The document provides an overview of India's power sector, including current challenges and future opportunities. It notes that power demand is growing rapidly but supply is not keeping pace, leaving a large gap. To meet the government's targets for increased access and per capita consumption, massive investment will be needed in both conventional sources like coal as well as renewable sources like wind and solar. The power sector is complex with many stakeholders at both central and state levels.

1. POWER : DRIVING INDIA BY SUDIPTA SAR

2. Overview – observing industry Industry structure Sectorial overview Industry Analysis Conclusion AGENDA

3. GLOBAL ENERGY CONSUMPTION

4. Correlation between GDP & Power generation Correlations GDP POWER GDP Pearson Correlation 1.000 o.396 Sig. (2-tailed) .958 N 10.000 10 Power Pearson Correlation .396 1.000 Sig. (2-tailed) .958 N 10 10.000

5. Same Fuel Mix as now Aggressive Nuclear Capacity Addition Reduction in annual coal consumption ~ 100 Million Tons Reduction in annual CO 2 Emissions > 170 Million Tons Indian Energy Scenarios: 2015

6. Primary energy consumption per capita

7. Low penetration providing significant opportunities for future growth Over 400 million people without appropriate access to electricity Source: World Energy Outlook, 2006; Human Development Report 2007-08, Source: China Electricity Council, China Power Year Book, Government of India, Ministry of Statistics & Programme Implementation Per Capita Consumption of Electricit y Large investment required to achieve Govt. target of per capita consumption of 1,000 KWh by 2012 Comparison with China India - Low penetration and underserved market India China Installed capacity in 2006 (GW) 132 622 Per capita consumption (per kWh) 618 1,684 Capacity growth rate over the past 6 years 4.4% 11.8% Capacity addition in past 6 years (GW) 30 303

8. POWER DEMAND SUPPLY GAP (BU) Effect of the gap: Industries under utilised Lac of irrigation –lower agriculture growth ↓↓ Lower GDP Widening demand supply gap Inability of Centre/ State to meet capacity addition Power sector reforms Huge opportunity for private sector participation \\ \

9. $2,300 Bn $1,900 Bn High Investment Demand Scenario (3%) Low Investment Demand Scenario (2%) Historic Future Private Capital Mobilized in Power Sector Gap covered by public financing, self - financing, donor funding, and rationing. Total Power Investment ($Billion) Cumulative Sum ($Bn) Source: : World Bank, IEA, Deloitte Touche Tohmatsu Emerging Markets Group Financing required for the Power Sector in India 1990 - 2020 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Indian market environment – Demand for Power Investment - a large Growing Gap?

10. SOURCE : IDEAs workshop Delhi Major Stages in Electricity Sector NTPC 1975-90 I ncreased Access & Federal intervention Growth 1950–75 Major Growth, Public Ownership IPP Era 1991-98 Private Power Projects E Act 2003 Competition WB Model 1996-2002 Orissa & others

11. Power is a concurrent subject Multiple stakeholders with different functions Sets the vision (Vision 2012) Frames laws (Electricity Act, 2003) Frames taxation policies Sets investment guidelines (FI sectoral limits etc) New National Electricity Policy New National Tariff Policy (Draft) Owns and controls State Electricity Boards Constitutes state regulatory body Determines extent of subsidies Significant presence across the system National Thermal Power Corporation Power Grid Corporation of India National Hydro Power Corporation SEB’s (30) Central public utilities * Accounts for 11% of generation Present in distribution (e.g., Mumbai, Delhi, Kolkata, Orissa parts of Gujarat) Two large players – TPC and REL, several small players - IPPs (e.g., GMR, Torrent ) and Distcoms (e.g., AESC, CESC) COMPLEX INDUSTRY STRUCTURE WITH MULTIPLE STAKEHOLDERS Central government 30 State governments Public utilities * * * * * * * * Private sector

12. 20th Dec 2005 IDEAs workshop Delhi SOURCES Competition in Power (Bulk / Retail )

13. Conventional View of the Industry Structure

14. The Emerging View - anchored in competition

16. THERMAL POWER Oldest sector in india Contribution: -65% of total electricity generation Generates :-86015MW (as on March 31,2007), By 2011- expected 78000MW Key players: - NTPC, RPL,DVC,PGCL,TATA POWER GOVT. INITIATIVES: - proposal of ten UMPPs each of capacity 4000MW (in 11 th five year plan) ,projects awarded to Reliance Power & Tata Power

17. Inferred potential > 120 GW Installed capacity 30 GW Most big projects are in North-Eastern states of Arunachal Pradesh, Sikkim, Uttaranchal and J&K Problems of rehabilitation and resettlement with large projects Environmental issues Water sharing agreements with neighbors National Hydro Power Corporation, Government of India Hydro-Electricity

18. Possible Gas Imports (Tongia & Arunachalam, 1999) Natural Gas Gas Authority of India Limited India’s Gas Pipelines

19. In general, wind speeds lower (~200W/m2) in India as compared to Europe (350 W/m2) and US WIND ENERGY Denmark US

20. 123 Agreement Nuclear Power: The Present Status

21. India has been pursuing a 3-stage Nuclear Power Program. The first stage - Pressurized heavy water reactors (PHWRs) and associated fuel cycle facilities. The second sta ge - Fast breeder reactors (FBRs) backed by reprocessing plants and plutonium based fuel fabrication plants. The third stage - thorium-uranium-233 cycle. Utilization of thorium.

22. THANK YOU