Twin Market Solution to solve
India’s Energy Sector
3 steps for transition to free markets
while honoring current contract...
Indian Power Sector faces $27 bln
annual loss – World Bank
Fuel
(mostly Coal)
• not available
Generation
•big losses
•(Fre...
Who needs to do What ?
• All natural resources belong to Center including
Coal. (Article 297) – Issue right of way to
comp...
Two Separate Markets for Generators
Old Contracts
• Fixed price fuel (coal)
• Fixed price supply
New Contracts
• Free mark...
NDC Agenda – Right of Way
(under article 297)
State
Benefits
Coal cost to
include
all kinds of
restoration costs
At-least ...
MOC Agenda
Coal compulsory electronic trading
All future contracts need to
adhere to market
discovered pricing on
exchange...
MOP Agenda – USO Compensation or
Give Open Access
Right to paid Power (basic human need)
- universal service obligation (U...
Transition to Free Markets
Coal
Trading &
Futures
Open
Access
USO
Penalty
Article 297
Center own all
Resources
1st April 2...
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Dual Market solution for India's Energy Crisis 2014

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Emergency Transition plan for India's energy sector to save $27bln annually.

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  • http://www.reuters.com/article/2014/06/24/india-power-idUSL6N0P54BA20140624
  • Dual Market solution for India's Energy Crisis 2014

    1. 1. Twin Market Solution to solve India’s Energy Sector 3 steps for transition to free markets while honoring current contracts 24th June 2014 By Vishal Gupta & Team24/06/14 by Vishal Gupta & team. 1
    2. 2. Indian Power Sector faces $27 bln annual loss – World Bank Fuel (mostly Coal) • not available Generation •big losses •(Free Market) Distribution • Can’t buy • No money Government Controlled This does not include the resulting GDP loss of the country! 24/06/14 by Vishal Gupta & team. 2
    3. 3. Who needs to do What ? • All natural resources belong to Center including Coal. (Article 297) – Issue right of way to companies (to create free market). • Promise environment restoration cost NDC • All coal needs to be traded on electronic exchange and futures. • All coal cost includes environmental restoration cost. Ministry of Coal • Compulsory universal obligation to supply electricity till open access granted.Ministry of Power 24/06/14 by Vishal Gupta & team. 3
    4. 4. Two Separate Markets for Generators Old Contracts • Fixed price fuel (coal) • Fixed price supply New Contracts • Free market fuel • Open access Supply 24/06/14 by Vishal Gupta & team. 4 USO compensation by discoms to consumers if Open access not made available after 1st April 2015
    5. 5. NDC Agenda – Right of Way (under article 297) State Benefits Coal cost to include all kinds of restoration costs At-least 50 percent staff has to be local. State Tax Blocks to be allocated at no cost on sales contracts in futures market 24/06/14 by Vishal Gupta & team. 5
    6. 6. MOC Agenda Coal compulsory electronic trading All future contracts need to adhere to market discovered pricing on exchanges. All coal needs to be sold thru exchanges. All electricity sold thru open access needs to purchase fuel only from exchange. Sunset clause for off market transactions in 3 years. !st April 2016 IPPs have choice to short close their off-market fuel supply agreements OpenAccess RegulatedContracts 24/06/14 by Vishal Gupta & team. 6
    7. 7. MOP Agenda – USO Compensation or Give Open Access Right to paid Power (basic human need) - universal service obligation (USO) State to provide open access or compensate (USO) in bill. 1st April 2015 Free Market 24/06/14 by Vishal Gupta & team. 7
    8. 8. Transition to Free Markets Coal Trading & Futures Open Access USO Penalty Article 297 Center own all Resources 1st April 2015 deadline 1st April 2016 Transition opportunity for locked IPPs States save electricity deficit Earn Taxes, generate jobs 24/06/14 by Vishal Gupta & team. 8

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