NEWS, ANALYSIS

INDIA WILL MISS POWER TARGET OF 62,000 MW

India will miss its target for extra power capacity of 62,000 megawatts by March 2012 by about 4,000 megawatts, Power Secretary P. Uma Shankar said, potentially reining in economic growth. "About 3,000-4,000 megawatts of (planned new) capacity will be delayed due to reasons beyond our control like floods, chimney failure and local agitation," Shankar said on the sidelines of a conference. "These are very big projects. But all efforts are on to meet the target." India has already revised down its target for adding generating capacity from an original 78,000 megawatts in the five years to March 2012 to the current 62,000 megawatts. State-run hydro power utility NHPC will miss its target by 3,000 megawatts, its chairman S.K. Garg said, but it was not immediately clear if this figure was included in that given by the power secretary. "The 3,000 MW (shortfall) will be ready in 2013/14," Garg said. India, the world's second-fastest growing major economy, desperately needs to improve its electricity infrastructure to reduce peak hour power shortages and provide electricity to millions of rural households, as well as keeping its resource-hungry industry on the move. Shankar said the sector needed investment of about $400 billion in the five years to March 2017. "The power sector ... would require $300-400 billion for provision of adequate and reliable supply of power at reasonable prices to all segments of Indian society," he said in a speech delivered at the conference. The sector is likely to raise coal imports to 60 million tonnes in the next financial year, Shankar said, from 45 million tonnes in the current one. This year, coal imports are expected at 45 million tonnes and next financial year it should be more than that ... about 60 million tones.

The annual growth in power generation during 11th Plan period is as under: Growth in Achievement(%) 2007-08 6.3 2008-09 2.7 2009-10 6.6 11th Plan Electricity generation during the month of September, 2010 has been 64315 MU against the generation of 63479 MU during the same month last year representing growth rate of about 1.32 % given as under:

Though the growth rate for nuclear and hydro electric energy generation were 23.5% and 17.24 % respectively, the growth rate for thermal power stations has been (-)3.46%. The cumulative electricity generation during the period April10 September10 has been 397389 MU against generation of 382234 MU during the same period last year representing a growth rate of 3.96 % and achievement of 97% of the target set for the period as under:-

The Indian power sector has the 5th largest electricity generation capacity in the world today. Have more than one hundred and sixty four thousand MW today and the worlds third largest transmission and distribution network. However, the demand from increased manufacturing activities, a growing population and the rising energy needs of a rapidly growing consumer base has led to a situation where the supply of energy falls short of the demand. In the electricity sector alone, we face a peaking shortage of almost 12% and an energy shortage of 9 to 10%. Government is targeting a capacity addition of 62 thousand MW in the 11th Five Year Plan during the years 2012 -2017. During 2007-2012, the funding requirement in Indian Power Sector has been estimated at US $ 230 billion, out of which US $ 132 billion is in power generation

The existing power deficit and a rising demand coupled with our commitment to provide access to electricity for all necessitated a large scale capacity addition programme.

28,572 MW Commissioned till 19 October 2010 : Power Minister Power Minister, Mr. Sushil Kumar Shinde Address at Economic Editors Conference, New Delhi Enactment of the Electricity Act, 2003, was a major initiative towards addressing the problems which were plaguing the Power Sector. One of the most important objectives of reforms has been to achieve commercial viability and sustainability of the sector so as to ensure quality supply at affordable price. Generation, except hydro, has been delicensed. Electricity Act also provides for specific dispensation for power development in rural areas. Concepts such as rural distribution through cooperatives and arrangement of franchisees are being envisaged so that reliability and quality of power supply to these areas are also improved. The Act provides for open access in transmission from the very beginning and in distribution in a phased manner. Our goal as per National Electricity Policy of 2005 is to achieve power to all and to increase the per capita availability of power to over 1000 units by 2012. As per Mid Term Appraisal a revised capacity addition target of 62,374 MW has been fixed for the 11th Plan which is three times the capacity added during 10th Plan. This comprises of 21,222 MW in Central Sector, 21,355 MW in State Sector and 19,797 MW in Private Sector. Out of this a capacity totaling to 28,572 MW has been commissioned till 19.10.2010 which is higher than total capacity added during the 10th Plan. During 2009-10, we have added 9,585 MW capacity which is highest in a single year during the last sixty years. During January 2006 till September 2009, we have added 42,000 MW capacity. Further, a capacity of 12,590 MW is being attempted on best efforts basis. Also, an additional capacity of about 14,000 MW from Non- Conventional energy sources and about 12,000 MW from captive plants are expected during the 11th Plan. Friends, our future plans during 12th and 13th plan are likely to be even bigger to meet our rising demand, which will lead to substantial increase in per capita availability of power. To achieve the ambitious target, rigorous monitoring of capacity addition of the on-going generation projects is being done at the highest level by the Ministry of Power as well as by the Central Electricity Authority. To augment the equipment manufacturing capacity to support the envisaged capacity addition programme on the initiatives of Ministry of Power, five new joint venture companies are setting their base in India. The joint ventures are L&T-MHI, Bharat Forge-Alstom, AnsaldoGB Power, Toshiba & JSW, and Thermax with Babcock & Wilcox. Besides this, Dussan from Korea is putting up equipment manufacturing facility in

India on 100% FDI. This will expedite the capacity addition programme. In addition to this, capacity of BHEL is also being increased to 20,000 MW by the end of 2012. Since coal will continue to dominate power generation in near future, introduction of new efficient technologies for power generation are being pursued. Installation of large size supercritical units is being encouraged with a view to have faster capacity addition and also to enhance efficiency, reduce coal consumption and Green House Gas emissions. During 11th plan, it is proposed that few units of 660MW based on supercritical technology would be commissioned. However, during 12th plan, it is estimated that around 50% of the coal based thermal capacity addition would be through supercritical units. Further, it has already been decided that 13th plan coal based thermal capacity addition will be through Supercritical units only. In order to bridge the gap between demand & supply of power, especially in the context of limited financial resources available, it has become imperative to look for other options which are not capital intensive as new capacity addition and which could be implemented in a comparatively shorter time frame. In this regard optimum utilization of existing installed capacity in the country to maximize generation through Renovation & Modernization (R&M) of existing power plants had been considered to be most cost effective option. CEA has prepared a National Enhanced Efficiency Renovation and Modernization Program for implementation during 11th and 12th Plans. This covers Renovation & Modernization of about 19000MW capacity, Life Extension of about 7300MW during 11th Plan and Renovation & Modernization of about 5000MW and Life Extension of about 16500MW during 12th Plan. Renovation and Modernization (R&M) and Life Extension of existing old power stations provide an opportunity to get additional generation at low cost in short gestation period. Besides generation improvement, it results in improvement of efficiency, environmental emissions and improvement in availability, safety and reliability. In order to ensure free flow of electricity from one part of the country to another part we have been upgrading our inter-State transmission systems and inter-regional transmission links. As a result of these efforts, the aggregate inter-regional transmission capacity in the country today is more than 20750 MW and it is planned to increase to 32650 MW by the end of 11th Plan. We are hopeful that in the 12th Plan we will be integrating Southern Region with the rest of the country and the whole country would be operating at one common frequency backed up by a strong National Grid. The growth in transmission system is characterized by the physical

growth in transmission network as well as introduction of higher transmission voltages and new technologies for bulk power transmission. As you are aware, Government of India launched Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) as one of its flagship programmes in March 2005 under which electrification of one lakh eighteen thousand unelectrified villages and providing free electricity connections to 2.34 Crore rural BPL households have been taken up. The continuation of RGGVY in the 11th Plan was sanctioned by the Government in January 2008 with subsidy outlay of Rs. 28,000 crore. Under this programme, about 85,000 villages have been electrified, 1,50,163 villages have been intensively electrified and 127.87 lakh free electricity connections have been released to BPL households. India is losing large quantum of electricity in the form of Aggregate Technical and Commercial (AT&C) losses. To check this, the Central Government is implementing Restructured- APDRP scheme. The focus of this programme is on actual, demonstrable performance in terms of AT&C loss reduction. The aim of the scheme is to reduce the AT&C losses to the level of 15% in project areas. It is expected that reduction of transmission and distribution losses will release more generation into the system without additional burning of coal or new capacity addition, thereby, reducing emission. Total programme size is Rs. 51,177 crores which consists of Rs. 10,000 crores for Part A which is energy audit and Rs. 40,000 crores for Part B, i.e. System Strengthening. Under this programme, 1401 projects at the cost of Rs 5305.23 crore have been approved to cover all the eligible towns in the country under Par-A. 644 projects worth Rs 10859.33 Cr have been approved to thirteen states under Part-B. Part-B projects for balance states are expected to be approved by March 2011. My Ministry is implementing a multi-pronged strategy on energy conservation which is backed by the Energy Conservation Act, 2001. The current programmes focus on achieving energy savings which results in avoided power generation capacity of 10,000 MW during the 11th Plan period. The largest amount of savings are being obtained from the standards and labeling programme, under which we have introduced the BEE star label for a number of energy user appliances, such as refrigerators, air-conditioners, TVs, motors, pumps, etc. The Bachat Lamp Yojana is focusing on replacement of inefficiet incandescent bulbs by efficient-CFLs in all households in the country. Further, the Energy Conservation Building Code is targeting new commercial building construction to ensure that they are designed in an energy-efficient manner. In the first three years? of the Plan these measures have resulted in avoided capacity generation of about 5500 MW.

NEWS
Scope for $ 300 Billion Investment in Power Sector Union Minister of Power (5/10/10) Delivering the keynote address at the 7th Annual India Investment Forum titled "India-An Attractive Investment Destination" in New York, Shri Sushilkumar Shinde, Union Minister of Power, has stated that the scope for investment in the power sector over the next few years is well over US $ 300 billion and given the large expansion programme in this sector, we would definitely need and welcome a large amount of Foreign Direct Investment. "The confidence of investors in our sector is reflected in the fact that the IPOs of public sector undertakings under the Ministry of Power over the last 5 to 6 years have been over-subscribed between 13 to 77 times", he added. Shri Shinde further informed the participants that India is one of the most attractive investment destinations for power in the world and added that India is growing at rapid pace and we have huge opportunities for investments and technology especially in power sector to move forward on the path of growth and progress. Speaking on the occasion, the Minister said that drawing on India's substantial knowledge base, many foreign high-technology firms are increasingly finding it attractive to conduct advanced research and development in India and added that out of Fortune 500 companies around 200 have set up research and development base in India. "India looks to these innovators for their unmatched scientific output and the ability of converting this strength into wealth-generating innovations. Indian partnership in the areas of information technology and its applications, biotechnology, nanotechnology, medicine, advanced material, high-energy physics etc. would bring unprecedented efficiencies to the world. In recognition of the importance of innovation in meeting our economic goals. Interacting with Forum, the Minister said that we are actively pursuing a low carbon growth strategy for the Indian Power Sector. "Amongst the many elements of this strategy, I wish to highlight our move towards Super Critical Technology in Thermal Plants, the rapid induction of Clean Coal Technologies and a sharper focus on renewables. International majors like Mitsubishi, Toshiba, Hitachi, Alstom and Ansaldo have already started the process of partnering with Indian manufacturers to set up Super Critical Manufacturing facilities in India", the Minister stated. Shri Shinde further highlighted that we are also planning the creation of a capacity of over 20 thousand MW based on Solar Energy by the year 2020 and have already launched Jawaharlal Nehru National Solar Mission.

The Minister said that National Mission on Enhanced Energy Efficiency is being launched and drawn up a strategy for implementing this mission through a market transformation approach. Towards this end, programmes such as Energy Saving Certificates, Mandatory Standards and Labelling and fiscal incentives to facilitate adoption of energy efficiency have been proposed. Centre targets 100,000 MW in 12th Plan (11/10/10) The Centre has targeted capacity addition of 100,000 MW each in the 12 thPlan (2012-17) and 13 th Plan (2017-22), said the Union Power Minister, Mr Sushil Kumar Shinde. Addressing the India Nuclear Energy Summit 2010 here on Friday, he said about 65,000 MW was slated to go online in the 12 th Plan. Of this, nearly 50 per cent of thermal plants would be subcritical while the balance would have supercritical technology. In the 13th Plan, the Centre would ensure that only supercritical technology came up as it was about two per cent more efficient than subcritical and consumed less coal, besides having a lower carbon footprint. Over 1.48 lakh MW of hydel power capacity had been identified and despite doubts of environmental clearances, he was confident the projects would be set up. The Ministry was concentrating on modernisation, renovation and life extension of old power stations. Like all emerging economies, India offered exciting growth opportunities, especially in the energy sector. Many of these opportunities will come from the energy sector where we have several schemes in operation. The New Electricity Policy is committed to providing electricity to all households by 2012 and plans to rapidly increase power generation. Nuclear energy plays a vital role in this as it is clean, fast and sustainable, he said. Later, while speaking to reporters, Mr Shinde conceded that environment issues remained and these were being coordinated with the Environment Ministry. Dr Srikumar Banerjee, Chairman of Atomic Energy Commission, and Dr R.K. Sinha, Director, BARC, spoke on the roadmap ahead and the addition of 40,000 MW by way of light water reactors. While the progress of indigenous technology would continue to supplement capacity augmentation, the more important task was to evolve a closed fuel cycle so that resources were conserved for the longer term.

India seeks Canadian investment in power sector

(20/09/10)

Power Minister Sushilkumar Shinde has invited Canadian firms to invest in India, saying that the government expected the private sector to contribute almost 40 percent of investment during the 12th Five Year Plan period (2012-17), a ministry statement here said Monday. "India's power sector presents an opportunity for investment in all its segments as we seek to not only put in greater capacities but also strive to indent the latest technologies across the board," Shinde said at a function organised by Carleton University in Ottawa. He pointed out that India has taken several measures to attract local and overseas private investments in the power sector. The major reforms and polices include the Electricity Act, 2003, and the National Electricity Policy and Tariff Policy, the minister said. The new liberal policy adopted by the country has done away with the restrictive licensing regime and now 100 percent foreign direct investment is permitted in all segments of the power sector including power trading, he said. "We are today placed at a point where we are expecting the private sector to contribute almost 40 percent of investment in 12th Five Year Plan in areas of capacity addition," Shinde said. He said the power sector required $230 billion investment during the 11th Five Year Plan period (2007-2012). He pointed out that India has one of the largest installed capacities for power generation in the world, still, it proved woefully inadequate to meet the growing needs of the Indian economy. Over 40 percent Indians have no access to electricity. The per capita electricity consumption in India is 700 kwh, among the lowest in the world.