JUNE 2015
Chief Editor
Harish Saran
Editorial Team
Sneh Daheriya
Shashank Gupta
Saurabh Kaura
Raghuram C. Soragavi
Parvesh Sharma
Lavjit Singh
Shruti Rai
Surinder Sharma
Editorial Address:
PTC India Ltd., 2nd Floor, NBCC Tower, 15, Bhikaji Cama
Place, New Delhi 110066
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Deepak Amitabh
FOREWORD
From the
Chairmans Desk
PTC Retail
A Strategic Business Unit of PTC India
Editorial
T
he pace at which the Indian power market is exhibiting the inherent dynamism across the value chain needs to be
appreciated. Coal block auctioning and allocation of coal blocks, implementation of National Transmission Asset
Management Centre for transmission planning, introduction and planning of separation of content and carriage, a move
embarking on increasing competition in retail power supply and delivering value to end consumers, revision and increase
of renewable energy targets to 175000 MW by 2022 based on growth in India's environmental stewardship, all expressing
clearly the potential and future growth story of the sector.
The key to sustainability will prove to be continuing reforms to address inefficiencies and irregularities in the sector,
and successful implementation of the same. This edition of PTChronicle will deliberate on the multifarious power sector
developments, and regional power markets in South Asia aimed towards improving synergies and resource mobilization
in the sub-continent.
Power trading has been a subject of discussion right from the very first day of its existence. There have been various
impediments for the growth of the power trading in the Indian Power Sector. Bottlenecks being experienced are issues
related to creditworthiness of the distribution utilities, open access restrictions, fuel shortage and transmission congestion.
The evolving policy framework for reforms in the sector are expected to create solutions to these bottlenecks gradually.
Aggregation and disaggregation of contracts as envisaged by CERC in its staff paper may open up new avenues for the
short term bilateral markets however, the collective open access provisions for such transactions similar to power exchange
will be needed for effective implementation of aggregation and disaggregation.
We thank you for your continued support and solicit your suggestions to make PTChronicle more enriched with each
edition.
Harish Saran
Executive Director
C O N T E N T
MARKET WATCH
28
CHALLENGES OF SOLAR
POWER - GRID PARITY
Dr. Rajib K. Mishra
12
20
30
32
Executive VP,
PTC India Financial Services Ltd.
22
Executive Director,
PTC India Limited
36
38
RETAIL ELECTRICITY
MARKET - UK EXPERIENCE
Sneh Daheriya
48
Faculty, TERI
42
44
46
All the contents of PTChronicle are only for general information and/or use. Such contents do not constitute advice and should not be relied upon
in making (or refraining from making) any decision. Any specific advice or replies to queries in any part of the journal is/are the personal opinion of
such experts/consultants/persons and are not subscribed to by PTC India. PTChronicle has employed due care and caution in compilation of data
for preparing this journal. The information or data of photographs have been compiled from various sources including newspapers, websites, etc.
PTChronicle does not guarantee the accuracy, adequacy or completeness of any data/information that was furnished by external reports and is not
responsible for any error or omission or for the results obtained from the use of such data/ information.
CMD Speaks
Deepak Amitabh
Chairman & Managing Director, PTC Group
HIGHLIGHTS
AP TO ADD OVER
1000 MW WIND
ENERGY PROJECTS
THIS FISCAL
ddressing
a
press
conference
Ajay Jain,
Secretary, Energy, Andhra
Pradesh, said, Even though
the 'Power for All' scheme had
projected a capacity addition
of 800 MW through wind
farms in the State, we expect to
augment additional capacity
of 1000 MW this fiscal.
The State is planning to install
about 6,500 solar pump sets
during the year supported
by the Central Government
(MNRE
scheme)
and
funding from Power Finance
Corporation. The beneficiaries
are now being identified, he
said.
RENEWABLE ENERGY
GOALS MAY SLIP ON
FUNDING GAPS
GOVERNMENT AIMS TO
MAKE GURGAON A SMART
CITY IN SIX MONTHS
HIGHLIGHTS
AN E-EYE ON NETWORK
he
state-owned
power
transmission
behemoth Power Grid Corporation (PGCIL)
is in the final stages of implementing the National
Transmission Asset Management Centre
(NTAMC) project, a system that would give the
company a bird's eye view of its vast network
spread across the country and help resolve
technical issues quickly.
NITI AAYOG
MAKING A
BLUEPRINT TO
TACKLE INDIA'S
ENERGY WOES
ix coal-rich states are set to reap a bonanza from coal-field auctions in the form of upfront
payments, revenue and royalty, the promise of which may have spurred the ruling parties
of Odisha and West Bengal to break ranks with the opposition and support the coal mines bill
passed by Parliament.
At stake is the Rs.2.097 trillion in bids received for 33 blocks from two rounds of auctions, which
will accrue to the states.
While the Biju Janata Dal (BJD)-governed Odisha will get Rs.33,741.94 crore over the life- time of
these blocks, the Trinamool Congress (TMC)-led West Bengal will get Rs.13,354.23 crore.
Other states such as Madhya Pradesh, Maharashtra, Jharkhand and Chhattisgarh will get
Rs.42,811.44 crore, Rs.2,738.53 crore, Rs.49,272.92 crore and Rs.67,821.18 crore, respectively.
Odisha and West Bengal will also get an upfront payment of Rs.273.89 crore and Rs.143.37 crore,
respectively, from these schedule II (operational) and schedule III mines (ready to be mined).
The crucial Coal Mines (Special Provisions) Bill, 2015, won Parliament's approval on 21 March
when the Rajya Sabha, where the NDA is in a minority, passed the legislation.
The finances of coal-bearing states are expected to improve thanks to the passage of the bill. More
money may accrue from a possible auction of coal linkages through which projects get assured
supply of the fuel at a discounted price. The government is to take a call on this shortly.
A total of Rs.3.35 trillion will accrue to the states from 66 blocks, which are being awarded
through a mix of auctions and allotments to the state-owned public sector firms, leaving another
138 blocks to be allotted in the next fiscal year, which will add to the proceeds.
Additionally, electricity tariff benefits totaling Rs.69,311 crore will accrue to the state distribution
companies.
HIGHLIGHTS
Adani Power in for 5/25
model relief
he government's disinvestment programme for 201516 started on a strong note with the 5% stake sale of
state-run Rural Electrification Corp. Ltd (REC) through
the offer for sale (OFS) route getting oversubscribed by
5.5 times and raising Rs.1,550 crore.
Out of the 49.3 million shares offered for sale at the floor
price of Rs.315 per share, 20% were reserved for retail
investors placing bids for shares not more than Rs.2
lakh, which were oversubscribed by nine times. Retail
investors also got a 5% discount on price bid. After the
disinvestment, the government's share in REC will come
down to 60.64%.
Shares of REC rose 2.61% to Rs.330.05 each on BSE, while
India's benchmark Sensex gained 0.67% to 28,707.75
points. At the end of the day, with total subscription of
Rs.7,621 crore, the issue stood oversubscribed by 553%,
the highest ever for an OFS, a finance ministry statement
said.
JM Financial Institutional Securities Ltd, IL&FS Broking
Services Pvt. Ltd and Morgan Stanley India Co. Pvt. Ltd
managed the share sale.
Odisha and West Bengal will also get an upfront payment
of Rs.273.89 crore and Rs.143.37 crore, respectively, from
these schedule II (operational) and schedule III mines
(ready to be mined).
HIGHLIGHTS
Government drops plan for
power sector asset reconstruction firm
Dr Rajib K Mishra,
Director,
Marketing & Business Development,
PTC India Limited
The lack of
evacuation and
dedicated transmission
grid for effective
evacuation of
renewable
power has been
identified as a key
bottleneck in the
development of RE
sector in India.
SOUTH ASIA
ENABLING A SUCCESSFUL
REGIONAL POWER MARKET
Harish Saran
Executive Director
PTC India Limited
Interconnection 1:
Surjyamaninagar (India) - Comilla (North) & Comilla
(South) 400 kV D/C line (to be op. at 132kV)
Interconnection 2:
System Strengthening
India Side
400 KV Farakka- Behrampur D/C
Removal of LILO of Farakka-Jeerat S/C
LILO of above line at Sagardighi
LILO of Sagardighi-Subhasgram at Jeerat
Bangladesh Side
Bheramara-Ishurdi 230 KV D/C
500 MW HVDC back to back converter unit at
Bhermara
issues
unique
to
techno-commercial
participating
terms
and
India-Bhutan
Currently, PTC is purchasing surplus power from the
following projects in Bhutan for onward supply to Indian
Utilities:
0Chukha (336 MW)
0Tala (1020 MW)
0Kurichhu (60 MW)
India- Nepal:
Projects
Start
Date FY
COD FY
Mode
Punatsangchhu - I
1,200
2009
2015
Bilateral (40:60)
Mangdechhu
720
2010
2017
Bilateral (30:70)
Punatsangchhu - II
990/1020
2010
2017
Bilateral (40:60)
Sunkosh Reservoir
4060/2585
2011
2020
Kuri-Gongri
1800/2640
2012
Amochhu Reservoir
620/540
2012
Kholongchhu
600
Chamkharchhu - I
670/770
NEA
IPP
478MW
240 MW
Bilateral (40:60)
Under Construction
862 MW
358MW
2020
Bilateral (40:60)
PPA Concluded
IPP 502 MW
2018
Bilateral (40:60)
2012
2018
2012
2018
Wangchhu
600/570
2012
2019
10
Bunakha Reservoir
180
2012
2020
Total
10825
Under Implementation
Interconnection (Bhutan Portion) :
Punatsangchu-I HEP (1200 MW)
Lhamoizingkha (Bhutan Border) 400 kV 2xD/c .
Interconnection (Indian Portion) :
Lhamoizingkha (Bhutan Border) Alipurduar
400kV D/c (Quad)
Jigmeling Alipurduar 400 kV D/c (quad)
line
0 Indian Territory
: 130 km
0 Sea Route
: 120 km
0 Sri Lankan Territory : 110 km
0 Tentative cost
: Rs. 5000 Cr. (USD 867 Million)
0 Rs. 3300 Cr. (USD 645 Million) (Stage-I) & Rs. 1700
Cr. (USD 222 Million) (Stage-II)
Interconnection Description
Capacity (MW)
Bhutan-India
Reinforcement of 2100 MW
Nepal-India
1000 MW
Sri Lanka-India
Bangladesh-India
500 MW
India-Pakistan
250-500 MW
Interconnection
Description
Capacity (MW)
India-Bhutan
India-Nepal
1000 MW
India-SriLanka
India-Bangladesh
500 MW
India-Pakistan
250-500 MW
1300 MW
Risk Profile
Viability of the Projects
Lenders concerns
Viability of the Power Sector
Source funding and financing options
Risks
0
0
0
0
0
0
0
0
Energy
Efficiency
Services
PTC has been continuously making strides in the direction of Energy Efficiency
Management. PTC's engagement with Bureau of Energy Efficiency (BEE)
under Ministry of Power has been extended for a further period of 5 years
to undertake Energy efficiency projects and also to seize emerging
opportunities such as perform, achieve, and trade (PAT).
- AIIMS
- Safdarjung Hospital
- IGESIC (Rohini)
- Dr. Ram Manohar Lohia Hospital
- ESIC Hospital (Jhilmil)
- National Archives
MARKET
WATCH
Max. Price : 3.95
Source:
CERC Market Monitoring Report Indian Energy Exchange Power Exchange India Ltd.
Top 5
Purchase
Top 5
MARKET TRADE
SPOT MARKET
Top 5
Sellers
Purchase
Top 5
Sellers
Year
Electricity
Transacted
through
Traders (BU)
Price of
Electricity
Transacted
through
Traders (Rs/
kWh)
2009-10
26.72
5.26
Size of
bilateral
Trader Market
(Rs Crore)
Electricity
Transacted
through
Power
Exchanges
(BU)
Price of
Electricity
Transacted
through
Power
Exchanges
(Rs/kWh)
Size of Power
Exchange
Market (Rs
Crore)
Total Size of
the bilateral
trader +
Power
Exchange
Market (Rs
Crore)
14055
7.19
4.96
3563
17617
2010-11
27.70
4.79
13268
15.52
3.47
5389
18657
2011-12
35.84
4.18
14979
15.54
3.57
5553
20532
2012-13
36.12
4.33
15624
23.54
3.67
8648
24272
2013-14
35.11
4.29
15061
30.67
2.90
8891
23952
M a r k e t O u t l oo k
BILATERAL MARKET
POWER SUPP
Thermal
Coal
Gas
Diesel
Total
Nuclear
Hydro
RES (MNRE)
Grand Total
State
58,101
6,974
603
65,678
27,482
1,919
95,079
Private
58,405
8,568
597
67,571
2,694
33,858
104,122
Central
48,130
7,520
55,650
5,780
11,091
72,521
Total
164,636
23,062
1,200
188,898
5,780
41,267
35,777
271,722
PLY POSITION
State Wise Power Supply Situation ( FY 2015)
Region
State/UT
Energy
Req. MUs
Energy
Availability,
MUs
Surplus
Deficit (-)%
Peak Demand
MWs
Peak Met,
MWs
Surplus/
Deficit (-)%
Northern
Chandigarh
1,616
1,616
367
367
Delhi
29,213
29,073
-0.5
6,006
5,925
-1.3
Haryana
46,615
46,432
-0.4
9,152
9,152
Himachal Pradesh
8,807
8,728
-0.9
1,422
1,422
16,214
13,119
-19.1
2,554
2,043
-20
Punjab
48,457
47,972
-1
11,534
10,023
-13.1
Rajasthan
65,730
65,323
-0.6
10,642
10,642
Uttar Pradesh
103,249
87,132
-15.6
15,670
13,003
-17
Uttarakhand
12,445
12,072
-3
1,930
1,930
Chhattisgarh
21,210
20,940
-1.3
3,817
3,638
-4.7
Gujarat
96,235
96,211
13,603
13,499
-0.8
Madhya Pradesh
53,737
53,445
-0.5
9,755
9,717
-0.4
Maharashtra
135,217
133,397
-1.3
20,147
19,804
-1.7
2,047
2,047
301
301
DNH
5,339
5,337
714
714
Goa
3,932
3,895
-0.9
501
489
-2.4
Andhra Pradesh
59,174
56,289
-4.9
7,144
6,784
-5
Telangana
43,186
40,493
-6.2
7,884
6,755
-14.3
Karnataka
62,679
59,961
-4.3
10,001
9,549
-4.5
Kerala
22,411
22,079
-1.5
3,760
3,594
-4.4
Tamil Nadu
95,660
92,652
-3.1
13,663
13,498
-1.2
Puducherry
2,393
2,367
-1.1
389
348
-10.5
Lakshadweep
48
48
Bihar
19,013
18,479
-2.8
2,994
2,874
-4
DVC
18,121
17,628
-2.7
2,653
2,590
-2.4
Jharkhand
7,540
7,343
-2.6
1,075
1,055
-1.9
Odisha
26,067
25,638
-1.6
3,814
3,764
-1.3
West Bengal
46,157
45,909
-0.5
7,544
7,524
-0.3
Sikkim
396
396
83
83
Andaman- Nicobar
240
180
-25
40
32
-20
Arunachal Pradesh
677
610
-9.9
139
126
-9.4
Assam
8,555
7,926
-7.4
1,450
1,257
-13.3
Manipur
705
678
-3.8
150
146
-2.7
Meghalaya
1,936
1,634
-15.6
370
367
-0.8
Mizoram
453
425
-6.2
90
88
-2.2
Nagaland
689
661
-4.1
140
128
-8.6
Tripura
1,210
1,048
-13.4
310
266
-14.2
1,067,085
1,028,955
-3.6
148,166
141,160
-4.7
Western
Southern
Eastern Region
All India
Vjay Bisht
Executive VP,
PTC India Financial Services Ltd.
- Battery storage
Mohd. Zeyauddin
AVP,
PTC India Limited
Conclusion
Amidst all these challenges, Short market is still eying a
revival. Thanks to the federal outlook of bringing widespread
changes to the regulatory framework like Separation of
Carriage and Content, Introduction of General Network
Access (GNA), Ideation of a Green Corridor, etc. At this
juncture, we just have to patiently watch how this plan is
converted to a reality.
JUNE 2015 | PTC INDIA LIMITED | 37
Arpit Agarwal
Manager,
PTC India Limited
RETAIL ELECTRICITY
MARKETUK EXPERIENCE
Sneh Daheriya
AVP,
PTC India Limited
Value to Consumers
The regulator OFGEM administers a price control regime
that ensures that efficient distributors can earn a fair return
JUNE 2015 | PTC INDIA LIMITED | 43
STRENGTHENING OF REGULATORS A
MUST FOR MARKET EVOLUTION
Manan Thaper
Senior Manager, Price Waterhouse Coopers
APPLICATION OF
ARBITRATION CLAUSE
IN POWER PURCHASE
AGREEMENTS
R D Gupta,
POLICY INSTRUMENTS
FOR RENEWABLE
ENERGY: EFFICACY
ANALYSIS
Sapan Thapar
Fellow, TERI &
Adjunct Faculty, TERI University
Unit
Value
Project Cost
Rs Lakhs/ MW
650
Debt
Rs Lakhs/ MW
455 (70%)
Equity
Rs Lakhs/ MW
195 (30%)
Cost of Debt
13
Cost of Equity
17
Discount Factor
12
Annual Depreciation
5.83
CUF
21
O&M Charges
% of project cost
1.62
Project Life
Years
25
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