1 February 12,2013

Tushar PandeySenior President and Country Head

Public and Social Policies Management Group

MANAGING POWER Smart Governance through Technology

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Power Sector in India, is the fourth

largest in the world

Power Sector in India

India requires a Robust transmission and distribution (T&D) network to increase evacuation capacity and

coverage , prevent cascading failures and transmission losses.

India loses $68 billion, or about Rs 4,14,800 crore of its Gross Domestic Product due to electricity shortage.

Per-capita consumption of electricity in India is only about one-fourth of the world average and 404 million people in India do not have access to electricity

Existing grids are constrained and under pressure to deliver the growing demands for power, along with providing stable and sustainable supply of electricity.

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FUEL GENERATIONTRANSMISSIO

N DISTRIBUTION

& SUPPLY

68%

17%

2% 12%

Energy Generation MW

Thermal Power Hydro (Renewable) NuclearRES** (MNRE)

59%

9%

1%

India’s energy basket indicates heavy dependence on thermal power for production of electricity.

GENERATION CAPACITY - 2,36,387MW,

•India accounts for 4.4% of global energy consumption.

•Energy and peak availability shortage is 8.7% and 9%, respectively

Power Sector in India

(AT&C) LOSSES were 26.1which is HIGHEST when compared against largest power producing countries such as China, Japan , US and Russian Federation

•Only 67% of households in India have electricity connection

•45% of rural households do not have electricity connection

DEMAND - 89 GW (12TH FYP)

Electric power transmission and distribution losses

WEAKEST LINK IN THE INDIAN POWER SECTOR

Source: Ministry of Power, GOI Source: World Bank data

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Smart Grid: Catalyst for Change

Improving the country’s energy security by reducing reliance on imported fossil fuels

Bring in economies of scale to support large projects as compared to smaller stand-alone renewable energy projects

Energy accounting and settlements

Smart Meters

Demand Side Management

Green Buildings

Administering green energy certificates mechanisms

IMPACT

•Reduced impact on environment•Balance renewable – integrating VRE

Defer capital expenditures

A smart grid is an electrical grid with automation, communication and IT systems that can monitor power flows from points of generation to points of consumption (even down to the appliances level) and control the power flow or curtail the load to match generation in real time or near real-time.

Meet fast-growing energy needs in a sustainable manner

CAPACITYMeeting the

growing demands for electricity-

Demand response management

system

RELIABLE NETWORK

Monitor grid stability

EFFICIENCY

Augmenting electricity supply on both new as well as existing

systems

SUSTAINABILITY

Integration of renewable power

sources

• Emergency Capacity• Prevent load

Shedding and grid failure

•Increase capacity of existing infra •Leverages SMART GRID’s nationwide transmission •Infrastructure for telecom

Real time Grid Operation and Management

Facilitate power evacuation

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Smart Grid Implementation

Greenfield Cities DMIC

24 new SMART CITIES

Industrial Parks• 11 investment

regions • 13 industrial

areas

Agro-Processing Zones

Supporting Infra – Rail, Airports, Logistics Facilities, Road

Brown-field ImplementationsImplement through PPP mechanism tailored to each setup BOOT , Concession, VGF etc.

Generate- • Economic activity, Employment •Demand for Power - Total Power Requirement for DMIC corridor is1,700 MW. The composition is as follows:

• Industrial: 1000MW• Social: 600MW• Mixed: 100MWImplementSMART GRID INFRA to provide reliable supply of power, thereby, improving the economics of operation,encouraging investment and fostering economic growth.

GoI Initiative:

SMART GRID - 14 pilot projects have been approved by the government.

Implemented National Grid

Restructured-Accelerated Power Development and ReformProgram (R-APDRP)

Green Corridor

Various missions aimed at promoting growth of RE

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Current Policy Framework

Ministry of Power formulates the policy structure and takes decisions pertaining to investments in power projects.• Electricity Act, 2003 governs the sector• National Smart Grid Mission• Restructured-Accelerated Power

Development and Reform Program (R-APDRP)

State Electricity Boards own and operate state grid and distribution network

Power Grid Corporation of India Limited (PGCIL) owns and operates inter-regional and inter-state transmission lines, facilitating transfer of power from surplus to deficit regions.

Private Sector – distribution and power generation

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Challenges faced by the Power Sector

Timely implementation of projects• Difficulty in obtaining clearance s• Difficulty in acquiring land

Power Tariff regulation

Regulatory Disputes between center and state

• Poor grid discipline

Poor infrastructure – poor evacuation and transmission of power

Pilferage and high AT&C losses

More investment in transmission sector is required

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Suggestions

Standardization of the process for award of projects, within specific time-frame.

Single window clearance for Power projects

Frame Antitheft legislation to minimize AT&C losses

Set up regulatory body to minimize project delays due to disputes

Rationalize power tariff to facilitate ‘open access’ and approvals for the same

Establish Demand Response Management

Clear policy framework defining roles and responsibility of both Center and State

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Financing

• The Twelfth Plan (2012 - 2017) estimates a total investment of INR 95 BN in developing Smart Grid infrastructure.

50 bn Grants

through government

45 bnPrivate Sector

Service

Contract

Management Contra

ct

Leases

Concession BOT

BOO divestiture

Public

Provider

Investment

Government

Private

Enabler

Spectrum of Public Private Partnership Options

operational efficiencies

innovative technologies

managerial effectiveness

access to additional finances

construction and

commercial risk sharing

• Foster private sector participation:

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Way Forward

Smart Grid Investment Fostering PPP

Removing entry barriers for smart grid solution providers

Encourage private sector to set up power projects of any size to increase investments and incentive for renovation of existing power plants

Ease out legal process by setting up arbitration cell

Formulate standard agreement for commissioning power projects

Un-bundling or SEBs to bring in transparency, accountability and better management

VGF for promoting private sector to take up projects.

Bring PPP approvals under the RTI

Market Estimated Investment (US$ million) 2015

Software and Hardware

339

Smart Meters 446

Sensors 2236

Comm &wireless

289

Smart and T&D equip

392

Source: ZPRYME

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Way Forward

Coordination between various states and center on policy issues and implementation is required to ensure seamless integration of Smart Grid technologies across the country and facilitate stakeholder participation.

Private sector participation would bring efficiency in operations and minimize losses.

  Suitable measures to augment financial

resources facilitating integration of smart and micro grid needs to be established. Framing and enforcing anti-theft legislation and legal system for speedy resolution of disputes would foster private sector participation in the distribution sector

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Way Forward

Stakeholder collaboration

India has a large pool of professionals and experts in the IT and telecom sector which can be leveraged for development of smart and micro grids.

Establishing collaborative community models and fostering empowered consumer base would make way for sustainable power infrastructure.

Human Resource Development

Smart Grids enable the more sophisticated use of the electricity system requiring development of Skill development and Training infrastructure.

12th FYP envisages a capacity addition of about 1,00,000 MW (including renewable) requiring a work force of the order of 4 lakh out of which nearly 3 lakh will be technical.

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Social Equity

Local Community

Contribute Land

Transmission lines

NGOFacilitating synergetic partnerships

Promoter (Entrepreneur/s or

Company)

Government

Knowledge Bank

Private Sector Efficiency

Facilitating Land Acquisition

Structure Social Equity Advisory and PPP implementation Equity in

ProjectEmployment Empowerment

1. Social Equity • Transmission projects face delay due to inability to

acquire land• Social Equity Model can facilitate timely

implementation of projects by partnering with local community , ensuring their support and equity in project.

2. Community Energy Partnership Program (Ontario, Canada)

Ontario’s FIT (Feed In Tariff ) program provides guaranteed purchase of all of the power supplied by renewable energy projects for 20 years (40 years for waterpower) at a fixed price that is high enough to generate a reasonable rate of return.

3. Industries and commercial establishments in Tamil Nadu are letting out their lands or rooftops in return for cheaper solar power.

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Alternate Financing Mechanism Plan

Kerosene /other fuel sources

Govt. Subsidy

Frame plan to study towards establishing financial viability of smart grid

Increase coverage and Consumer Base

Installing Renewable Energy sources should qualify as PSL

Utilize M-commerce industry for power sector

Branch Correspondents to provide due diligence of co-operative for

implementing micro-grid projects

Study Incremental Benefit- understanding Smart Grid Value Chain

404 million people in India do not have access to electricity

Meet energy need

Emissions SMART GRID

Offset cost –

Reduce AT & C losses

Integrate Renewable Sources and hence reduce environment impact

Reduce dependence on fossil fuels and their imports

POWER FOR ALL

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YES BANK Limited

Northern Regional Corporate Office: 48 Nyaya Marg, Chanakyapuri, New Delhi 110 021 Tel: + 91 11 6656 9000; Fax: +91 11 4168 0144

Public and Social Policies Management (PSPM)GroupTushar Pandey, Senior President & Country HeadNorthern Regional Corporate Office: 48 Nyaya Marg, Chanakyapuri, New Delhi 110 021 Tel: + 91 11 6656 9056; Email-tushar.pandey@yesbank.in

About YES BANK

YES BANK, India’s new age private sector Bank, is the outcome of the professional commitment of top management team, to establish a high quality, customer centric, service driven, private Indian Bank catering to the “Future Industries of India”. YES BANK has adopted international best practices, the highest standards of service quality and operational excellence, and offers comprehensive banking and financial solutions to all its valued customers. A key strength and differentiating feature of YES BANK is its knowledge driven approach to banking and an unprecedented customer experience for its retail and wealth management clients.

YES BANK is steadily building Corporate and Institutional Banking, Financial Markets, Investment Banking, Corporate Finance, Business (SME) and Transactional Banking, Retail Banking and Wealth Management business lines across the country. YES BANK has institutionalized YES International Banking that offers a complete suite of international banking products and services, driven by state-of-the-art technology, which includes Debt, Trade Finance, Corporate Finance, Investment Banking and Business Advisory Services, Treasury and Global Indian Banking. The Bank’s constant endeavor is to provide a delightful banking experience expressed with simplicity, empathy and totality.

Contacts

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Disclaimer

YES BANK LimitedRegistered & Corporate Office: Nehru Centre, 9th Floor, Discovery of India, Worli, Mumbai 400018 Tel: + 91 22 6669 9000; Fax: + 91 22 6669 9018

Northern Regional Corporate Office: 48 Nyaya Marg, Chanakyapuri, New Delhi 110 021 Tel: + 91 11 6656 9000; Fax: +91 11 4168 0144

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