2. Energy and Power Sector of India
By
Mathangi Sridhar
Indresh Vikram Singh
Dipankar Biswas
Mazid Ali Khan
3. The Big Picture
Total Installed Energy Capacity:210GW
3.4% of Indian GDP (2012)
Energy Capacity Generation Statistic in
India(as of 2011) High presence of energy mix
10%
in India compared to world
1% average of 27%
11%
2% 4th largest consumer of
energy globally
55%
21%
5th largest producer of
Coal Hydro Nuclear Renewable Diesel Gas energy globally
4. India’s Energy Trajectory
Post - Reform
Phase 3 (post
2003)
Phase 2 (1996-
2003) Electricity Act
2003
Pre - Reform Phase 1 (1991- CMNAP Guidelines
Delicensing
1995) Nationalization of
tariffs Open Access in
Post- IPP T&D
Independence Enron case Single-buyer to
Era : (1947- Orissa Multi-buyer
1990) Restructuring model
Electricity Act 1995 – Mega
Pre-independence era 1948 amended Power Policy
: prior to 1947
Creation of SEBs
Dates back to Calcutta
Hydropower
Electricity Supply
Project
Corporation in 1897
Electricity Act 1910
5. What changed the energy game?
Pre - 2003 Post - 2003
Generation
Transmission
Distribution
Consumers
6. Current Status : Twin Issues
Demand Supply Gap
1000
830.3
Power in Billion Units
800
559.4 620.9 •Current demand-supply gap
600 746.5
266.4 447.3 of 8% leading to peak
400 168.1 517.4 559.4
395.9 shortages at 11-12%
200 245.4 •Grid access not available to
156.8
0
more than 55% of the rural
1 2 3 4 5 6 population
Five Year Plans of Indian Government
Availabiliy Demand
Cost Vs Tariff rates in India
Unit Cost(paise/kWh) Tariff(paise/kWh)
1000
357 380
The gap between average tariff and 800 326 333
Paise/kWh
306
average cost per unit of electricity 600
460 476 484 487
400 404
has ranged from between 20 % and
200
30 % of cost per unit in the last 5
0
years.
2008 2009 2010 2011 2012
Years
7. E = m * Coal²
• 70 % of the electricity generated is from coal based power plants.
• On the domestic production front, Coal India Ltd is the largest
contributor accounting for 81 % of country's coal production.
– 9.5 % of balance comes from the Singareni Collieries Company Ltd
– Meghalaya – 6 mn tonnes of production
• 285.86 billion tonnes - country’s total known and estimated coal
resources(Sept, 2012)
– Coal India Ltd (CIL) holds 65 bn tonnes, NLC and Singareni holds 49 bn tonnes
• Presently the country imports about 85 million tons of coal(2012)
8. Captive , not attractive!
• Captive mining introduced in 2003 to open up private investments.
– Cement , coal & steel industries
• 30 out of 200 blocks have commissioned production
– Produced 36.30 million tons in FY 2010-11 against a target of 104 million tons
• Huge loss to Government due to state monopoly
– Loot of coal
– Corporate tax loss on profits
– Inefficiencies in mining & production
• Supreme Court order on allocation of captive mines?
9. Coal India Ltd :One Man’s Army!
• Coal India Ltd – largest coal producing company in the world
CIL’s Projection for
About 20% of the 2017
CIL’s Production in 2011-12 output is lost in 918
713 pilferage, 35% MT
loss in T&D 556
436 487 MT
MT
MT MT
Output Target Demand Output Demand
• Classifies customers based on the requirement of coal
– Supplies either through e-auction/agencies/FSA
• Shift from differential pricing strategy based on gross calorific value
based pricing
– At par with international pricing
10. CIL : Sitting on Cash Reserves?
Gross Profit (in crore) EPS (in Rs.)
10,000.00 15 12.77
8,606.91
Gross profit in Crore
EPS in Rs
8,000.00 10 7.43
5.56 5.82
6,000.00 4,729.14 3.88
3,658.50 5
4,000.00 3,879.39
2,593.58 0
2,000.00
2008 2009 2010 2011 2012
0.00
2008 2009 2010 2011 2012 Years
Years
• CIL sits on Rs.65,000 crore(2012) cash reserves but fails to meet
coal demand in India
• Lack of land acquisition policy in place
– 236 CIL proposals pending with environmental ministry for clearance
• A widening demand-supply gap due to huge administrative issues.
11. From 1 barrel of Crude Oil…
1 barrel 35% of
3%
of Crude Gasoli Others
LPG
Oil ne
• Huge demand for Natural gas has pushed imports of LNG in the recent
years
• The recent development of shale gas reserves in North America –
opportunity for increased LNG demand in emerging economies like
India, China and other emerging markets (Argentina, Brazil, Bangladesh
etc.).
• Demand for gas is expected to increase by a CAGR of 14% during 2011-
12, to 2016-17, from 194 MMSCMD to 373 MMSCMD.
12. To Million Units of Natural gas!
14000 12800
Million Metric Standard Cubic
12000
10000
metre/day
7600
8000
6000
868
4000 158
6 India stands 6th in
production figures 2000 81 95
151 231 313
globally 0
2001-02 2006-07 2011-12
Years
Demand (MMSCMD) Supply (MMSCMD)
Contributes to 7% of Imports (cubic meteres)
7
total GDP
•Currently, power sector consumes
about 37% followed by fertilizers with
India stands 9th in 23%
consumption figures •Development of National Gas Grid
9 globally •LNG regasification terminals
13. But the story continues…
To march towards 2020, to achieve 15% target of GOI
Let’s go the green way!
14. ‘New –clear’ and Clean Source
• Six nuclear power plants producing 4780 MW
• India is endowed with 1/3 rd of world’s thorium reserves.
• Power Generation by NPCIL : 26,473 million units in 2011
70
60
50
40
30
20
10
0
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
World India
15. Hydro is next in the row!
• New Electricity Act 2003 and 2005
• 100,000 MW is planned for the coming 5 years
• Continuous decline of hydro power from 50% in 1963 to 25%
in 2010
Hydropower Class
Pico < 5 kw
Micro < 100 kw
Mini < 2000 kw
Small < 25000 kw
Medium < 100,000 kw
Large > 100,000 kw
16. The answer my friend is blowing in the
Wind!
• Current production capacity of wind turbines – range of 3000 to 4000
MW
• Fiscal concession such as income tax exemption, excise duty
exemption etc available from the government
• Last year 6 new companies were given approval
• Bold move- Government washing hands off to the States
17. Going the Solar Way!
• 2008 - National Action Plan on Climate Change was announced,
constituting 8 major national mission
• Jawaharlal Nehru National Solar Mission (JNNSM) was launched in
January 2010
• Gujarat ranks first in manufacturing solar power; 2/3rd of the 900
MW of PV in the country
• 48 cities and 23 states to be built as solar cities, Nagpur and
Chandigarh will be built as a model solar cities
18. Is India heading towards darkness?
• India power consumption to double by
2020
Energy Mix of India in 2020
• Dependency on import of fuel for Coal Oil Gas
power generation expected to increase Nuclear Traditional Renewable
to 73% to 2020
8%
16% 30%
• India, even with a low per capita
consumption of electricity, is already 5%
the third largest emitter of GHG gases. 16%
25%
• Excluding a few private players like
Reliance, TATA, industry is dominated
by public sector
19. Power Play @ 2020
• Coal : Mine the Gap!
– Output estimated to grow from 257.7m tonnes of energy (mtoe) in 2011 to
320.2 mtoe in 2020.
– Increased private sector participation to reduce imports
• Natural Gas : Unnatural Progress
– Will grow to displace coal to increase imports
– Australia – LNG provider?
• Oil : Less than Slick
– Privatization of ONGC
• Renewables : Rapid Evolution
– Minimum of $50 bn investment required in renewable energy alone by 2020
20. Electricity Saved is Electricity Produced!
• If you turn off your monitor for a minute, a bulb can be lit in some
remote part of India for about 2 minutes.
• Try to switch off all your electrical appliances for at least half an
hour everyday.
• Do not switch on the power when TV and Audio Systems are not in
use i.e. idle operation leads to an energy loss of 10 watts/device
• If you reside at an above sea-level region, minimize the use of fans.
Doing this and more can save about 30% of the total domestic power
consumption in India!!!