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PPP Status: THERMAL POWER

By- Abhishek Agarwal (2012E01)

Objective: To Study the Current Status of PPP in

Thermal Power Sector and Identify the Challenges

involved.

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Contents

Key Statistics

Why Privatization

Current Scenario

Legal & Regulatory Environment

Government Initiatives

Challenges

Project Experiences

Conclusion and Way Forward

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Key Statistics

Fifth Largest Generation capacity

Generation as on Aug. 12- 207,006 MW

Thermal Power Contribution- 66 %

44% of 11th Plan Generation by Pvt.

Sector

In 12th Plan: 80% of addition to be

done by Thermal Power and 58% by

Pvt. Sector

Funds Allocated: Rs. 6386 billion

Lowest per Capita Consumption- 600

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Why Privatization

High Cost of Electricity Services

Unreliable Supply

Poor Maintenance

Lack of Investment and Inadequate

Expansion

Poor Technological Advancements

Rising Subsidy Burdens

Budgetary Constraints

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Current Scenario

Generation Transmission Distribution

Private Participation

Allowed (1991)

Privatization

Allowed Recently

Private Participation

Allowed (2003)

Single Buyer

Model

Wholesale

Competition

Captive

Generation

No Model Available.

Usually PPP model

through Concession

Agreement is used

License Required

Players:

Reliance Power ,

Tata Power,

Lanco Power,

GVK Power

Players:

Torrent Power,

Tata Power

Players:

Torrent Power,

Tata Power,

Reliance Power

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Legal & Regulatory Environment

(I) Power Sector is in Concurrent List.

Electricity Act Amendments,1991- to

attract IPPs to produce and sell only to

SEBs. Electricity Regulatory Commission

Act, 1998- setup regulatory

commissions for fair & just tariff setting

transparent policy formulations

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Legal & Regulatory Environment

(II)

Electricity Act, 2003

De-licensing of Generation

Open Access

Captive Power Generation

Bulk Purchasing

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Legal & Regulatory Environment

(III)

Electricity Act, 2003.contd

Distribution licenses

Power Trading

Formation of SERC mandatory

Theft Minimization, Tariff

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Government Initiatives

100% FDI Allowed

Customs & CVD Exemptions

Tax Holidays for 10 years

FSAs and PPAs

APDRP & National Electric Policy for

increased attractiveness

UMPPs

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Challenges

Empowerment of Regulators

Obtaining Clearances

Overlapping Central & State

Responsibilities

Reduction of Subsidy

Fuel Supply & Transportation

Poor FSAs and PPAs

T&D Losses

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Project Experiences (I)

GVK Plant at Jegurupadu, AP, 1992, 235MW

Owned by GVK

Constructed by ABB, Germany & India

O&M by Jegurupadu O&M Co.

FSA signed with GAIL

PPA signed with AP Transco for 28

years

Financing: D/E Ratio: 2.33:1

E uit : GVK CMS Asian Infrastructure

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Project Experiences (II)

Dabhol Power Plant

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Project Experiences (III)

UMPP by Tata Power, Mundra, 2006, 800x5MW

SPV: Coastal Gujarat Power Ltd. (CGPL)

Tariff: Rs. 2.26/KW Estimated Investments: 16000-20000 Cr.

Govt. Role: Provide Land, Water, FSA,

PPA, Clearances TP Role: Funds, Technology, Equipments,

Execution & Operations

FSA with Indonesian Government

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Conclusion & Way Forward

Overcoming Challenges

Increased Competition

Open Access for consumers

PPP in Transmission

Reduce Demand-Supply Gap

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Thank You