Transcript Document

Presentation
on
Investment Opportunities in
Indian Power Sector
and
Cooperation with IEA
By
R.V. SHAHI
Secretary, Ministry of Power
Government of India
December13, 2006
1
Strengths of Indian Economy

India has been able to achieve an economic growth rate of
8% per annum during last few years.

Industrial growth rate over 9%.

Domestic savings rates have been rising and reached over
29%.

Inflation level
moderate, despite of sharp rise in
international oil prices.

Current Account Deficit only 1.3% of GDP.

Foreign exchange reserves about USD 170 billion.
2
Strengths of Indian Power Sector

During 2007-12, average Economic growth rate projected at
9% pa.

Power sector to also grow by 9% to sustain the economic
growth.

Installed capacity to reach 800 GW by 2031-32 from the
present level of 128 GW. Present captive generation 41,000
MW.

Enabling environment created by enacting Electricity Act
and various policies framed thereunder.
3
New Liberal Competitive Framework

New Electricity Act
2003 - Liberal and competitive
framework.

Entry Barriers
•Removed in generation.
•Reduced in transmission, distribution and supply.

Open access in transmission already in place in
interconnected all India grid.

Open access to consumers above 1 MW by Jan, 2009.
4
Contd..
New Liberal Competitive Framework

100% FDI permitted in all segments.

Duty free import of equipment permitted for Mega Power
Projects.

Most project execution through International Competitive
Bidding.
5
National Electricity Policy

Total Village Electrification in 5 years.
By year 2012 :

Per capita availability 1000 units.

Installed capacity over 200,000 MW.

Spinning reserves 5% .

Minimum lifeline consumption of one unit per
household per day.

Inter-regional transmission capacity 37,000 MW.

Quality and reliable power supply.
6

Tariff Policy
Tariff of all Generation and Transmission Projects in
Private Sector through Competitive route- Public sector to
complete transition in five years.

Reduction of cross subsidy to (+)(-) 20% in next five years.

Emphasis on facilitating Open Access in Distribution; clear
formulation on cross subsidy surcharge.

Transmission Tariff framework sensitive to distance and
direction.

Strict Implementation of Performance Standards.

Agriculture Tariff to leverage sustainable use of Ground
Water Resources.

Time bound introduction of MYT.
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Competitive Tariff Bidding for Project
Development

Tariff based International Competitive Bidding for
selection of project developer.

7 Large coal based Ultra Mega projects of 4000 MW each
being developed.

Mix of Coastal projects with imported coal and pit head
integrated coal mining- cum- power projects.

Use of more efficient super critical technology – lower CO2
emissions.

Final tariff bids already received for 2 projects- selection
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of successful bidder by December, 2006.
Contd..
Competitive Tariff Bidding contd..

Two more projects to be awarded in April/ June’ 2007.

Bids of other projects in pipeline.

States initiating bids for smaller capacity thermal projects.

Bids for transmission projects in pipeline.
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The Energy Strategy

Full development of hydro potential. Hydro power
irrespective of size, renewable source of energy.

Domestic coal to remain primary source. Emphasis on
Super Critical Plants and Clean Coal Technologies.

Import of coal on moderate scale for coastal locations.

Use of gas dependent on availability and price.

Import of gas – LNG terminals. Gas pipelines from
Western and Central Asia.
10
Contd..
Alternate Sources of Energy

Emphasis on Biomass.

Wind power potential – success story for rapid
development. More than 3800 MW added in the last four
years.

At over 5500 MW , Wind capacity 4th largest in the
world.

Development of mini and micro hydroelectric projects.

Solar power needs intensive R&D for cost reduction .
Extensive development of solar dependent on CDM
benefits to offset present high cost.
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Contd..
The Energy Strategy

Nuclear power presently 3,900 MW- Share of Nuclear
power to be enhanced. No CO2 emissions.
• Mastery in fuel cycle and technology.
• Fuel Constraint.

Rapid increase in share of nuclear power dependent on
International Cooperation.
12
Energy Efficiency – High Priority

Bureau of Energy Efficiency (BEE).

Standards and Labeling of appliances.

Building Codes being developed.

Energy
conservation
norms
for
industry
and
performance standards for equipment being developed.

Public awareness campaign launched.
13
Low Energy Intensity and Low Carbon
Path of Development
Energy Intensity
TPES/GDP
(KgOE/2000PPP$)
Per Capita CO2
Emissions
(Tonnes/capita)
India
0.18
1.02
China
0.23
3.66
USA
0.22
19.73
OECD
0.19
11.09
14
Investment Requirements During XI Plan
(2007-2012) in Power Sector

USD 50 Billion for Generation.

Another USD 50 Billion for Transmission, Distribution
and Rural Electrification.

Total USD 100 Billion.

At present 43,000 MW generation capacity is already
under
execution.
Investment
of
USD
50
Billion
committed.

Public sector investments have been stepped up ; will
need to be supplemented through private investments.15
Merchant Power Plants

Development of Merchant power plants with highly
competitive tariff- a new electricity market development
initiative.

To fill the demand supply gap.

Facilitated by Open access
in transmission and
distribution.

Full market risk to be absorbed by the developer.

Coal linkage to be provided for plants up to 1000 MW
size. Captive coal blocks for plants in the range of 5001000 MW.
16
Present India - IEA Cooperation

MoU signed with IEA during April 1998 for cooperation
in power sector.

Training programmes organised by IEA on Energy
statistics, forecasting etc.

Jointly organised International workshop on Standards
and Labeling.

India participating in IEA Greenhouse Gas R&D
programme.

India
participating
in
IEA DSM
implementation
agreement.
17
Proposed Future India - IEA Cooperation

Energy Efficiency and Demand Side Management.

Data
Management,
Demand
supply
mismatch
projections, Energy Balance : method of assessment.

Establishing World over that Hydro power irrespective
of size is renewable, and accepting these projects under
CDM.

Collaboration in Clean Coal Technologies.

20 year projections for gas availability and prices.

Capital cost benchmarks for Nuclear power projects.

20 year projections
prices.
for nuclear fuel availability and
18
THANK YOU
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