Indian Power sector BTG

8/13/2019 Indian Power sector BTG

1/17

Current Scenario of Indian

Power Sector & Expectationsfrom BTG & BOP Suppliers

1


2/17

CONTEXT

The Indian economy has experienced unprecedented economic growth

over the last decade.

Today, India is the ninth largest economy in the world, driven by a real

GDP growth of 8.7% in the last 5 years (7.5% over the last 10 years).

Growth in power sector is one of the most important requirements for

sustained growth of a developing economy like India. As per planning

commission power sector growth should be at least 8 % per annum for

sustained economic growth.

2/1/2014 2


3/17

Generating Capacity - INDIA

Thermal,

153847.99

MW, 68%

Hydro,

39623.4

MW, 18%

Nuclear,

4780 MW,2%

RES,

27541.71

MW, 12%

Total Generating capacity

Thermal

Hydro

Nuclear

RES

Total generating Capacity in the country in Jul-2013 was 225793 MW. Out of totalgeneration capacity 68% is contributed by Thermal Power Plants i.e. Coal, gas &

diesel.

Thermal Capacity has a share of 81.7% of the total capacity addition in XII Plan.

225793MW

2/1/2014 3


4/17

1362

28448

63636

85795105046

132329

199877

223344

0

50000

100000

150000

200000

250000

1947 1980 1990 1997

(8th

plan)

2002

(9th

plan)

2007

(10th

plan)

2012

(11th

plan)

2013

Installed capacity (MW)

23

2352

4408

5141

6030

6940

8726 8970

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1947 1980 1990 1997

(8th

plan)

2002

(9th

plan)

2007

(10th

plan)

2012

(11th

plan)

2013

Length of T & D lines

(Ckt 1000 Kms)

2/1/2014 4

There has been remarkable increase in the capacity addition since

independence. In this span of 65 years india has increase its Generation

capacity to more than 225 GW from mere 1.3 GW.

Transmission network has increase 8970 thousand kms from 23 thousand

kms. and per capita consumption has increased to 917 from 23 kwh.

Growth in Indian Power Sector

since independence


5/17

Energy demand and supply

Despite the increase in availability, India faced an energy deficit of 6 to 8 % and

a peak deficit of around 10 %. It is expected that the energy deficit and peak

deficit will rise to 10% and 13% respectively in the coming years if growth rate

does not fall drastically.

2/1/2014 5


6/17

demand and supply region wise

Peak Demand YTD in July-2013 was 135,561MW and Peak demand deficit was at 6.3%.

Total Demand YTD in July 2013 was 345,989 MUs and the % S-D gap was 5.5% across

the country.

The Monthly Peak demand deficit improved from 5.8% in June-2013 to 4.5% in July-2013

due to improved availability of Hydro Plants

225793MW

2/1/2014 6

44450

38054

39015

15743

2101

41666

37361

32507

15375

1973

109677

10

0245

944

02

37498

4167

10

2797

99

414

83915

36894

3841

0%

5%

10%

15%

20%

0

20000

40000

60000

80000

100000

120000

NR WR SR ER NER

Percentage

MW

Power Scenario YTD July 2013

Peak Demand (MW) Peak Met (MW) Demand (MUs) Supply (MUs) % Deficit % S-D gap


7/17

Low per-capita consumption

The average per capita consumption of electricity in India is around 900kWh, compared to the world average of 2,800 kWh. The other comparable

countries, like the other BRIC nations, have significantly higher per capita

consumption compared to India.

16

172

229

465

559

672

884 917

0

100

200

300

400

500

600

700

800

900

1000

1947 1980 1990 1997

(8th

plan)

2002

(9th

plan)

2007

(10th

plan)

2012

(11th

plan)

2013

Per capita consumption(kwh)

2/1/2014 7

13361

6460

29422384

884

2892

0

2000

4000

6000

8000

10000

12000

14000

16000

USA Russia China Brazil India World

Per capita consumption(kwh)


8/17

Encouraging policy measures Till 1990, except in few pockets entire power sector was shielded from private

sector participation. Govt. resource were not adequate to meet the growing

demand supply gap. This has compelled Govt. to open up private sector

participation in power generation area.

The amendment of Supply Act (1948) in 1991, followed by the enactment of

Electricity Act(2003) and notification of Mega Power Policy(1995), National

Tariff Policy (2005), National Electricity Policy and Integrated Energy Policyhave all led to a much liberal power sector, which then saw active investments

from private sector across the value chain.

Most of the participation by private investors has happened in generation

sector only.

The growing demand supported by policy reforms have encouraged private

sectors participation not only in generation & transmission but also in

developing manufacturing capabilities in the country.

2/1/2014 8


9/17

Key challenges for growthSHORTAGE IN COAL SUPPLY

Indias current coal production is far less

compared to its reserves & potential.

Forecast of FY 2013-14 envisaged coal

production of 670 MT against which the

production indicated is 505 MT . The gap

of 165 MT is required to be met throughimported at exorbitant forex out flow and

uncertainties of supplies.

2/1/2014 9

Country will have a coal shortfall of 238 MT/ annum by 2016-17, if current scenario

continues..., - Working Committee Group on coal.

Coal transportation logistics is also a serious concern for raising coal production. For

example coal blocks in Mand raigarh of SECL can raise their production to 90 MTPA

but are able to mine only 10 MTPA. Similarly coal blocks in Vasundhera in MCL area

has potential for mining up to 100 MTPA against which only 10 MTPA is being

mined.

596.0

3

672.84

669

.69

432.74

450.53

505

163.29

222.31

164.69

71.05

103.17

116.28

0

100

200

300

400

500

600

700800

FY 2011-12 FY 2012-13 FY 2013-14(Forecasted)

Coal Scenario (Values in MT)

Coal required Coal production

Coal Gap Imported


10/17

Key challenges for growthSECURING LAND

Acquisition of land is major issue and time consuming apart from hurdles &other challenges.

Number of projects have been either cancelled or delayed due to non-availability

of land or difficulties in land acquisition.

With the recent policy of land acquisition the consent route for the private

player will continue to be big challenges & also project cost will go up on

account of higher acquisition charges.

Acquisition of land for afforestation also comes in the way of the delays of the

project on account of forest clearance.

The expectation of land losers in terms of approved CSR of respective state

government is also point of concern while acquiring land.

Rehabilitation of community & resistance by land owners is also cause for delay

in land acquisition.

2/1/2014 10


11/17

Key challenges for growthWater

All the land locked power plants requires huge amount of water for

consumptive use, which are predominantly fed from the catchment of dam or

directly through big rivers like ganges. In all the other areas due to non

availability of enough dams power plants are dependent on rain fed small rivers

& tributaries.

Thus, water in the lean season is scarce and affecting the plant operations. It has

been seen that due to water shortage some of the plants has to cut down the

generation.

As water are fed from small rain fed rivers , to store water for the rest of the

season big reservoirs are required which again poses the problem of landacquistion.

At places water is to be transported through long distances, leading to ROW

issues.

2/1/2014 11


12/17

Key challenges for growthWORSENING FINANCIAL HEALTH OF THE DISTRIBUTION SECTOR &

INADEQUECIES IN T & D SEGMENT

Apart from a handful of franchisees the distribution sector is still largely in the

hands of the state owned utilities.

Transmission & Distribution losses in the country is 23.65% (2010), which is a

mere 1.3 % improvement from the levels of 23.97% in 2009. World average for T& D loss is 9.8 %.

The low collections and cash deficit scenario of the distribution sector severely

impacts the financial viability of generation and transmission sectors.

The development of the transmission system is not commensurating to theflexible needs of the generating station & restricted by regulation.

Under lying distribution system which in most cases is with SEB need lot of

improvement.

2/1/2014 12


13/17

Expectations from BTG &

BOP Suppliers

Efficient & Compact Project Schedule: As all ready lot of time gets lost in sorting land & clearance issues in india, once

project is cleared aggressive project schedule is the only way out and it is expected

from BTG & BOP suppliers to match & maintain these schedule.

Manufacturing base in the country:

Manufacturers based in the country are better placed to rise during emergency formeeting the spares & experts requirements. This will be a welcome step and also

carries less risk for sustainable generation.

Less imports

Manufacturer based in country to restrict their import to bare minimum level to

mitigating currency & others associated risk involved.

Most Advance & reliable technology in the world.

Manufactures should encourage & propagate most advance & reliable technology

in the world.

2/1/2014 13


14/17


BOP Suppliers

Quality Products: Manufactures should ensure products manufacturing, material selection and

erection & commissioning are carried out with highest standard of quality and is

commensurate with latest codes & standards applicable.

Design & Engineering:

Manufactures should ensure plant & products are designed & engineered with mostadvances & proven engineering practices and is commensurate with latest codes &

standards applicable.

Reduction in manufacturing time cycle.

Manufacturers should adopt means & method to reduce manufacturing time cycle.

Project management:

Project management of highest standards to cover up complete facets of the

project. This will help project implementer to avoid time & cost overrun.

2/1/2014 14


15/17


BOP Suppliers

Environmental friendly products & Services:

Manufacturers should develop product & services which are environmental friendly

and add value to the environment.

Prompt response & services

Efficient & Prompt response & services to the project requirement.

Post operational replacement & services

Spares:

Spares avilabilty at optimum cost

Efficient Layout for land and utilities optimization

Manufacture should encourage compact & optimizes layout without compromise

on operational requirement.

2/1/2014 15


16/17

Conclusion

Thus based on low per capita consumption prevailing in the country and

continuously growing demand supply gap it can be said that there will be

continuous demand for power in the country for many years to come.

The capacity additions envisaged under 12th and 13th five year plan presents with

immense opportunities for manufacturing sector (OEMs) for building up capacitiesto cater to the growing requirements.

The focus would be on production capacity expansion, diversity of product

offerings, developing new clean technologies and improving operational

characteristics of their offerings.

It is expected from BTG/BOP suppliers to rise to the occasion for bridging this gap

by providing product with most advance & reliable technology base and of highest

quality & engineering standards. It is also expected that they will have

manufacturing base in the country to minimize the imports and provide most

Compact Project & manufacturing Schedule.

2/1/2014 16


17/17

Thank You

17

Documents

Indian Power sector BTG