A Snapshot on Power & Energy Sector in India Sample Report Disclaimer: This publication/report contains information in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment.
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P) INDIA www.ispiritsolutions.com 1. Overview India’s power sector is one of the most diversified in the world.
Power generation ranges from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power to viable non-conventional sources such as wind, solar, and agricultural and domestic waste. In recent years the Electricity demand in India has been increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, the electricity supply chain consisting of generation, transmission and distribution has undergone a phase of transformation to competitiveness.2.
Current Scenario India is the third largest producer and fourth largest consumer of electricity globally. The Indian power sector is undergoing a significant change that is redefining the industry outlook. Sustained economic growth continues to drive power demand in India.
The Government of India’s (GoI) focus to attain ‘Power for all’ has accelerated capacity addition in the country. At the same time, the competitive intensity is increasing on both market side as well as supply side (fuel, logistics, finances and manpower). As on December 2017, the peak demand for electricity in India was approx.
164.1 gigawatt (GW) while the installed capacity is approx. 330 GW. Additionally, In India approx. 240 million have no access of electricity which shows a demand supply disparity due to lack of proper transmission lines installed across the region of India. 2.1 Electricity Industry at the Glance GHG*- stands for greenhouse gas.2.
2 Energy Classification 3. Industry Structure and Market Size 3.1 Generation India has the fifth largest power generation portfolio worldwide with total installed power capacity of 330 GW. Coal is the major energy source for electricity generation in India, which is contributes approx. 58 per cent of total electricity generation, followed by renewable energy source with contribution of 18 per cent, Hydro (14 per cent), Gas (8 per cent), Nuclear (2 per cent) and Diesel (0.2 per cent).The total installed capacity of India has increased from approx. 1.
3 GW in 1947, to 330 GW in 2017. Economic growth and increasing prosperity coupled with factors such as rate of urbanization, rising per capita energy consumption, and growing population are likely to push energy demand further in the country. 3.
1.1 India’s energy mix breakup across region Mode wise Breakup in MW (megawatt) Region Thermal Nuclear Hydro RES * Grand Total Coal Gas Diesel Total Northern 52489 5781 0 58270 1620 19424 12279 91593 Western 68909 11059 0 79968 1840 7448 18825 108081 Southern 44382 6474 762 51617 3320 11808 27728 94474 Eastern 26672 100 0 26772 0 4942 1027 32741 North Eastern 520 1736 36 2292 0 1342 285 3919 Islands 0 0 40 40 0 0 12 52 ALL INDIA 192972 25150 838 218960 6780 44963 60158 330861 *RES (Renewable energy Sources) includes small hydro project (? 25 MW), Biomass Power, Urban & Industrial waste, Solar and Wind Energy. 3.1.
2 Sector Contribution As far as power generation is concern, Power and energy industry in India is mainly divided into three sectors these are central sector, state sector and private sector. In recent years, Private sector enterprises are emerged and played a major role in generation, transmission and distribution of electricity. This sector is contributing approx. 45 percent (147 GW) of total installed capacity. Central sector or public sector undertaking (PSU’s) are contributes approx. 24 percent (80 GW) of overall generation.
Besides PSU’s and private sector state level corporations are plays crucial role across the value chain of power and contributes approx. 31 per cent (103 GW) of total energy generation. 3.2 Transmission In India, An extensive network of transmission lines has been developed over the years for evacuating power produced by different electricity generating stations and distributing the same to the consumers. Power grid Corporation of India Limited (POWERGRID) and Central Transmission Utilities (CTU) are responsible for planning inter-state transmission system (ISTS). Similarly there are State Transmission Utilities (STU) (namely State Transco/ SEBs) responsible for the development of Intra State Transmission System. In order to electrification of all regions, 13,820 circuit kilometers (ckm) of transmission lines have been commissioned during 2017-18 (April-November 2017) which is 59.
9% of the annual target of 23,086 ckm fixed for 2017-18. Similarly, 50,805 MVA (Mega Volt Ampere) of transformation capacity of substations has been added during 2017-18 (April-November 2017) which constitutes 94.1% of the annual target of 53,978 MVA fixed for 2017-18.
As on March 2017, the capacity of transmission line was 367851 ckm with an annual growth rate of 8 per cent. Similarly for substation transformation the capacity was stood at 721265 MVA with annual growth of 12 per cent. Trans- mission System Type AC Transmission lines (ckm) HVDC(ckm) Total (AC+ HVDC) (ckm) Annual Growth (%) AC Substations Transformation Capacity (MVA) Annual Growth (%) Voltage (KV) level 765 400 220 Total 765 400 220 Total FY 2012 5250 106819 135980 248049 9432 257481 – 25000 151027 223774 399801 – FY 2013 6459 118180 140517 265156 9432 274588 7% 49000 167822 242894 459716 15% FY 2014 11096 125957 144851 281904 9432 291336 6% 83000 177452 256594 517046 12% FY 2015 18644 135949 149412 304005 9432 313437 8% 121500 192422 268678 582600 13% FY 2016 24245 147130 157238 328613 12938 341551 9% 141000 209467 293482 643949 11% FY 2017 31240 157787 163268 352295 15556 367851 8% 167500 240807 312958 721265 12% Source: CEA, Monthly Reports 3.3 DistributionDistribution is the most important link in the entire power sector value chain. It is only interface between utilities and consumers and responsible for distribution and supply of power to rural and urban consumers which generates revenues for power sector. GoI has provides assistance to states through various central Sector/centrally sponsored schemes for improving the distribution sector which are as follows. Scheme Date of launch Total Outlay Key Objective Integrated Power Development Scheme (IPDS) *Also known as URJA Scheme 20.
11.2014 USD 5 billion 1. Strengthening of sub-transmission and distribution networks in the urban area 2. Metering of distribution transformers/feeders/ consumers in the urban area 3. IT enablement of distribution sector and strengthening of distribution network Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY) 20.
11.2014 USD 6.8 billion 1. Separation of agriculture and non-agriculture feeders 2. Strengthening of sub-transmission and distribution networks in the rural areas; 3. Metering of distribution transformers/feeders/ consumers in the rural area. 4.
Rural Electrification 3.4 Power Consumption – Sector (end user) wise In FY 2017, Industrial sector has witnessed the major consumer of electricity in India with approx. 42 per cent of total market share. Followed by Domestic household (24 per cent and) and agriculture (17 per cent).
3.5 Foreign Direct Investment (FDI) Inflow (2010-2017) In December 2012, The GoI has permitted FDI up to 100% in the power sector, under the automatic route, for: 1. Generation and transmission of electric energy produced in hydro-electric, coal/lignite based thermal, oil based thermal and gas based thermal power plants; 2. Non-Conventional Energy Generation and Distribution; 3. Distribution of elective energy to households, industrial, commercial and other users; 4. Power Trading During 2016-2017, the Power sector of India attracts total FDI inflow worth of USD 1.
1 billion with the growth rate of 22 per cent. 4. Government Initiatives and Policy Framework 4.1 SaubhagyaIn September 2017, GoI has launched a scheme named “Saubhagya ‘”.Under this scheme GoI aims to provide electricity to all households by December 2018. The total proposed outlay for this scheme is USD 2.
5 billion where the outlay for rural household is 2.1 USD billion and remaining outlay of USD 0.5 billion earmarked for urban household.4.2 Rural ElectrificationIn November 2014, GoI has launched a scheme “Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY)” for rural electrification; the previous scheme Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) which was launched in April 2005 for village electrification has been subsumed in the DDUGJY scheme as its rural electrification component.
Under DDUGJY scheme, GoI has sanctioned 921 projects to electrification of 121,225 un-electrified villages. Additionally, The Intensive electrification of 592,979 partially electrified villages and provide free electricity connections to 397.45 lakh poor households across the India. 4.3 UjalaIn November 2015, the GoI has launched “National Program for Efficient Appliances” with aims to promote efficient lighting, enhance awareness on using efficient equipment which reduce electricity bills and emissions from inefficient lighting.
Under this scheme GoI are distributing LED bulbs, 20W LED tube light and electricity fans at subsided rate. With the major focus on LED bulbs GoI has set a target of 770 Million LED’s by 2019 across 100 cities of India As of January 2018, 285 million LED bulbs are distributed across the India. And the glimpse of scheme is as follows. 4.
4 UDAY (Ujwal DISCOM Assurance Yojana)In November 2015, UDAY scheme was launched for a sustainable financial and operational turnaround of DISCOM (power distribution companies) which aims to provide permanent solutions to legacy debts of approximately USD 67 billion (by FY 2014-15) and address potential future losses. With support from state government this scheme allows state governments to own the DISCOM by take over 75 percent of their debt (as of September 2015) and pay back to lenders by selling financial bonds. 5. Major Players Company Sector Segment Revenues NTPC Central Thermal USD 12 billion Tata Power Private Solar, hydro, wind & geothermal USD 1 billion Power Grid Corp Central Transmission & Distribution USD 4 billion NHPC Central Hydro Power USD 1 billion Reliance Power Private Thermal, Renewables, Hydro USD 7.5 billion 6. Business Opportunity & Operational Challenges 6.1 Business OpportunityRenewable energy With the Strong Government and favorable policies support, renewable energy sector in India has emerged as one of the most sustainable and fastest growing sector.
GoI set an ambitious target of 100GW by 2022 under the “National Solar Mission” which creates a positive environment among the investors keen to tap into India’s renewable energy potential.Investment Opportunities across the Value Chain The Indian power sector has an investment potential of USD 225 billion in next 5 years, which creates an immense opportunities in power generation, distribution, transmission, and power equipment.Growth in Power ConsumptionDue to Industrialization and urbanization, India’s per capita power consumption is expected to grow with growth rate of 63 per cent and reach to 1894 TWh by 2022.Thereby its creates an ample opportunity for power generation. 6.2 Operational ChallengesElectricity Supply India has abundant power generation capacity despite this; 240 million people have no access of electricity yet. This shows a significant gap between electricity generation and distribution. To tackle this issue transmission line needs to be connected to the region where people are still facing electricity issue which also helps to balance demand and supply of power.
Deficiencies in revenue collection of utilitiesIn India, deficiencies in proper billing and revenue collection for the energy used seriously always remains a key hurdle for power sector meanwhile it is affecting the financial health of power sector. Thereby the DISCOM has suffering from huge revenues deficit. The proper financial management needs to be done to tackle such issues.Coal SupplyDespite the abundant reserves of coal, India is not producing enough coal to feed its power plants. India’s monopoly coal producer, state-controlled “Coal India” has poor mining technique which affecting quality and supply of coal.