSW Energy Centre of Excellence (JSWECE) has been set up by
Davangere, Tumkur, Bidadi, Bangalore JSW Energy Limited, the energy vertical of the dynamic US$ 8
billion JSW Group with the objective of training engineers in the
gamut of O&M of thermal power plants, thereby providing skilled
and competent manpower to meet the ever-growing demand for
skilled engineers by power sector in the country.

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• JSWECE provides technical training to power professionals,
offering tailor-made programmes in power plant engineering.
• It is the first training institute established by a private power
company in the country to develop the Real-Time PC-based
Power Plant Simulator of 300 MW in the country.
• The 300 MW high fidelity dynamic emulated power plant
simulator is the replica of the 300 MW units being
commissioned by JSW Energy at Vijayanagar in Karnataka
(4x300 MW) and Ratnagiri in Maharashtra (4x300 MW).
• JSWECE which offers advanced simulator training
programmes to other power generating companies, has
signed an MoU with M.S. Ramaiah Institute of Technology,
Bangalore to run a one-year full time Post-Graduate Diploma
in Power Plant Engineering for engineering graduates.
• The centre also runs an autonomous Post Diploma Certificate
Course in Power Plant Engineering for Diploma graduates,
and conducts short-term Industrial Certificate Programmes in
Power Plant Engineering to give a power plant familiarization
to engineering and diploma students.
Power Systems Training Institute (PSTI) has been conducting
high-quality training courses in power systems since 1972. Set up
as the Load Despatch Training Institute by the Central Electricity
Authority at Bangalore in 1972, it conducted training courses on
economic load despatch techniques. The institute was renamed
Power Systems Training Institute in 1975 and the scope of training
was enlarged to cover other facets of power systems. PSTI
merged with the National Power Training Institute in 2002, an
ISO 9001:2000 organisation under the Ministry of Power,
Government of India.
• Conducts about 20 specialised courses for engineers from
various state/central electricity organizations.
The Central Power Research Institute (CPRI), established by
the Government of India in 1960, was re-organised into an
autonomous society under Ministry of Power in 1978, as a
National Level Laboratory for applied research in the field of
power engineering and also to function as an independent
authority for testing, evaluation and certification of electrical
equipment and components. The head office and its largest unit-
Central Research & Testing laboratory - is located in Bangalore.
• CPRI has built up expertise in the areas of transmission and
distribution systems, power quality, energy metering, energy
20
auditing, transmission line tower design, conductor vibration
studies, power systems instrumentation, transformer oil
reclamation and testing, diagnostic, condition monitoring and
estimation of remaining life of equipment, new materials for
power system application, ultra high voltage testing, short
circuit testing, high voltage testing and other related fields.
• The institute has a state-of-the-art seismic testing facility and a
Real Time Digital Simulation facility.
• CPRI offers consultancy services in these areas, including
specialized services on the performance, evaluation and
certification of different kinds of power equipment, in its seven
laboratories spread across India. CPRI also undertakes third
party inspection as one of its regular functions for Indian
utilities. CPRI has been functioning as an advisor cum
consultant in the states of Andhra Pradesh, Karnataka and
Kerala under the Accelerated Power Development & Reforms
Programme of the Government of India during the past
six years.
Apart from the engineering colleges and specialised training
centres for the power industry, there are also excellent
management schools, with IIM (Bangalore) leading the field, that
provide training and skills for various complementary fields of
finance, logisitics, human resources, marketing etc.
Karnataka also has the largest number, 1162, of Industrial Training
Institutes in India, making up 15% of the country’s total. These
institutes provide a valuable resource in skilled technicians.
Under the Government of India’s Skill Development Initiative, the
Modular Employable Skills Scheme has been initiated in
Karnataka. In 2009-10, 340 modules were developed in 32
professions for training of unorganised laborers, with priority
given to automobile, construction of building, hospitality and
electronic fields under this scheme, the government plans to train
ten million persons, by providing training in the ITI's/ITC's and at
any other location having facilities. More than 400 centres in the
state have registered as vocational training providers under this
programme to impart training through courses in auto repair,
electronics, fabrication, process instrumentation, plastics,
information and communication technology, material
management, soft skills etc.
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Policy and Investment

Suvarna Karnataka Development Corridor Initiative
The Karnataka Government has targeted balanced regional
development by creating development corridors in the state,
linking major industrial areas by national highways and rail links
and matching natural resource capabilities to sector specific
development. Every part of Karnataka is set to be supported
with infrastructure projects to boost growth and employment.
Under the Suvarna Karnataka Development Corridor (SKDC)
programme, an extent of 25 Kms on both sides of the corridor
will be developed by establishing industrial clusters, townships,
satellite towns and sector specific industrial zones.
Four major industrial corridors connected through eight-lane
roads:
Public sector enterprises dominate the Sector in the State:
• Karnataka Power Corporation Ltd (KPCL)
• Power Company of Karnataka Limited (PCKL)
• Karnataka Renewable Energy Development Limited (KREDL)
• Karnatak Power Transmission Corporation Limited (KPTCL)
• Bangalore Electricity Supply Company (BESCOM)
• Mangalore Electricity Supply Company (MESCOM)
• Chamundeshwari Electricity Supply Company (CESCOM)
• Hubli Electricity Supply Company (HESCOM)
• Gulbarga Electricity Supply Company (GESCOM)
On-going projects planned by KPCL, PCKL, KREDL and IPPs are
going to culminate after 2013-14. If these projects get completed
in time, then the energy sufficiency will be achieved only in 2013-14
with a capacity addition of 23,523 MW in the next four years.

1. Bidar - Bangalore via Chitradurga The installed capacity in the public sector was likely to be
2. Tumkur - Honnavar via Shimoga 6,014 MW by the end of the last fiscal contributed by 3,652 MW
3. Chitradurga - Mangalore via Shimoga - Udupi of hydel power, 2,220 MW of thermal power, 128 MW of diesel
4. Bangalore - Belgaum via Davanagere - Hubli power, 5 MW of wind power and 9 MW from solar PV plants.
There is more to be achieved, given that the State has a hydel
Additional corridors will cover Bidar, Bijapur and other potential potential of 7,750 MW.
locations.
Non-conventional energy sources are also being tapped for
Karnataka Industrial Areas Development Board (KIADB) is the optimal power generation in the State, an additional 4,200 MW is
nodal agency for this project and has already identified the land planned through these sources.
requirements, working towards the execution of projects through
Installed Capacity & Proposed Targets for RE Generation in Karnataka, 2009 -14
the PPP mode. Sector specific industrial zones are planned on
the PPP model across the state in synergy with local natural Renewable Energy Source Potential Installed Capacity Addition
resources with the aim of optimising value addition. (MW) Capacity by 2014 (MW)
Investments in Power Sector in Karnataka (MW) Target Cumulative
(Rs. crore) The State’s Power Generation zones are Raichur, Bellary,
5000
Wind Power 2,950 1,368 2,269 3,637
Bijapur and Chitradurga districts.
4000
Mini and Small Hydro 3,000 416 500 916
3000 Investments in the power sector have risen from Rs. 732 crore
in 2001- 02 to Rs. 4,105 crore in 2008 - 09, yet only 71% of the Cogeneration in 500 535 281 816
2000
demand is being met by the existing power sector in the state. Sugar Industry
1000 Economic activity has increased at a much faster clip than the Biomass/Bio-gas 1,000 81 1,000 1,081
power generation, there is an urgent need to tap all possible
0
2001 2002 2003 2004 2005 2006 2007 2008
sources of energy and meet the growing demand in the state. Waste to Energy 135 -- 50 50

Solar PV/ CSP/ Thermal 50 -- 100 100

Total 18,500 2,400 4,200 6,600

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Since 2008-09 a number of initiatives were taken up by the
government to address the severe power shortage resulting from
inadequate monsoons.
• Renovation and modernisation Unit IV of Nagazari Hydro
power house which has started producing 15 MW.
• Agreement with NTPC was signed to put up 4000 MW Ultra
mega power project at Kudgi in Bijapur district and land
acquisition process initiated.
• MOU was signed with Chattisgarh State for putting up a
1,600 MW plant at the pit-head in Jangir, Champa District.
Engineering and construction major Larsen & Toubro (L&T)
plans to set up a 1,600 MW power plant in Karnataka and has
bid under the PPP model along with KPCL for a coal-based
power plant involving an investment of Rs. 10,000 crore.
• Work started on 400 MW hydro electric plant at Gundia.
• KPCL in JV with BHEL started work for 2,400 MW Coal based
power plant at Yermarus, Edlapur and Raichur districts.
• 3 MW Solar power projects each at Kolar, Belgaum and
Raichur were undertaken by KPCL.
• Commissioning of 500 MW of Bellary Thermal Power Station
(BTPS) unit-I.
• 230 MW of Varahi Hydro Electric Power Plant Commissioned.
• Power Company of Karnataka Limited got the approval for
setting up a 1320 MW plant through private investors in
Gulbarga and process of land acquisition has began.
• Government land was allotted in Ghataprabha of Belgaum
District for establishing 1320 MW power plant through
Private Investment.
• PCKL invited bids for procurement of 2000 MW of power on
long term basis through competitive bidding route (Case-I)
under merchant Power Plants.
• PCKL also invited bids for 5 MW power plants at taluk level
for decentralised power production in each taluk.
• The State Cabinet also cleared gas-based project at Belgaum,
Kudgi and Davangere of 700 MW each.
• Wind power project of 500 MW also put up by NTPC in
collaboration with KPCL under joint venture.
24
• Power was purchased from IPP’s and through energy exchange.
• All the distribution companies went for scheduled power
supply of three-phase and single-phase (in rural areas) for
6 hours each during this period.
• From non-conventional energy sources, 422 MW capacity was
also added.
The state’s proactive investor-friendly policies have attracted
many investors in the recent past as well:
• Two gas pipeline projects of Relogistics Infrastructure and Gas
Authority of India Ltd have got in-principle approval from the
Karnataka State Government.
• Reliance (Relogistics) will lay 455 km of gas pipeline through
Chennai-Bangalore-Mangalore at a cost of Rs. 6,796 crore,
GAIL will lay 746 kms of gas pipeline from Dhabol to Belgaum
and Bangalore at a cost of Rs. 4,544 crore. These pipelines are
expected to help the industries as well as the State's
proposed gas-based power plants along the pipeline route.
• Oil refinery project at Rs. 8,655 crore in Dakshina Kannada is
mooted by Mangalore Refinery and Petrochemicals Ltd,
• Solar energy producer Azure Power plans to start a solar plant
each in Kolar and Bagalkot and add 12 MW to the grid in 18
months. Azure would invest between Rs. 200 crore and
Rs. 225 crore in both the plants.
• Shree Renuka Infra Projects has been given approval to set up
a thermal power plant at an investment of Rs. 5,500 crore.
• Bharat Heavy Electricals has been contracted by KPCL to set
up an eco-friendly grid-interactive solar power plant of 3MW
capacity, on turnkey basis. The company will invest Rs. 420
million in the solar photovoltaic power plant at Yapalaniddi
village in Raichur district. The scope of work in the contract
envisages engineering, manufacture, supply, erection and
commissioning of the equipment, besides operation and
maintenance of the plant for three years thereafter. The plant
will be completed in a schedule of eight months.
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Innovative Schemes for Energy:
Wind Energy: Karnataka, one of the first states to undertake
wind power projects, stands fourth in the country in wind energy
generation. Of the 30 districts in the state, 8 districts –
Chitradurga, Davanagere, Bellary, Gadag, Koppal, Belgaum, Hassan
and Tumkur - have excellent wind energy potential.
While the installed wind power as of September 2009 was about
1421 MW with different ratings of wind turbine generators
ranging from 225 KW to 1650 KW capacities, plans have been
made to establish wind power capacity addition of 800-1000
MW annually till 2014. The wind energy potential of the state has
been assessed to an extent of 13236 MW by considering wind
borne of 2% of the geographical area of the state
Mini Hydel: Hydro power plants with an installed capacity of
upto 25 MW are considered to be Small Hydro Plants and the
Government of Karnataka is encouraging private participation in
a bid to harness the small hydro potential available across the
State. The hydro power projects are built downstream of dams,
across rivers, streams, canals etc. While the installed capacity till
date is about 474.27 MW, potential for small hydro energy has
been assessed to an extent of 2500 MW in the State. The
Government has made power allocation for 2063.35 MW of
small hydro projects so far and has identified a number of small
hydro projects with different capacity amounting to total of 100
mega watt for development on Public Private Participation (PPP)
basis. The projects to be developed in this mode shall be in the
joint name of the Government and the developer. All technical
assistance for developing the project and also obtaining statutory
clearances will be facilitated by the Government for the
developer. In turn the developer has to pay a royalty for the
energy generated through these projects. The PPP could be on
Build Own Transfer (BOT)/ Build Own Operate & Transfer
(BOOT) basis.
Solar Energy: The region of the earth between the latitude of
40° North and 40° South is generally known as the solar belt
and this region is covered by an abundant amount of solar
radiation. Karnataka’s location between 11O 40’ and 18O 27’ N
latitude is ideally suited for harvesting solar energy. While
Karnataka receives global solar radiation in the range of
3.8-6.4 KWh/sq.m., the coastal parts of the state receive higher
global solar radiation, with good potential for solar energy plants.
26
Karnataka receives global solar radiation in the range of 5.1-6.4
kWh/sq.m during summer,3.5-5.3 kWh/sq.m during monsoon,
and 3.8-5.9 kWh/sq.m during winter. Maximum global solar
radiation is received in districts such as Uttara Kannada, Dakshina
Kannada etc. Global solar radiation in Uttara Kannada during
summer, monsoon and winter are 6.31, 4.16 and 5.48 KWh/sq.m.
respectively. Similarly, Dakshina Kannada has 6.16, 3.89 and 5.21
KWh/sq.m. during summer, monsoon and winter, whereas
Mandya district has minimum global solar radiation of 5.41, 3.45,
3.73 KWh/sq.m. during summer, monsoon and winter.
State’s solar potential can be summarised as:
• Solar Energy Availability: 4-7 kWh per square metre.
• Sunny for more than 300-330 days per year.
• Proposed solar potential estimated at about 10,000 MW.
• Investment needs of Rs. 15 crore per MW; total investment
requirement for 10,000 MW is of about Rs. 150,000 crore.
• Given that 5 acres required to generate 1MW of power, there
is a need of 50,000 acres for 10,000 MW.
Solar power will be the dominating source of energy in the future
and Karnataka has a tremendous potential. The field has seen
tremendous innovations globally that the State has yet to
experience. With cost reduction in harnessing the sun for power,
the State can hope to reap high profits.
KREDL has made a humble beginning in the solar sector and
entered into an agreement with investors for generation of 65
MW as against the proposal received for 100 MW. The Solar
sector has a distinct future of reaching the common man and as
well as producing power in a large scale.
KREDL has planned to develop the solar sector on a broad
principle by categorising it in three different concepts viz
Unorganised sector, Organised sector and the Investor sector.
The organised sector caters to the needs of remote villages by
installing solar roof tops. In the organised sector the concept of a
“Solar City” is being outlined and is proposed in cities like Hubli -
Dharwad, Mysore and Shimoga - Bhadravathi in the first phase.
Subsequent phases will include Mangalore and Belgaum.
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R-APDRP: The Government of India’s Restructured Accelerated
Power Development and Reform Programme (R-APDRP) aims
at ushering in a revival of the power distribution sector by
bringing down the overall Aggregate Technical and Commercial
(AT&C) losses in the country to 15% from over 30 % at present.
State governments are granted resources for the implementation
of this programme. The scheme has two parts.
a) R-APDRP Part-I: Initiatives limited to towns with a minimum
population of 30,000 as per 2001 Census. Karnataka is the
first State to have been sanctioned a Central Government
loan of Rs. 388 crore which will be converted to a grant if the
work is completed within the 3 years period. The Central
Government has been requested to reduce the population
criteria from 30,000 to 25,000 as per 2001 Census which
would enable 25 more towns to be included in the scheme.
b) R-APDRP Part-II: System improvement to strengthen regular
distribution. It is expected that Karnataka would get a grant of
Rs.1,200 crore, which would be used over the next 4 years to
bring the ATC losses below 15%.
Smart Grid: Always on the frontier of technology, Karnataka is
utilising its IT-advantage and high potential in resources for
renewable energy to tap into the latest technology and set up
Smart Grids in the State. A Smart Grid is an automated, widely
distributed energy delivery network, characterised by a two-way
flow of electricity and information and is capable of monitoring
everything from power plants to customer preferences to
individual appliances. It incorporates into the grid the benefits of
distributed computing and communications to deliver real-time
information and enable the near-instantaneous balance of supply
and demand at the device level.
Karnataka has planned a smart grid pilot project to be
implemented in Bangalore's IT hub, Electronics City under the
public-private partnership model. At a cost of Rs. 100 crore, the
project is expected to get implemented in less than two years
and the state plans to set up similar smart grids across the state.
The grid would cater to 2,000 customers in Electronic City. The
two-way communication nodes will be placed in each installation,
including houses and commercial buildings, and transformers to
help control power consumption. This will be India’s first Smart
Grid, an innovative scheme being propelled forward by a
government that is determined to address the issue of power
shortage in the most efficient manner.
28
Karnataka Industrial Policy 2009-14
Karnataka’s investor friendly and responsive administration has
worked towards easing administrative procedures and implementing
policy measures geared for faster and smoother industrial growth in
the state.
The Karnataka State Government has always provided an
investor-friendly responsive administration. The Karnataka Udyog
Mitra works as single-contact point for all investors - from
receiving a proposal to ensuring its implementation KUM is
actively working with the investors at all stages. The State Level
Single Window Clearance Committee and the State High Level
Clearance Committee (for investments greater than Rs. 50 crore)
have been working to clear proposals in a speedy manner.
While the State Industrial Policy 2006-11 was a comprehensive,
investor friendly policy, the government initiated a new Karnataka
State Industrial Policy 2009-14, with various improvements over
the previous policy. They include:
• One main policy measure, intended to smooth the path for
investors is an exclusive land acquisition policy and
development of a Land Bank - each district to have 1000-2000
acres acquired by the Karnataka Industries Development Board
for industrial development. This eases the difficulties faced by
investors in creating the basic infrastructure before
operationalising the production facilities.
• Suvarna Karnataka Development Corridor connecting cities in
all districts through a network of highways, with cluster
development in designated zones
• Sector Specific Industrial Zones and SEZs that match the natural
resources and capabilities of a region with the industry
requirements
• Special focus on skill development to enhance generation of
technical manpower
• Creation of World-Class ready to use Infrastructure through
investments in power, roads, water, warehouse and logistic
facilities, connectivity through rails and ports etc.
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In accordance with the above policy, the Karnataka government
has set up Power Generation Zone in Raichur, Bellary, and
Bijapur and Chitradurga Districts and Sugar and Co-Gen Zone in
Bidar, Belgaum, Bagalkot, Shimoga and Mandya Districts.
The government offers tax concessions to attract investment in
desired sectors and the automotive industry has benefited from
this policy. For all industrial investment, the state government has
put together an attractive package of incentives and concessions,
some of which are listed below.
• 75% to 100% stamp duty exemption on land sale deeds and
loan documents registration.
• Refund of land conversion fine to an extent of 75% to 100%
for converting agricultural land for industrial use.
• 100% exemption on entry of plant and machineries for a
period of 3 years during the implementation of the project.
• 100% exemption on entry of raw materials, inputs, components
etc for a period of 5 years during the operation period.
• Rs.100 lakhs subsidy for setting up of Effluent Treatment Plants.
• Interest free loan to an extent of 50% of the value of fixed
assets and will be sanctioned at 25% of the assessed gross
VAT for the initial period of 7 years to 12 years. Loan is
repayable after 7 to 12 years in four to five annual installments.
Karnataka Renewable Energy Policy 2009, was formulated to
undertake development of renewable sources with two goals:
• RE power Generation from 2400 MW to about 6600 MW
by 2014.
• Energy Conservation & Energy efficiency 7900 MU (900 MW).
Highlights of the policy:
• Green Energy Cess of Rs. 0.05 (five paise) per kWh on
commercial and industrial consumers to generate about
Rs. 55 crore annually.
• Akshaya Shakthi Nidhi (Green Energy Fund) to finance the
Renewable Energy projects amounting to Rs. 500 crore.
“Green Energy Cess” of Rs. 0.05 (five paise) per unit would be
levied on the electricity supplied to commercial and industrial
consumers. It is estimated to generate about Rs. 55 crore
annually. Out of the Rs. 55 crores, 10% of this fund to the tune
of Rs. 5 crore will be set apart as contribution to Energy
Conservation Fund for Energy Conservation activities. The
balance Rs. 50 crore will be set apart for Renewable Energy
project financing.
30
• Akshaya Shakthi Nidhi Trust to raise project finance for
Renewable Energy. Akshaya Shakthi Nidhi trust will be
registered under the Trust Act. The duration of the trust will
be 5 years. The object of the trust is to raise funds through
bonds or schemes to make portfolio investments in the
Renewable Energy sector.
• Consortium KREDL, Akshaya Shakthi Nidhi Trust and Energy
department in collaboration with the Karnataka State Finance
Corporation (KSFC).
• Land inventory of surplus and unused land, private land
purchase under Section 109, Karnataka Land Reforms Act,
Forest Land clearance within four months, land development
by KREDL are all features of a policy to facilitate land
acquisition for RE companies.
• 10% of barren government lands will be kept at the disposal
of KREDL for setting up Renewable Energy power projects,
10% of SEZ land to be reserved for RE power projects.
• Solar Karnataka Programme for 25000 Solar Roof Tops of 5
to 10 kw with Net Metering will be taken up with a 250 MW
potential during next 5 years with a generation potential of
350 MU.
Government support for harnessing solar energy include:
• Entry Tax Exemption: Windmills and its parts and accessories
are exempted and for small hydro projects all
electromechanical equipment and accessories are exempted.
• Electricity Tax: Electricity tax is exempted for a period of 5
years for captive consumption of power generated.
• Purchase Price for Power: KPTCL is purchasing power from
RE projects at Rs. 3.40 per unit (Wind) without any annual
escalation valid for the period of 10 years and for small hydro
Rs 2.80 per unit.
• Third-Party Sale of the Power: Under the open access
system, KPTCL allows the sale of power to a third party.
• PKCL is a Special Purpose Vehicle to facilitate private player
investment; two bids have been floated and are in the process
of being finalised.
• The Government of Karnataka has put in guidelines for
competitive bidding on Route A and Route B as specified by
the Ministry of Power, Government of India.
• Gas pipeline has great potential and will be ready by 2012,
IL&FS have been chosen as consultants for this.
• Three gas-based projects have already been approved at
Gadag, Belgaum and Davangere districts with a capacity of
700 MW each.
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• The Government has approved mini gas plants along the gas
pipeline; the bidders are free to select location and technology.
• 19 bidders have qualified at RFQ stage with the Government
acting as a facilitator.
• Solar plants of great potential in northern parts of Karnataka.
• The wheeling and banking scheme in Karnataka is unique,
offering the grid for generators and consumers to match
demand and supply.
• Government of Karnataka is encouraging the establishment of
a 4,000 MW Super Thermal Power Plant through the MOU
Route and a 1,320 MW Power Plant through the competitive
bidding route.
• The will Government provide all support and act as a
Facilitator. Coal-based power projects at Kudgi,Gulbarga and
Ghataprabha are proposed.
Project Land(Acres) Water(TMC)
Kudgi (4000 MW) 3500 5.2
Gulbarga (320 MW) 1500 2.06
Ghataprabha (320 MW) 1300 1.56
• Deemed Industry Status: Renewable energy projects have
been proposed for, according to the industry status in the
ensuing RE policy so that the required lands for development
of the project can be acquired without hassels.
• Green Projects Status: Wind and small hydro projects have
been accorded green projects status under, “The Water
(Prevention and Control of Pollution) Act”, 1974 and The Air
(“Prevention and Control of Pollution) Act”, 1981 respectively
and can avail the benefits of CDM by registering the project
with the UNFCCC under the Kyoto Protocol.
• Clean Development Mechanism (CDM): India being a
developing country allows the promoters to trade the CERs
among the developed nations. Thereby the indirect benefit
obtained from the CDM reduces the cost of the project.
Karnataka’s Semiconductor Policy 2010 is one more step in the
right direction of leveraging the State’s IT capabilities to tap clean,
green energy sources.
32
Strengths and Opportunities
Karnataka has a long and enviable tradition in being at the
forefront of technology, from setting up the first hydroelectric
power station in Asia in 1902 to being the first to introduce
Smart Grid technology in 2010. At the base of the value chain in
power generation lies raw materials. Karnataka is rich in resources,
it has seven river systems with their tributaries for hydel projects.
More than a third of the power generation in the State comes
from hydel sources and there is ample scope for utilising more
water for energy needs.
With high potential for wind energy, Karnataka has been amongst
the first to start wind power projects, the State ranks fourth in
the country with respect to wind energy generation. Located in
the high solar radiation belt, the State, especially in the coastal
regions, also has extremely high potential for solar energy.
Power in the state is generated through all conventional methods
- thermal, hydel, gas, the state has one of India’s six nuclear power
stations. Further, with high potential for renewable energy
development, the state has made impressive strides in co-gen and
small hydro projects, wind and solar energy plants. However, the
high growth in the economy has made strident demands on
power and the energy shortage calls for higher investments in the
power sector. While at one end stands the high unmet demand,
at the other is the enabling environment created by the state
government that has made power sector an attractive investment
option in Karnataka.
The SEZ for Hi-tech Engineering Products & related services in
New Mangalore Port spread over an area of 259.32 hectares set
up by Suzlon Infrastructure provides a reckoning source of
equipments for non-conventional energy related to windmills.
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The State’s expertise in skilled manpower is backed by high Shelf of Projects

quality engineering colleges, power research institutes and Power Districts
excellent training institutes for technicians at every level. The Gas Based Power Projects Bijapur
engineering companies in the State include those manufacturing
Thermal Plants Raichur
inputs for power plants, while the IT ecosystem is well suited to
Solar PV Power Plants Bellary
integrate with the power sector to set up the country’s first
Smart Grid, raising efficiency in power networks. Generation from Extra Thermal Energy of Coke Plant Chitradurga
Sustainable Research Institute
The high interest shown by the private sector in investing in the Agro Waste Wind Farm
power industry reflects on the strengths and opportunities Technology Transfer for Geo Thermal Projects
present in abundance here. The partnership between the private Wind Turbine Manufacturing Unit
sector and the proactive investor-friendly Government is slated to Geo Thermal Projects
bring about energy sufficiency in Karnataka.
Wave Energy Plants
Solar Thermal Power Plants
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Three decades and the task of fulfilling the power needs of a State. Captive Power Plants
That defines the Karnataka Power Corporation Limited (KPCL), Co-Generation Power Plants
a prime mover and catalyst behind power sector reforms in
Karnataka. KPCL’s strength has been its resource management which
has given it a high rating in project completion and commissioning
within the implementation calendar.Through the decades, the PSU,
constantly working at lowering the cost per MW, is known to raise
the bar on the quality of deliverables. ‘Growth from within’ is the
prime drive for KPCL, which today has an installed capacity of 5,510
MW of hydel, thermal and wind energy, with 4,000 MW in the
pipeline.The 1,470 MW Raichur thermal station is ISO 14001-2004
certified for its environment protection measures.

Karnataka’s emphasis on using the latest technology shows in its

attracting investments that are revolutionary in their field. For
instance, General Electric has a long relation with the State going
right back to 1902 when it set up Asia’s first hydroelectric plant at
Sivasamudram. In 1999, it set up the John F. Welch Technology
Centre in Bangalore, India, a multi-disciplinary research and
development centre. The centre collaborates with GE’s three
other R&D facilities that form the GE Global Research team (the
Research Centre in Schenectady, New York; Munich, Germany;
and Shanghai, China) to conduct research, development and
engineering activities for all of GE’s diverse businesses worldwide.

The Bangalore-based Udupi Power Corporation Ltd is an

imported coal-based thermal power project, in the process of
being set up at a cost of Rs 43,420 million through a mix of debt
and equity from a consortium of 14 banks and financial
institutions led by the Power Finance Corporation Ltd. This is the
first Independent Power Project in the country to operate on
imported coal and has been awarded a ‘mega project’ status. The
project has obtained all clearances from the Central and the State
Governments.

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Appendix

CONTACT US

The Principal Secretary to Government

Commerce & Industries Department
Government of Karnataka
Vikasa Soudha, Bangalore - 560 001, Karnataka, India
Ph: +91 80 2225 2443/22203 4340
E-mail: prsofci@gmail.com

Commissioner for Industrial Development and

Director of Industries & Commerce
2nd Floor, Khanija Bhavan
No.49, Race Course Road
Bangalore - 560 001

Karnataka Udyog Mitra

Managing Director
Karnataka Udyog Mitra
3rd Floor, Khanija Bhavan (South Wing)
No.49, Race Course Road, Bangalore - 560 001

Other agencies supporting investors in Karnataka

Karnataka State Industrial Investment Development Corporation http://www.ksiidc.com/
Karnataka Industrial Areas Development Board http://www.kiadb.kar.nic.in/
Karnataka Small Scale Industries Development Corporation http://www.kssidc.kar.nic.in/index.asp
Technical Consultancy Services Organisation of Karnataka http://www.tecsok.com/

Websites

Karnataka Udyog Mitra http://www.kumbangalore.com/

Karnataka Industries Area Development Board http://www.kiadb.in/
IBEF http://ibef.org/industry/aviation.aspx
Government of Karnataka http://www.karunadu.gov.in/informationdepartment/Pages/People-place.aspx
Government of Karnataka Water Resources Department http://waterresources.kar.nic.in/index.asp
Karnataka Power Transmission Corporation Ltd. http://www.kptcl.com/kptclhistory.htm
Karnataka Renewable Energy Development Ltd. http://kredl.kar.nic.in/Index.asp
Visvesvaraya Technological Institute http://www.vtu.ac.in/
NITK, Suratkal http://www.nitk.ac.in/

References

Economic growth data from Central Statistical Organisation, Government of India

Newspapers quoted: Hindu, Planning Commission, Government of India, Eleventh Five Year Plan documents
Govt. of India
http://www.iea.org/stats/indicators.asp?COUNTRY_CODE=29
Projected Costs of Generating Electricity – 2010 Edition, IEA, available at
http://www.iea.org/Textbase/npsum/ElecCost2010SUM.pdf
Ministry of power
http://www.mangalorean.com/news.php?newstype=broadcast&broadcastid=157663
http://www.jswel.net/about_jswece.html
http://psti.kar.nic.in/PSTI-Introduction.htm
http://www.powermin.nic.in/research/cpri.htm
http://detkarnataka.com/ilp/jsp/homepage/training/schemes/mes.jsp
http://dget.nic.in/mes/index.htm
http://www.business-standard.com/india/news/lt-plans-1600-mw-power-plant-in-karnataka/90171/on
http://www.blonnet.com/2010/01/06/stories/2010010652211900.htm
http://www.business-standard.com/india/news/lt-plans-1600-mw-power-plant-in-karnataka/90171/on
http://smart-grid.tmcnet.com/news/2010/01/07/4563464.htm
Scope for Global Investor’s in Global Energy Sector Karnataka State, KREDL
http://www.bloombergutv.com/industry-news/it-industry-news/44695/powering-up-the-smart-way.html
Scope for Global Investor’s in Global Energy Sector Karnataka State, KREDL
36 37
DEPARTMENT OF INDUSTRIES & COMMERCE KARNATAKA UDYOG MITRA Associate partners:
Government of Karnataka (A Government of Karnataka Organisation)
E-mail: commissioner@karnatakaindustry.gov.in E-mail: kum@kumbangalore.com
Website: www.karnatakaindustry.gov.in Website: www.kumbangalore.com