Industry Insight - Indian Power Sector

Industry Insight Indian Power Sector
Cygnus Business Consulting & Research Pvt. Ltd. 2010
Industry Insight
Indian Power Sector
May - 2010
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Tel: +91-40-23430203-05, Fax: +91-40-23430201, E-mail: info@cygnusindia.com;
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Disclaimer: All information contained in this report has been obtained from sources believed to be accurate by Cygnus Business Consulting
& Research (Cygnus). While reasonable care has been taken in its preparation, Cygnus makes no representation or warranty, express or
implied, as to the accuracy, timeliness or completeness of any such information. The information contained herein may be changed without
notice. All information should be considered solely as statements of opinion and Cygnus will not be liable for any loss incurred by users from
any use of the publication or contents
SYNOPSIS
India has the fifth largest generation capacity in the world with an over all installed capacity
of 159,398.50 MW as on 31 March 2010, which is about 4% of global power generation. The
Indian government has set ambitious goals in the 11th plan for power sector on account of
which is poised for significant expansion. In order to facilitate over 1,000 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 led to massive plans being proposed in the subsectors of Generation, Transmission and Distribution. Thermal generation in 11th five year
plan requires total funding of Rs2,984 billion for building up power plants. The current
installed transmission capacity is not more than 13% of the total installed generation capacity
(20,721.81 MW). With focus on increasing generation capacity over the next ten years, the
corresponding investments in the transmission sector are also likely to enhance. The Ministry
of Power intends to set up an Integrated National Power Grid in the country by 2012 with
approximately 200,000MW generation capacities and 37,700 MW of inter-regional power
transfer capacity.
In the backdrop of above scenario of massive investments required to cover up demand
supply mismatch in power Cygnus Business Consulting & Research has come out with a
report on power sector in India. The report comprises of 11 chapters; first chapter discusses
the overall scenario in generation, transmission and distribution and major sector wise
consumption. Second chapter provides a comprehensive scenario of all segments of power
followed by other chapters like transmission and distribution, demand for power, growth
drivers, major players in generation, transmission and distribution. Regulations/policies,
issues and challenges, critical success factors and future outlook chapters are provided in the
report to make the report a complete one for understanding the current scenario and emerging
growth opportunities.
The report will be useful for industry researchers, power equipment manufacturers, advisory
firms in the power sector, global investors looking at India in terms of future investments to
compensate power deficit status and above all global manufacturing companies intending for
setting up manufacturing units in India may be also benefited by this report to understand the
current power scenario and future status of the availability of power.
No of Pages: 210
Annexure: 04
No of Figures: 33
No of Tables: 67
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CONTENTS
Executive Summary ............................................................................................... 14
Highlights ................................................................................................................ 18
1. Overview............................................................................................................. 21
1.1 Introduction ...................................................................................................................21
1.2 Generation .....................................................................................................................21
1.2.1 Segment Wise Generation......................................................................................22
1.2.2 Sector Wise Contribution ......................................................................................22
1.3 Transmission ..................................................................................................................23
1.4 Distribution....................................................................................................................24
1.5 Consumption .................................................................................................................25
1.5.1 Consuming sectors .................................................................................................25
1.5.2 Sector Wise Consumption .....................................................................................25
1.5.3 Consumption trend in different sectors.................................................................26
1.5.4 Per capita consumption...........................................................................................26
2. Segments in Power Generation ........................................................................ 28
2.1 Thermal ..........................................................................................................................28
2.1.1 Overview of current status.....................................................................................28
2.1.2 Technology..............................................................................................................30
2.1.3 Profile of major projects.........................................................................................36
2.1.4 Investment Opportunities.......................................................................................38
2.1.5 Future Outlook .......................................................................................................39
2.2 Hydro .............................................................................................................................40
2.2.4 Future Outlook .......................................................................................................48
2.3 Nuclear...........................................................................................................................48
2.3.2 Nuclear Power Reactors & Technologies ..............................................................49

2.3.5 Future Outlook .......................................................................................................53
2.4 Wind ..............................................................................................................................54
2.4.2 Technology..............................................................................................................55
2.4.5 Future Outlook .......................................................................................................63
2.5 Solar ...............................................................................................................................64
2.5.1.1 Potential in the Indian Solar Power Sector..........................................................64
2.5.1.2 Policy Initiatives and National Solar Mission........................................................64
2.5.2 Technologies in solar power...................................................................................65
2.5.2.1 Solar Thermal Energy...........................................................................................66
2.5.2.2 Concentrating Solar Power .................................................................................66
2.5.2.3 Linear Concentrator Systems ..............................................................................66
2.5.2.4 Dish / Engine Systems ..........................................................................................67
2.5.2.5 Power Tower Systems .........................................................................................68
2.5.2.6 Thermal Storage...................................................................................................68
2.5.2.7 Solar Water Heating ............................................................................................68
2.5.2.8 Solar Water Heating for Buildings .......................................................................68
2.6 Growth of Solar Thermal Technologies........................................................................71
2.7 PV Systems .....................................................................................................................72
2.7.1 Flat-Plate PV Systems ..............................................................................................73
2.7.2 Concentrator PV Systems.......................................................................................73
2.7.3 Solar PV Manufacturers...........................................................................................74
2.7.4 Solar PV Installers ...................................................................................................74
2.7.6 Future Outlook .......................................................................................................79
2.8 Biomass ..........................................................................................................................80
2.8.1 Current Scenario ....................................................................................................80
2.6.6 Future Outlook .......................................................................................................88
2.7 Emerging Trends in Technology ....................................................................................89

2.7.1 Hydrogen.................................................................................................................89
2.7.2 Fuel cells..................................................................................................................90
3. Transmission and Distribution ............................................................................ 92
3.1 Overview of Current Status ..........................................................................................92
3.1.1 Major Projects Commissioned in Transmission .....................................................93
3.1.2 Transmission & Distribution (T & D) losses ..........................................................96
3.2 Distribution....................................................................................................................97
3.2.1 Accelerated Power Development & Reform Program ..........................................97
3.2.2. Rajiv Gandhi Grameen Vidyutikaran Yojna............................................................98
3.3 Investment Opportunities in Transmission and Distribution........................................99
3.4 Future Outlook............................................................................................................100
4. Demand for Power ........................................................................................... 101
5. Growth Drivers .................................................................................................. 103
5.1 High economic growth ................................................................................................103
5.2 Peak shortage of demand and supply ..........................................................................103
5.3 Growth in Power Generation during 11th Plan; focus on non-renewable source ....104
5.4 Capacity Addition during manufacturing growth ........................................................104
5.5 Attracting Private Investment in Power ......................................................................105
5.6 Huge untapped Renewable sources ............................................................................105
5.7 Huge FDI inflow ...........................................................................................................105
5.8 Government Fiscal measures.......................................................................................106
6. Major Players in Generation, Transmission and Distribution ........................ 107
6.1 Generation - Thermal Power Companies...................................................................107
6.1.1 National Thermal Power Corporation Limited....................................................107
6.2 Nuclear Power Company ............................................................................................111
6.2.1 Nuclear Power Corporation of India Limited ......................................................111
6.3 Hydropower Companies .............................................................................................116
6.3.1 National Hydroelectric Power Corporation........................................................116
6.3.2 North Eastern Electric Power Corporation Limited ...........................................121
6.3.3 Damodar Valley Corporation ...............................................................................125
6.3.4 Jaiprakash Hydro Power Limited ..........................................................................129

6.4 Wind Power Companies .............................................................................................133
6.4.1 BF Utilities Ltd.......................................................................................................133
6.4.2 Indo Wind Energy Limited ....................................................................................135
6.5 Biomass Power Companies .........................................................................................137
6.5.1 Orient Green Power ............................................................................................137
6.5.2 Clenergen India Private Limited............................................................................138
6.6 Power Transmission & Distribution ............................................................................139
6.6.1 Power Grid Corporation of India.........................................................................139
6.6.2 Reliance Infrastructure Limited.............................................................................147
6.6.3 Tata Power............................................................................................................152
6.7 Power Financing ...........................................................................................................159
6.7.1 Power Finance Corporation .................................................................................159
6.8 Power Equipment Manufacturers ................................................................................163
6.8.1 Suzlon Energy Limited...........................................................................................163
6.8.2 Tata BP Solar Limited............................................................................................166
6.8.3 Photon Energy Systems .................................................................................168
6.8.4 Anu Solar Power Pvt Limited ...............................................................................169
7. Regulations & Policies...................................................................................... 171
7.1 Electricity Act 2003......................................................................................................171
7.2 Status of Power Sector Reforms .................................................................................172
7.2.1 State Reforms Acts ...............................................................................................172
7.2.2 State Electricity Regulatory Commissions............................................................172
7.3 Foreign Direct Investment Policy ................................................................................175
7.3.1 Automatic Route...................................................................................................175
7.3.2 Generation & transmission of electricity..............................................................175
7.4 Income Tax Benefits ....................................................................................................176
7.4.1Incentives on return on investment (equity) .........................................................176
7.4.2 Other incentives ...................................................................................................176
7.4.3 Related incentives .................................................................................................176
8. Ultra Mega Power Projects .............................................................................. 177
8.1 Introduction .................................................................................................................177
8.2 Benefits of UMPPs........................................................................................................177

8.3 Current Status .............................................................................................................178
8.3.1 Special Purpose Vehicles.......................................................................................178
8.3.2 Allocation of Power to UMPPs.............................................................................181
8.4 Issues & Challenges......................................................................................................182
8.5 Future Outlook............................................................................................................184
9. Issues & Challenges ......................................................................................... 185
9.1 High Transmission & Distribution Losses ...................................................................185
9.2 Power TheftBiggest Threat to Industry...................................................................185
9.3 Demand-Supply Mismatch still continues ....................................................................186
9.4 Regulatory Hurdles ......................................................................................................186
9.5 Global Participants in Power & Distribution Transformer Market.............................186
9.6 Inadequate Generation and Transmission Capacity....................................................187
9.7 Quality of supply and maintenance of grid discipline ..................................................187
9.8 Subsidised Price Inflicts Losses ....................................................................................187
9.9 Price Hike in Transformer Raw Materials ...................................................................188
9.10 Acute Shortage of Fuel Supply...................................................................................188
9.11 Poor Quality of Coal and Ash disposal .....................................................................188
9.12 Untapped Renewable Energy Sources .......................................................................189
9.13 Shortage of power equipments .................................................................................189
10. Critical Success Factors ................................................................................ 190
10.1 Generation .................................................................................................................190
10.1.1 Sourcing & management of funds critical to the project....................................190
10.1.2 Selection of location for hydro & wind power projects important to ensure
optimum generation.......................................................................................................190
10.1.3 Success lies in controlling project implementation schedule .............................191
10.1.4 Roping in the private partner is a big deal..........................................................191
10.1.5 Smooth supply of raw material for coal-based projects to ensure ceaseless
generation ......................................................................................................................191
10.1.6 Demand-supply gap will lead to increased import of coal .................................192
10.1.7 Meeting environmental requirements is a social responsibility..........................192
10.1.8 Improving capacity utilisation of existing projects..............................................192
10.1.9 Meeting safety norms for nuclear power is an international requirement ........192
10.1.10 Risk Management Strategy and Planning is Critical for Nuclear Power Plants 193
10.1.11 Encouraging industrial entities to be self reliant in power ..............193
10.2 Transmission & Distribution......................................................................................193
10.2.1 Reducing T&D losses can save huge money .......................................193
10.2.2 Private participation can improve distribution management ........194
10.2.3 Effective utilisation of IT in transmission sector development ..........194
11. Future Outlook................................................................................................ 195
Annexure .............................................................................................................. 202
Annexure 1: Power Projects Statutory & Non-statutory Clearances ...........................202
Annexure 2: Bibliography ..................................................................................................205
Annexure 3: List of Abbreviations.....................................................................................207
Annexure 4: Power Map of India.......................................................................................209
List of Figures
Figure 1.1: Global operational Model of Electricity Industry
Figure 1.2: Power Consuming Sectors
Figure 1.3: All India Electricity Sales Sector Wise
Figure 1.4: Trend in Power Consumption by Sector (2003-04 to 2007-08)
Figure 1.5: Per Capita Consumption of Power (kWh)
Figure 1.6: Per Capita Consumption of Major Countries
Figure 2.1: Major Thermal Power Plants
Figure 2.2: Location Map for Various Hydro Power Projects under NHPC
Figure 2.3: Capacities planned to be added in 11th five year plan
Figure 2.4: Capacities planned to be added in 11th five year plan
Figure 2.5: Components of Biomass Energy Potential
Figure 2.6: State wise Biomass Potential
Figure 2.7: Sustainable Development via Renewable, Zero Carbon Emission Fuel
Figure 3.1: Trend of India's Transmission Lines
Figure 3.2: Share of Transmission lines March 2010
Figure 3.3: India's T&D losses
Figure 3.4: Funds required for T&D 11th five year plan
Figure 5.1: Trend of Components of GDP
Figure 5.2: India Power Consumption and Peak demand Deficit
Figure 5.3: Trend of Source wise Power
Figure 5.4: Untapped Power (MW) in India 2010
Figure 5.5: FDI in Power Industry
Figure 11.1: India Expected Power Generation Capacity till 2012
Figure 11.2: Fund Requirement for Power Sector
Figure 11.3: Sources of Fund to be Raised - 11th Five Year Plan
Figure 11.4: Thermal Power Capacity by 2012
Figure 11.5: India Hydro Capacity 2012
Figure 11.6: State wise projects to be completed in 12th plan
Figure 11.7: Fund Requirement in Hydro for 11th plan and 12th plan
Figure 11.8: Nuclear Power Plan 2012
Figure 11.9: Fund Requirement Nuclear Power - 12th Plan
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Figure 11.10: Wind Energy Capacity 2013

Figure 11.11: India Transmission network 2012
Figure 11.12: Transmission Addition Program
List of Tables
Table 1.1: Segment wise Power Generation (MW) as on March 31, 2010
Table 1.2: Summary of Installed Capacity (MW) as on March 31, 2010
Table 1.3 Sector wise and Ownership Capacity (MW) as on March 31, 2010
Table 2.1: Major Thermal Power Plants (to be read along with the map given above)
Table 2.2: Projects executed from Sept 2007 to March 2010
Table 2.3: Thermal Units Included in Original 10th Plan But Slipping to 11th Plan
Table 2.4: Future Thermal Power Plants under 11th Five Year Plan
Table 2.5: Hydropower Generation Capacity (MW) in 11th Plan (2007-12)
Table 2.6: Potential Hydropower Locations in India
Table 2.7: Hydel Units Commissioned during FY08-FY010
Table 2.8: Hydropower Projects Planned for 11th Plan (2007-12)
Table 2.9: Ongoing Hydroelectric Projects in 11th Plan (2007-12)
Table 2.10: Details Nuclear Power Plant
Table 2.11: Nuclear Power Plants under Construction
Table 2.12: Estimated Wind Power Potential in India
Table 2.13: Wind Turbine Technologies
Table 2.14: State wise share of Wind Energy (as on 30.9.2009)
Table 2.15: Major Wind Energy Projects Completed between 2007 and 2009
Table 2.16: Recently Completed Projects at a Glance: Wind Energy
Table 2.17: State-Wise Demonstration Wind Power Projects (As on 31 March 2009)
Table 2.18: Solar Photovoltaic Production Profile Indian Scenario
Table 2.19: List of Grid Interactive Solar Photovoltaic Plants Installed in Recent Past
Table 2.20: Proposed applications for investment in solar PV manufacturing Under the
Semiconductor Policy
Table 2.21: Availability of biomass resources in India along with their coal equivalent
Table 2.22: Energy Potential of Plantation Biomass
Table 2.23: Name of Major Projects completed in Biomass
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Table 2.24: List of Major Venture Capital Funds that have invested in Clean Energy
Table 2.25: Utilized and Unutilized Potential of Biomass Power in India
Table 3.1: Transmission Line Commissioned in 2009-10
Table 3.2: Sub station commissioned in 2009-10
Table 3.3: Details about inter regional transmission capacity
Table 3.4: State wise T&D Losses March 2009 (Revised Estimates)
Table 3.5: State wise AT&C Losses March 2008
Table 4.1: Demand as per National Electricity Policy
Table 4.2: Demand as per National Electricity Policy
Table 6.1: NTPC Projects in Operation
Table 6.2: NTPC Projects under Implementation
Table 6.3: Nuclear Power Plants in Operation
Table 6.4: NPCILs Power Projects under construction
Table 6.5: NHPCs Power Projects under operation (as on 31/07/2009)
Table 6.6: NHPCs Power Projects under Construction (as on 31/07/2009)
Table 6.7: NHPCs Power Projects Awaiting Clearance (as on 27/11/2009)
Table 6.8: NHPCs Power Projects under Survey and Investigation Stage
Table 6.9: Deposit Turnkey Projects (as on 27/11/2009)
Table 6.10: Projects of NEEPCO in operation
Table 6.11: Projects of NEEPC under construction
Table 6.12: DVCs Projects
Table 6.13: Capacity Addition of DVC in 2007
Table 6.14: Proposed Projects of DVC
Table 6.15: Project of JPVL at a glance
Table 6.16: Transmission Lines Approved by Power Grid Corporation of India in 2008 &
2009
Table 6.17: Sub Stations Approved by Power Grid Corporation of India in 2008 & 2009
Table 6.18: Generation Projects Executed in India by Reliance Energy
Table 6.19: Transmission Projects Executed in India by Reliance Energy
Table 6.20: EPC Projects Executed in India by Reliance Energy
Table 6.21: EPC Projects Executed Abroad by Reliance Energy
Table 6.22: Projects Executed in India by Tata Power
Table 6.23: Projects Executed abroad by Tata Power
Table 6.24: Re-powering/ Capacity Augmentation Projects in India by Tata Power
12
Table 6.25: Receiving Stations /Sub-Station Projects (in-house & abroad) by Tata Power
Table 6.26: Transmission & Distribution Projects by Tata Power
Table 6.27: Power Plant Management/Operation by Tata Power
Table 6.28: Projects Funded by PFC
Table 7.1: Status of Reforms in different states
Table 8.1: Special Purpose Vehicles
Table 8.2: Allocation of Power to UMPP
Table 9.1: Demand-Supply Scenario of Power in India
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Cygnus Business Consulting & Research Pvt. Ltd. 2010