ENERGY SECTOR STRUCTURE, POLICIES & REGULATIONS

GROUP ASSIGNMENT

COMPANY ANALYSIS

(BHAKRA BEAS MANAGEMENT BOARD)

Submitted by: Group # 4 Roll No. 02, 14, 29, 36

Submitted to: Mr. Anupam Sircar Date: 2-11-2010

COMPANY OVERVIEW

Developmental History of Bhakra – Nangal Dam Project

Bhakra Nangal Project is something tremendous, something stupendous,

something which shakes you up when you see it. Bhakra, the new temple of
resurgent India, is the symbol of India’s progress.

-Jawaharlal Nehru

Brief History

The proposal to construct a storage reservoir on the satluj first time originated in a
note dated 8 November 1908 by Sir Louis Dane indicating Suni and Badu Gorges as
being favourable sites for dams for storage and power development. A detailed report
on this proposal was submitted in March 1910. However, the estimated cost of the
project was considered prohibitive and project was shelved.

1919 Project Report

The proposal for a dam on the satluj was again revived by Mr. F.E. Gwyther, the then
Chief Engineer, in a note dated 20 February 1915. On the basis of this note, the first
detailed and comprehensive project report for a high dam at Bhakra was prepared in
1919. The 1919 project report provided for the storage of the unutilized satluj water
during the period of excess flow and essentially consisted of the following four big
works:
 • Bhakra Dam
• Upper Sirhind Canal
• Lower Sirhind Canal
• The Western Yamuna Canal Extension.

The proposed dam was to be 120.40m (395 ft) high located about 69 km (43 miles)
from Ropar almost at the same place as where the present dam has been constructed.
It provided for a maximum storage of 3182.38 million m3 (2.58 million-acre ft). The
dam was to have a solid masonry gravity section arched in plan and was to be the
highest dam in the world at that time. The project did not provide for any
hydroelectric installation and was essentially an irrigation project. The project was
fully supported by geological investigations carried out by the Geological Survey of
India.

The 1919 project, however, never materialised and was shelved in favour of the satluj
Valley Project sanctioned in 1919.

Final Proposal of the Project during 1948-51

In 1948 when irrigation & power demands of the partitioned state of Punjab on the
Indian side further increased, the question of the height of the dam, the top elevation
which was fixed at El. 487.68 m (1,600 ft) only to prevent the submergence of
Bilaspur town, was reviewed and it was decided to construct the dam to the
maximum safe optimum height as determined by foundation rock conditions, so as to
fully exploit irrigation and power potential.

In 1951, a revised project report was prepared for the 207.26 m (680 ft) high, straight
gravity dam.

The final project proposal comprised the following units:

• Bhakra Dam and Power Plants

• Nangal Dam
• Nangal Hydel Channel
• Ganguwal & Kotla Power Houses on the Nangal Hydel Channe
• Remodelling of Ropar Headworks
• Remodelling of Sirhind Canal
• Bhakra Canals
• Bist Doab Canal
• Transmission and distribution system of electrical energy
• Development of markets and communications of Bhakra area

Thus, with the above proposal, Bhakra Nangal Project took the shape of a true multi-
purpose project, providing irrigation and power generation as its main benefits and
facilities for flood prevention, recreation and fish culture as incidental advantages.
Construction Phase of Bhakra-Nangal Project during 1951 - 1963

The working conditions at Bhakra in the early years of the Project Layout and
Construction were appalling, to say the least. The rail-head was up to Ropar (Punjab)
only, about 60 Km away from Nangal, the construction of further extension up to
Nangal started in 1946. Pt.Nehru was immensely proud and fond of Bhakra. He
visited the project 10 times during its construction. Fired by passion and enthusiasm
to build new India, all engineers and technicians put in un-tiring efforts day & night
for almost a decade to build Bhakra Dam – the Nation’s Pride. Pt. Nehru dedicated
the dam to the nation on 22nd October 1963.

Beas Project

The Beas Project, comprising two units namely, Unit-I – BSL Project and Unit-II – Beas
Dam, is a part of the Master plan for the utilisation of the waters of the three eastern rivers
viz. the Satluj, the Beas and the Ravi for irrigation and power-generation in an integrated
manner. With the completion of Bhakra-Nangal Project, the waters of the Satluj (average
flow 16,652 million cum or 13.5 million-acre feet) were fully harnessed. With the help of the
existing Madhopur-Beas link which transfers, on an average, 2344 million cu m (0.9 million
acre feet) of Ravi waters to the Beas, the Beas dam at Pong together with the Bhakra Dam
enables India to harness about 92% of the average inflow of the three eastern rivers. With the
completion of Beas-Satluj Link project, the figure has further risen to 97%.

KEY BUSINESS AREA

Water is essential for sustenance of all forms of life on earth. It is not evenly distributed all
over the world and even its availability at the same locations is not uniform over the year.
While the parts of the world, which are scarce in water, are prone to drought, other parts of
the world, which are abundant in water, face a challenging job of optimally managing the
available water resources. No doubt the rivers are a great gift of nature and have been playing
a significant role in evolution of various civilizations, nonetheless on many occasions, rivers,
at the time of floods, have been playing havoc with the life and property of the people.
Management of river waters has been, therefore, one of the most prime issues under
consideration. Optimal management of river water resources demands that specific plans
should be evolved for various river basins which are found to be technically feasible and
economically viable after carrying out extensive surveys. Since the advent of civilization,
man has been constructing dams and reservoirs for storing surplus river waters available
during wet periods and for utilization of the same during lean periods. The dams and
reservoirs world over have been playing dual role of harnessing the river waters for
accelerating socio-economic growth and mitigating the miseries of a large population of the
world suffering from the vagaries of floods and droughts. Dams and reservoirs contribute
significantly in fulfilling the following basic human needs: -
 • WATER FOR DRINKING AND INDUSTRIAL USE
• IRRIGATION
• FLOOD CONTROL
• HYDRO POWER GENERATION
• INLAND NAVIGATION
• RECREATION

FUTURE PLANS

The future plans for BBMB are concentrated on renovation, modernization and uprating
Bhakra power house an addition of 90 MW is underway as Machines of Bhakra (Left) Power
House are being renovated from present capacity of 108 MW to 126 MW. Capacity of this
power house shall be increased from 540 MW (5x108 MW) at present to 630 MW (5x126
MW). Contract for Renovation, Modernization & Uprating has been awarded to consortium
of M/s Sumitomo-Japan, Hitachi-Japan & Andritz-Austria, at an approximate cost of 490
crores. RM&U of five machines is being executed in a phased manner & is expected to be
completed by March, 2013.

SWOT ANALYSIS

STRENGTHS

Bhakra Beas Management Board was constituted in 1966 named as Bhakra Management
Board and then it underwent changes and later in 1976 was renamed as Bhakra Beas
Management Board. During all these years the company has overcome many issues and
challenges and has built itself as a strong units. Today BBMB has got a total installed
capacity of 2804.73 MW which is the largest base of Hydro Power in India with a high PLF.

Project Generation Capacity (MW)

Bhakra Left Bank Power House 540
Bhakra Right Bank Power House 785
Ganguwal Power House 76.39
Kotla Power House 77.34

Dehar Power House 990

Pong Power House 396
 BBMB’s strength also lies in the fact that they maintains the largest reservoirs in the country
such as Bhakra and Pong Dams and they also operate long Hydro tunnels and Hydel
channels.

Name Length(KM) Diameter(M) Capacity(Cumec)

Pandoh-Baggi Tunnel 13.1 7.62 254.85
Sundernagar Satluj Tunnel 12.35 8.53 403.52
Sundernagar Hydel Channel 11.8 - 254.85
Nangal Hydel Channel 64.5 - 354

One of the other strengths of BBMB is in its network of transmission lines which is
widest in the country .

S.No. Voltage Level Number of Sub Stations Line Length (CKT. KMS)
1. 400 KV 3 573.95
2. 220 KV 17 2993.54
3. 132 KV 2 21.72
4. 66 KV 2 115.50
Total 24 3704.04

Apart from the technical aspect BBMB has got the advantage of its Human Power. They have
got about 11,500 employees, out of which 5000 are highly skilled employees in their
professions. They have got a work force of highly skilled graduates and post graduates who
are involved in operation & maintenance of 6 hydro powerhouses, reservoirs and water
conductor systems etc. BBMB has also invested a lot in their employees welfare such as
maintaining its own hospitals and schools at the project sites for their employees and their
families which in turn ads to their strength.

WEAKNESS

Apart from its strengths BBMB has also got certain weaknesses also. Running and managing
a multipurpose hydroelectric project is not a easy task and brings along some problems and
issues along with it. In order to setup such hydroelectric projects rivers are to be diverted
which is not an easy task to do and if the things are not planned properly it may result into a
potential weakness for the company. One of the main weakness for the company is that they
have to face with the problems related to huge displacement of people which is not always a
easy task to do and if people are not ready to give away their lands then it becomes a hurdle
for the project and also leads to financial losses. One of the major weakness of the company
is that it has to rely on monsoon for its power generation. In 2009-10 the company’s
performance went down because of a draught like situation that prevailed whole year. During
that year the total electricity generation was just 9,494 million unit as compared to 11,171
units produced by them during the previous year.

OPPORTUNITIES

There are large numbers of opportunities which BBMB can explore more and more upon.
BBMB deals in multipurpose hydroelectric project which scores over dedicated generation
projects on several fronts. It helps in generating low cost green energy as well as helps in
water management for the purposes like irrigation, drinking etc.
Apart from electricity generation BBMB also has the opportunity in areas like irrigation,
providing drinking water facilities, fisheries etc.
The other major and big opportunity which the company has is that most Indian cities faces
huge shortage of drinking water and such projects are helpful in controlled and channelized
release of water through downstream canals which in turn helps in reducing drinking water
shortage.
Today India is facing a energy shortage situation with peak energy shortage of around 11,286
MW which is about 10% short of the demand. In such a scenario the company can use the
opportunity and increase its capacity and efficiency and try to capture more and more market.

THREATS

One of the major threats being faced by a hydro electric company is that there is a lot of focus
being laid on environmental issues and building and hydro project have become that much
more difficult to setup. Apart from this if we see then the current installed capacity of hydro
is 36913.40 MW and the total potential of hydro in India is 84000 MW . Therefore we are left
with almost 50% of the capacity only. Though this 50% constitutes to a major chunk but still
it will decrease day by day and when the potential is reached then it will be a threat to the
company as it will be difficult to expand further thereof . Not only this but BBMB also faces
a serious threat from other sectors or constituents of energy mix in India such as
renewable( solar, wind, etc) and also Nuclear. In a situation where environment has become a
key issue government has been seeing renewable and nuclear as the major contributor which
in turn increases the threat level for the company to a greater extent. Therefore even though
there are major strengths and advantages for the company but the limited threats do neutralise
the strength of the company up to some extent.

FINANCE:

Budget Figures for the Year 2008-2009 to 2009-2010, BBMB, Chandigarh.

 Expdtr. upto
Final Budget Expdtr. upto Final Budget
September
For 2008-2009 March 2009 For 2009-2010
2009
Gross
Figures in lakhs of rupees
Expenditure
Irrigation Wing 26335.47 24800.40 30711.05 14106.29
Power Wing 29634.37 23791.78 39297.50 11995.03
Total 55969.84 48592.18 70008.55 26101.32
Net Expenditure
Debitable to IRR.
12393.74 11668.81 14745.70 6555.18
To be shared by
the Partner states
Debitable to
Power to be shared
43576.10 36923.37 55262.86 19546.14
by the partner state
EBs
Total 55969.84 48592.18 70008.56 26101.32

OUTSTANDING DUES POSITION (30/09/2010)

(Rs.In Lakhs) (Rs.In Lakhs)

Punjab Govt. (+)4110.12 P.S.E.B. (+) 1029.42
Haryana Govt. (-)1088.02 H.V.P.N.L. (+)1436.12
Rajasthan Govt. (+)272.11 R.R.V.P.N.L. (+) 739.19
TOTAL (+) 3294.21 (+) 3204.73

Grand Total 6498.94

Outstanding dues on account of S.O.P., POOLED LOSSSES, WHEELING CHARGES etc.

1. RRVPNL 3771.54
2. HPSEB 44.15
3. UT CHANDIGARH 19879.64
4. J & K 1489.06
5. DPSCL 51.13
6. UPPCL -2.71
7. NFL 1.00
8. Others 161.25

TOTAL 25395.06

DUES IN RESPECT OF IRRIGATION WING (WATER CHARGES as on dated 28.02.07)

DWSU NIL DESU 189.06

FURTHER UPDATES ON BBMB (past year achievement)

Clean – Development – Mechanism (CDM)

The Green House Gases (G.H.G) namely Carbon Dioxide, Methane, Nitrous Oxide, Hydro
Fluoro Carbons, Perfluorocarbons, Sulphurhexafluoride are leading to climate changes and
global warming. Efforts are being made to reduce the emission of these Green House Gases.
UNFCCC (United Nation’s Framework Convention on Climate Change) has adopted under
Kyoto Protocol signed in Feb.2005 by 140 Nations, an international agreement that sets
emission reduction targets (5.4% reduction of emission of G.H.G. from their 1990 levels
during the 1st commitment period of 2008-12). CDM is one of the methods adopted by the
nations of the world for making their emission related commitments.
The CDM Project actively generates tradable carbon credits or CERs (Certified Emission
Reductions) which can be traded internationally in analogy like share in stock market.

BBMB also qualifies to meet the CDM Project criteria, namely:-

1. RM&U activities were not ‘Business as usual’ feature where BBMB had to stay in
busines but were additional.
2. Environmentally the project activity leads to lesser generation of fossil fuel based
electricity which would have contributed to additional GHG emission.
3. Also the CDM project is a voluntary participation by BBMB.
4. CDM project contributes to sustainable development of the region.

It is projected that by the end of year 2013, RM&U capacity addition of 90.00MW will be
completed and a revenue of approximate 13 crore will be generated from the sale of 2,40,000
CERs up to December 2013..
CDM Project for sale of Certified Emission Reductions (CERs) generated by Renovation,
Modernization and Uprating program of BBMB for its Hydro Power stations with World
Bank has been undertaken by BBMB. Host Country approval has been accorded by Ministry
of Environment & Forests (MoE&F).

An Emission Reduction Purchase Agreement (ERPA) with World Bank has been signed by
BBMB for the sale of 2,40,000 CERs @ Euro 9/CER upto Dec. 2013. Registration for the
sale of CERs is awaited from UNFCCC. Process for signing of second ERPA for the sale of
5,65,000 CERs starting from 31st Dec. 2013 has been initiated.

HR Excellence Award

BBMB under the able guidance of its Chairman Sh. A.B. Agrawal, has won the Corporate
Greentech HR Excellence Gold Award-2010 in Training Excellence Category and Best
Strategy Category. The innovative practices and rich HR experience of the Chairman helped
BBMB represented through its HR team of Er. G.S. Wason, Director/HRD and Er. B.S.
Sabharwal, Joint Secretary/HRD, Board Secretariat, Chandigarh, win the award. An Award
Distribution Function was held in Goa during the conference on “Sustainable Practices in
HR” from 17-18.09.2010.

Enertia Awards 2010

The BBMB Team was selected from amongst 103 participating teams in all from various
PSUs, Private Sector Companies and Govt. of India Enterprises, in each of the four Corporate
Award Categories and Individual Award Categories. Greentech Foundation Awards have
become most admired and top honour in the Corporate World.

This National award has been given in recognition of BBMB's consistent and excellent
operational performance of India's largest multipurpose Hydro Power Projects. In the last
three years, BBMB's generation continuously exceeded the targets fixed by Central
Electricity Authority (CEA). BBMB projects generated 9494 MUs of Electricity in 2009-10
against target of 9110 MUs inspite of poor monsoon. It is worth mentioning that BBMB
achieved highest ever generation i.e. 1575.5 MUs in the month of September, 2010 since its
inception.

REFERENCES:

1. Financial Express- Interview of chairman Mr. A.B. Agrawal of BBMB

2. http://bbmb.gov.in

3. http://bhakra.nic.in

4. Financial Journal