indian transmission sector
TRANSCRIPT
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Indian Transmission Sector
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July 2007
P w C
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Agenda
Legislative Framework
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Section 1
Sector Overview
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Indian Power Sector: Overview
th
128 GW of installed capacity,150 million consumers
resources Eastern region and North-eastern
er cap a consump on s
kWh against the world average
of 2429 kWh
during most of the months in a year
85% of the villages are
electrified, 57% households
have access to electricity
Target: Power for all by 2012
Shortage in generation
-
PricewaterhouseCoopers
July 2007
Slide 4
.
- Peak shortage 13.5%
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Transmission Sector: Overview
India is demarcated into 5 regions
- WR-ER-NER-NR connectedthrough synchronous links
-
through asynchronous links
Inter-regional capacity
- In 2007: 11,500MW
- In 2012: 37,150MW
regional transmission system to
meet the current demands
PricewaterhouseCoopers
July 2007
Slide 5
Source: PGCIL
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Transmission Sector: Overview
Substantial rowth in total -
transmission line length over lastdecade
transmission capacity plannedExisting and Proposed - Inter-regional Transmission Capacity
40000
Transmission lines (ckm)
350000300000350000400000
20000
25000
30000
35000
onCap
acity(MW)
57000
172000
50000100000150000200000
0
5000
10000
15000
Transmissi
2002 2005 2007 2010 2012
27000
1950
1970
1990
2006
012
jected
)
220 kV
HVDC mono-pole 200 200 200 200 200
HVDC b-t-b 2000 3000 3000 3000 3000
HVDC bi-pole 0 2000 2500 2500 6500
400 kV 1000 2400 7800 11400 16400
765 kV 0 0 1100 2200 9200
PricewaterhouseCoopers
July 2007
Slide 6
(P
ro
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Transmission Sector: Industry Structure
- PGCIL is designated as CTUby Govt. of India
- Each State has one STUdesignated by State Govt.
- Plans and operates National
Grid / Regional Grids
- Undertakes the functions of
- Plans and operates State grid
in respective state
- Undertakes the functions of
Transmission Operator as well
as System Operator
- -
Transmission Operator as well
as System Operator
- -
other inter-state transmission
licensees
other intra-state transmission
licensees
PricewaterhouseCoopers
July 2007
Slide 7
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Transmission Sector: System operation aspects
(ABT) introduced at regional level(in 2002)
- maintaining grid frequency andvoltages within statutory limits
responsibility and accountability in
power generation and consumption
- ,
- narrowing demand-supply gap
100%
=50.5Hz
disincentives
ABT has provided robust and 60%
80%
TIME
of deviations by grid users
Similar mechanism proposed to be 0%
20%
r-02
n-0
2l-02
t-02
c-0
2
b-0
3
r-03
n-0
3
g-0
3t-03
c-0
3
r-04
t-04
%O
PricewaterhouseCoopers
July 2007
Slide 8
rep ca e a a e eve A Ju J O De Fe A Ju Au O De A OPre-ABT ABT in WR ABT in WR+ER ABT in
WR+ER+NER
Source: RLDC Reports
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Transmission Sector: Investment requirement
system to handle 2,00,000MW by2012 from 1,28,000 MW presently
transmission (XIth plan):- Regional level: USD 17.5 Billion
Electricity Plan (NEP) for XIth plan
- Inter-regional capacity to
PGCIL: USD 10.3 Billion
PSP*: USD 7.2 Billion
en ance rom , n
2007) to 37,150 MW (in 2012)
- Evacuation projects (UMPPs,
- State level: USD 32.5 Billion
No identified ro ects for
ISGSs, MPPs, IPPs etc.)
- System strengthening projects
PSP yet
Only couple of steps have
PricewaterhouseCoopers
July 2007
Slide 9
*PSP: Private Sector Participation
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Transmission Sector: Key issues
Challen es for STUs to achieve their Possible o tions to achieveinvestment targets:
Institutional capability
investment targets:
- Augment skilled workforce
- Private sector artici ation JV /
Capability to arrange funds
Limited know-how of new
IPTC)
Support required from respectiveGovernments:
technologies (e.g. 765kV AC)
Right of Way Issues
Dela in statutor clearances
- Statutory clearances
- Providing counter-guarantee todonors against loans
Limited suppliers for materials andequipment
- Budgetary support
- Policies for encouragingequipment manufacturing
PricewaterhouseCoopers
July 2007
Slide 10
construction
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Section 3
Legislative Framework
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Transmission Sector: Regulatory framework
-
CERC approves annualtransmission charges based on
approach):- O&M expenses
Currently, Multi Year Tariff (FY04
to FY09) is in force
- Depreciation (straight line
method, up to 90% of cost)
- Advance A ainst De reciationSTUs
Respective SERC approves annual
transmission charges based on
- Interest on loan capital
- Return on Equity (14% post tax)
Terms and Conditions of Tariff Some states have moved to MYT
(3 years)
- Interest on working capital
- Income tax
PricewaterhouseCoopers
July 2007
Slide 12
u recovery o a arge
availability (98%) else pro-rata
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Transmission Sector: Regulatory framework for PSP
CEA has to re are National Electricity Plan
Private investor proposes toconstruct a transmission line, not
with guidelines for encouragingcompetition in development of
transmission ro ectsbeing a dedicated transmission lineand not included in the Network
Plan, the required load flow study
Envisage formation of Empowered
Committee whose primary role is-be undertaken by the CTU/ STU
The result of such studiesindicatin either inclusion or
- To identify projects to be
developed under PSP
exclusion of the proposedtransmission line
The line can then be constructed
- o nv e s an o se ec adeveloper
Similar framework is envisaged at
PricewaterhouseCoopers
July 2007
Slide 13
by CTU/STU or through PSP state level, however the framework
is not operational
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Transmission Sector: Business models for PSP in India
- CTU/STU owns 26% equity- Balance by the Joint Venture
Company (IPTC) route:- 100% equity owned by private
entit
- JVP selected throughcompetitive bidding process
-
- IPTC selected throughcompetitive bidding process
- Exam le: Western Re ion.
To evacuate power fromTala HEP (Bhutan) andsur lus ower in ER/NER
System Strengthening Scheme- II (package B&C)
Reliance selected out of
Tata: 51%, PGCIL: 49%
Approved cost: Rs.1,600 Cr.
eight bidders Cost: Rs. 2,000 Cr. (25%
lower than the cost-plus
PricewaterhouseCoopers
July 2007
Slide 14
- -and Koldam HEP evacuation
tariff)
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Transmission Sector: Sharing of Transmission Charges
sharing of transmission charges: To introduce capacity allocation to
for the new system Transmission charges for the new
-
To rationalize transmission charge
for using inter-regional links
beneficiaries
Implementation of distance &
No pooling of transmission charges
for the new system
rec on sens ve oss a oca on a
National level
PricewaterhouseCoopers
July 2007
Slide 15
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Section 4
Power Market Development
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Transmission Sector: Promoting power trading
Delicensed generation (excepthydro)
trading Setting up of a power exchange(s)
Non-discriminatory open access:
- Mandatory in transmission
15% of new generating capacity
may be sold outside long term PPA
as per National Electricity Policy-
distribution
Electricity trading identified as a
Merchant Power Plants (MPPs)
- MPPs compete for consumers
st nct cense act v ty Development of markets (including
trading) by CERCs / SERCs
- Ministry of Coal has identified
15 coal blocks (3.6 billion
PricewaterhouseCoopersJuly 2007
Slide 17
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Transmission Sector: Current scenario of power trading
14,188MU (2.2% of totalgeneration availability)
row n ower ra ng s
14188
14000
16000
1000-1500MW (0.8-1.2% of
generation availability)
11029
10000
12000
gn can grow n ra e vo ume
in last four years (CAGR ~ 72%)
Inter-regional trade increased4178
4000
6000
manifold through ER-NR, ER-WR,ER-SR links
0
2000
FY'02 FY'03 FY'04 FY'05 FY'06
PricewaterhouseCoopersJuly 2007
Slide 18
Source: CERC Power exchange paper
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Transmission Sector: Current scenario of power trading
Consistent rise ~40% er annum in prices of traded power
Prices of off-peak power and RTCpower almost same as most of the
0.1 cent/kWh
Trader-Trader transactions notallowed
erma s a ons are opera ng onbase load
Indian power market needs
Increase in price of traded power
500
600
700
hshortage
100
200
300
400
Paise/k
Sl.
No.
Category of
the Trading
Licence
Volume of Electricity
proposed to be traded
(in kWh)
No. of
Traders
0
Jan-Mar'04
Apr-Jun'04
Jul-Sep'04
Oct-Dec'04
Jan-Mar'05
Apr-Jun'05
Jul-Sep'05
Oct-Dec'05
Jan-Mar'06
Apr-Jun'06
Jul-Sep'061 A Upto 100 million 102 B 100 to 200 million 1
3 C 200 to 500 million 3
4 D 500 to 700 million 0
5 E 700 to 1000 million 0
PricewaterhouseCoopersJuly 2007
Slide 19Source: CERC Power exchange paper
Off-peak power
Round-the-clock (RTC) power
ove m on
19
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Transmission Sector: Promoting energy trading through PX[CERC guidelines for setting up a Power Exchange (PX)]
Voluntary participation
De-mutualized form of
Transparency in operation anddecision-making
organization
Reliable, efficient and impartial
mana ement
Computerized trading and clearing
system
Efficient financial settlement and
Ring fencing between ownership,
management and participation
payment security mechanism
Effective system for dissemination
nvestment support rom t einvestors including institutional
investors
PricewaterhouseCoopersJuly 2007
Slide 20
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Transmission Sector: Promoting energy trading through PX[CERC guidelines for setting up a Power Exchange (PX)]
Commission to stay away fromgovernance of the Power
National Power Exchange Day ahead markets
Scrutiny of rules and bye-laws
Assignment of transmission
Congestion management through
merit order of bids & offers / pro-
rata allocation
Apportionment of transmission
charges
Deviation in delivery to be settled
under ABT/UI mechanism
Uniform market clearin rice
roce ures or an ngcongestion
Monitoring of PX for gaming
PricewaterhouseCoopersJuly 2007
Slide 21
Adjudication of dispute between
PX and Members
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Transmission Sector: Promoting Merchant Power Plants
MPP have to seek open accessfrom CTU up to prospective
block allocation, hence should theybe allowed to bid for long term
rocurement b distribution
MPP required to bear the cost of
dedicated system required for
interconnection with the nearest
licensee
Transmission system requirement
grid point
Issues related to MPP
Whether MPPs can sell art of
-
- Transmission charges
Sale of power
capacity under long term PPA Can MPP enter into long term
PPA after settin u the lant as
- Short term
- Spot
PricewaterhouseCoopersJuly 2007
Slide 22
MPP?-
- ToD
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