5.

MARKET ANALYSIS
5.1. POWER SECTOR SCENARIO IN INDIA: A PERSPECTIVE 5.2. THERMAL POWER IN INDIA
5.2.1. Introduction

5.3. PERFORMANCE AT A GLANCE

5.3.1. Power Supply Despite significant growth in electricity generation over the years, the shortage of power continues to exist primarily on account of growth in demand for power outstripping the capacity additions in generation. The problem of the shortage in supply becomes worse during peak hours leading to load shedding by many utilities to maintain the demand-supply balance. The power supply position is characterized by shortages both in terms of the demand met during peak time and overall energy supply. 5.3.1.1. Peak Demand & Deficit Position The demand-supply situation for Peak Power requirement in India for the past few years is as follows:
Graph 5-1: Peak Supply & Deficit Position as of 31st March, 2011
160000 MW 140000 MW 120000 MW 100000 MW 80000 MW 60000 MW 40000 MW 20000 MW 0 MW 9th Plan 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 End Peak Supply (MW) (Source: CEA) Peak Deficit (MW) (9252) (9945) (9508) (10254) (11463) (13897) (18073) (13124 ) (12151) (15748 )

5.3.1.2. Total Energy Requirement & Deficit Position The total Energy requirement in India for the past few years is as follows:
Graph 5-2: Total Energy Availability & Deficit Position as of 31st March, 2011
1000000 900000 800000 700000 600000 500000 400000 300000 200000 100000 0 9th Plan 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 End Peak Supply (MU) (Source: CEA) Deficit (MU) 52735 39187 48093 39866 43258 66092 73236 83950 73336 86001

The energy shortage has increased from 7.5 % in 2001-02 to 10.1 % during 2009-10; the peaking shortage has reduced from 11.8 % in 2001-02 to 8.5 % in 2010-11. 5.3.1.3. Region wise Peak Demand and Energy Requirement & Shortages The region wise power situation for the five regions in India is given below:
Table 5-1: Region-wise power situation 2010-2011 Peak Peak Demand (MW) Northern Western Southern Eastern 37431 40798 33256 13767 Gap (MW) -3330 -5979 -2135 -682 Shortage (%) -8.9% -14.7 % -6.4 % -5.0 % Energy Energy Requirement (MU) 258780 268488 229904 94558 Gap (MU) -20795 -35617 -11923 -4032 Shortage (%) -8.0% -13.3% -5.2% -4.3%

N Eastern All India

(Source: CEA)

1913 1222287

-353 -15418

-18.5 % -12.1

9861 861591

-869 -73236

-8.8% -8.5%

Major shortage in terms of energy and peak power is observed in Western Region of India which comprises of Maharashtra, Gujarat, Madhya Pradesh, Chattisgarh and Goa. 5.3.2. Installed Capacity The Indian power sector has grown significantly since 1947 and the power generating capacity has increased from 1,362 MW in 1947 to about 1,73,626.40 MW as on March 31, 2011. 5.3.2.1. Sector-wise installed capacity The existing Sector-wise installed capacity (MW) as on 31st March, 2011 is given below: Graph 5-3: Installed Capacity (MW) as on April 30, 2011: Sector-wise
Private Sector, 36761.19 MW, 21%

Central Sector, 54412.63 MW, 31%

State Sector, 82452.58 MW, 48%

(Source: CEA)

The State sector still dominates the power sector in terms of installed capacity. Western region comprising Maharashtra, Chhattisgarh, Madhya Pradesh, Gujarat and Goa has the maximum generating capacity in the country followed by Southern and Northern Region.

5.3.2.2. Region wise installed capacity (MW) Existing region wise installed capacity (MW) as on 30th April, 2011 is depicted below:
Graph 5-4: Existing Installed Capacity (MW) as on 30th April, 2011 : Region-wise

2329.34 MW 76.12 MW 23196.34 MW 46988.55 MW Northern Western Southern 48073.30 MW Eastern North Eastern Islands 53697.25 MW

(Source: CEA)

Chhattisgarh, Maharashtra and Madhya Pradesh have coal reserves and most of the power plants are located on the bed-head in these States. The land fall of HBJ pipeline carrying natural gas from Bombay High is located at Hazira, Gujarat and no. of gas based thermal units are located in Gujarat. Besides, Gujarat has lignite and thermal power plants based on lignite are also located at the pithead in Gujarat. 5.3.2.3. Fuel wise installed capacity (MW) The fuel wise installed capacity (MW) as on 31st March, 2011 is depicted below:

Graph 5-5: Existing Installed Capacity (MW) as on 30th April, 2011: Fuel-wise

Nuclear, 3% R.E.S., 11% Coal, 54% Thermal, 65% Hydro, 22%

Oil, 1%

Gas, 10%

(Source: CEA)

Thermal power still continues to be the backbone of the power supply in India. GoI is contemplating to increase capacity addition in nuclear power by 2030 so as to reduce carbon emission and to reduce dependability on coal as the reserve would be depleting. 5.3.2.4. Region wise and Fuel wise installed capacity (MW) The region wise and fuel wise installed capacity is given below:
Table 5-2: Existing Installed Capacity (MW) as on 30th April, 2011 Thermal Region Nuclear Hydro R.E.S. Total Coal Gas DSL Total Northern Western 24232.50 31130.50 4134.76 7903.81 4690.78 190.00 787.00 0.00 12.99 17.48 939.32 17.20 142.74 70.02 28380.25 1620.00 13822.75 39051.79 1840.00 7447.50 3165.55 46988.55 5357.96 53562.25 9341.67 47473.30 359.64 23196.84 223.60 6.10 2329.34 76.12

Southern 20482.50 Eastern N.Eastern Islands 18747.88 60.00 0.00

26112.60 1320.00 11299.03 18955.08 989.74 70.02 0.00 0.00 0.00 3882.12 1116.00 0.00

Total

94653.38 17706.35 1199.75 113559.48 4780.00 37567.40 18454.52 174361.40

(Source: CEA)

Western region has the maximum installed capacity with majority contribution from Thermal Generation. The major capacity additions during 11th Plan would be in thermal accounting for 76% of the total capacity addition and the capacity addition in hydro would be 15,627 MW (20% of the total capacity addition).

5.3.2.5. Growth rates in installed capacity (MW) Growth rates in installed capacity are depicted in the following graph:
Graph 5-6: Historical Growth in Installed Capacity
200000 MW 180000 MW 160000 MW 140000 MW 120000 MW 100000 MW 80000 MW 60000 MW 40000 MW 20000 MW 0 MW 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00%

Installed Capacity (Source: CEA)

YoY Growth(%)

From the above graph, it is observed that in the recent, past generating capacity has been growing at a pace much below the required levels. However, during the last 2-3 years due to some focused efforts in the power sector, there have been some improvements in the growth rates and the sector is expecting major initiatives in terms of capacity additions.

5.4. FUTURE OUTLOOK

5.4.1. Capacity Addition Program The capacity addition scenario had been dismal in all previous 5 year plans despite the Government of India (GoI) taking aggressive measures to push the capacity additions. The capacity additions in the earlier two plans missed the targets by nearly 50 per cent. GoI had set aggressive targets every time but achievement figures painted a dismal picture. 5.4.1.1. Actual capacity addition vis-a-vis the target in last 5 year plans The actual capacity addition vis-a-vis the target in last four 5 year plans is as under:
Graph 5-7: Actual Capacity Addition Vs Target Capacity Addition
70000 60000 50000 40000 40% 30000 30% 20000 10000 0 8th Plan Target (Source: CEA) 9th Plan Achieved 10th Plan 11th Plan (underway) 20% 10% 0% 80% 70% 60% 50%

Percentage Achieved

A number of Eleventh Plan projects are already behind schedule; CEA has revised the capacity addition in Eleventh Plan to 62,488 MW as against the Planning Commission target of 78,700 MW. As of 31st March, 2011, capacity addition of about 41GW has been achieved. 5.4.2. Demand Forecast (All India 17th EPS)

CEA in its 17th EPS has given detailed estimates of the growth in power demand, region-wise and for the country as a whole. The summary is given below:

Table 5-3: Long-term Projected Energy Requirement

Region Northern Western Southern Eastern North Eastern All India (Source: 17th EPS) Peak Load ( MW ) 2011-12 48,137 47,108 40,367 19,088 2,537 1,52,746 2016-17 66,583 64,349 60,433 28,401 3,760 2,18,209 2021-22 89,913 84,778 80,485 42,712 6,180 2,98,253 Energy Requirement ( MU ) 2011-12 2,94,841 2,94,860 2,53,443 1,11,802 13,329 9,68,659 2016-17 4,11,513 4,09,805 3,80,068 1,68,942 21,143 13,92,066 2021-22 5,56,768 5,50,022 5,11,659 2,58,216 36,997 19,14,508

According to the 17th EPS, India's peak demand will reach 152,746 MW with an energy requirement of 968 billion units (BUs) by the year 2012. By the year 2016-17, the peak demand will reach 218,209 MW and energy requirement will touch nearly 1,392 BUs. 5.4.3. Supply Forecast for All India at the end of the XIth Plan To cater to this demand, huge capacity addition is being planned. As of now, nearly 78,700 MW of new power plants are under various stages of implementation / conceptualisation. 5.4.3.1. Likely capacity additions during the XIth plan period (2007-12) A brief summary of the likely capacity additions fuel wise, sector wise and region th wise, during the XI plan period (2007-12) is given in the graph:
Graph 5-8: Likely capacity additions during the XIth plan - Fuel wise

Wind, 0% Hydro, 15627, 20% Nuclear, 3380, 4% Coal, 52850, 67% Hydro Nuclear Coal, 59693.4, 76% Wind Coal Diesel, 0% Gas Diesel Gas, 6843.4, 9%

(Source: CEA)

5.4.3.2. Sector wise capacity addition in the XIth Plan Sector wise capacity addition in the XIth Plan is as follows:
Graph 5-9: Likely capacity additions during the XIth plan - Sector wise

Central 36,874 47%

State 26,783 34%

State Private Central

Private 15,043 19%

(Source: CEA)

The Central Sector envisaged major capacity additions comprising 47% of the total followed by State Sector comprising 34%. The major capacity additions would be by NTPC, NHPC and DVC in the Central Sector. 5.4.3.3. Region-wise, Fuel-wise capacity addition in the XIth Plan The Region-wise, Fuel-wise capacity addition in the XIth Plan is as follows:
Graph 5-10: Likely capacity additions during the XIth plan - Region wise
25,000 20,210 20,000

15,000

13,000 10,886

14,060 Hydro Thermal Nuclear

10,000 7,488 5,000 440 Northern (Source: CEA) Western Southern Eastern North Eastern 1,170 0 1,094 0

2,940

3,151

2,724 1,537 0

In case the above planned capacity additions come up as per the envisaged schedule, the total installed capacity of the country will nearly reach 2,11,029 MW at the end of XIth plan. However, as witnessed in the past, the capacity addition targets were never achieved. Rather in the last two five year plans, the capacity addition targets were missed by nearly 50%. However, there could be some improvement in achieving the capacity addition targets during the current XIth plan, still it is felt that the same would be much below the targeted level and India would continue to be in power deficit assuming a capacity addition target of 60% during XIth Plan. Based on the above, it is expected that the total capacity addition during the XIth five year plan would be 47,220 MW (60% of the envisaged capacity for XIth plan, as against 50% added during Xth plan). Accordingly, the total available capacity at the end of FY 2012 would be 179,549 MW.

5.4.3.4. Capacity Utilization of existing Installed Capacity Total available Energy and available Peak Load against installed capacity for the period Oct 08 to Sep 09 has been tabulated below:
Table 5-4: Total Energy & Peak Load Availability Vs Installed Capacity
Month Installed Capacity (MW) Energy Availability (MU) PLF Peak Load Availability (MW) Peak Load Availability

Sep '09 Aug '09 July '09 June '09 May '09 Apr '09 Mar '09 Feb '09 Jan '09 Dec '08 Nov '08 Oct '08
Average (Source: CEA)

1,52,360 1,52,148 1,51,073 1,50,323 1,49,392 1,48,265 1,47,965 1,47,715 1,47,457 1,47,402 1,46,902 1,46,752

62,201 65,287 62,685 62,126 62,477 60,377 61,997 54,677 58,342 56,945 55,268 59,510

56.70% 59.60% 57.63% 57.40% 58.08% 56.56% 58.19% 51.41% 54.95% 53.66% 52.25% 56.32%
56.08%

1,01,852 99,277 96,282 96,871 95,033 97,355 96,785 94,896 93,198 91,022 91,068 94,634

66.85% 65.25% 63.73% 64.44% 63.61% 65.66% 65.41% 64.24% 63.20% 61.75% 61.99% 64.49%
64.23%

Based on above data, it is evident that the total available Energy and total available Peak Power is 56.08% and 64.23% of the installed capacity. However, considering GoI impetus on improving operation and maintenance, reduction in Transmission and Distribution loss and encouragement to Private players in Power sector, available Energy and available Peak Power considered for arriving at supply position by the end of XIth plan is 60% and 70% of the installed capacity respectively. 5.4.3.5. Projected demand and supply at the end of XIth five year plan (201112) Taking into consideration the above, the projected demand and supply position at the end of eleventh five year plan (2011-12) after factoring available Energy and available Peak Power at 57% and 70% of the installed capacity respectively is given below:

Table 5-5: Projected Demand & Supply Position at the end of XIth Five Year Plan
Peak Demand All India 1,52,746 (Source: CEA) Region (in MW) Peak Supply 142765 Deficit -9981 % -6.5 Energy Demand 968659 (in MU) Energy Supply 948836 Deficit -19823 % -2.0

The country shall face a peak power deficit of 27,000 MW and 72,536 million units in terms of energy supply at the end of XIth five year plan. 5.4.3.6. Region-wise demand and supply at the end of the XIth five year plan Following is the region-wise demand and supply position at the end of the XIth five year plan:
Table 5-6: Projected Demand & Supply Position at the end of XIth Five Year Plan
Region All India Northern Western Peak Demand 1,52,746 48,137 47,108 (in MW) Peak Supply 1,25,684 34,357 36,312 Deficit -27,062 -13,780 -10,796 % -17.72% -28.63% -22.92% Energy Demand 9,68,659 2,94,841 2,94,860 2,53,443 (in MU) Energy Supply 9,43,709 2,57,974 2,72,649 2,43,421 Deficit -24,949 -36,867 -22,210 -10,021 % -2.64% -14.29% -8.15% -4.12%

Southern 40,367 32,419 -7,948 -16.69% *Data for Eastern & North-eastern states not depicted. (Source: CEA)

The western region as well as the northern region together would have deficit of approximately 24,000 MW and 88,000 million units by the end of 11th Plan.

5.5. POWER SCENARIO

REGION WISE

5.5.1. Power Scenario in Northern India 5.5.1.1. Installed capacity-Sector Wise The total installed capacity in the northern region as on 31st March, 2010 is 42,189 MW. Details of the installed capacity in Northern region are given below:

Graph 5-11: Installed Capacity as on 3th April, 2011: Sector-wise

Central, 19007 MW, 40% State, 23902 MW, 51%

Private, 4079 MW, 9%

Most of the generating capacity is in the State Sector and the Private sector comprises only 9% of the total installed capacity. 5.5.1.2. Installed capacity- Fuel Wise
Graph 5-12: Installed Capacity as on 30th April, 2011: Fuel-wise

R.E.S., 6.74% Coal, 51.57%

Hydro, 29.42%

Coal, 60.40%

Nuclear, 3.45% (Source: CEA)

Diesel, 0.03%

Gas, 8.80%

Most of the generating capacity in the northern region is based on Thermal Power Plants, which comprises 51% of coal and gas comprises 9%, followed by Hydro (30%).

5.5.1.3. Demand-supply position of peak power The demand-supply position of peak power in Northern India over the last tan years is given below:
Graph 5-13: Historical Demand-Supply of Peak Power
45000 (3330) 40000 35000 30000 25000 20000 15000 10000 5000 0 9th Plan 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 End Energy Supply (MW) (Source: CEA) Energy Deficit (MW) (1854) (2203) (1546) (2709) (2954) (4872) (2967) (3530) (5720)

The peak power requirement during April- December, 2010 was 37,431 MW and the deficit was 3,330 MW. 5.5.1.4. Demand-supply position of peak power The demand-supply position of total energy in Northern India over the last nine years is given below:
Graph 5-14: Historical Demand-Supply of Total Energy

300000 (29570) (20795) 250000 200000 150000 100000 50000 0 9th Plan 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 End Energy Supply (MU) Energy Deficit (MU) (7973) (12392) (8852) (16140) (19980) (22139) (23650) (25153)

The energy deficit during April, 2010- March, 11 was 20,795 MU. 5.5.1.5. State-wise demand-supply position in Northern Region The state-wise demand-supply position in Northern Region for the period FY2010-11 is shown in the table below:
Table 5-7: State-wise Demand-Supply Position for the Period 2010-11 Peak Demand (MW) Chandigarh Delhi Haryana Himachal Pradesh Jammu and Kashmir Punjab Rajasthan Uttar Pradesh 301 4,810 6,142 1,278 2,369 9,399 7,729 11,082 Peak Peak Energy Gap Gap Requirement Gap (MW) (%) (MU) (MU) 0 -71 -568 -91 -798 -1,461 -287 -410 0.0% -1.5% -9.2% -7.1% -33.7% -15.5% -3.7% -3.7% 1,519 25,559 34,552 7,626 13,571 44,484 45,261 76,292 0 Gap (%) 0%

-66 -0.3% -1,926 -5.6% -262 -3.4% -3,390 -25.0% -2,685 -6.0% -425 -0.9% -11,446 -15.0%

Uttarakhand
(Source: CEA)

1,520

0%

9,850

-595 -6.0%

The northern region is facing peak power deficit of 3,330 MW while the energy shortage was 20,795 MU. The major States where the shortfall is occurring are Haryana, J&K, Punjab and Uttar Pradesh. The reason is due to industrialization and development around Delhi and extensive use of power in agriculture. 5.5.1.6. The demand forecast for Nothern Region as per 17th EPS As per 17th EPS, in 2011-12 Northern Region will have a peak demand of 48,137 MW while the energy requirement is expected to touch 2,94,892 MU. The State-wise demand forecast for Northern India is given below:
Table 5-8: State-wise Demand Forecast for Northern India
Peak Load (MW) 2011-12 Delhi Haryana Himachal Pradesh Jammu & Kashmir Punjab Rajasthan Uttar Pradesh Uttarankhand Chandigarh Total (Source: 17th EPS) 6,092 6,839 1,611 2,063 11,000 8,482 13,947 1,533 420 48,137 2016-17 8,729 9,375 2,194 2,790 14,441 11,404 19,623 2,085 602 66,583 Energy Requirement (MU) 2011-12 36,293 38,417 9,504 11,202 60,489 48,916 79,268 8,445 2,308 2,94,842 2016-17 52,762 54,305 13,136 15,272 82,572 67,767 1,10,665 11,668 3,367 4,11,514

The State of Uttar Pradesh, Punjab and Haryana would be the demand centres for peak power as well as energy. 5.5.1.7. Capacity Addition during the XIth five year plan: Likely capacity addition sector-wise and state-wise in the northern region during the XIth five year plan is given below:
Table 5-9: Likely capacity Addition During the XIth Plan
Hydro Thermal Coal Gas Diesel Total Nuclear Wind Total

State Private Central

964 1,792 4,732

5,870 2,680 2,730 11,280

1,720 0 0 1,720

0 0 0 0

7,590 2,680 2,730 13,000

0 0 440 440

0 0 0 0

8,554 4,472 7,902 20,928

Total 7,488 (Source: CEA)

The likely capacity addition during 11th Plan in Northern Region would be mainly in hydro and coal and the most of the additions would be in the State and Central Sector. Demand supply forecast for the Northern Region is based on success rate of 60% of the envisaged capacity addition in XIth Plan. 5.5.1.8. Demand-supply forecast for the Nothern Region in 2011-12 The demand-supply forecast for the Nothern Region in 2011-12 is depicted below:
Table 5-10: Demand-Supply Forecast for the Northern Region in 2011-12
Peak Demand (MW) Northern 48,137 (Source: CEA) Region Peak Supply (MW) 43790 Deficit --4347 % -9.0% Energy Need (MU) 2,94,841 Energy Supply (MU) 293501 Deficit -1340 % -0.5%

It may be observed from table above that Northern Region will have deficit in peak power as well as energy requirements at the end of eleventh five year plan (2012) to the tune of 9% and 0.5% respectively.

5.6. POWER SCENARIO IN UTTARAKHAND

5.6.1. The installed capacity in Uttarakhand The installed capacity in Uttarakhand was 2455.24 MW as on 31st March, 2010. The break-up of the same is given below:
Table 5-11: Installed Capacity as on 31st April, 2011 Thermal Sector Hydro Coal STATE PRIVATE 1252.15 400.00 0.00 0.00 Gas 0.00 0.00 Diesel 0.00 0.00 0.00 0.00 134.12 12.05 1386.27 412.05 Nuclear R.E.S. Total

CENTRAL Total
(Source: CEA)

304.03 1956.18

261.26 261.26

69.35 69.35

0.00 0.00

22.28 22.28

0.00 146.17

656.92 2455.24

Uttarakhand has an installed capacity of 2455.24 MW which is entirely in the State and Central Sector as of now and number of projects are being developed by private sector players which is likely to be commissioned in XIth Plan. 5.6.2. Demand and Supply position in Uttarakhand The historical demand and supply position of peak power and energy in Uttarakhand for the year 2005-06 onwards is given below:
Table 5-12: Historical Demand-Supply Position of Peak Power & Energy in Uttarakhand Peak Peak Deficit Energy Peak Deficit Energy Deficit Time Demand /Surplus Requirement /Surplus (%) /Surplus (MU) (MW) (MW) (MU) 2006 2007 2008 2009 2010 2010-11
(Source: CEA)

Energy Deficit /Surplus (%) -2.9% -6.0% -2.9% -1.2% -6.5% -6.0%

991 1108 1200 1267 1397 1,520

-134 -117 -50 0 -84 0

-13.5% -10.6% -4.2% 0.0% -6.0% 0

5155 5957 7047 7762 8904 9,850

-147 -358 -202 -93 -583 -595

The energy requirement has gone up from 5155 MU in the FY 2005-06 to 8921 MU in FY 2009-10. Sikkim is a net exporter of energy from April to October while it is an importer of energy for the balance period. 5.6.3. Peak load demand and energy requirement forecasts The forecasts for the peak load demand and energy requirement for the state of Sikkim are given below:
Table 5-13: Demand-Supply Forecast for the Northern Region in 2011-12

Peak Peak Demand Supply (MW) (MW) 1533 2305 (Source: CEA)

Deficit 772

% 50.4%

Energy Need (MU) 8445

Energy Supply (MU) 12789

Deficit 4344

% 51.4%

The above forecast was done by CEA in its report on Seventeenth Electric Power Survey of India published in the month of March, 2007. The actual data used for forecast was for the period 2004-05 only and balance projections were done by extrapolation, however, vigorous industrial development has happened after the aforesaid period. Hence, despite the rise in demand for energy, the shortfall in peak power and energy availability shall prevail to continue in the state of Sikkim. In view of the foregoing, the peak power requirement by the end of 2011-12 would be much above 93 MW and the corresponding energy requirement would be above 320 MU. State of Sikkim would be power deficit State once the industrial development activities peak up. However, the power generation trend in the State indicates that Sikkim is a net exporter from April October and net importer during November March on account of low generation of hydro in winter and increase in demand of power for heating during winter.

5.7. POWER TRADING IN INDIA

The power requirement of a region can be gauged from the power transactions done through bilateral trading, energy exchange and unscheduled interchange. The power transactions done by the various regions are depicted below:
(million units)

Table 5-14: Actual Net Power Position in India - Export (-) / Import (+)
Month Aug '08 Sep '08 Oct '08 Nov '08 Dec '08 Jan '09 Feb '09 Mar '09 April '09 May '09 June '09 (Source: CERC) Northern 280 745 723 215 90 889 376 191 -10 521 1,126 Western 207 131 373 754 652 -179 -205 -482 -562 -486 -6 Southern 669 494 347 532 939 650 874 1,084 1,215 832 -125 Eastern -360 -510 -526 -587 -768 -410 -384 -181 -320 -138 -530 North Eastern -302 -230 -180 -97 -53 -25 2 57 40 -11 -51 Total 494 630 738 817 860 924 663 669 364 718 413

From the table above, it emerges that all regions are importing power throughout the period of August 08 to June 09. While discussing the peak demand and energy requirement it has been observed that northern region, western region and southern region are the major power deficit region and will remain so in future on account of economic development taking place in aforesaid regions. 5.7.1. Sale of Power The power generated from CHEPP is proposed to be sold as merchant power, i.e. through short-term PPA. The power trading done under short term PPA is through Bilateral trade (3.78%), Unscheduled Interchanges (3.05%) and through newly established Power Exchanges (0.59%). The graphical representation of power traded through various options available under short term agreements for the period April, 09 to March 10 is depicted below:

Graph 5-15: Power traded through various options under short-term agreements
Mar/10 Feb/10 Jan/10 Dec/09 Nov/09 Oct/09 Sep/09 Aug/09 Jul/09 Jun/09 May/09 Apr/09 0.00% 1.00% 2.00% 3.00% % of Generation (Source: CERC) 4.00% 5.00% 6.00% UI Exchange Bilateral

The average weighted price for power traded through short term agreements works out to Rs. 5.71 per unit. The average weighted price for transaction through Bilateral Trade, Energy Exchanges and UI works out to Rs.6.41, Rs.5.73 and Rs. 4.99 respectively. The detailed graphical presentation for the per-unit rate for short-term transactions for the year 2009 is depicted below:
Graph 5-16: Per-unit rate for short-term transactions
12 10 8 Bilateral 6 4 2 0 PX (IEX) PX (PXIL) UI (New gRID) UI (SR Grid)

It is evident from the graph above that the weighted Weighted Average Price of Electricity Transacted through Licensees and PXs is Rs. 5.19. Thus, considering the energy deficit market of India, particularly the Northern, Western Regions and Southern Region the power generated from the Chuzachen Hydro-electric Project can be easily traded at a minimum weighted price of Rs. 5.00 per unit. Recently, CERC, on experimental basis, has introduced a cap of Rs. 8.00 per unit for sale of power through energy exchanges. However, even after the introduction of the aforesaid norms the power continues to trade around the Rs. 5.00 mark. 5.7.2. Frequency Spectrum The maximum, minimum and average frequencies for the NEW (Northern, Eastern & Western) regions for the period from July 08 to August 09 are depicted below:

Graph 5-17: Frequency data for the NEW regions

51.00 50.50 50.00 49.50 49.00 48.50 48.00 47.50 July Aug Sep '08 '08 '08 Oct Nov Dec '08 '08 '08 Max (Source: WRPC) Jan '09 Min Feb Mar' Apr' May Jun Jul '09 Aug '09 09 09 '09 '09 '09 Average

The frequency profile in different frequency bands for the NEW regions for the period July 08 to August 09 is depicted below:
Graph 5-18: Frequency profile for the NEW regions
70.00 Aug '09 60.00 50.00 40.00 30.00 20.00 10.00 Below 48.50 - 48.80 - 49.20 - 49.50 - 49.80 - 50.20 - 50.30 - 51.00 - Above 48.50 48.80 49.20 49.50 49.80 50.20 50.30 51.00 51.50 51.50 (Source: WRPC) Jul '09 Jun '09 May '09 Apr' 09 Mar' 09 Feb '09 Jan '09 Dec '08 Nov '08 Oct '08 Sep '08 Aug '08

The maximum, minimum and average frequencies for the SR (Southern) region for the period from July 08 to August 09 are depicted below:
Graph 5-19: Frequency data for the SR region
51.5 51 50.5 50 49.5 49 48.5 48 47.5 47 Maximum Minimum Average

(Source: SRLCD)

The frequency profile in different frequency bands for the SR region for the period July 08 to August 09 is depicted below:
Graph 5-20: Frequency profile for the SR region
100 90 80 70 60 50 40 30 20 10 0 Below 48.5 48.5 - 49 49 - 49.5 49.5 - 50.2 Above 50.2 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11

(Source: SRLCD)

After introduction of Availability Based Tariff (ABT), frequency profile has improved and frequency lies for most of time in the frequency band of 49.5 Hz to 49.8 Hz for the NEW Regions. As for the SR Region, the frequency lies mostly in the band of 49.20 Hz to 50.30 Hz. The discipline in grid operation is due to the deterrent of paying UI charges, however, it does not imply that the power requirement has been fulfilled and the country is deficit in energy and peaking power.

5.8. POWER OFFTAKE ARRANGEMENT

GIL and Tata Power Trading Company Limited (TPTCL) have entered into a Power Purchase Agreement (PPA) for sale of power from CHEPP with a net tariff of Rs. 4.25 per unit on 05.05.2009. The brief feature of the PPA is given below and the terms and conditions of the PPA are provided in Annexure XVIII. Salient features of the PPA are given below:
Parameter Capacity tied-up Terms 85% of the actual generated power out of the installed capacity of 110 MW. Average annual base tariff of Rs.4.25 per kWh at delivery point for a block of 5 years Trading margin:-3% of the sales price or trading margin as per CERC whichever is lower for electricity sold on short term basis. -2% of the sales price or trading margin as per CERC whichever is lower for electricity sold on long term basis Upside Sharing- Any upside from the base tariff for sale on short term basis to be shared in the ratio of 87.5:12.5 between GIL and TPTCL subject to CERC regulations. 10 years from COD No take or pay obligation. Both the parties shall endeavour to promote the sale of electricity on short term basis. Off-take the contracted capacity for which open access approval has been granted Payment of transmission charges beyond delivery point Obtain and maintain short term open access

Tariff and trading margin

Term of Agreement

TPTCL s obligations

TPTCL is a wholly owned subsidiary of India's largest private sector power utility, The Tata Power Company Limited. It is one of the leading power trading companies in India catalyzing development of Indian electricity market. TPTCL has been buying and selling

power from various State Utilities, Captive Power Plants and Independent Power Producers across all the regions in India by entering into long-term/ medium-term and short-term Agreements. TPTCL has grown at a compounded average growth rate exceeding 100% since inception. It has taken an important position amongst the various trading companies and is recognized as an efficient and reliable trading company.

The revenue & power sale value for FY 05 to FY 09 is given below:

Particulars FY05 FY06 FY07 FY08 Sales (MUs) 76 675 1205 1711 Revenue (Crs.) 20 208 604 896

The detailed profile of TPTCL is given in Annexure XIX.

5.9. CERTIFIED EMIISSION REDUCTION

The CHEPP will produce 484.1MU of electrical energy annually with the net energy to the grid being 469.5 MU after deducting 0.5% for auxiliary consumption, 0.5% for transformation losses and 2% for transmission losses. According to the Tool to calculate the emission factor for an electricity system which is referred to in the methodology ACM0002, the baseline emissions are the amount of electricity produced times the grid emission factor which is the Combined Margin (CM), calculated as the simple average of the Operating Margin (OM) emission factor and the Build Margin (BM) emission factor. The CHEPP is expected to export 469.5 MU power to India s Eastern Power Grid. The Project will reduce 4,83,526 tonnes of CO2 equivalent of emissions of greenhouse gases (GHGs) annually at a combined Margin value of 1.0297 tCO2/MWh. Financial Benefit: The CER entitlement at 4.83 lakh per year would provide scope of additional funding through forward selling of the entitlements. The project would be entitled to additional cash flows of approximately Rs. 25 crore annually calculated at a conservative rate of Euro 8 per CER (1 Euro @ Rs. 65).

The revenue from the CER has not been considered in financial analysis, however, it is imperative to mention that in the event of delay in commissioning of the project beyond August, 2010, GIL is having provisions for cash flow to meet shortfalls if any. Current Status The Project Design Document (PDD) has been duly validated by Designated National Authority (DNA) and Designated Operational Entity (DOE) and is due to be uploaded on the site of the Executive Board of the United Nations Framework Convention on Climate Change (UNFCCC).

Activity wise status is given below:

S.N 01 Activity Appointment of Consultant Registration and sale of CERs for CDM Agency M/s Zenith Energy Services Pvt. Ltd., Hyderabad MoEF, GoI TUV-Nord Carbon Services, Germany TUV-Nord Carbon Services, Germany UNFCCC Status / Completion Date 06.09.2007

02 03

Validation by Designated National Authority (DNA) Appointment of Designated Operational Entity (DOE) Validation by DOE Registration at UNFCCC

Completed 25.06.2008

04 05

Completed Expected by Jan 2010

The CHEPP is expected to be registered at UNFCCC by January, 2010.