Power Generation in India

Raghav Kanoria

Managing Director, India Power Corporation 26th April,2018

Agenda~ About IPCL~ Power Generation Scenario India

IPCL-An Integrated Power Utility

India Power Corporation Ltd (IPCL) is a customer-focused end-to-end energy solutions provider

IPCL Business Areas

In partnership with Uniper, IPCL offers a wide range of services to power plants with

focus on operational efficiency

Services

Presence in thermal and renewables segments

Generation

One of the oldest Distribution Licensees in the country having expertise in efficiently

managing distribution systems

Distribution

- 1,312 MW Thermal- 105 MW Wind- 36 MW Solar

- 205 MVA Licensee over 618 sq.km area, Asansol

- 350 MVA Franchisee over 1,630 sq.km, Gaya, Bihar

- Plant O&M- Asset monitoring- Value added services

4

IPCL - Part of Kanoria Foundation~The Kanoria Foundation is primarily engaged in the business of Infrastructure Development

Infrastructure Finance

Equipment Finance

Power Sector

Education

Hospitality &Housing

Media

Healthcare

Technology

•Financial Services Company with AUM of more than USD 7 Billion

•Major equipment financier :Pan India presence with more than 89 Office Locations

•Integrated Power Utility player with Generation Capacity of 1312 MW & More than 2 lacs customers serviced from its distribution network

•ISO 9001:2000 certified infrastructure development company,

•Business & Economics- Popular fortnightly business magazine offering realistic insights

•IISD conducts several program for skill improvement , entrepreneurship, management etc

•Software solution and services company providing comprehensive range of IT services

•Suasth Healthcare India (Pvt) Limited is setting up a 400 bed ‘super specialty’ hospital at Navi Mumbai

Wind Power Generation Power Distribution Thermal Power Generation Solar Power Generation

1,000 MW Thermal Power Plant, Nellore, Andhra Pradesh

300 MW Thermal Power Plant, Haldia, West Bengal

2 MWSolar Power Plant, Seebpore, West Bengal

12 MW Thermal Plant, Dishergarh

205 MVA Distribution Licensee, Asansol

60 MW Wind Plant, Rajasthan

36 MWSolar Power Plant,

Uttarakhand

350 MVA Distribution Franchisee

Gaya, Bihar

29.8 MW Wind Plant, Gujarat

5 MW Wind Plant, Maharashtra

10.4 MW Wind Plant, Karnataka

India Power - Span of Business

Generation Sector~ Thermal~ Renewable~ Hydro ~Gas

• Electricity Act (2003) • New renewable energy policy• Promotion of competition • Implementation of Deen Dayal Upadhyay

Gram Jyoti Yojana (DDUGJY) and Integrated Power Development Scheme for rural and urban areas respectively

• Implementation of Ujwal DISCOM Assurance Yojana (UDAY) for improving the health of state distribution utilities

• National Tariff Policy (2016) with focus on renewable energy resources

• Generation and distribution of power under state ownership

• Continuation of State Electricity Boards• Creation on Central Sector Power Utilities –

NTPC, NHPC, NEEPCO, POWERGRID

• Electricity (Supply) Act 1948 • Establishment of State

Electricity Boards (SEBs).

2003 Onwards Growth Era

1991-2003 Liberalization Era

1956-1991Nationalization Stage

Before 1956 Introductory

Stage

• Private sector participation in generation

• Electricity Regulatory Commissions Act (1998) for establishing Central and State Electricity Regulatory Commissions and rationalisation of tariffs

Evolution of Indian Power Sector

Source :IBEF Report

Power demand in the country is set to grow

Note: India’s figures is for 2015-16

15520

12987

10067

7836 73825409

30261122

Canada USA Australia Japan France UK World India

Per Capita Electricity Consumption

India needs to catch up on per capita electricity consumption Around 15% of Total Households still need access to electricity to be electrified.-(As of Oct’17)

Electrified Households , 189,853,126 ,

85%

Un-electrified Households34,783,588

15%

Electrification Status of Households

571

1.198

1.771

2.853

4.128

0

500

1000

1500

2000

2500

3000

3500

4000

4500

FY 2000 FY 2013 FY 2020 FY 2030 FY 2040

TWH

Growth in Energy Demand Across Sectors

Industry Residential Services Transport Agriculture Other Energy Sector T&D Loss PG Own Use Gross Generation

• Significant capacity addition after Electricity Act 2003

• Private sector participation has been phenomenal

• Majority coal based thermal power plants

• Renewable capacity has shown significant growth due to supportive policies

• However, electrification yet to cover all households

0

50

100

150

200

250

300

350 Installed Generation Capacity (in GW)

Coal Gas Diesel

Nuclear Hydel Renewable

0

20

40

60

80

100

120

140

160 Installed Generation Capacity –Ownership ( in GW)

Private (In GW) State (In GW)

Central (In GW)

Installed Power Generation Capacity is growing

192 249 249

2530 305161 8757

175275

0

100

200

300

400

500

600

700

FY 2017 FY 2022 FY 2027

Indian Electricity Capacity Additions and Totals to FY2027 (GW)

Renewables

Other Zero Emissions(Hydro,Nuclear etc)

Gas

Coal

Source :IEEFA Estimates, CEA Data

Vision ‘24x7’ Power for All’Affordable and quality power for all by March 2019

Green Energy Corridor ProjectDedicated Power Transmission Corridor for renewable project

Boost to Renewable EnergyNo Environment Clearance for Solar , RPO Obligations, Aggressive Target for Capacity Addition

Direct Benefit Transfer (DBT) SchemeDirect Transfer of electricity subsidy

National Mission on Enhanced Energy Efficiency Funds energy efficient electrical appliances

Ujwal Discoms Assurance Yojana (UDAY) Reduction in losses and improvement in State Utilities Financials

Power to the people (DDUGJY,IPDS)Reduction in losses and improving electrification

Power Purchase PlatformFor Medium Term 2500 MW of ElectricityUltra Mega Power Projects (UMPPs)

Ease of land possession, tariff based competitive bidding

Saubhagya SchemeElectricity Access to 40 Million families by Dec’18

UJALA SchemeDistribution of energy efficient LED bulbs

Boost to manufacturingManufacture of Solar Power Equipment in India

Coal ReformsCommercial Mining, GCV based pricing, Mine Auction

National Tariff Policy (2016)Power Purchase through competitive bidding

Government Initiatives for Improving the Power Generation Sector

0

50000

100000

150000

200000

250000

300000

2017-18 2018-19 2019-20 2020-21 2021-22

INR

Cro

res

Investment Trends

Thermal Hydro Nuclear Renewables

Thermal; 140.772 ;

31%

Hydro; 45.168 ; 10%

Nuclear; 25.606 ; 6%

Renewables; 237.027 ;

53%

Share of Investment (Cr) FY 17-22

Source :NEP,CEA Data

Investment Plans in Power Generation Sector-India

India is likely to attract a massive investment of Rs 11,55,652 Crore or USD 18 Billion in power generation sector

in the five-year period between 2017 and 2022 in setting up projects across thermal, hydro, nuclear and renewable

segment and close to USD 40 Biliion between 2017 and 2017.

Energy Demand / Supply (in BU) & PLF for Coal based IPPs

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

200

400

600

800

1000

1200

1400

Supply Demand IPP PLF

• While PLF of thermal IPPs is already below 60%, over 45 GWof coal based capacity continues to be under development.

• Low PLF has resulted in both financial and operational distressfor such plants. Large scale renewable addition is aggravatingPLF for such plants.

• Based on underlying demand drivers and policy actions(Power for All, manufacturing focus, Electric Vehiclesetc.), we believe market would have supply deficit inmedium term

Plant Capacity Profile (GW)

330

192

50

6,122,7

0

50

100

150

200

250

300

350

Installed capacity Coal based Coal older than20 years

Retd. betweenAug. '15 to Nov.

'17

To be retired byMar. '22

Thermal Generation :Low PLF, Aging Assets May Lead To Supply Deficit

40037

123959163996

54045

54045

Pre -1993 MW Post -1993 Total

Thermal Power Capacity Pre & Post 1993

Subcritical (MW) Supercritical (MW)

Source :CEA Report, Institute for Energy Economics and Financial Analysis,Nov’17

• Requirement of retrofitting and implementation pollution control equipments in plants e.g FGD (Flue Gas Desulphurization) SCR ( Selective Catalytic Reduction), ESP (Electrostatic Precipitator)

Compliance to Environmental Norms by 2022

• 30 GW of thermal capacity have been identified for R&M/LE program for FY 2012-17. R&M works for 7.2 GW has already been completed.

• Further 15 GW of capacity have been identified for R&M/LE Works in FY 2017-22(R&M-Renovation & Modernization) (LE-Life Extension)

Renovation & Modernization Program for Aging Plants

• Policy for auction and allocation of coal linkages for plants with PPA and without PPA

SHAKTI

• Introduction of commercial coal mining to reduce imports• Pricing of non coking coal based on GCV value• Emphasis on reduction of grade slippage in coal supply• Coal Swapping & rationalization of coal linkages

Coal Reforms

Integrated Approach towards strengthening the sector

Government Initiatives For Thermal Generation Sector

Source : Draft NEP-Generation ,CEA,Jan 2018

Thermal Capacity-Plans for Future

-194 -42 -188 -683-3896 -2500 -2500 -2500

19927

16725

2064321777

76555750 5500 5500

-10000

-5000

0

5000

10000

15000

20000

25000

2013 2014 2015 2016 2017 2018 Est 2019 Est 2020 Est

MW

Net Capacity Addition (MW) –Coal Fired Plants

Gross Thermal Capacity Addition (MW) Closures (MW) Net Thermal Capacity Addition (MW)

2017 2018 2019 2020 2021 Total % Total

Subcritical 4,970 650 5,620 12.94%

Supercritical 10,403 15,640 4,100 2,920 1,320 34,383 79.19%

Ultra super critical 1,320 1,320 3.04%

Others 420 1,150 525 2,095 4.83%

Grand Total 17,390 18,308 7,859 6,090 3,866 43,418 100.00%

Capacity Addition Plan (MW)-As per Technology Type

Source : Institute for Energy Economics and Financial Analysis,Nov’17

Renewable Generation : Increasing Contribution In Generation Mix

Renewables generation to grow backed by environmental concerns and focus on green

power

Indian Renewable Generation Sector is witnessing rapid growth aided by both policy incentives and private participation.

4,78

3,152,44 2,65 2,62

4,81

3,46 3,46 3,42

2,43

0

1

2

3

4

5

6

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Rs/

Kw

H

Solar Tariff (Rs/KwH) Wind Tariff (Rs/KwH)

Government Targets for Expansion

Source Total Installed Capacity (MW)* 2022 target (MW)Solar power 18,455 1,00,000Wind power 32,877 ~60,000Bio-energy 8,527 ~10,000*As on 31 Jan’18.

Source – MNRE, CEA, BEE

Solar and wind tariffs cheaper than ever12,92% 13,17%

14,18%

17,52%

18,81%

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

16,00%

18,00%

20,00%

2013-14 2014-15 2015-16 2016-17 2017-18

RE as % of Installed Capacity

14,77 32,78,3 4,39

750

102

25 200

100

200

300

400

500

600

700

800

900

Solar Wind Bio-Mass Small Hydro

Potential vs Installed Capacity for Renewables

Installed Capacity Potential

Renewable Energy Potential & Government Initiatives

National Offshore Wind Energy Policy ,2015

Repowering Policy for Wind Sector

Wind-Solar Hybrid Policy

Renewables Purchase Obligations (RPOs)

Scheme for development of solar Parks

Aggressive Target of 175 GW of renewable by 2022

Development of Green Corridor for power evacuation

Policies & Initiatives for Renewable Sector

Source :IBEF Report Mar’18

Hydro Power Capacity In India

A Hydro Electric Project has a long useful life extending to well over 50 years and helps in conserving scarce fossil fuels. Hydro power stations have the inherent ability for instantaneous starting, stopping and managing load variability which helps in improving reliability of the power system which makes them very significant for managing the integration of renewable.

05

101520253035404550

FY2004

FY2005

FY2006

FY2007

FY2008

FY2009

FY2010

FY2011

FY2012

FY2013

FY2014

FY2015

FY2016

Trend in Hydro Power Capacity Addition (GW)

44,478411,9285

61,352

124,0851

241,844

0

50

100

150

200

250

300

Under Operation Under Construction Under Approval Stage Yet to be Explored Total Potential

Hydro Power Capacity (GW)

33%

10%1%11%

45%

Region Wise Hydro Power Capacity Development

Northern

Western

North Eastern

Southern

Eastern

Government Initiatives for Hydro Power

National Electricity Policy,2005

• Emphasis on full development of feasible hydro potential in North Eastern and Northern States• Debt Financing for Longer Tenure recommended, Full Support from Central Government

Hydro Power Policy-2008

• Transparent Selection Criteria for private developers• Provision of merchant sale of upto 40% of saleable energy to recover costs

Tariff Policy 2016

• Cost Plus Tariff Regime for HEP• Promotion of HEP f, No obligation of RPO• Certainty of long term PPA (60%) , balance as merchant sales

Fair Compensation-Land Acquisition

• Increasing participation from locals in land acquisition

Other Measures

• Time bound appraisal of DPRs by CEA• Proactive Monitoring of projects• Collaboration to remove infrastructural issues

22,80%

0,00%

10,00%

20,00%

30,00%

40,00%

50,00%

60,00%

70,00%

80,00%

0

5000

10000

15000

20000

25000

30000

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Gas Based Capacity Addition(MW) & PLF(%)

Gas Based Capacity (MW) Average PLF

Gas Based Power Capacity In India

38,14 37,45

55,4559,31

55,98

39,95

27,13 25,2028,26 29,59

0

20

40

60

80

100

120

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

MM

SCM

D

Demand Supply Scenario for Gas

Gas Required-90% PLF (MMSCMD) Average Gas Supplied (MMSCMD)

Source : Draft NEP-Generation ,CEA,Jan 2018

Importance of Gas Based Power Plants

Grid Balancing-Renewable Integration

Meet Peak Demand & Quick Ramping Requirement

Less Environmental Impact

Optimisation studies indicate that for integrating renewable of 175 GW by 2021-22 , PLF of gas based capacity during 2021-22 is likely to be around 37% compared to around 22% at present. The gas requirement is of the order of about 45.27 MMSCMD.

To achieve success in gas based generation-primary need is to have reliable and low cost gas supply

Government Initiatives for increasing gas supply

Encouraging import of gas in the form of Liquefied Natural Gas (LNG)

Efforts for import of gas through international pipelines projects

Introduction of scheme for utilization of gas based generation capacity

Formulation of Hydrocarbon Exploration & Licensing Policy (HELP)

Policy for marketing freedom for gas from deepwater areas

Augmentation of production from existing fields under New Exploration Licensing Policy

Source : Draft NEP-Generation,CEA,Jan 2018

Thank You

India Power Corporation LimitedPlot X 1-2&3, Block-EP, Sector-VSalt Lake City, Kolkata – 700091

Ph: +91-033-66094300Email: corporate@indiapower.com

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