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7/25/2019 Transmission Economics & Finance
1/18
Transmission - Economics and
Finance
Anil Raawal21stMay 2015
1
7/25/2019 Transmission Economics & Finance
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Contents
Lots of Work in Pieline Lots of Positi!es " T#e Trends Lots of Positi!es " Transmission as $nfra
%&siness
T#e reality c#eck T#e La' desite Ena(lin' Framework T#e Power and t#e Prayer T#e )oncerns
*ey Risks T#e Way Forward
2
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Transmission Scenario
Lots of Work in Pipe Line
Source -Metis
Additions during 12thPlano As per the latest estimates of MoP
90,000 ckm transmission lines and
1,54,000 MVA transformer capacity is
projected to be added in Xth plan .
Historic Investment
Decito !espite "s 4,50,000 #rs in$estmentplanned in %eneration for 1&th and
1'th plan, the in$estments in the
transmission sector not ade()ate*
o +or e$ery ")pee in$ested in
%eneration, 50 sho)ld be in$ested
in transmission*
o n ndia, this ratio stands at '0*
o n$estment deficit - "e()ired more
than 0*5 times of the f)t)re
in$estments made in %eneration into
transmission*
+o&rce " )AREResearc#
3
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Transmission Scenario
./o)rce 2P for 1&thPlan, #2A and Prospecti$e plan, 3o
./tate sector opport)nity yet to emer%e
Lots of Work in Pipe Line
12thPlan Capex estimates
CentralSector 125,000 Cr
State Sector 55,000 CrTotal 1,80,000 CrOut of kitt !s 25000 Cr for Pri"ate Participation
12thPlan Capex estimates
CentralSector 125,000 Cr
State Sector 55,000 CrTotal 1,80,000 CrOut of kitt !s 25000 Cr for Pri"ate Participation
12thPlan Tar#ets -
1,10,000 ckm of Transmission lines an$ 2%0000 M&' of
transformation capacit a$$ition
12thPlan Tar#ets -
1,10,000 ckm of Transmission lines an$ 2%0000 M&' of
transformation capacit a$$ition
1(thPlan Capex estimates
P)C*+ an$ States 1(0,000 Cr
Pri"ate Sector 1,10,000 Cr
Total 2,0,000 Cr
1(thPlan Capex estimates
P)C*+ an$ States 1(0,000 Cr
Pri"ate Sector 1,10,000 Cr
Total 2,0,000 Cr
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Lots of Positives !he !rends
Competitive "idding !rendso
Sector is Maturing QRs were amended, No of players have settled to a reasonable numberwith major players in een contest.o !rend line of "st #RR $ %&' indicates upward trending
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Lots of Positives !ransmission as Infra"usiness Competitive "idding
#Approacho (arger number of projects are being put for bidding
year on year with larger project )osts.
o )oncept to )ommissioning period has come downo*as come down from about + months previously to about - months
o "emption for State Sector from !/)/ is over andmore projects from State Sector are epected
o !ime period for )onstruction has been aligned with
the time period provided under !ariff Regulations
&%01%2
o "arly )ommissioning is under )onsideration by
Mo3 for recognising tariff
o )hange in 4pproving 4uthorities foro Section %+0
o 3owers now with )"4 )hairperson, shall save time.
o Section +5o 3owers now with )"4 )hairperson, shall save time.
o Selection of projectso 3owers now shifted to Mo3 as re6uired under 7a8ette
Notification6
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Lots of Positives !ransmission as Infra"usinessAmendment in $A $%panding Hori&onso Section %0 4mendment
!he 4ppropriate )ommission may, on an application made to it under section %-, grant alicence to any person11
9a: to transmit electricity as a transmission licensee; or
9b: to distribute electricity as a distribution licensee; or
1111111111111111111111111111
9c: to undertae trading in electricity as an electricity trader, or
9d: to supply electricity as a supply licensee.
PoC 'echanismo National "lectricity 3olicy mandates that the national tariff framewor implemented should be
sensitive to distance, direction and related to 6uantum of power flow.o /illing, )ollection and
7/25/2019 Transmission Economics & Finance
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!ransmission # the real )ottlenecko #n recent times transmission has wored as major bottlenec, some facts 1
o Millions of
7/25/2019 Transmission Economics & Finance
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!he Lag despite $na)ling (rame,ork
2,
55
22
1-.
/0.
1.
StateCentral
Pri"ate
StateCentral
Pri"ate
11thplan - 67548 MW
12thplan (2 yrs) - 45516 MW
Source - 'PP
11thplan - Rs 1,40,000 Crs
12thplan - Rs 1,80,000 Crs
$um*ers te(( it
a((++++++++++++>#t is also a fact that in the
architecture of electricity sector,
generation
is delicensed and, accordingly,
generation capacities have
come up
and will continue to come up
based on technical and
commercial
feasibilities of these projects.
!herefore, the contention thatmassive
capacity additions, in a
delicensed regime, pose a
major challenge to
transmission system planning
and, therefore, this type of
mismatch is
inevitable, cannot be taen as
an acceptable argument. #n a
situation
of power sector being starvedof generation capacity,
delicensing have
been a correct strategy and
transmission system planners
will have to
devise strategy to cope with
thisA #2"# #on%estion
"eport 6)ne &015
Pri"ate *n"estment is must to match the monstrous $eman$s
7/25/2019 Transmission Economics & Finance
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!he Po,er and the Pra+er
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* $on.t kno. ho. * am #oin# to $eci$e this case, /ut it appears from the paper.ork, .e ha"e a /ar o.ner .ho/elie"es in the po.er of praer an$ .e ha"e an entire church an$ its $e"otees that $oes not
!he Po,er and the Pra+er
11
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Proect 3electiono Reconstitution of "mpowered )ommittee1
!he Concerns
Representation and confdence building or private parties to invest expectedmore than Rs 1 lac Crores!!!
efore 'fter
Mem*er '% Mem*er .S/ '
Mem*er .S/ ' Mem*er .'/ '
Mem*er .'/ ' oint Sec .Mo/
oint Sec .Mo/ irector .ro/
irector .ro/ &visor .'nerg8/, $T 8og
9ormer hairman, ' 9ormer hairman, '
9ormer hie: Sec, Mah ';-Mem*er.S/, '
irector .Trans/ Mo hie: 'ng .(an S/, '
Secretar8, '%
12
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$na)ling (rame,orko Tari:: o(ic8 # ';em"tions "ro"ose eaves "ractica((8 nothing !hich necessari(8 has to *e
"ut un&er T ?>
Wor=s require& to *e &one cater to anurgent situration require& un&er
com"resse& time sche&u(e+
ntrastate transmission "roects u" to 6 than 2013
9irst t!o 1200 => su*station @"-gra&ations o: e;isting (ines o:T@AST@A
Some more u"-gra&ations o: (ines ugmentation o: e;istingAun&er
construction su*stations o:T@AST@A
'vacuation :rom $uc(ear o!er (ants roects un&er com"resse& timesche&u(e+
roects !here no *i&&ers comes:or!ar&+
13
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Contractual (rame,orko $o TS # ost o, no TS :or "re-commissioning "erio&, current TS is not va(i&o TS "rovisions the "ena( "a8ment o: a&&itiona( in case the &eve(o"er :ai(s to o*tain
Transmission icense or get the tari:: a&o"te& !ithin sti"u(ate& time :rame+o $o recognition o: &e(a8s cause& *8 the reasons *e8on& contro( o: the &eve(o"er inc(u&ing the
c(earances (i=e :orest, !i(& (i:e, section 164 a""rova( etc+o $o incentive :or ear(8 commissioning, the change no! un&er consi&eration is a(so ha(: hearte&
as it &oes not s"e(( out an8 incentive an& on(8 recogniBes ear(8 commissioning, !hich means
ear(8 start o: 35 8ears earning stream+o
>er8 Stee" s # can eat u" to :irst 8ear tari::
Price 4ariations )e+ond a )ando >aria*(e com"onent o: *i& "ricing can not han&(e the stee" variation o: commo&itieso $o (ong term instruments o: he&ging on stee( an& a(uminium avai(a*(e in n&ia
-5 clearances involved6 processes for some of,hich are open ended ,ith no timel+ redressal
o s man8 as 120 transmission "roects have :ace& &e(a8s *ecause o: the &eve(o"erCs ina*i(it8 to
acquire (an& an& get time(8 c(earances :rom a(( sta=eho(&erso 9orest, Wi(& (i:e c(earances
Courts issuing directions for (I*s against
developers on *oW case ,ithout hearing the
!he 7e+ *isks
14
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$ncouraging Private 3ector Participation
e"elopmental *ssues
!he Wa+ (or,ard
15
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$ncouraging Private 3ector Participation
Pro3ect *mplementation *ssues
!he Wa+ (or,ard
16
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$ncouraging Private 3ector Participation
4inancial *ssues
!he Wa+ (or,ard
17
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Thank ou
Anil8ra,al9relianceada8com6anilraa,al9gmail8com
i Con#estion !eport C6!C, 2015ii )a7ette otifications of )o*iii 4*CC* !eport on Transmissioni" C'!6 !esearch *nputs" 'PP presentation to MoP
"i Po.er-line"ii e.spapers 9 6T, usiness +ine an$ 4inancial 6xpress
Ackno,ledgements
1)