Corporate Presentation

PART I
Disclaimer
 This presentation and the accompanying slides (the “Presentation”), which have been prepared by PTC India Limited (the “Company”), have been
prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities,
and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever.
 This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company
makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness,
fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the
information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly
excluded.
 Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that
are individually and collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are
subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not
limited to: the performance of the Indian economy and of the economies of various international markets, the performance of the power industry in
India and world-wide, competition, the company’s ability to successfully implement its strategy, the Company’s future levels of growth and
expansion, technological implementation, changes and advancements, changes in revenue, income or cash flows, the Company’s market
preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity, performance or
achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no
obligation to update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third
parties included in this Presentation are not adopted by the Company and the Company is not responsible for such third party statements and
projections.
 The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes
should inform themselves about and observe any such restrictions.
Overview
Genesis of PTC PTC Today

 Set up in 1999 at the initiative of Government of India with the  PTC’s business includes Short term, Medium term, Long term
following objectives: (including cross border) power trading, banking, trading of
 Promoting power trading to optimally utilize the existing power through Power Exchanges
resources;
40.0 37.1
 Facilitate development of power projects under private 35.1
sector 35.0
30.0 28.6
 Development of power market for market based investment
24.5
in the Indian Power Sector; and 25.0 24.3

 Promote exchange of power with neighboring countries. 20.0 18.2

13.8
 Promoted by industry participants with a credible track record 15.0
11.0
10.1
9.9
and significant sector experience 10.0 8.9 9.5
 NTPC - India’s largest thermal power generator 5.0 4.2
1.6
 POWERGRID - India’s largest Central Transmission Utility 0.0
(CTU) FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15
 PFC – Development Financial Institution (DFI) dedicated to Total BUs traded
the power sector
 PTC has now expanded its business operations and moved
 NHPC - Large hydroelectric power generator in India
towards an Integrated Energy player
 Played a pivotal role in creation of power market in India
 PTC India Financial Services Ltd
 Sale of MUs increased from 1,617 MUs* in FY 2002 to
37,137 MUs in FY 2015  PTC Energy Limited
 Revenue and PAT for FY2015 - INR 130,820 mn and INR  Direct investments in other identified projects
2031 mn respectively  Fuel Intermediation

* MUs: Million Units

 Shareholding Pattern
As on 31.03.2015

Others POWERGRID
23% NTPC
India’s largest India’s Central
Promoters
16% thermal power Transmission
Mutual
Funds generator Utility
15.40%
Promoters
PFC
NHPC
Insurance Development
Cos. Largest
17% Financial
FIs/Banks
Hydroelectric
FIIs Institution power generator in
2% dedicated to the
28% India
power sector

Source: PTC data

Strong Board and Management Team
Experienced and stable senior management team Corporate governance structure

Senior Management Team Board of Directors

Mr. Deepak Amitabh CMD Mr. Deepak Amitabh Chairman and Managing Director

Dr. Ashok Haldia MD & CEO (PFS) Ms. Jyoti Arora Director (Jt. Sec., Ministry of Power)

Dr. Pawan Singh Director (PFS) Mr. Ajit Kumar Director (Commercial & Operations)

Mr Arun Kumar Director (Finance)

Mr. Ajit Kumar Director (Comm. & Operations)

Dr Rajib K Mishra Director (Marketing and Business

Mr. Arun Kumar Director (Finance & CFO) Development)

Mr. A. K. Agarwal Director (Nominee of PFC)

Dr. Rajiv Kr. Mishra Director (Marketing & Business
Development)
Mr. K. Biswal Director (Nominee of NTPC)
Mr. Harish Saran Executive Director (Marketing)
Mr. Ravi P. Singh Director (Nominee of POWERGRID)
Mr. Rajiv Malhotra Executive Director & Group CRO
Mr. Hemant Bhargava Director (Nominee of LIC)

Mr. Bimal Dhar Executive Director (Commercial)

Mr. Anil Razdan Independent Director

Mr. V. S. Bisht Exec. Vice President Mr. Dipak Chatterjee Independent Director

Mr. D. Swarup Independent Director

Mr. Hiranmay De Exec. Vice President
Mr. H. L. Bajaj Independent Director

Mr. Ved Kumar Jain Independent Director

PTC: Milestones Signed Agreements for Tangsibji HEP in Bhutan; Long Term
Share~40% of total volume
2015
Export of power to Bangladesh 2014

Started PTC Retail for HT/industrial consumers 2013

PFS Listed on NSE and BSE;2011

2009 Established PTC Energy Ltd.;

2007 Established PTC Financial Services

2004 Listed on NSE and BSE

2002 Commencement of Cross Border Trade

Commenced sustained Business
2001 Operations

1999 Incorporated
PTC: Capability Profile
An Integrated Energy Player
Power Trading
Investments
• Domestic OTC market;

Short/Medium& Long-term • Early stage support as

trades (utilities) Equity Investor / co-
developer
Retail (Open Access
consumers) • PTC India Financial
Services Ltd.
• Cross Border trade

Renewables / Energy Fuel Intermediation

Efficiency
• Promoting Renewables • Tie up fuel from
through models like international markets
Bundling
• Sale of fuel in domestic
• Energy efficiency market
implementation
• PTC Energy Limited
• Advisory Services

* - Investment related business primarily through subsidiaries

PTC: Capability Profile (contd.)

Pan India • Relationship with all utilities in the country - Currently

trading with utilities in 27 States/UTs
Presence • More than 400 clients in Retail segment

Trading Volume • ~5300 MW (37,137 MUs) - ~2970 MW in short-term and

~2330 MW in long-term *
in FY15 • 27% of Power Exchanges’ volume contributed by PTC

• Total PPAs – more than 11,000 MW. Sale tie ups: more than
Power Purchase 7,500 MW (including Cross Border Sales)
Agreements • With domestic and international developers and covering
all major sources of generation

Success in Case-1 • Total LOI placed with PTC – ~4300 MW

Bidding • PPA signed out of above – ~2300 MW

• Managing complete power portfolio of various

Power Portfolio States/Utilities
Management • Jharkhand, Himachal Pradesh, Chhattisgarh, NDMC,
Tripura etc.

* - Converted at 80% PLF

Indian Power Sector
PART II
Sector Scenario
350 • Rising energy demand; consumption is estimated to increase from
912TWh today to 1915 TWh in 2022
• Per capita consumption of electricity in India is very low compared to
300 Other Developed Countries such as Canada, USA etc. 289
• Major coal importing nation in the world; high proportion of primary
energy needs being met by imports mainly in the form of crude oil and 245
250
gas
• India is the fourth largest producer and the fourth largest consumer in 223
the world, after China, US and Russia 200
200 • Power Generation Capacity increased at CAGR of 11.8% during FY 09-
15
150
132
Source: CEA, DIPP
105
100 Generation Capacity Growth Story 1947-2016 86
(Figures in GW)
64 69
50 43
27 28
5 9 13 17
1 2 3
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D D M M M M M M M M M M M M M M M M F
Evolution of the Power Sector
Prior to Power Market
Monopoly Suppliers (SEBs, Private Licensees) ; Each SEB had an allocated share in a
Central/ Jointly owned station

Generators (CGSs, IPPs and SEBs) with capacity fully tied up

Price setting by Central/ State Governments – SEBs hardly having any say

Entire sector developed on fixed rate return; Interplay of market forces

remained non-existent

Utilities would back-down in case of low demand and resort to load shedding in
case of excess demand

Power as a resource for earning revenue did not exist in this cost based regime
Objective of Indian Power Market
Current situation
Largely cost plus tariff systems
with limited incentives for
improving efficiencies
End goal
A well functioning power market
leading to free competition
Gradual transition path

The power sector needs to introduce competition into the power procurement
process as it gradually migrates to competitive markets across electricity value
chain
 Power Sector Value Chain
Customers

Distribution NR
NER
Trading
ER

Transmission WR

Generation

Resources SR
INSTITUTIONAL
FRAMEWORK
 Policy Framework
Indian Electricity Electricity National National
Electricity Act, Supply Act, (Amend.) Act, ERC Act, Electricity Act, Electricity Tariff Policy,
1910 1948 1991 1998 2003 Policy, 2005 2005

• Power of • Enforced • Overall • Autonomou • Power Trading • OA – surcharge

licensing State industrial s regulatory introduced as should not be • Tariff
with local ownership reforms bodies distinct activity too onerous rationalization
governmen • Introduced introduced • Central as • Generation de- • Redundancy in • competitive
t regulation licensed bidding
• Private well as transmission
and licensing • ABT
capital State level • Open Access, emphasized
• Formation of
infusion - • Unbundling of • Distribution introduced
SEBs
generation SEBs reforms • MYT
• CEA formed
• Private framework for
• Introduced
participation in tariff
principle of
return on net G, T & D determination
capital • Appropriate
Commission to
decide RoE,
depreciation,
RPO
 Renewable Energy Initiatives
National Solar Mission

Government specified targets for capacity addition in

both grid /off-grid solar
• Biggest demand pull program globally
• High quantum availability reduces tariff
• 3 rounds of bidding for solar projects have
happened since its inception
• Payment security increases investor confidence
Scaling up solar energy
Government to scale up solar through 3 key measures
• Large scale deployment of rooftop projects
• Increased pace of grid connected projects.
• Thrust on large scale projects (100 MW min.)
• Government ambitions for 100 GW in 6-8 years

Solar park scheme (draft)

National wind mission & offshore policy (draft)
Government support for large scale solar parks
• Offer pre-existing infrastructure facilities
Defined targets with aggressive frameworks for On/off
• Competitive advantage of plugging in projects
shore wind; small wind; hybrid and other technologies
• SECI is the nodal agency for central support
• Thrust on increased local manufacturing
• Resource allocation for faster deployment
Strengthening of transmission infrastructure • Repowering of old wind machines
• Single window clearance
Development of network specifically for wheeling of • Sea Bed Lease Arrangement.
RE power. • Grid connectivity and evacuation of power
• Integration of existing grid with green corridor.
• Strengthening of infrastructure will assist
developers in accurate forecasting of generation
 Foreign Investment Policy
FDI: Foreign Direct Investment
• 100% FDI under the Automatic Route
• Does not require approval from the
Government of India
• The Indian Company receiving FDI is
required to:
• Report to the Reserve Bank of India
the receipt of FDI within 30 days
• File form FC-GPR within 30 days of
issue of shares
• Shares are issued to the Investor within 180
days of receipt of FDI
• Financial and fiscal advantages, such as
preferential tariff or payment security
mechanism
• Government encourages transfer of foreign
technology
JV: Joint Venture
• Automatic approval for up to 74% foreign
equity participation in a JV
• Liberalized foreign investment approval
regime
• 100% foreign investment as equity is
permissible with the approval of Foreign
Investment Promotion Board (FIPB)
• Various chambers of commerce and industry
associations in India provide guidance to
investors in finding appropriate Partners
• Investors can set up a liaison office in India
• Foreign Investors are encouraged to set up
RE-based power generation projects on
build-own-operate basis
Power Sector Value Chain
Customers

Distribution NR
NER
Trading
ER

Transmission WR

Generation

Resources SR
INSTITUTIONAL
FRAMEWORK
Fuel Reserves
Large reserves of coal, as of April’2014, total reserves
stood at 301.6 Billion Tonnes

India’s proven natural gas reserves measure about

1488.73 billion cubic meters
With a large swathe of rivers and water bodies,
enormous potential for hydropower; 12 th Five-Year Plan includes
30GW hydroelectric power generation capacity

Wind is the largest renewable energy source in India;

Major focus on increasing the Renewable energy mix in the Indian Power Sector;
Plans to set up Ultra Mega Solar Power Projects
India has 4.8 GW of net electricity generation capacity using nuclear fuels; with one
of the world’s largest reserves of thorium, India has a huge potential in nuclear
energy

Sources:- MoC, MoPNG, CEA, MNRE

Power Sector Value Chain
Customers

Distribution NR
NER
Trading
ER

Transmission WR

Generation

Resources SR
INSTITUTIONAL
FRAMEWORK
 Generation Capacity (MW)
40000
250,000
35000
201,360 30000 25088.19
25000
200,000 175,858
20000
15000
10000 4878.87
4550.55
150,000
5000 4176.82 127.8
0 Small Hydro Wind Biomass/Cogen Waste-to-Energy Solar

100,000 RES Installed Capacity

42,703
50,000 38,822
24,509

994 5,780

-
. Thermal Coal Gas Diesel Hydro Nuclear Renewable

 Total Installed Capacity = 288.7 GW Source: CEA Installed Capacity

Report As on Jan 2016
 Sector-Wise Generation Share (MW)
Central
Private 26%
40%

State
34%

80000 75860.34
67964.37
57535.33
60000
40000 36887.29
28052
20000 11531.42
3120 0 1934
0
Thermal Hydro Renewables
Central State Private
Power Sector Value Chain
Customers

Distribution NR
NER
Trading
ER

Transmission WR

Generation

Resources SR
INSTITUTIONAL
FRAMEWORK
Transmission Infrastructure
139,034

65,000
140,000
70,000

120,000 102,034
60,000
92,891

100,000
50,000

80,000 40,000 28,000

60,000 30,000

40,000 20,000

10,000
20,000

-
- 2012-13 2016-17
2011-12 Aug-13 2016-17

Inter State Inter Regional Capacity of

Transmission (ckt kms) Transmission Lines (MW)
Transmission Evolution & Growth
Grid management on regional basis started in sixties

Initially, State grids were inter-connected to form regional grid and India was demarcated into 5
regions namely Northern, Eastern, Western, North Eastern and Southern region.

In October 1991 North Eastern and Eastern grids were connected

In March 2003 WR and ER-NER were interconnected .

August 2006 North and East grids were interconnected thereby 4 regional grids Northern, Eastern,
Western and North Eastern grids are synchronously connected forming central grid operating at one
frequency.

On 31st December 2013, Southern Region was connected to Central Grid in Synchronous mode with the
commissioning of 765kV Raichur-Solapur Transmission line thereby achieving national uniform frequency
 Distribution Sector
State-wise details of Profit & Loss (Rs. Crores)
• The Distribution sector is the most 10000
important part of the power sector
Profit/Loss without Subsidy Profil/Loss on Subsidy
value chain -10000 Received basis
• However, the health and state of the
Distribution Utilities in India has been -30000
a matter of immense concern
perpetually -50000
• Almost all Distribution Utilities in
India have seen large losses in their -70000
operations, which have crippled their
functioning -90000
• As a result, the developments in the
sector have also suffered -110000
2011-12 2012-13 2013-14
Source:- PFC Report on Performance of State Power Utilities, July 2015
 AT&C Losses
40.00%

34.33%
35.00% 33.02%
30.62% 29.45%
30.00%
27.37% 26.58% 26.15% 26.63%
25.38%
25.00%

20.00%

15.00%

10.00%

5.00%

0.00%
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13

AT&C Losses

AT&C Losses: Aggregate Technical and Commercial losses means T&D losses accounted for
collection inefficiency of bills raised
Source: CEA, Research Reports
 Utility Revenue & Cost Gap
All India Level
figures in INR/kWh

• Subsidy is provided by respective State

1.4 Governments to their utilities as
compensation for lower tariffs that
1.2 utilities charge from politically sensitive
customers (agriculture, poor people,
1
etc.). Generally, the subsidies remain
0.8 on paper only and get paid either in
part or with substantial delays
0.6
• The adjacent figure shows the Gap
0.4 between Average Cost of Supply (ACS)
and the Average Revenue realised by
0.2 State Utilities, before and after
accounting for the subsidies
0 promised/provided
2011-12 2012-13 2013-14
Gap (without Subsidy) Gap (Subsidy received basis)

Source:- PFC Report on Performance of State Power Utilities, July 2015

 Understanding Gap through Tariff
1
0.73

0.5 0.39 0.42

0.12
0.01 0.02
0
nd L L L L ia
am i m P P
DD DD CO DC d
kh
a ss Si
kk BR BY P KP D E In
-0.5har A i- i- -T J& GE M
S
Al
l
J lh lh lh
i N
De De TA
De
-1 -1

-1.5
-1.73 -1.81
-2 -1.88

-2.5
Gap (Subsidy received basis)
Revenue and Cost Per Unit Difference in INR/kWh For Key States for 2013-14
 State Governments year after years avoided raising tariffs of electricity to gain political mileage
 Even if the tariffs were raised, they were generally not enough to cover increased costs. However,
in recent times, the tariffs have been raised in many states with a view to bridge this gap
Source:- PFC Report on Performance of State Power Utilities, July 2015
More than National Average Tariff Hikes
40%

35%

30%

25%

20%

15%

10%

5%

0%
Kerala Delhi Nagaland Andhra Tamil Nadu Haryana Rajasthan J&K Bihar Uttar Odisha
Pradesh Pradesh

FY2011-12 FY2012-13 FY2013-14 FY2014-15 FY2015-16 Average Hike (%)

 Power Sector Value Chain
Customers

Distribution NR
NER
Trading
ER

Transmission WR

Generation

Resources SR
INSTITUTIONAL
FRAMEWORK
 The Why of Power Trading
Prior to power trading as a business concept: power exchanges between the States/vertically
integrated utilities were characterized by small , intermittent volumes

Mostly in the nature of emergency support

No commercial arrangements

Non-payment or payment delays with resultant disputes

The exchanges were further limited due to lack of transmission inter-connections

Sustained shortages, both in energy and peak demand, discouraged initiatives

 The Pioneer’s Role
Instruments Mechanism
Process & Execution
Pioneer Role - Initiated development of
Established the viability of concept
short term power market and
introduced innovative products for Power market can play key role in
customers growth of sector
Transition from cost-based returns to Credible intermediary
market based returns
Payment Security Mechanism
Creating “value” for power – market
Weekly billing to reduce credit
based price discovery of power risks
Right to divert in case of default
Optimal utilization of generation Relationship of trust,
capacity – short-term trading transparency
Comfort to developer of power
Increased generating capacity addition
– long-term trading projects –by addressing market risks
Comfort to lender – by addressing
credit risks
Development of Power Exchange
A catalyst for private investment in
the sector
 The Benefits Delivered Price volume break up (%)
98
Utilities Realization among utilities of
power as a source for revenue
earning 59
48
Improved PLF, particularly of State
36
Power Utilities 26

9 12
5
No backing down 2

FY 05 FY 06 FY 07
Rs 1-3 Rs 3-4 Rs 4-5 Rs 5-6
Reduction in load shedding
The short term market created “value” for power.
Distinct shift towards higher revenue realization.

• Encouraged IPPs to invest in generating assets- spurt in investment based on competitive tariff due to widening demand –
supply gap
• Market-based returns
• No sovereign/government guarantee
• Large merchant capacity is being funded
• States Governments of Chhattisgarh, Jharkhand, Orissa, Himachal Pradesh, J&K, Uttaranchal, etc. have recognized “
Power as Resource”
• Planned rapid capacity additions – have devised policies to become Power Hubs
 Markets Facilitating Investments
Power Power market has in fact become a
Market catalyst for private investment in power
sector
More than 75,000 MW under
development by IPPs without any
Government support
The wholesale market for electricity in
India is completely voluntary by design - ST/MT
30-40%
that none of the market participants are
obliged to operate through a restricted and
compulsory market. LT
60%

Further, the rules regarding standards of

supply are more liberal, permitting greater
flexibility to utilities on demand side
response

Capacity Tie-Up
Such strong markets make capital funding
easier through effective support from
market intermediaries
 Growth in Power Trading
• Power Trading growth 120 12
• Volume has grown from 22 BUs in 2008 to
105 BUs in FY14 100 10
• As percentage of total generation, ST market has
grown from 3% in 2008 to 11% in FY14 80 8
• Power Exchanges started in 2008
• Two exchanges – IEX and PXIL 60 6
• PTC co-promoter of first National PX Indian
Energy Exchange (IEX) – has > 97% market 40 4
share
• Type of Trades
20 2
• Day Ahead Market (DAM) – 95% of PX
trades
0 0
• Term Ahead Market (TAM) – 5% of PX FY10 FY11 FY12 FY13 FY14
trades
ST Market Volume (BUs)
• Renewable Energy Certificates (RECs)
% of Generation
Development of Regional Power Market
India and
Presently, inter-country cooperation mainly
Bhutan on bilateral basis
Currently India imports about 1400 MW
from Bhutan (3 operational projects) for
which Indian Govt. has identified PTC India
Ltd as nodal agency.
Another 10000 MW likely to be added by
2026.
India & Supply of 500 MW power has commenced from India
Bangladesh to Bangladesh via 400 kV Behrampur-Bheramara Line.
250 MW is being supplied by Govt. of India and
balance through PTC
India and PTC facilitates power sourcing for Nepal in
Nepal
winters on commercial terms
Power Exchange between Nepal & Bihar as
per the formula of Indo-Nepal Power
Exchange Committee
Several transmission interconnections exists
between India & Nepal on Radial Mode
400 kV Muzaffarpur - Dhalkebar line once
implemented will have carrying capacity of
1000 MW
Presently, inter-country cooperation mainly
on bilateral basis
Sale/Purchase of Power & Open Access
PART III
Category of Buyers
Source of Power supply
• Generation from State Generation companies/Own Generation
• Long term sourcing from Central Generators-NTPC/NHPC etc.
State • Pooling from Ultra Mega Power projects under Case-2
Utilities/Distribution • Procurement through competitive bidding
licensees • Long term (up to 25/35 years. )
• Medium Term (1-5 Years)
• Short term (<1 Year)
• Power Swap arrangement between State Utilities (Banking)
• Procurement from Hydel sources on bilateral basis (For up to 35
Category years)
of Buyers • Power Exchanges (IEX/PXIL)
• Short term contingency through negotiation

• Self Generation (Captive Power Plant)

• Procurement from State Utilities/Distribution Licensees
Industries • Procurement of Power from Power traders/Generators through
competitive bidding/Negotiation through Open Access
• Procurement from Power Exchanges (IEX/PXIL)
Short Term Power Sale/Procurement
Short Term Power Procurement
• Short term transactions are a means for balancing short term needs, i.e. to
procure seasonal and fluctuating power requirements due to seasonal
variation or any other reason(s) and to allow sellers to sell any unplanned and
fluctuating surplus power. Short term purchase is done for mitigating the
demand as last option.
• Features:
 To handle seasonal and temporary demands
 To market for merchant capacity
 To cater to unfulfilled demand by Discoms
 Day ahead requirements being fulfilled by power exchanges
 Pricing on the basis of utility of end-use, bargaining power of counterparties, competitive
bidding
• Challenges:
 Constraints in terms of availability of open access (Transmission capacity restrictions,
NOC issues from Discoms)
Procurement of Power by Utilities on Short term is to the tune of approx 10% on average
during the past few years
Short Term : Type of Transactions
Bilateral Trading Direct Bilateral Power Exchanges
(Through Traders) Trading

 Largest component of  Directly between  Day Ahead Market

Short-term Market Utilities or between  Term Ahead Market
 Facilitated by traders generators and  Contingency
 Negotiable Contracts Utilities  Various Open Access
 Short-term tenure up  Banking transactions Consumers
to 1 year  Direct Participation in
 Competitive Bidding Trading is done through
Competitive Bidding
Tenders Power Traders as well as
Tenders through direct participation
 Banking transactions
Short Term Bilateral vis-à-vis Power Exchange
Parameters Bilateral Trades Power Exchange

Contract Tenure & Less than 1 day up to 1 year on 1 day-ahead & up to 7 days
Scheduling Firm Bilateral Scheduling under Collective Scheduling

Contracted Tariff Fixed with no variation linked to Depending up on market

& Market Risk market / fuel conditions; Volatile & Risky

Requirement / Usefulness Management of Surplus/Deficit Balancing Mechanism for Day-

on Firm Basis Ahead Surplus/Deficit

Billing & Payment Weekly billing; Payment within 7 Advance Payment with
days up to 30 Days Daily Billing

Credit Available 14 days up to 37 days No Credit; Advance Payment

Rescheduling & Surrender Allowed on 2 days notice Not Allowed

Short term Bilateral Products
• Short Term transactions for peak/off-peak load balancing: different
products brought in the market
• Duration of Transactions (Few hours to 1 year)
• Hours of Supply
• Round the Clock
• Evening Peak / Morning Peak
• Night Off Peak / Day Power
• “As and When Available” Power for balancing Scheduled Interchanges
• “Weekend / Holiday Power”
• Banking of Power
Short term Power Procurement : Mechanism
Bilateral

Contingency  By Utilities mainly for meeting contingency demands

& Day-Ahead  Utilities finalize the tariff based on prevailing market condition within a blanket
tariff approval given by SERCs

 OTC under the provisions of EA 2003

Contracts for more  MoP has issued Guidelines for Short term power procurement (SBD) by
than 14 days to 1 Distribution licensees through tariff based Competitive bidding process in May
year 2012
 Almost all Utilities nowadays are referring to the SBD with some modification
as suitable to them

Power Banking  Utilities enter into power swap agreement to utilize the seasonal variation in
arrangement their load pattern
 Forward banking Utility returns the banked energy to other utility with some
agreed premium at a pre decided date
 Undertaken directly or through Power Traders primarily on negotiation basis
 Need of a transparent guideline for Swap arrangement is felt
Short term Power Procurement : Mechanism
• Banking arrangement is wherein two utilities/states trade power in order to
match seasonal variation in surplus & deficit situation
• It is a cashless transaction wherein there is no tariff paid for the energy
availed/supplied
• A brief of flow of a banking transaction is shown below:-
Part - A
‘State A’ will bank/supply power to ‘State B’ through Trader
 
     
 
Trader
PTC  

   
 
Start
Here State A State B
   
         
PTC
Trader
‘State B’ will return/supply power to ‘State A’ through Trader

Part - B

• The banking arrangement has successfully been carried out between almost every
utilities/states.
Short term Power Procurement : Mechanism
Power Exchanges
Day-Ahead-Market  Trading of 15 minute contracts
(DAM)  Double-sided anonymous auction bidding process
 Clearance obtained from SLDC by buyers and sellers based on availability of
network and ABT meters
 Congestion Management through market splitting and determining Area
Clearing Price (ACP) specific to an area

Term-Ahead-  Trading of Region specific contracts

Market (TAM)  Firm Delivery 
The contracts under Term Ahead Market can be used to ensure delivery of
electricity for a few days in advance.
 Delivery Blocks: | RTC | Day | Night | Peak | Hourly |
FBA -- Firm Base – 24 Hrs. 
FNT -- Firm Night – 8 Hrs. (0-7 & 23-24) 
FDY -- Firm Day – 11Hrs. (7-18) 
FPK -- Firm Peak – 5 Hrs. (18-23)
Short Term : Contracts Discussion
Nature of Contract Duration of Contract Transmission Open access availability

> 1 Day and Up to 1 year Short term open access is available on up to

Short Term – Bilateral 3 months in Advance from Flow of Power
(Competitive Bidding
and/or OTC Contracts) Day Ahead / Contingency STOA available from 2 Hours to 1 Day in
Same Day advance from Flow of Power

Salient Terms & Conditions of a Short Term Contract

Delivery Point As per market practice, Buyer’s State Periphery
OA Charges & Losses Up to Delivery Point on Sellers account and beyond Buyer’s Account
Compensation As per MoP Guidelines, on equilateral basis, Deviation up to 15% of
contracted energy in a month is allowed thereafter a penalty of 20% of the
contracted tariff is applicable on defaulting party

Billing & Payment For OA, trader pays POSOCO upfront and raises bill on the party with full
payment within 3 days, delayed payment attracts 15% p.a. surcharge
For Energy, weekly energy billing with payment within 7 days (with 2%
rebate). Delayed payment beyond 30 days attracts 15% p.a. surcharge
Power Procurement Avenues – Snapshot
Particulars Agreement Duration Open Access
Duration
Medium Term (earlier SBDs) >1 year up to 7 years

>3 months up to 3 years

Medium Term (FOO) >1 year up to 5 years

Long Term (excluding Hydro) >7 years up to 25 years

>12 years
Long Term (Hydro) >7 years up to 35 years

Short Term –Bilateral Upto 1 year For a period of up to 3

months

Day Ahead Market (1 day) 1day (corridor left after

short term bilateral)
Short Term –Power Exchange
Term Ahead Market (up to 7 days) Up to 7 days in advance
Short Term – Scheduling & Operations

Physical flow of
Application to power through Final Settlement
Concurrence from Nodal RLDC as per the reserved of bill by
DIC as per FORMAT- Acceptance by Provisional Billing
transmission incorporating the
FORMAT- I(Bilateral) for Nodal RLDC and by Trading
corridor. Payment actual energy flow
II(Bilateral) by Acceptance of issue of Open Licensee based on
of Open Access based on Regional
Buyer/Seller or by Schedule and Access Charges as implemented
Charges to Nodal Energy Account
Trading Licensee reservation of per FORMAT- schedules issued
RLDC within 3 (REA) issued by
on behalf of Transmission VI(Bilateral) by Nodal RLDC.
days of issuance Regional Power
Buyer/Seller Corridor of Acceptance of Committees(RPC)
Schedule
Short term Power Market : A Snapshot
Volume of Volume of Total ST ST % of Total Through Through Trader+ PX % of Short Top 5
Year UI Direct Trade Electricity
(BU) Trader (BU) PX (BU) (BU) Term trader
(BU) (BU) Generation

2008-09 14.39 3.31 35.27 7% 21.92 2.77 24.69 48% 79.80%

2009-10 25.81 6.19 65.9 9% 26.72 7.19 33.91 51% 83.32%

2010-11 28.08 10.25 81.56 10% 27.70 15.52 43.22 53% 85.43%

2011-12 27.76 15.37 94.51 11% 35.84 15.54 51.38 54% 78.49%

2012-13 24.76 14.52 98.94 11% 36.12 23.54 59.66 60% 70.41%

2013-14 21.47 17.38 104.64 11% 35.11 30.67 65.78 62.8% 68.37%

2014-15 19.45 15.58 98.99 9% 34.56 29.40 63.96 64.6% 66.70%

PTC has grown in terms of its market share from 30% in FY 2012-13 to 33% in FY 2014-15
Short Term Market Tariff Trends
Month/ Utility WBSEDCL NPCL UPPCL BEST

April 2.82 (RTC) 3.70 (RTC) -- 3.03 (RTC)

May 2.90 (RTC) 3.70 (RTC) 2.99 (RTC) 3.06 (RTC)

3.03 (NOPk)
June 2.81 (RTC) 3.70 (RTC) 2.99 (RTC) 3.13 (RTC)
3.04 (NOPk)
July -- -- -- 3.07 (RTC)

August -- -- 2.99 (RTC) 3.13 (Day Power)

3.02 (NOPk)
September -- -- 2.99 (RTC) 3.13 (RTC)
3.04 (NOPk)
October -- -- -- 3.13 (RTC)

November -- -- -- 3.13 (Day Power)

December -- -- -- 3.11 (RTC)

The Competition amongst Generators is increasing. Recently, a generator located within the Southern
Region has quoted a rate of Rs. 4.66/kWh at regional periphery for sale of power to Telangana Discoms.
Last year, the tariff was in the range of Rs. 5.50/kWh to Rs. 5.99/kWh in the Southern Region.
Long/Medium Term Power Sale/Procurement
 Long / Medium Term Power Procurement
 Long Term Procurement of power is for a
period up to 25 years for thermal power
projects
 Medium Term Procurement of power LT/MT Procurement
ranges from a duration of more than 1 year
and up to 5 years
 Under the Negotiated Route, state utilities
buy power from the Projects after approval Competitive Bidding
Negotiated Route (u/s Route
of resp. State Regulatory Commissions, and
62 of EA 2003)
at regulated tariff. However, since January (u/s 63 of EA 2003)
2011, this route is rarely exercised for
Thermal Power Projects, and still available
for Hydro Projects Hydro
- Case-1
(currently)
 Competitive Bidding Route is generally - DBFOO/FOO
adopted for power procurement since
then, and has undergone several changes
in itself
Bidding Guidelines – past vis-à-vis new
 The premise of Case-1 procurement so far was based upon the
focus on power supply side, while the newly notified documents for
Long Term procurement of Power(DBFOO), seem to focus more on
project side.

 Some of the Salient features of the new notified documents are:-

 the pass-through nature of the fuel cost.
 the introduction of bids invited based upon specific fuel source
(such as Domestic Coal or Imported Coal).
 only first contract year fixed tariff needs to be quoted by the
developer and for rest of the life of the project it will be indexed
to the WPI.
Bidding Guidelines – past vis-à-vis new
 Some disadvantages in the said documents are:-
 tend to concentrate more towards the Project Side (or the
input parameters) rather than the Supply Side (i.e. output).
 Monitoring of operational Project details (such as SHR, Aux.
etc.) seems to imply that the fuel cost pass-through is
conditional
 Constant monitoring by the Procurer of the Project
Construction activities
 Large number of Projects may have power tie-ups through
previous guidelines and new guidelines (difficult to match
distinct requirements)
Medium Term Procurement
 When the revised guidelines for procurement of power on medium
term basis through Competitive Bidding process were notified by
MoP, Traders and State Utilities were not allowed to participate
 However, the guidelines have been later revised by MoP allowing
the Traders to participate (a testimony, perhaps, of the value-addition by traders)
 Some advantages of Medium Term Procurement of power are:
 Flexibility to counter any uncertainties
 Optimum Contract Duration
 Leveraging market conditions & improvement in Open Access
scenario
 Since the notification of revised guidelines, many Utilities have
initiated bidding processes for Medium Term power procurement
Long / Medium Term – Competitive Biddings
• The prices discovered in the Competitive Bidding Processes invited by
State Discoms since 2012 are as per the table given below:-
Buying Utility Term of Contract Type of Contract Landed Tariff (Rs./kWh)*

Kerala 3 Years Case-I 4.452 – 4.525 (levellised)

Uttar Pradesh 25 Years Case-I 4.886 – 5.73 (levellised)

Rajasthan 25 Years Case-I 4.517 - 4.94 (levellised)

TANGEDCO 15 Years Case-I 4.91 (levellised)

Kerala 25 years DBFOO 3.60 – 4.450

Andhra Pradesh 25 years DBFOO 4.27 – 4.83

* Tariff range under which PPA have been executed to date

Long / Medium Term – Competitive Biddings

 The tariffs under the new DBFOO Processes may seem on the lower side, but in
actuality may result in higher tariff depending on the actual fuel cost
Several other Utilities have also come out with Long Term Power Procurement tenders
under DBFOO Competitive Biding Guidelines, which are under various stages of
finalization

International Competitive Bidding Processes

Many such opportunities with increased inter-connectivity between countries
PTC is already supplying 250 MW power to Bangladesh from WBSEDCL Power Pool,
through International Competitive Bidding process, for a period of 3 years
PTC has also executed Agreements for sale of Power from a Hydro Project in Bhutan for
sale to a North-Eastern Utility, through one such international Bidding Process
Open Access & Scheduling of Power
Landed tariff Calculation

Consumer Periphery
Plant Periphery Regional periphery, State periphery
D= C+ State
Tariff (connected to B= A + PoC Inj. charge C= B+ PoC Withdrawl
Transmission charge
CTU) – A/Unit and loss, RLDC operating charge and loss,
and loss +
(If STU connected charges RLDC operating
SLDC operating charges
State Tx. Charges & charges
(+ ED + CSS, if any)
Losses to be
added)
Open Access –Regulatory framework

 Availability based tariff (ABT) introduced in 1998.

 ABT is a commercial mechanism in which fixed and variable cost components are treated
separately. And variable cost is paid as per the schedule and the Difference between schedule and
actual is paid as per system condition(Frequency) known as unscheduled interchange(UI). Power is
scheduled by SLDC’s on merit order based on the variable cost.
 All earlier Acts and Rules enacted were repealed by enactment of Electricity act 2003
 CERC (Procedure, Terms & Conditions for grant of Trading License and other related matters)
Regulations, 2004.
 CERC (Sharing of Inter State Transmission Charges and Losses) Regulations, 2010.
 CERC (Grant of Connectivity, Long-term Access and Medium-term Open Access in inter-State
Transmission and related matters) Regulations,2009.
 CERC (Deviation Settlement Mechanism and related matters) Regulations, 2014.
 CERC Open-Access regulation,2008-included collective transaction for mechanism of operation of PX
keep the identity of buyer/ seller unknown to bidders
 CERC (IEGC) regulations 2010 (IEGC Grid code)
Open Access –Short term
 ADVANCE SCHEDULING:-
 shall be considered only when transactions are commencing & terminating in the same calendar month
 One Month, Two Month & Three months in advance (Month wise applications)
 TimeLine for submission Last date for submission (-10/-5/0 days prior to end of current month respectively for
the transaction in M1,M2,M3)
 Cut-off time of application submission: 17:30Hrs.
Type of Advance Period of Flow Application Submission Last Date
Three Month April January (last date)
Two Month March January (5 days before last date)
One Month February January (10 days before last date)

 Request for concurrence (RLDC) – Within 5 days from Submission of Application

 Congestion Information to Applicant by nodal RLDCs – Next day 12:00 Hrs. (Day2)-Format-IV (Congestion
information-Advance scheduling)
 Revised Request–next day 11:00 Hrs. (Day3)-Format-V-Request for revision due to congestion)
 E-bidding–in case of Congestion (Day4)
 Acceptance/Refusal of Scheduling Request –(Day5) -Format-VI-Acceptance for scheduling by nodal RLDCs.
Open Access –Short term
FIRST-COME-FIRST-SERVED (FCFS) shall be considered only when transactions are commencing &
terminating in the same calendar month
 Processing time –3 clear days on submission of Application
 Application received up to 1730 hrs in a day to be processed together –same priority
 Application Received after 17:30 Hrs. -to be considered as received next day
 Congestion Management –pro-rata

Day Ahead Bilateral Transaction

 Applications received within 3 days prior to the day of Scheduling and upto 15:00 Hrs.of the day
immediately preceding the day of scheduling shall be treated as same priority
 Processing only after approval of the Collective Transactions of the Power Exchange(s)

Contingency/Same Day Transactions

 Application to the Nodal RLDC To be considered after 1500 hrs. of the day immediately preceding
the day of scheduling
 In case of Intra-day/same day–scheduling from 6th time block
E-Bidding for Congestion
 Invitation of Bids from the concerned applicant
 Period of congestion
 RTS/IR corridor –expected to get over stressed
 Only Registered Users User ID & Password
 Electronic submission –website of CTU
 Bid Closing time as specified
 Single Price Bid
 No Modification/withdrawal once submitted
 Bid Price-in addition to Open Access Transmission Charges
 Multiples of Rs.10/MWh. (Min.Rs.10/MWh)
 Mandatory-Non-participation–Rejection of Application
 Acceptance-Decreasing order of Price Quoted
 Equal Price Bids–Pro-rata
 Applicants getting less quantum than applied shall pay the charges quoted by him.
 Applicant getting equal quantum of what sought by him shall pay the charges quoted by the last
Applicant getting approval of its full scheduling request.
Open Access – Medium/Long term
S. No. Particulars LTA MTOA

1. Application Fees 2-9 lakh/MW 1-4 Lakh/MW

2. Timeframe for processing of 120/180 days* 40 days

Application
3. Start Date Not before 1 year/ 3 Not before 5 months,
years* and not later than 1
year

4. Term 12-25 years 3 months - 3 years

* Depending upon whether system augmentation is required or not

 Marketing facts
Economy Grid situation Market
Long term/Medium term Short term
Bad financial Restricted scope Very few of various Merchant power available in market exceeds
health of the of supplying DBFOO/Case-1 bids for demand i.e. if a utility comes out with a tender for
Distribution power to many Long Term have been purchase of 500 MW then these days they get a
utilities States specially finalized in the recent quote for supply of 2000 MW or more.
to Northern and past. Competition is fierce.
Overall Southern region This may be attributed to The whole power market is now buyer driven which
bearish States due to the ailing financial health has led to lower tariffs in the range of Rs. 3.00 to
economic Grid constraints of the State utilities, 3.50/kWh landed at buyer’s periphery.
situation in which may be making
the country them wary of having long Even many state utilities traditionally buyers have
term commitments. turned sellers of power
However, this trend may
change in coming future, Current buying utilities RTY:
as having power on long- Andhra, Telangana, Kerala, U.P., Noida, Uttarakhand,
term basis is preferable Assam, BEST, TPC-D
for Utilities. Major selling utilities:
GUVNL, GRIDCO, CSPDCL, MSEDCL, Tripura, Madhya
Pradesh, Himachal, Sikkim
Delhi Power Sector
• Highlights
– On July 1, 2002, Delhi Vidyut Board (DVB) was unbundled
– Delhi Transco Limited (DTL) was created as the Transmission Company, Indraprastha Power
Generation Company Ltd. (IPGCL) and Pragati Power Corp. Ltd. (PPCL) as the Generating
Companies, and three Private Distribution Companies i.e. BSES Rajdhani Power Ltd. (BRPL),
BSES Yamuna Power Ltd. (BYPL) and Tata Power Delhi Distribution Ltd. (TPDDL) (earlier NDPL).
The management of the distribution business was shared with 51% equity being handed over
to the private sector and 49% equity being retained by GNCTD.
– Apart from the Private Distribution Companies, New Delhi Municipal corporation (NDMC) and
Military Engineering Services (MES) also undertake distribution of electricity for specified areas
– Reforms in Power Sector of the Capital City in 2002 have been a great success, and became a
showcase model in the country, and many states have followed the Delhi model in their
reforms.
– Delhi has achieved 100% electrification a long time back, and per capita consumption of Delhi
at 1561 Units in FY 2014-15 is significantly higher than the national average during that period.

Sources:- Delhi Power Dept. Website & Delhi Govt. Data

Delhi Power Portfolio & PSP
Delhi Power Portfolio – Current Situation (as on 29.02.2016)
Sector Mode-Wise Break-up Grand % Share
Total
Thermal Nuclear Hydro RES (MNRE)
(RE)
Coal Gas Diesel Total

State 135.00 2050.40 0.00 2185.40 0.00 0.00 0.00 2185.40 26%

Private/IPPs 445.50 108.00 0.00 553.50 0.00 0.00 34.71 588.21 7%

Central 4421.37 207.61 0.00 4628.98 122.08 822.05 0.00 5573.11 67%

TOTAL 5001.87 2366 0 7367.9 122.08 822.05 34.71 8346.72 100%

% Share 59.93% 28.35% 0.00% 88.27% 1.46% 9.85% 0.42% 100.00%  

Power Supply Position – Delhi (April 15 to February 16)

Requirement Availability Surplus(+)/Deficit(-)

MW/MU %

Energy (MU) 27692 27652 -40 -0.1

Peak (MW) 5846 5846 0 0

Sources:- CEA Reports

 Load Profile – Delhi (FY 2014-15)
3,500

3,000

2,500

2,000
Availability (MU)
1,500 Requirement (MU)
1,000

500

0
Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15
7,000

6,000

5,000

4,000
Peak Demand (MW)
3,000
Peak Met (MW)
2,000

1,000

0
Apr 14 May Jun 14 Jul 14 Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15
14

Sources:- CEA Power Supply Position Report

Load Profile – Delhi (Apr15-Feb16)
3,500

3,000

2,500

2,000
Availability (MU)
1,500 Requirement (MU)
1,000

500

0
Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16
7,000

6,000

5,000

4,000
Peak Demand (MW)
3,000 Peak Met (MW)
2,000

1,000

0
Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16

Sources:- CEA Power Supply Position Report

Delhi Expected Generation Capacity Addition
Year wise Existing & Likely Capacity to be added-Cumulative (MW)

Sl. No. Particulars FY FY FY FY

As on March
2015
2015-16 2016-17 2017-18 2018-19
A. State Sector
a. Thermal 1,697.00 1,697.00 1,697.00 1,697.00 1,697.00
B. Private/IPPs
a. Thermal 1,117.38 1,117.38 1,117.38 1,117.38 1,117.38
b. Hydro (Renewable) 0 0 0 0 81.74
c. RES (MNRE) 16.5 79 119.88 1,029.88 1,059.88
C. Central Generating Station
a. Thermal 3,884.68 3,884.68 3,884.68 3,884.68 4,059.73

b. Hydro (Renewable) 768.43 824.65 856.65 856.65 1,288.80

c. Nuclear 103 103 103 103 103
 TOTAL 7,587.00 7,705.71 7,778.59 8,688.59 9,407.53

Sources:- Delhi Govt. & Discoms Data

Expected Peak Surplus Deficit Scenario
Peak Surplus/Deficit Scenario for Delhi Discoms
S. No. DISCOM Unit 2015-16 2016-17 2017-18 2018-19
MW -340.52 -446.74 -532.25 -423.37
1 BSES Rajdhani Power Limited (BRPL)
% -15.31% -19.99% -23.44% -16.79%

MW -192.82 -240.38 -275.92 -229.15

2 BSES Yamuna Power Limited (BYPL)
% -14.28% -17.67% -19.98% -15.32%

MW 292.36 225.79 159.47 278.99

Tata Power Delhi Distribution Limited
3 (TPDDL)
% 14.17% 10.89% 7.64% 12.18%

MW -26.39 -36.39 -48.39 -61.39

4 New Delhi Municipal Corporation (NDMC)
% -7.40% -10.20% -13.57% -17.22%

MW -16.18 -16.58 -16.98 -17.38

5 Military Engineering Services (MES)
% -67.90% -65.21% -62.84% -60.73%
MW -255.55 -486.3 -684.08 -421.3
6 Delhi State
% -4.25% -8.04% -11.17% -6.29%

Sources:- Delhi Govt. & Discoms Data complied by Consultants for 24x7 PFA
Cost of Power Purchase by Delhi Discoms
Approved Power Purchase Cost for Delhi Discoms for FY 2015-16
Sl. No. Name of Station Fixed Charges Energy Charges Average Rate
(Rs/kWh) (Rs./kWh) (Rs./kWh)
A NTPC
1 BTPS 1.16 4.62 5.78
2 UNCHAHAR-III 1.44 3.07 4.50
3 Dadri Extension 1.62 3.38 5.00
4 Aravali 2.48 3.72 6.20
B NHPC
1 Dulhasti 2.27 2.27 4.55
2 Sewa-II 2.44 2.44 4.88
3 Parbati – III 1.75 3.18 4.93
C State Generating Stations
1 Rajghat 4.69 3.78 8.47
2 Gas Turbine 2.04 4.7 6.74
3 Pragati – I 1.09 4.42 5.51
4 Pragati – III, BAWANA 4.95 3.08 8.03
D Other Stations
1 Tehri HEP 2.45 2.45 4.89

Sources:- DERC Tariff Approved for FY 2015-16 for Delhi Discoms

Delhi Power Sector – Future outlook
• Delhi had achieved 100% electrification a long time back, and the
target now should be enhancing the supply availability for the ever-
increasing demand expected in the coming years
• As per the calculations being carried out in relation to the preparation
of ‘24x7 Power for All’ document for delhi, there have been indications
that the Delhi Discoms may well face Peak shortages in the coming
years, while the energy shortages may not be there
• In order to mitigate such shortfalls, the Delhi Discoms need to
effectively plan comprehensive power procurement measures to
ensure power availability on Short Term, Medium Term and long term
basis
• There may also be a review conducted on the procurement of costly
power currently being purchased by Delhi Discoms and its substitution
by cheaper power available from the market
THANK YOU