OVERVIEW | OPPORTUNITIES

Power

 

OVERVIEW

 

SIZE

• Generation capacity of 141 GW; 663 billion units produced (1 unit = 1kwh)-January 2008
  • CAGR of 5% over the last 5 years
• India has the fifth largest electricity generation capacity in the world
  • Low per capita consumption at 631 units; less than half of China
• Transmission & Distribution network of 6.6 million circuit km - the third largest in the world
• Coal fired plants constitute 54% of the installed generation capacity, followed by 25% from hydel power, 10% gas based, 3% from nuclear energy and 8% from renewable sources

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STRUCTURE

• Majority of Generation, Transmission and Distribution capacities are with either public sector companies or with State Electricity Boards (SEBs)
• Private sector participation is increasing especially in Generation and Distribution
  • Distribution licences for several cities are already with the private sector
  • Three large ultra-mega power projects of 4000MW each have been recently awarded to the private sector on the basis of global tenders

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POLICY

• 100% FDI permitted in Generation, Transmission & Distribution - the Government is keen to draw private investment into the sector
• Policy framework: Electricity Act 2003 and National Electricity Policy 2005
• Incentives: Income tax holiday for a block of 10 years in the first 15 years of operation; waiver of capital goods' import duties on mega power projects (above 1,000 MW generation capacity)
• Independent Regulators: Central Electricity Regulatory Commission for central PSUs and inter-state issues. Each state has its own Electricity Regulatory Commission

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Major players and presence in value chain	Capacity (MW)	•G	•T	•D
Public Sector
National Thermal Power Corporation	29,144
National Hydro Electric Power Corporation	2,755
Nuclear Power Corporation	4,120
Domestic Private Sector
Tata Power	2,323
RPG Group - CESC	975
Reliance Energy	941
International Private Sector
China Light and Power (CLP)	655
Marubeni Corporation	347

•G - Generation •T - Transmission •D - Distribution

Source: Ministry of Power, Capitaline

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OPPORTUNITY

Over 150,000 MW of Hydel Power is yet to be tapped in India	India requires an additional 78,000 MW of generation capacity by 2012

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OUTLOOK

• Over 78,000 MW of new generation capacity is planned in the next five years
  • A corresponding investment is required in Transmission and Distribution networks
• Power costs need to be reduced from the current high of 8-10 cents/unit by a combination of lower AT & C losses, increased generation efficiencies and added low-cost generating capacity

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POTENTIAL

• Large demand-supply gap: All India average energy shortfall of 9% and peak demand shortfall of 14%
• The implementation of key reforms is likely to foster growth in all segments
  • Unbundling of vertically integrated SEBs
  • “Open Access” to Transmission and Distribution networks
  • Select distribution circles to be franchised/privatised
  • Tariff reforms by regulatory authorities
• Opportunities in Generation for:
  • Ultra Mega Power Plants (UMPP) – 9 projects of 4000 MW each
  • Coal based plants at pithead or coastal locations (imported coal)
  • Natural Gas/CNG-based turbines at load centres or near gas terminals
  • Hydel power potential of 150,000 MW is untapped as assessed by the Government of India
  • Renovation, modernisation, up-rating and life extension of old thermal and hydro power plants
• Opportunities in Transmission network ventures - additional 60,000 circuit km of Transmission network expected by 2012
  • Private sector participation possible through JV and 100% equity mode
• Total investment opportunity of about US$ 150 billion over a 5 year horizon

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For additional information: Ministry of Power, Central Electricity Regulatory Commission, State Electricity Regulatory Commission (http://powermin.nic.in)