Problem of electricity in maharashtra


Published on

Published in: Technology, Business
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Problem of electricity in maharashtra

  2. 2. DECLARATIONDECLARATION I, HEMANT M. PALAV. Student of MBA {full time} LN COLLEGE OF MANAGEMENT & TECHNOLOGY (Semester IST) hereby declare that I have completed this project “PROBLEM OF ELECTRICITY IN MAHARASHTRA” in the academic year 2007- 2008. The information submitted is true and original to the best of my knowledge. HEMANT M. PALAV. MBA (FULL TIME) ROLL NO. FO29 CERTIFICATECERTIFICATE I, PROF. RANJIT KRISHNAN hereby certify that Mr. HEMANT M. PALAV student of LN COLLEGE OF MANAGEMENT & TECHNOLOGY MBA {Full Time} (Semester IST) has completed project in the academic year 2007-2008.The information submitted is true and original to the best of my knowledge. SIGNATURE OF PROJECT GUIDE 2
  3. 3. ACKNOWLEDGEMENT It gives me pleasure to present this project on “PROBLEM OF ELECTRICITY IN MAHARASHTRA”. The subject matter is made more compact and logical. I am gratefully acknowledged the valuable efforts, suggestion and clarifications provided by many by making this project practical. It would be rather unfair on my part for not thanking our college LN College Management & Technology for having shown their continuous faith on me. I take this opportunity to express our sincere appreciation and gratitude to our college administrative staff that helped me. I express my grateful thanks to every one who have contributed even in a small way towards successful completion of this project. 3
  5. 5. 11. ALL INDIA INSTALL CAPACITY (in MW) 23. INTRODUCTION The power sector in MAHARASHTRA was organized as a separate electricity board in mid 1950’s, after the 1948 Supply Act was passed. It is being realized that the existing set up of SEBs are not enough to keep pace with the growth in demand. The Electricity Act 03 (EA, 2003) has, in particular, made ‘restructuring’ of SEBs on functional basis, monetary. MSEB (Maharashtra State Electricity Board) was restructured in June 2005 into four companies, which were incorporated under the Companies Act, 1956. These were: 5
  6. 6.  A generation company: Maharashtra state power Generation Company Limited (MAHAGENCO)  A transmission company: Maharashtra state Electricity Transmission Company Limited (MAHATRANSCO)  A distribution company: Maharashtra state electricity distribution Company Limited (MAHADISCO) and  A holding company: MSEB Holding Company Limited holding Government’s equity in these three companies. SR NO. NAME OF COMPANY MANAGING DIRECTOR DIRECTOR (FINANCE) DIRECTOR (OPERATION) 1 MSEDCL Dr.AJAYBHUSHAN PANDEY ARVIND GHOSH ANIL PALAMWAR 2 MSPGCL AJOY MEHTA GULABSINGH GIRASE VINAY BAPAT 3 MSETCL SUBRATO RATHO KHANDALKAR SHRISH TAMOTIA 4 MSEB HCL SUBRATO RATHO VINAYAK RAO -- Restructuring has been done on the basis of a provisional Transfer Scheme wherein the valuation of assets is based on book value of assets. Government of Maharashtra’s resolution of January 2005, states that the 6
  7. 7. valuation of the assets of MSEB to be transferred to the companies should finally be based on revenue potential of the assets transferred. The assets would be revalued within a period of one year and this revaluation would be effective retrospectively from the date of transfer. The financial restructuring after revaluation, was to be determined in such a manner that the consumers would face minimum increase in tariff. MAHARASHTRA STATE FACES 5700 MW POWER SHORTAGE 7
  8. 8. The western region of the country comprising Maharashtra, Gujrat, Madhya Pradesh, Chhatisgarh, is facing acute power shortage of nearly 10000 MW, which is mainly due to increase in demand. Maharashtra faces maximum shortage of more than 5,700 MW followed by Gujrat (3,000 MW), Madhya Pradesh (1,000 MW) and Chhatisgarh (300 MW) 8
  9. 9. PROBLEMS OF ELECTRICITY IN MAHARASHTRA There are five major problems face by electricity companies in MAHARASHTRA 1) LOSSES BETWEEN GENERATION AND TRANSIMISSITION: It is the major problem faced by the companies that there is loss in transportation between the electricity generation and transimissition. First generation company generate the electricity through power station like PARLI, CHANDRAPUR, URAN (GTPS), KHAPERKHEDA etc. then it transport to the transmission company. In that process there is loss of electricity cause of infrastructure, technology 2) THEFT: It is the serious and major problem face by the electricity companies. In June 2007 PM MANMOHAN SINGH was addresses to the MD of all state electricity companies about this problem. In MAHARASHTRA the rate of electricity theft is near about 28%. There are 11 zones in MAHARASHTRA like AMRAVATI, AURANGABAD, BHANDUP, KALYAN, KOKAN, KOLHAPUR, LATUR, NAGPUR, NAGPUR (U), NASHIK, and PUNE. Out of 11 zones every zone has the problem of electricity theft. 3) TENDENCY OF EMPLOYEES: The electricity companies are formerly MSEB and now it’s the public undertaking companies. The employees of state government are not interested in the work and the management level also neglects the 9
  10. 10. performance of employees. There for there is not optimum utilization of human resources and it resulted into the losses of companies 4) SHORTAGE OF PERSONNEL: The electricity companies have problem of the shortage of personnel because the decision of the recruitment is depend upon the state government. Electricity companies have the workload and it is increases day-to-day. Cause of the 5) LACK OF FINANCIAL HELP FRON CENTRAL: After a dismal performance in the 10th plan, the power sector is facing a similar fate in the 11th plan. There is a shortfall of 4,50,000 crore during 2007-12, which is nearly 45% of the total funds requirement. MAHARASHTRA STATE PLANS NEW POWER TRADING COMPANY The holding company is planning to set up new state power trading company. Though this company; it can buy power from independent power producers. Power purchase agreement can be signed more easily without the gestation period. The state is also looking at JVs with private players in transmission sector. On the background of severe power shortage in the state, the government will encourage and focus small power projects of 50- 100 MW where PPAs can be signed quickly. 10
  11. 11. RISING STEEL PRICES AFFECT MILLS POWER PLANS The state government’s plans to tap sugar factories as an alternatives source of power are affected due to rising steel price. The use of sugarcane bagasse as a source of energy for production of power would have helped to overcome huge power deficit in the range of 5000-6000 MW. Last year, the state government in association with IL&FS launched ‘URJANKUR NIDHI’ of Rs 418 crore for this purpose. The main aim of this fund was to help sugar co-operatives in the state to set up their own co-generation plants based on bagasse. Under the scheme, SPV was to be created which would own the plant. The fund managers found proposals of 16 sugar factories, which had, potential of generating 350-400 MW. However, there is hike almost 20% in steel prices in last one year, which has made setting of power to MSEDCL at Rs3.05 costly. The steel components in co-generation plant is almost 60% and cost of commissioning such a plant is around 4.5 to 5 crore Rs, which is almost equivalent to any thermal plant. UNION BUDGET 2007-08 AT A GLANCE (POWER SECTOR) 11
  12. 12. - Electricity generation has recorded a growth rate of 7.5 % in April to December - MOP has awarded two Ultra Mega Power projects (UMPP) in sasan and Mudra. Seven more UMPPs are under process. Two more Ultra Mega Power Projects to be added by July. 2007. - The Ministry of power will facilitate setting up of merchant power plants by private developers and private participation in transmission projects. -APDRP is being restructured to cover all district headquarters and towns with a population of more than 50000. Allocation of funds to APDRP hiked from Rs 650 crore to Rs 800 crore. -19,758 villages have been covered so far under Rajiv Gandhi Grameen Vidyutikaran Yojna. Allocation of funds to RGGVY increased from Rs 3000 crore in 06-07 to Rs 3983 crore in 07-08 12
  13. 13. SHORT FALL IN POWER FOR 11TH PLAN After a dismal performance in the 10th plan, the power sector is facing a similar fate in the 11th plan with the centers, states and private companies’ estimates to fall short by 4,50,000 crore during 2007-12, which is nearly 45% of the total funds requirement. The needs about Rs. 10, 31,600 crore to add more than 70000 MW of generation capacity, besides creating and upgrading transmission and distribution systems. However the sector will have a shortfall of Rs 451607 crore, as stated in the report of the working group on power for the 11th plan. The major portion of the shortage is for states which are stated to make total capacity additions of around 24000 MW in the 11th plan and need Rs 514167 crore. Out of Rs 359917 crore of total debt required the states can arranged for 164973 crore. This leaves a gap of close to Rs 270000 crore in debt and equity for the states taken together, after considering an additional Rs 80000 crore in funding by special schemes such as APDRP and RGGVY. According to the report of the working group, the centers needs total funds of Rs 300000 crore, including Rs 90000 crore in equity. Of this, it is facing a shortfall of Rs 26897 crore in equity and Rs 50807 crore in debt. 13
  14. 14. Power Minister Mr. Sushil Kumar Shinde, talks on the 10th Five Year Plan, National Capacity Addition, Energy Conservation Union Initiatives and his Vision for India. IEEMA RESEARCH GROUP Question- Unlike 8th and 9th five year plans, the 10th five year plan has a greater achievement in terms of capacity addition. According to you, what will be the figure achieved against the targeted addition pf 41,100 MW to the Generation capacity. Answer. Sometime back it was reported in the print media that due to delay in some of the projects the slippage would be of the order of about 10000 MW in the 10th plan to examine why we had gone down in achievement as compared to the target Whatever we have achieved even after slippage of 10000 MW in the 10th plan, we have achieved greater addition in capacity as compared to 8th and 9th plans we could add approximately 20000 MW. However, in the 10th plan, we have done capacity addition of 30000 MW. When I went into details, I noticed that there was slippage since the gas based plants could not come on line as LNG was not available, though it was expected that the LNG would be available from the foreign countries. Also the gas was not available either locality or from foreign countries. 14
  15. 15. QUESTION – Though govt has opened doors for private developers in transmission sector, there are very few takers. Do you feel we need more private or public-private partnership in transmission sector? ANSWER- Yes, absolutely we have opened the transmission sector also for private or as joint ventures. In Himalayan range, there has been public- private partnership. So far, we have 9,500 MW and we intend to go up to 27000 MW. We have covered all regions- east, west, north and south. This shows that we have connected to each other so that the electricity generated at a particular place can be taken to other places. We have to speed up this now and we are doing so. I must tell you that our powergrid is doing excellent work in this area. QUESTION -Rajiv Gandhi Gamin Vidyutikaran Yojna (RGGVY) is the most notable initiative taken by the Ministry of Power for the creation of rural electricity backbone. With the current pace of progress, do you feel 1 crore house hold i.e. 125 lakhs villages electrified by 2009? ANSWER- we are committed to giving electricity to each and every body by the year 2012, every home in the country by 2009. Even village will be electrified in the country. In the 10th plan, we have spent about rupees 5000 on the initiatives and in the beginning itself, we have electrified more than 28000 villages and this work is allotted not only to the utilities, but also to central utilities like NTPC, POWERGRID and other power organizations. 15
  16. 16. QUESTION -Your message to the countrymen for power saving? ANSWER- Power saving is very important. I have been telling that if we save 20% of power, we save Rs 80000 crores and you see the perspective of this problem. I am quite sure that if we make people aware of the problem and discuss the same with them, it can be solved. I am quite confident that those who are using electricity unnecessarily will also stop using when not required. IMPORTANTS: - “If a state is having power shortage then the central government should not come and give it to them. It is the responsibility of the state to look after the problems of the people." - “After the UPA government came into power, under the leadership of our PM Manmohan singhiji, we took the decision to restart ENRON” - “Power saving is a very important thing. I have been telling this if you save 80000 crore and you see the perspective of this problem MERC SUGGESTS PRIVATE PARTICIPATION TO LESSEN POWER 16
  17. 17. SHORTAGE To improve power supply situation in the state, MERC has suggested some changes in power sector. The commission in its communication with the state government has suggested for adopting a franchisee model where private sector entities would be allowed to set up small power plants at various places undertake distribution and collect payment from the consumers. As per estimate, the franchisee model plants could generate over 7000 MW of power. MERC has started that with increasing power crunch, there is need to augment power production and installation of short gestation generation capacity. It has recommended use renewable energy sources such as biomass, small hydro and wind along with conventional energy sources such as liquid fuel. The new system will help to reduce technical losses and it will also allow private sector to function with relative independence. ECO-HOUCING GAINS MARKET ACCEPTANCE AND BANK-SUPPORT IN THE STATE The eco-houcing program, installed in Pune with USAID support in the last two years, has successfully addressed the factors influencing the scale-up of sustainable houcing development. Policy and market intervention led by IIEC in the first phase, have helped accelerated the adoption of energy efficient technologies and practices in the residential sector and have setup stage for expansion of the program at a national level. UNEP SCHEME TO LIGHT HOMES IN RURAL PARTS OF THE STATE United Nations Environment Programme (UNEP) with the help of Bank Of 17
  18. 18. Maharashtra is bringing loan scheme for solar system in rural parts of the state. The similar scheme has been already successful in Karnataka. This scheme would be ray of hope to many houses in rural Maharashtra where power situation is worsening day day. There is large market for solar lighting products. Mr. D. Mallya, CMD, Bank Of Maharashtra said that BoM has designed a scheme called Mahadeep for financing solar home system by providing finance without collateral. The objective is to reach out to more than 2000 beneficiaries in the state by March 2008. UNEP has identified around seven vendors to run this loan programme across eight districts, which include Ahmednagar, Kolhapur, Nashik, Pune, Ratnagiri, Satara, Sangli and Sindhudurg. CURRENT SITUATION OF MAHARASHTRA POWER SECTOR 1) SEB’s rating State Government Parameters 18
  19. 19. Haryana, Delhi, Goa, Gujarat , Karnataka and Uttar Pradesh have scored higher than the rest of the states on account of good structural adjustment support provided to the utilities along with above average subsidy payment track-record and satisfactory progress against targets laid down in MoU / MoA with Ministry of Power (MoP). Many states are gearing up provide aggressive financial and structural assistance to the respective power sectors taking the next step in reforms in the sector. These include formulation of Restructuring Plans and unbundling on functional lines. With these developments in view, the scores are expected to go up in the next review exercise The states need to proactively address the issues of addition to the power generation capacity in the state to cope up with the increasing demand in the sector. Most of the Electricity Departments in the North East and the Electricity Department in Sikkim, despite having taken limited steps in terms of reforming the sector, have been able to secure decent scores against the parameter ‘subsidy payable’ - since the Non- 19
  20. 20. Plan expenses to the Departments for meeting cash shortfall is being treated as ‘subsidy’ payment. However, for most of these states, the non-plan allocation for meeting the expenses of the department are stagnating, implying curtailing of power purchases unless cash collections are steeped up significantly `1) ENERGY SHORTAE MAHARASHTRA POWER SECTOR PROFILE ENERGY SHORTAGE (%) & PEAK DEFICIT(%) 2)TRANSMISSION AND DISTRIBUTION LOSSES TRANSMISSION & DISTRIBUTION LOSSES (%) 20
  22. 22. Five year block: 1998-99 to 2002-03 Over 1993-94 to 1997-98 Generation (BU) during the period Improvement of + 6.5% yearly generation Plant Load Factor (%) at end of period Improvement of + 7.4% (during five years) Capacity addition (MW) 22
  23. 23. + 19.5% improvement in Yearly addition [3750 MW over 3138 MW] Transmission lines addition (ckm) + 36.5% improvement in Yearly addition [7011 ckm over 5136 ckm] H.T. Transformation (Substations) addition (MVA/ MW) + 39.7% improvement in Yearly addition [11577MVA over 8282 MVA] inter-regional transfer capacity addition (MW) Five fold improvement in Yearly addition [1080 MW over 220 MW ] 23
  24. 24. Fresh capacity approvals TEC accorded to generation projects (MW) + 5.2% increase on yearly average Power deficit (MU) at end of period Improvement of 2.5% over five years Peak shortfall (MW) at end of period Improvement of 3% over five years 24
  25. 25. Undertakings under Ministry of Power + 16.5% increase yearly +14.4% increase yearly 5) Accelerated Performance during last five years (1998-2003) Electricity Generation Enhanced generation performance during current five year block period of 2474 BU Compared to 1871 BU during the previous block. • Yearly generation at beginning of the five year block of 421 BU has improved to 531 BU (average yearly growth rate of more than 5%) while generation from Central stations has improved by more then 6%. 25
  26. 26. • Plant Load Factor of thermal stations has increased in the country from 64.7% in 1997-98 to 72.1% in 2002-03 and in Central sector stations from 70.4% to 77.1%. Plant Load factor (%) During last 9 months of current year 2003-04 Generatio n - Overall -411 BU -Central stations -167 BU PLF Overall -70.8% Central -76.3% 26
  27. 27. stations Improved performance in fresh additions with more than 18,000 MW of new generating capacity and 35,000 ckm of H.T. transmission lines added during the five years block against 16,000 MW and 26,000 ckm in previous five years block period. Accelerated Power Development & Reforms Programme (APDRP) has been initiated to provide financial assistance to States for strengthening of Transmission & Distribution networks. • Cumulative sanctions Rs. 16,647 cr. and releases Rs, 3,113 cr. till end Mar.'03 it includes Rs. 379 cr. as incentive paid during 2002-03 to Maharashtra, Gujarat and Haryana for exhibiting loss reduction. - During 2002-03, under incentive component of APDRP; states of Maharashtra, Gujarat and Haryana reduced their losses by over Rs. 1661 cr. and therefore claimed incentives of Rs. 830 cr. - During 2003-04 budget allocation of Rs. 1750 cr each for Investment and incentive component. • Turnaround plan for State power utilities: Introduced system of rating of SEBs w.r.t. reforms process. 27
  28. 28. • Six level intervention strategy - A six level intervention strategy formulated for distribution reforms at National, State, SEB, Distribution Circle, Feeder & Consumers levels" to ensure accountability, deliverability and performance at all levels. • Anti Power -Theft Provisions - For curbing the theft and pilferage of power, the States of Andhra Pradesh, Karnataka, Madhya Pradesh, Uttar Pradesh and West Bengal have already enacted the Anti-Theft Legislation. Further, Maharashtra, Punjab, Bihar, Kerala and Gujarat have also taken steps in theft control resulting in increase in revenue collection and reduction in commercial losses. • Acceleration in feeder metering : Overall 86% of 11 KV feeders metering achieved with 100% in 10 States and more than 90% in 5 States. • Consumer metering: 100% completed in 7 States, more than 90% in 5 States. • Reliability index of power supply being established: 17 towns/ cities reported Reliability index more than 96%. • AT&C losses in majority of identified circles have started exhibiting reduction. Rural Electrification 28
  29. 29. There are 80,000 villages, which are still unelectrified out of which 18,000 are situated in remote and inaccessible areas. #Complete village electrification by end of Xth Plan. # full household coverage by end of XIth Plan. Villages electrified Deteriorating performance, cause of concern, turnaround achieved in year 2002-03 • Rural electrification included under "Pradhan Mantri Gramodaya Yojana" • States allowed to access 'Rural Infrastructure Development Fund, RIDF. • Accelerated Rural Electrification Programme initiated with focus on unelectrified villages, dalit bastis and hamlets at low cost funds; subsidy to extent of Rs. 564 cr. to cover 4% Interest subsidy during Xth Plan • Implementation of Kutir Jyoti intensified - Budget provision of Rs. 100 cr. (for about 7.2 lakh single point connections) • Allocation enhanced from Rs. 175 cr. to Rs. 600 cr. under "Minimum Needs Programme, MNP". 29
  30. 30. Rs. 500 cr. annual allocation for loan assistance by REC for villages and hamlets electrification at 3% and tribal and dalit basis electrification at 1 % which will be waived off on successful project implementation. - Rural Electricity Supply Technology (REST) Mission constituted with emphasis on decentralized distributed generation for electrification of rural areas. - The Mission has been set up to develop the indigenous technologies for meeting the needs of the rural power supply and operationalize the schemes on commercially feasible terms. - Distributed Generation has been identified as one of the mechanism for ensuring supply of power in rural areas by way of setting up small generating units based on a variety of local fuels alongwith localized distribution. - A Workshop on Rural electrification through Distributed Generation System organized on 27th Aug.’03 was attended by representatives from States. The audiences were given presentations by the Technology providers and select NGOs were also called to share their experiences. - REST Mission has evolved Short Term, Medium Term & Long Terms strategy for rural electrification by using different technologies 30