This talks about invest opportunities in the power sector over the years

1. Power Sector Investors’ Meet
Ministry of Power, GoI
1

2. Outline of the presentation
 Socio Economic Trends and Power Sector
 Electricity Demand Outlook
 Drivers of Growth
 Myths Prevailing in the Sector
 Key Issues and GoI Interventions
2

3. Socio Economic Trends
Rapid
Urbanization to
drive Energy
Demand
Better
Utility-
Consumer
Engagement
Adoption
of Cleaner
Energy
Sources
Rising
trend of
Electric
Mobility
`
Adoption
of electricity
for cooking
 Increased
Consumption will
boost Manufacturing
for appliances.
2021 2026
380 TWh/yr
482 TWh/yr
Source: World Bank, 2008
 Higher demand for
products & services
e.g. Smart Meters.
Estimated No of
Smart/Prepaid meters
required
~70 Million, immediately
Source: CEA, 2017
Estimated Investment
in EE, 2015-2040
$ 832 Bn.
Source: IEA 2015
 Energy efficiency
adoption to create
new segments.
 New PPP ventures
with Utilities
 Accelerated demand
for RES technologies
and services.
 E-mobility to create
additional demand
 Rural sector
consumers to
increasingly adopt
electricity as primary
fuel for cooking.
2017 2022
124 BU
383 BU
 Strong demand to
propel energy
intensive industries
e.g. steel and cement
India: Appliance energy
consumption projection
Estimated* annual Energy
Supply (BU) by RES
Source: MoP
*At Avg. PLF of 25%
Estimated No of
EVs by 2030
~261 Million
Source: MoP
Estimated Capacity
requirement for HH cooking
@20% adoption
~50 GW.
“The largest contribution to demand growth (2017-2040)- almost 30% - comes from India, whose share of global energy use
rises to 11% by 2040 “(World Energy Demand 2040: 3305Mtoe)
-IEA World Energy Outlook, 2017
Source: NITI Ayog 2017,
(Transformative Scenario)
1 2 3 4 5
 New Business
segments to help
integrate VRE
penetration in grid.
 Rising trend of EV
adoption to boost
demand for EV
Subsystems.
 EV Ancillary Services
such as battery
swapping, recycling to
receive major boost.
 Major contribution
towards base
demand.
3

4. Power Sector is enabling Social and Economic Transformation….
Increasing Per Capita
Consumption
Connecting the last
household
Making Utilities Efficient
and Viable
24X7 Affordable and
Reliable Power
Increasing transparency
& Customer Inclusion
818 kWh (FY ’11) to 1122 kWh (FY ’17)
Requirement of additional 28,000
MW / 80,000 MUs per annum
25% reduction in DISCOMs financial
losses in last 1 year
Growth in energy billed by ~9% in
FY17 against ~6% in FY16
Portals/APPs launched along with
a National Power Portal
Source: CEA 2017
Source: SAUBHAGYA portal
Source: UDAY Portal
Source: CEA, UDAY Portal
4

5. Significant demand Potential: Similar Socio-Economic Conditions
but different Annual per capita Consumption
Present Power Demand growth CAGR: 5%
Key Drivers of
Demand
c
1003
1533
1432
694
392
1122
3126
3051
2059
1687
0 500 1000 1500 2000 2500 3000
Northern Region
Western Region
Southern Region
Eastern Region
NE Region
All India
World*
East Asia *
Latin America*
North Africa*
Electrification and Last Mile
Connectivity
Electrification of Transport
Reliability of Supply
Hours of Supply
Source: WB analysis and CEA
Source: CEA and 19th EPS
Positive Electricity Demand Outlook
Key Drivers of
Demand Growth
Expected Power Demand growth CAGR (FY’17 –FY ‘22: 6%
909
960 967
1,049
1,108
1,160
1,566
130
135 136
148
153
160
226
100
120
140
160
180
200
220
240
600
800
1000
1200
1400
1600
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2021-22
EnergyDemand ('000 MU) Peak Demand ('000 MW)
24X7
Power
for All
5

6. Drivers of Growth
6

7. Increase in
the Supply
Base
Expansion of
Transmission
Network
Improvement in
Governance &
Transparency
Distribution
Reforms &
System
Strengthening
Adoption of
Emerging Trends
& Technology
24X7
Affordable and
Reliable Power
Increased
Investment
Opportunities
1
Drivers of Growth
2
3
4
5
7

8. COAL SECTOR
TRANSFORMATION
Coal Mines (Special
Provisions) Act, 2015:
SHAKTI: Power Sector
Linkage Policy
Linkage policy Non
Regulated sector:
Coal production by
CPSEs:
Annual Domestic Coal Production Trend
2011-12
540 MT
2012-13
556 MT
2013-14
566 MT
2014-15
609 MT
2015-16
639 MT
2016-17
659 MT
Transparent Allocation
of coal blocks to
through E Auction
Coal Linkage through
transparent auctions
Transparent Allocation
through E-Auction to
steel and cement
sectors.
Sustained increase in
production has led to
fuel reliability and
lesser imports
Coal Sector Transformation: Shortage to Surplus to Superior
Increase in Supply Base
Source: CEA
Increase in Supply Base
8

9. Increase in Supply Base
Source: 19th EPS
Source: Draft, NEP 2016
Renewable Sources
16
57
78
100
124
149
173
0
20
40
60
80
100
120
140
160
180
2009-10 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22
Investment Line-up in next 5-10 Years
Enhancing
RE
Capacity
USD 310-
350 Bn.
266 GW
Addition
293 Global
Firms
1160
1566
2047
2531
3049
162
226
299
370
448
100
150
200
250
300
350
400
450
500
0
500
1000
1500
2000
2500
3000
3500
2016-17 2021-22 2026-27 2031-32 2036-37
Energy Requirement (BU) Peak Load (GW)
Source: IBEF
19th EPS Predicts a sustained
growth in Energy and Peak
Demand
RE Installed Capacity
CAGR (FY’10- FY‘18) : 22%
Envisaged CAGR (FY’18- FY‘22) :22%
Opportunities in Generation: Catering future Base Load
Increase in Supply Base
Sustained Growth in Demand is inclusive of
increasing Adoption of Energy Efficiency Measure
19th EPS is rather conservative compared with
other credible sources.
9

10. Expected India Duck Curve with 20,000 MW Solar Generation
Increase in Supply Base
Opportunities in Generation: Catering beyond Base Load
57
78
100
124
149
173
18%
22%
26%
30%
34%
37%
10%
15%
20%
25%
30%
35%
40%
45%
50%
0
20
40
60
80
100
120
140
160
180
200
2016-17* 2017-18 2018-19 2019-20 2020-21 2021-22
Installed Capacity RES (GW) RES as % of Total
RE Grid
Integration:
Opportunities
Ancillary Services
Storage Devices Capacity Market
Smart Grid Technologies
Source: Draft, NEP 2016
Source: NLDC
Envisaged RE Capacity Entails
higher Grid Penetration of
Variable Sources
Demand Supply Balance
Peak Load Management
Human Error Avoidance
Frequency Management
Voltage Management
Excess RE Generation 10

11. Target vs Actual Transmission Capacity Addition (‘000 ckm)
Target vs Actual Transformation Capacity Addition (‘000 MVA)
Expansion of Transmission Network
3.2 Lakh Crore
Investment Opportunity in
Transmission Sector FY ‘18-’22
Source: CRISIL
Projects Awarded Till Date through Tariff Based
Competitive Bidding (TBCB)
39
Project Value awarded in FY 2016 21,000 Cr
Intra state TBCB to fuel the next wave of Investments in
Transmission
19
20
17
19
21
24 23
10
15
20
17 17
22
28
26
10
5%
13%
17%
16%
10%
6%
4%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0
5
10
15
20
25
30
FY '11 FY '12 FY '13 FY '14 FY '15 FY '16 FY '17 Q2 '18
Target Achievement % Uncleared Vol
0%
32
35
11
51
45
64
57
9
63
82
0
10
20
30
40
50
60
70
80
90
FY '13 FY '14 FY '15 FY '16 FY '17
Target (MVA) Achievement (MVA)
Transmission: Growing in cohorts with Generation
Source: KPMG analysis
Source: CEA
Source: CEA
11

12. Distribution Reforms and System Strengthening
Electrification and Last Mile Connectivity: Outlay INR 42,561 Crores (DDUGJY)
Un -Connected
Households
Non
Paying
Consumers
Weak T&D
Infra
DDUGJY
Segregation of Agriculture feeder
Outlay: 15,190 Crore
Universal Metering
Outlay: 3,859Crore
Intensive electrification to
connect Villages
Outlay: 1,333 Crore
Un electrified Initially
18,452
Electrified Till Now
15,981
Remaining
1,370
Un electrified Initially
4,37,46,279
Electrified Till Now
2,79,18,695
Remaining
4,07,92,171
DDUGJY
Village Electrification Status Household Electrification Status
Access to Rural Households
Outlay: 10,246 Crore
System Strengthening
Outlay: 9,997 Crore
12

13. Distribution Reforms and System Strengthening
Electrification and Last Mile Connectivity
SAUBHAGYA
Last mile connectivity to all un-
electrified households in rural
areas and poor households in
urban areas
 Outlay : Rs. 16,320 Crore
 About 4 crore households to
be electrified by March 2019
Source: MoP
Demand Potential to be realized through Electrification of Households
18.05
14.05
0
2
4
6
8
10
12
14
16
18
Total Scope Electrified
Households in Crores
~4 Crore HHs
to be
Electrified
Demand
Implication
~28 GW
Annual Demand to be realized
by connecting all Households
Source: MoP
13

14. UDAY
24X7 Reliable &
Affordable Supply
Commercially
Viable Discoms
Eliminate stress of Banking
Sector from DISCOM exposure
Parameters FY16 FY17
Target
FY18
ACS-ARR Gap
(Rs. / kWh)
0.60 0.42 0.20
AT&C Losses (%) 21 20 17
Key improvement under UDAY
Source: UDAY Portal
Distribution Reforms and System Strengthening
DISCOM Transformation and Strengthening
IPDS
An integrated scheme for urban areas with
outlay Rs 27,052 Crores, targeting
 IT Enablement (Quality and Reliability)
 System Strengthening
 IT enablement completed in 1367 towns;
fresh sanctions for 1932 towns amounting
to Rs 985 Crores.
 Old System strengthening projects
completed in 970 towns; fresh sanctions for
3616 towns.
 Expected to boost industry performance,
as IPDS directs interventions in urban areas
where most industrial hubs/ centres are
located
Achievements under IPDS
Source: MoP
UDAY Performance IPDS 14

15. Adoption of Emerging Trends and Technologies
Smart Meters
Electric Vehicles
Decentralized
Distributed
Generation
• High prospects if
initiated at the
DISCOM level
• In Solar Rooftop,
40 GW capacity
addition target by
2022
• INR 23,450 Cr*
central financial
assistant for solar
roof top
installations
proposed by MNRE
•States aggregating
capacities and
inviting bids
• Increase base-
load demand,
higher PLF
• Effective channel
for renewable
peak power
• EV Estimates** as
per report by Niti
Ayog for 2030
- Business As Usual
scenario: 26
million
- Transformative
scenario: 261
million
• Installation of 35
million by end of
2019 (envisaged
under UDAY)
• EESL procuring 50
lakh smart meters
for 2 States
through
competitive
bidding
• Estimates on EV
battery domestic
manufacturing
under different
stages as per report
by Niti Ayog
-Battery pack1:
Potential: 120 GWh
- End to end
manufacturing2:
Potential: 2410 GWh
• High significance
with increased
VRE
• Total quantum of
spinning reserves
(primary,
secondary and
tertiary) is more
than 13,500 MW#
• Currently, tertiary
frequency control
• Going forward,
market based
ancillary service
framework
Storage
Ancillary
Services
* Proposed Sristi Scheme, MNRE ; **GDP Growth rate @ 7.4% CAGR; 1Cell import 2Cathodes import, # CERC Estimates for 2015
Emerging trends: Indicative Opportunity Sizing
15

16. Likely Investment Potential in Major Segments
On the Distribution side, new trends and emerging areas like Rooftop Solar, EVs, Smart
meter, Storage, Ancillary Services etc. to open additional avenues of investment
Areas
Investment (Approx.)
In INR In USD
Coal Generation INR 22 Lakh Cr $ 354 Billion
Nuclear Generation INR 6 Lakh Cr $ 96 Billion
Hydro INR 8.8 Lakh Cr $ 141 Billion
Renewables INR 38.4 Lakh Cr $ 611 Billion
Investment in Transmission & Distribution networks INR 53.2 Lakh Cr $ 845 Billion
DISCOM turnaround through UDAY to improve the overall performance of power sector,
thereby making it more investment friendly
Investment Potential b/w 2015-2040 as per India Energy Outlook, 2015
Source: India Energy Outlook, 2015
16

17. Myths prevailing in the Sector
17

18. UDAY is not Performing
Reality:
• UDAY is a 3 year long programme where performance of the States is contingent to the
time spent under UDAY, as different states have joined UDAY at different points in time
• Early results under UDAY are encouraging, with some distinct benefits on operations.
Going forward, improvement in metering to enhance the performance
• Performance slack in some states may be attributed to interlinked factors like lead time
of interventions, data-lag and seasonality of operations etc.
UDAY Performance
UDAY is not creating demand
Reality:
• UDAY is a supply side intervention which aims to release the latent demand, that exists
in the system due to short supply of power to the consumers.
• Under UDAY, total energy billed by DISCOMs increased by 9% in FY17* over FY16,
indicating a considerable growth in consumption, which in the past years had grown
around 5-6%.
Growth in Energy Sales
Myths prevailing in the Sector
18

19. Myths prevailing in the Sector
Increase in rural connection under SAUBHAGYA, will result in increase in losses
and low cost recovery
Reality:
• SAUBHAGYA scheme would ensure energy access to all households; expected increase in
demand of 28 GW.
• Increase in Demand would lead to lower fixed costs due to higher PLFs.
• 100% metering is integral to SAUBHAGYA ensuring theft control and revenue recovery
Losses are being camouflaged in Agriculture
719222 790207 823935
570537 621141 652233
148480 165355 173988
2013-14 2014-15 2015-16
Total Energy Input (MU) Total Sales (MU) Agriculture Sale (MU)
26.0%
26.6% 26.6%
Year wise total Input Energy, total Sales, Agriculture Sales in MUs and year wise Percentage Agriculture Sales
Above details are for 14 states contributing 95% of the Agriculture sales. Pecentage of Agricultural sales
have remained largely in the same range from FY14 to FY16. Therefore, there is no tell-tale sign of losses
being loaded on the Agricultural category.
Source: CEA
19

20. Key Issues and Ongoing
GoI Interventions
20

21. Key Issues and Ongoing GoI Interventions
Stressed Projects (coal based) in Power Sector
• Commissioned
capacity:
24,405 MW
• Under
construction
capacity:
15,725 MW
• Total stressed
capacity:
40,130 MW
• Comprises 34*
projects
* As per list provided by Dept of Financial Services
• Non-availability of fuel
• No PPA tie-ups
• Delayed payments by Discoms
• Inability- infuse equity, service debt
• Aggressive tariffs by bidders in PPAs
• Regulatory/ contractual disputes
• Legal Issues- auctioned coal mines
• Other financial issues like non-
compliance of Joint Lender Forum
(JLF) decisions, RBI restrictions on
funding of cost overrun, etc.
Current
Status
Major reasons for
stress
• Shakti Scheme: To provide assured supply
of coal through allocation and auctioning
• Pilot scheme- to procure 2500 MW
• Amendment in Mega Power Policy:
-Competitive bidding for future PPAs,
-Remove liquidity crunch with developers
-Ensuring project competitiveness
Steps by Lenders
- Joint lender forum, Flexible restructuring
(5/25); invocation of SDR; Scheme for
Sustainable Structuring of Stressed Assets
(S4A)
- NCLT through IBC Act, 2016, SARFAESI,
DRT.
Action taken for resolution
of Stress
21

22. Key Issues and Ongoing GoI Interventions
Revival of Hydro
• Revival of stalled projects, improving investor
confidence
• Tariff affordability and push for PPAs through
Hydropower Purchase Obligation
• Hydropower qualities critical for future-
Flexibility, Fastest ramping, Voltage regulation,
Reactive power absorption, Black start.
• Meeting peaking power and grid integration
requirement for 175 GW RE.
• Providing level playing field with Renewables
• Bringing discipline- Project Construction/ Mgmt.
• Water Storage- Flood moderation/Strategic
Needs
Why hydro needs revival
The following have been proposed:
• Declaring all hydropower (irrespective of size)
as Renewable Energy.
• Providing hydropower purchase obligations
apart from solar RPO.
• Financial support in the form of interest
subvention/ equivalent support.
• Financial support for storage/ flood
moderation hydropower projects.
NEW HYDRO POLICY 2017
22

23. Annexures
23

24. UDAY
24

25. UDAY Performance
UDAY has a clear impact towards improvement in operational efficiency
and decline in overall losses
Note: In all slides base year data of AT&C and GAP is as per PFC report (calculated as per revised methodology). Rest Data as per UDAY portal
Back to Myths
S.
No.
Parameter Unit
Base year Data
(31.03.2016)
Achievement
FY 2016-17
Comparative Progress of H1
Achievement
H1 FY17
Achievement
H1 FY18
1
AT&C
Losses
(In %) 21 20 24 23
2
ACS-ARR
GAP
(Rs./unit) 0.60 0.42 0.46 0.37
3
Energy
Billed
MUs 69,31,52* 75,77,88 3,76,287 4,21,192
*Data as per PFC report
UDAY snapshot
Increase: 9.3%
25

26. 26
Operational Achievements in Key UDAY parameters till H1,FY18
Operational
efficiency indicators
Base year
Data (FY16)
Progress during UDAY period Overall Progress
Target
(April’16
– June’17)
Achievemen
t (April’16 -
June’17)
Achievement
(April’16 –
June’17) in
%age
Overall
No. to be
achieved
Overall
achieveme
nt till
June'17
Overall
%age
achieveme
nt
Urban Feeder
Metering (Nos)
40,302 2,027 5,006 100% 45,555 45,308 99%
Rural Feeder Metering
(Nos)
86,404 10,801 13,285 100% 1,03,681 99,689 96%
Domestic connections
(In Lakhs)
1,364 136 116 86% 1,867 1,480 80%
UJALA LED-bulb (In
Lakhs)
637 1,147 1,679 100% 2,146 2,315 100%
*Note: States have filled data till Q1 FY18
UDAY Performance
Back to Myths UDAY snapshot

27. Energy Billed by DISCOMs (MUs) in UDAY States increased at a relatively higher
rate 9% in FY17 against 6% in FY16
Annual Performance
Quarterly
Performance
653,433
693,152
757,788
FY15 FY16 FY17
6%
9%
183,638
201,903
Q1FY17 Q1FY18
10%
Source: PFC Report FY 2015-16
MUs
MUs
MUs
MUs
MUs
UDAY Performance
Back to Myths UDAY snapshot 27

28. A total of 19 States have increased their tariff either in FY 16 or FY17. Tariff hikes have
resulted in an additional revenue of Rs. 10,009 Cr. in FY 16 and Rs. 20,427 Cr. in FY17
0% 0%
8%
4% 4% 4%
0%
2%
4%
14% 12%
8%
10%
8%
9%
4%
Himachal Pr J&K Jharkhand Manipur Puducherry Telangana Sikkim Mizoram
1% 0% 0% 0% 0%
8%
0%
5%
0%
5%
6%
20%
8% 8%
9% 9%
5% 6%
Andhra Pr. Assam Bihar Kerala Karnataka Madhya Pr. Punjab Uttarakhand Meghalaya
State wise Tariff Hike
FY 2016-17 FY 2015-16
FY 2017-18 FY 2015-16
Period
Impact of tariff hike
on Total Income (%)
Pre-UDAY FY 16 2.31%
Post-UDAY FY 17 4.35%
UDAY: Pre and Post
UDAY Performance
Back to Myths UDAY snapshot 28

29. IPDS
29

30. Integrated Power Development Scheme
• Rs 27,052 Cr sanctioned under IPDS - Rs 26,236 Cr System strengthening + Rs 985 Cr IT + Rs 69 Cr
Smart meters for Old Kashi Pilot
• System Strengthening projects for 3616 towns – Rs. 26,236 Cr sanctioned including Rs. 16,314 Cr
as GOI Grant, Rs. 4817 Cr released
• Quantum of work envisaged for System Strengthening in Urban sector :-
Back
30

31. DDUGJY
31

32. 32
Milestone Name Unit
Sanctioned
Quantity
Awarded
Quantity
Completion as on
18.01.2018
% Physical
Progress Achieved
w.r.t. awarded
Quantity
No. 1,825 1,591 168 11%
MVA 12,998 11,730 1,124 10%
No. 2,145 1,537 414 27%
MVA 8,675 7,775 1,890 24%
LT Line CKm 123,653 159,981 31,794 20%
11 KV Line (Excluding
feeder segregation)
CKm 111,412 98,252 14,986 15%
33&66 KV Line CKm 25,183 23,486 1,953 8%
Feeder
Segregation
Feeder Segregation
(excluding 11 KV New
Lines)
CKm 159,571 147,703 11,679 8%
No. 385,638 360,849 31,108 9%
MVA 12,686 12,598 2,172 17%
Consumer Nos 15,160,243 10,371,200 3,242,446 31%
DTR Nos 377,120 331,082 32,665 10%
11 KV Feeder Nos 29,336 14,817 3,822 26%
Energy Meters
33/11 KV
Substation
New
Augmentation
Lines
Distribution
Transformers
Distribution
Transformers
Deen Dayal Upadhyay Gramin Jyoti Yojana (DDUGJY)
Rs.42561 Crore sanctioned including GoI Grant of Rs.32607 Crore. Component wise details are as follows:
Electrification of UE Villages through Grid Rs. 2,667 Crore
Metering Rs. 3,859 Crore
System Strengthening Rs. 9997.45 Crore
Feeder Separation Rs. 15190.89 Crore