Training Programme for O&M personnel as per CEA Guidelines

OVERVIEW OF POWER SECTOR

SCENARIO

Ashis Kumar Pal

DOSEC

Power Sector Setting the tone

Electricity- the most imp. Infrastructural input

in the dev. & growth of economy.
Consumption of electricity- important Index of
advancement of the country & standard of
living.
Economic growth rate of 8-9% on a sustained
basis is necessary for us to catch up with the
There
are world.
many organizations in Indian power
rest
of the
sector that helps in improving quality of life!

Power Sector Value Chain

Power is a Regulated Business under the purview of respective State

and Central Electricity Regulatory Commissions and governed by
provisions of Electricity Act03. Electricity is a concurrent subject
under Constitution of India.
MoP (Centre): Policy formulation, Investment
decision, Implementation & review of Power Projects,
Administration and Enactment of legislation
MoP (State): Specific issues like Subsidy, Power
Situation, allocation of PPA for the state, etc.

Power System
Components
Generation

Power Plant

220 kV

Primary Grid
(220/66 kV)

66 kV
Transmission

Commercial/
Industrial
Customer

Distribution Transformer
(11/0.415 kV)

Urban
Customers

Primary Distribution

Secondary Grid

Secondary Distribution

(66/11 kV)

Distribution
Pole

Underground Cable

To Other
Residential
Customer

Residential
Customer

66Kv

Substations

An analogy-Power Sys vs
Human Body

Power Sector Regulatory / Reform Framework

Power is a Regulated Business under provisions of Electricity Act03
Act
National Tariff Policy
Electrification Policy
Subsidy

Regulations
Inter State Open
Access
Grid Code

Consume
r
Protectio
n

Advisory Role
Technical Standards
Specifications
Safety
Data Repository
Regulations
Supply Code
Performance
Standards
Tariff
Intra State Open
Access

Competit
ion

Generation

Thermal Power Plant

Hydro Power Plant
Gas Power Plant
Combine Cycle plant
Nuclear Power Plant
Diesel Power Plant

C
O
N
V
E
N
T
I
O
N
A
L

Solar
Tidal
Wind
Bio-mass
Fuel cells

R
E
N
E
W
A
B
L
e

Thermal : Hydro : Other (FY 12-13) 67:19:14

Installed Capacity (FY 12-13)

Units Generated
(FY 12-13)

225000+ MW*, 5th Largest in World

912 BUs, 4th Largest Consumer in World.

Peak Demand of 135000+ MW

Captive Power Plants :

36000 MW
Power deficit scenario with energy
deficits ~ 9%

Energy Resource Map of India

Jammu

Ludhiana

NR
RAPP

Guwahati

Lucknow
Patna
Vindhyachal
Bhopal

WR

Talcher/Ib Valley
Raipur
Bhubaneswar

Mumbai
Hyderabad

Vizag
Simhadri

SR

LEGEND
Generation
Coal

Krishnapatnam

Kaiga
Bangalore

Kayamkulam
Thiruvananthapuram

BANGLA
DESH
Kolkata

Korba

Tarapur

Kozhikode
Mangalore

NER

CHICKEN
NECK

ER

Gandhinagar
Pipavav

BHUTAN

Partabpur

Jaipur

Indore

SIKKIM

NEPAL

Delhi

Ennore
South Madras
Chennai

Hydro

Cuddalore

Lignite
Coastal

Kudankulam
COLOMBO

SRI LANKA

Nuclear

Load-Centre

Hydro potential in
North east and upper
part of Northern
Region
Coal reserves mainly
in Eastern Region
Distribution of energy
resources and
consumption centers
are extremely
unbalanced
Necessitate power
transfer over long

India: Generation scenario

Power Installed Capacity : 211 GW

Energy Generation (p.a.) : 855 BU
Supply Demand Gap
: 12.9 % Peak, : 10.3% Average
PLF : 75.07%

27/01/15

India: Installed Generation

growth (1/3)

India: Installed Generation

growth (2/3)

India: Installed Generation

growth (3/3)

Per capita Energy

consumption

PCEC in India Highest Goa 2014 KWh PA, Lowest PCEC in India Bihar 117 KWH PA

Electricity Demand Projection

Year

Total Electricity Required

( Billion kWhr)

7%
2011-12
2016-17
2021-22
2026-27
2031-32
Source: Energy Policy Report, Planning Commission, India

Installed Capacity (MW)

GDP Growth Rate

8%
7%

8%

1031

1097

206757

219992

1377

1524

276143

305623

1838

2118

368592

424744

2397

2866

480694

574748

3127

3880

627088

778095

Peculiarities of Regional Grids in

India

Five Regional Grids

Two Frequencies

August 2006
North synchronized
With Central Grid

March 2003
West synchronized
With East & Northeast

NEW Grid

October 1991
East and Northeast
synchronized

South
Grid

Central Grid

SR Synch
By 2013-14

MERGING
OF MARKETS

North
West
South

With effect from Jan14, the South Grid

is integrated with rest of the Grids

East
Northea
st

Five Regional Grids

Five Frequencies

Inter Regional
Capacity:
22 GW

Thus, now India has a

Single grid, single frequency
Jan14 Grid capacity: 214 GW

Strengths & opportunities in the

sector

Abundant coal reserves (enough to last

at least for 200 years).
Vast hydroelectric potential
Impressive power development in
absolute terms (comparable in size to
those of Germany and UK).
Expertise in integrated and coordinated
planning (CEA and Planning
Commission).
Emergence of strong and globally
comparable central utilities (NTPC,
POWERGRID,).
Wide outreach of state utilities.
Enabling framework for private
investors.
Well laid out mechanisms for dispute
resolution.
Political consensus on reforms.
Potentially, one of the largest
power markets in the world.

Private Participation in
Distribution.

Models Proposed for Privatisation

The Public Private Partnership Model(PPP
Model)
The Franchisee Model

Salient Features of PPP Model

Its salient features are:
Compliance with the Electricity Act,2003
Feasibility Report
Selection Criteria
Inventory of Assets
Use of Assets by Concessionaire
Concession Period
Equity participation of Govt.
Concession agreement b/w govt. & private entity
Procurement of Bulk Supplies
Tariff of Regulated Customers
Tariff of Open Access Consumers
Wheeling/distribution Charges
Continuation of Financial Support
Capital System

Cont

Performance Standards
Loss reduction targets
Incentives & Penalties
Enforcement & Inspections
Billing & Payment Mechanism
Existing agreements & liabilities
Treatment of existing employees
Safety requirements
Transfer of assets on expiry of concession
Model concession Agreement

Outcomes of PPP Model

Improvement in the Distribution System

Reliable & quality supply of electricity
Savings in resources & time
Elimination of regulatory risk
Governments overreaching role to continue

Salient Features of Franchisee Model

Franchisee Area
Contract Period
Pre-qualification Criteria
Baseline Parameters
Bid Variable
Securities against Performance

Demerits of PPP Model

Tariff: Different tariffs for different parts of a state

Political acceptability : Non Acceptability
Complex Model

Demerits of PPP Model

Tariff: Different tariffs for different parts of a state

Political acceptability : Non Acceptability
Complex Model

Distribution Reforms in
India

Problems in Indian Distribution

Sector
Losses per annum 1 lac Crores (Yr 2010-11) i.e approx.
1.5% GDP & may increase in future if proper steps are not
taken
Gap between cost of supply and average tariff is high.
Difference between Average Cost of Supply & Average
Revenue Realization is > 110 Paisa / Unit
High LT/HT line ratio
Overloaded DT/Lines
Poor quality/unreliable power
Lack of accountability in distribution setup of SEBs
Unaccountability at feeder level
Old and poor distribution network leading to frequent
outages and poor quality / unreliable power
Poor return to utilities affecting their viability and capability
to invest
Lack of private investment in power distribution sector
Poor billing (51% power generated billed and 41% realized)

T&D Losses Worldwide &

India

Few regions / areas privatized, SEBs still handling a large part of power
distribution (85%). Problems @ Rural areas: widely dispersed network
implying higher cost of supply with large number of subsidized consumers,
flat rate/tariff to farmers, low load and low rate of load growth and non-

AT&C:

Barometer for Power Sector

Difference between Units Input

& Units Recovered
Aggregate Technical &
Commercial Loss

= 1 (Billing Efficiency*Collection Efficiency)

Billing Efficiency (Input)

= Units Billed / Units Input

Collection Efficiency (Output)

= Amount Collected / Amount Billed

Units
Input
100
Technical Losses

Units to
be
Billed
86

Units
Billed

Amount
Billed

80

320

Distribution Loss

Amount
Collect
ed

Recover
ed

240

60

Units

Collection Loss

Technical & Distribution Losses

Aggregate Technical & Commercial Losses

Aggregate Technical &
Commercial Loss
Average Tariff (ABR)
Units Recovered

= 1 (Units Recovered / Units Input)

= Amount Billed / Units Billed
= Amount Collected / Average Tariff

Power Sector in Delhi

prior to 2002

Vicious Circle of Un-sustainability

AT&C/Theft losses range between 53% to 60%

of Input (approx. 2.5 million USD per day)
Govt. Subsidies approx. 300 million USD per
annum to bridge Revenue Gap
Approx. 18% Generation within Delhi
Condition of Network pathetic
Billing Receivables close to 1 year outstanding
Poor Condition of Consumer Records
Consumer nowhere in focus/Regular Power cuts
- black outs and brown-outs
Financially
unhealthy
utilities

Revenue needed to
attract viable
Generation Projects
Revenue needed to
improve Network

Significant
Need for
Reforms

Subsidies -not a long

term solution
AT&C loss reduction
and sector efficiency
improvements
required
Distribution Reforms
through PPP Model to
bring commercial
discipline vis-a-vis
consumer

30

Distribution Reforms in India

Distribution Reforms aimed at
System up gradation of Sub transmission and
distribution
Loss reduction (Technical & Commercial)
Theft control through increased vigilance &
Legislation
Consumer satisfaction
Approach
Profit centre approach: Tariff / subsidy
determination
Decentralized generation in rural areas
Focus on Concentrated Zones
IT initiatives to replace human intervention
Parameters to be monitored
Revenue realisation v/s Energy input
Reliability Index

For any query / suggestion / feedback, please contact:

Ashiskumar.pal@tatapower-ddl.com;
Mobile +91 9560044195