Chapter 5 Updated

8/4/2019 Chapter 5 Updated

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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:

(Source: CEA)

(9252) (9945)(9508) (10254)

(11463)(13897)

(18073) (13124 )(15748 )

(12151)

0 MW

20000 MW

40000 MW

60000 MW

80000 MW

100000 MW

120000 MW

140000 MW

160000 MW

9th Plan

End

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Peak Supply (MW) Peak Deficit (MW)

Graph 5-1: Peak Supply & Deficit Position as of 31st March, 2011


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5.3.1.2.Total Energy Requirement& DeficitPosition

The total Energy requirement in India for the past few years is as follows:

(Source: CEA)

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.Regionwise Peak DemandandEnergy Requirement& Shortages

The region wise power situation for the five regions in India is given below:

Peak Energy

Peak Demand

(MW)Gap (MW)

Shortage

(%)

Energy Requirement

(MU)Gap (MU)

Shortage

(%)

Northern 37431 -3330 -8.9% 258780 -20795 -8.0%

Western 40798 -5979 -14.7 % 268488 -35617 -13.3%

Southern 33256 -2135 -6.4 % 229904 -11923 -5.2%

Eastern 13767 -682 -5.0 % 94558 -4032 -4.3%

3918748093

39866 43258

52735 6609273336 86001

83950

73236

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1000000

9th Plan

End

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Peak Supply (MU) Deficit (MU)

Graph 5-2: Total Energy Availability & Deficit Position as of 31st

March, 2011

Table 5-1: Region-wise power situation 2010-2011


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N Eastern 1913 -353 -18.5 % 9861 -869 -8.8%

All India 1222287 -15418 -12.1 861591 -73236 -8.5%

(Source: CEA)

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 installedcapacity

The existing Sector-wise installed capacity (MW) as on 31stMarch, 2011 is given below:

Graph 5-3:Installed Capacity (MW) as on April 30, 2011: Sector-wise

(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.

State

Sector, 82452.58

MW, 48%

Central

Sector, 54412.63

MW, 31%

Private

Sector, 36761.19

MW, 21%


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5.3.2.2.Regionwise installedcapacity(MW)

Existing region wise installed capacity (MW) as on 30th April, 2011 is depicted below:

(Source: CEA)

Chhattisgarh, Maharashtra and Madhya Pradesh have coal reserves and most of thepower 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 installedcapacity(MW)

The fuel wise installed capacity (MW) as on 31stMarch, 2011 is depicted below:

46988.55 MW

53697.25 MW

48073.30 MW

23196.34 MW

2329.34 MW

76.12 MW

Northern

Western

SouthernEastern

North Eastern

Islands

Graph 5-4: Existing Installed Capacity (MW) as on 30th April, 2011 : Region-wise

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


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(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.Regionwise andFuel wise installedcapacity(MW)

The region wise and fuel wise installed capacity is given below:

RegionThermal

Nuclear Hydro R.E.S. TotalCoal Gas DSL Total

Northern 24232.50 4134.76 12.99 28380.25 1620.00 13822.75 3165.55 46988.55

Western 31130.50 7903.81 17.48 39051.79 1840.00 7447.50 5357.96 53562.25

Southern 20482.50 4690.78 939.32 26112.60 1320.00 11299.03 9341.67 47473.30

Eastern 18747.88 190.00 17.20 18955.08 0.00 3882.12 359.64 23196.84

N.Eastern 60.00 787.00 142.74 989.74 0.00 1116.00 223.60 2329.34

Islands 0.00 0.00 70.02 70.02 0.00 0.00 6.10 76.12

Hydro, 22%

Nuclear, 3%

R.E.S., 11%

Coal, 54%

Gas, 10%Oil, 1%

Thermal, 65%

Table 5-2: Existing Installed Capacity (MW) as on 30th April, 2011


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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.Growthratesininstalledcapacity(MW)

Growth rates in installed capacity are depicted in the following graph:

(Source: CEA)

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.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

0 MW

20000 MW

40000 MW

60000 MW

80000 MW

100000 MW

120000 MW

140000 MW

160000 MW

180000 MW

200000 MW

Installed Capacity YoY Growth(%)

Graph 5-6: Historical Growth in Installed Capacity


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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 capacityadditionvis-a-visthe targetin last5 yearplans

The actual capacity addition vis-a-vis the target in last four 5 year plans is as under:

(Source: CEA)

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 hasbeen 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:

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

10000

20000

30000

40000

50000

60000

70000

8th Plan 9th Plan 10th Plan 11th Plan (underway)

Target Achieved Percentage Achieved

Graph 5-7: Actual Capacity Addition Vs Target Capacity Addition


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RegionPeak Load ( MW ) Energy Requirement ( MU )

2011-12 2016-17 2021-22 2011-12 2016-17 2021-22

Northern 48,137 66,583 89,913 2,94,841 4,11,513 5,56,768

Western 47,108 64,349 84,778 2,94,860 4,09,805 5,50,022

Southern 40,367 60,433 80,485 2,53,443 3,80,068 5,11,659

Eastern 19,088 28,401 42,712 1,11,802 1,68,942 2,58,216

North Eastern 2,537 3,760 6,180 13,329 21,143 36,997

All India 1,52,746 2,18,209 2,98,253 9,68,659 13,92,066 19,14,508

(Source: 17th EPS)

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.Likelycapacityadditionsduring the XIth planperiod(2007-12)

A brief summary of the likely capacity additions fuel wise, sector wise and region

wise, during the XIth plan period (2007-12) is given in the graph:

Table 5-3: Long-term Projected Energy Requirement

Graph 5-8: Likely capacity additions during the XIth plan - Fuel wise


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(Source: CEA)

5.4.3.2.Sectorwise capacityadditioninthe XIthPlan

Sector wise capacity addition in the XIth Plan is as follows:

(Source: CEA)

Hydro, 15627, 20%

Nuclear, 3380, 4%

Wind, 0%

Coal, 52850, 67%

Gas, 6843.4, 9%

Diesel, 0%

Coal, 59693.4, 76%

Hydro

Nuclear

Wind

Coal

Gas

Diesel

State

26,783

34%

Private

15,043

19%

Central

36,874

47%

State

Private

Central

Graph 5-9: Likely capacity additions during the XIth plan - Sector wise


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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 capacityadditioninthe XI

th

Plan

The Region-wise, Fuel-wise capacity addition in the XIth Plan is as follows:

(Source: CEA)

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 XI th 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.

7,488

1,170 1,094

3,151 2,724

13,000

20,210

10,886

14,060

1,537440 0

2,940

0 0-

5,000

10,000

15,000

20,000

25,000

Northern Western Southern Eastern North Eastern

Hydro

Thermal

Nuclear

Graph 5-10: Likely capacity additions during the XIth plan - Region wise


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5.4.3.4.CapacityUtilizationof existing InstalledCapacity

Total available Energy and available Peak Load against installed capacity for the period

Oct08 to Sep09 has been tabulated below:

MonthInstalled

Capacity (MW)Energy

Availability (MU)PLF

Peak LoadAvailability (MW)

Peak LoadAvailability

Sep '09 1,52,360 62,201 56.70% 1,01,852 66.85%

Aug '09 1,52,148 65,287 59.60% 99,277 65.25%

July '09 1,51,073 62,685 57.63% 96,282 63.73%

June '09 1,50,323 62,126 57.40% 96,871 64.44%

May '09 1,49,392 62,477 58.08% 95,033 63.61%

Apr '09 1,48,265 60,377 56.56% 97,355 65.66%

Mar '09 1,47,965 61,997 58.19% 96,785 65.41%Feb '09 1,47,715 54,677 51.41% 94,896 64.24%

Jan '09 1,47,457 58,342 54.95% 93,198 63.20%

Dec '08 1,47,402 56,945 53.66% 91,022 61.75%

Nov '08 1,46,902 55,268 52.25% 91,068 61.99%

Oct '08 1,46,752 59,510 56.32% 94,634 64.49%

Average 56.08% 64.23%

(Source: CEA)

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.Projecteddemandandsupplyatthe endof XIth five yearplan(2011-12)

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 5-4: Total Energy & Peak Load Availability Vs Installed Capacity


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Region(in MW)

%(in MU)

%PeakDemand

PeakSupply

DeficitEnergy

DemandEnergySupply

Deficit

All India 1,52,746 142765 -9981 -6.5 968659 948836 -19823 -2.0

(Source: CEA)

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 demandandsupplyatthe endofthe XIth five yearplan

Following is the region-wise demand and supply position at the end of the XIth five year

plan:

Region(in MW)

%(in MU)

%PeakDemand

PeakSupply

DeficitEnergy

DemandEnergySupply

Deficit

All India 1,52,746 1,25,684 -27,062 -17.72% 9,68,659 9,43,709 -24,949 -2.64%

Northern 48,137 34,357 -13,780 -28.63% 2,94,841 2,57,974 -36,867 -14.29%

Western 47,108 36,312 -10,796 -22.92% 2,94,860 2,72,649 -22,210 -8.15%

Southern 40,367 32,419 -7,948 -16.69% 2,53,443 2,43,421 -10,021 -4.12%

*Data for Eastern & North-eastern states not depicted.(Source: CEA)

The western region as well as the northern region together would have deficit ofapproximately 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 31stMarch, 2010 is 42,189 MW.

Details of the installed capacity in Northern region are given below:

Table 5-5: Projected Demand & Supply Position at the end of XIth Five Year Plan

Table 5-6: Projected Demand & Supply Position at the end of XIth Five Year Plan


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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.Installedcapacity-FuelWise

(Source: CEA)

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%).

State, 23902

MW, 51%

Private, 4079

MW, 9%

Central, 19007

MW, 40%

Nuclear, 3.45%

Hydro, 29.42%

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

Gas, 8.80%Diesel, 0.03%

Coal, 60.40%

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

Graph 5-12: Installed Capacity as on 30th April, 2011: Fuel-wise


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5.5.1.3.Demand-supplypositionofpeakpower

The demand-supply position of peak power in Northern India over the last tan years is

given below:

(Source: CEA)

The peak power requirement during April- December, 2010 was 37,431 MW and the

deficit was 3,330 MW.

5.5.1.4.Demand-supplypositionofpeakpower

The demand-supply position of total energy in Northern India over the last nine years is

given below:

(1854) (2203) (1546)

(2709)(2954)

(4872)(2967) (3530)

(5720)

(3330)

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

9th Plan

End

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Energy Supply (MW) Energy Deficit (MW)

Graph 5-13: Historical Demand-Supply of Peak Power

Graph 5-14: Historical Demand-Supply of Total Energy


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The energy deficit during April, 2010- March, 11 was 20,795 MU.

5.5.1.5.State-wise demand-supplypositioninNorthernRegion

The state-wise demand-supply position in Northern Region for the period FY2010-11 is

shown in the table below:

Peak

Demand(MW)

Peak

Gap(MW)

Peak

Gap(%)

Energy

Requirement(MU) Gap(MU) Gap(%)

Chandigarh 301 0 0.0% 1,519 0 0%

Delhi 4,810 -71 -1.5% 25,559 -66 -0.3%

Haryana 6,142 -568 -9.2% 34,552 -1,926 -5.6%

Himachal Pradesh 1,278 -91 -7.1% 7,626 -262 -3.4%

Jammu and Kashmir 2,369 -798 -33.7% 13,571 -3,390 -25.0%

Punjab 9,399 -1,461 -15.5% 44,484 -2,685 -6.0%

Rajasthan 7,729 -287 -3.7% 45,261 -425 -0.9%

Uttar Pradesh 11,082 -410 -3.7% 76,292 -11,446 -15.0%

(7973) (12392)

(8852)(16140)

(19980)(22139)

(23650)(25153)

(29570) (20795)

0

50000

100000

150000

200000

250000

300000

9th Plan

End

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Energy Supply (MU) Energy Deficit (MU)

Table 5-7: State-wise Demand-Supply Position for the Period 2010-11


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Uttarakhand 1,520 0 0% 9,850 -595 -6.0%

(Source: CEA)

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 demandforecastforNothernRegionasper17th 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:

Peak Load (MW) Energy Requirement (MU)

2011-12 2016-17 2011-12 2016-17

Delhi 6,092 8,729 36,293 52,762

Haryana 6,839 9,375 38,417 54,305

Himachal Pradesh 1,611 2,194 9,504 13,136

Jammu & Kashmir 2,063 2,790 11,202 15,272

Punjab 11,000 14,441 60,489 82,572

Rajasthan 8,482 11,404 48,916 67,767

Uttar Pradesh 13,947 19,623 79,268 1,10,665Uttarankhand 1,533 2,085 8,445 11,668

Chandigarh 420 602 2,308 3,367

Total 48,137 66,583 2,94,842 4,11,514

(Source: 17th EPS)

The State of Uttar Pradesh, Punjab and Haryana would be the demand centres for peak

power as well as energy.

5.5.1.7.CapacityAdditionduring the XIth five yearplan:

Likely capacity addition sector-wise and state-wise in the northern region during the XIth

five year plan is given below:

HydroThermal

Nuclear Wind TotalCoal Gas Diesel Total

Table 5-8: State-wise Demand Forecast for Northern India

Table 5-9: Likely capacity Addition During the XIth Plan


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State 964 5,870 1,720 0 7,590 0 0 8,554

Private 1,792 2,680 0 0 2,680 0 0 4,472

Central 4,732 2,730 0 0 2,730 440 0 7,902

Total 7,488 11,280 1,720 0 13,000 440 0 20,928

(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-supplyforecastforthe NothernRegionin2011-12

The demand-supply forecast for the Nothern Region in 2011-12 is depicted below:

RegionPeak

Demand(MW)

PeakSupply(MW)

Deficit %EnergyNeed(MU)

EnergySupply(MU)

Deficit %

Northern 48,137 43790 --4347 -9.0% 2,94,841 293501 -1340 -0.5%

(Source: CEA)

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:

Sector HydroThermal

Nuclear R.E.S. TotalCoal Gas Diesel

STATE 1252.15 0.00 0.00 0.00 0.00 134.12 1386.27

PRIVATE 400.00 0.00 0.00 0.00 0.00 12.05 412.05

Table 5-10: Demand-Supply Forecast for the Northern Region in 2011-12

Table 5-11: Installed Capacity as on 31st April, 2011


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CENTRAL 304.03 261.26 69.35 0.00 22.28 0.00 656.92

Total 1956.18 261.26 69.35 0.00 22.28 146.17 2455.24

(Source: CEA)

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:

Time

Peak

Demand

(MW)

Peak Deficit

/Surplus

(MW)

Peak Deficit

/Surplus (%)

Energy

Requirement

(MU)

Energy Deficit

/Surplus (MU)

Energy Deficit

/Surplus (%)

2006 991 -134 -13.5% 5155 -147 -2.9%

2007 1108 -117 -10.6% 5957 -358 -6.0%

2008 1200 -50 -4.2% 7047 -202 -2.9%

2009 1267 0 0.0% 7762 -93 -1.2%

2010 1397 -84 -6.0% 8904 -583 -6.5%

2010-11 1,520 0 0 9,850 -595 -6.0%

(Source: CEA)

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 5-12: Historical Demand-Supply Position of Peak Power & Energy in

Uttarakhand

Table 5-13: Demand-Supply Forecast for the Northern Region in 2011-12


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PeakDemand

(MW)

PeakSupply(MW)

Deficit %Energy

Need (MU)

EnergySupply(MU)

Deficit %

1533 2305 772 50.4% 8445 12789 4344 51.4%

(Source: CEA)

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)

Month Northern Western Southern EasternNorth

EasternTotal

Aug '08 280 207 669 -360 -302 494

Sep '08 745 131 494 -510 -230 630

Oct '08 723 373 347 -526 -180 738

Nov '08 215 754 532 -587 -97 817

Dec '08 90 652 939 -768 -53 860

Jan '09 889 -179 650 -410 -25 924Feb '09 376 -205 874 -384 2 663

Mar '09 191 -482 1,084 -181 57 669

April '09 -10 -562 1,215 -320 40 364

May '09 521 -486 832 -138 -11 718

June '09 1,126 -6 -125 -530 -51 413

(Source: CERC)

Table 5-14: Actual Net Power Position in India - Export (-) / Import (+)


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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 inaforesaid 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:

(Source: CERC)

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00%

Apr/09

May/09

Jun/09

Jul/09

Aug/09

Sep/09

Oct/09

Nov/09

Dec/09

Jan/10

Feb/10

Mar/10

% of Generation

UI

Exchange

Bilateral

Graph 5-15: Power traded through various options under short-termagreements


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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:

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:

0

2

4

6

8

10

12

Bilateral

PX (IEX)

PX (PXIL)

UI (New gRID)

UI (SR Grid)

Graph 5-16: Per-unit rate for short-term transactions


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(Source: WRPC)

The frequency profile in different frequency bands for the NEW regions for the period

July 08 to August 09 is depicted below:

(Source: WRPC)

47.50

48.00

48.50

49.00

49.50

50.00

50.50

51.00

Aug

'09

Jul '09Jun

'09

May

'09

Apr'

09

Mar'

09

Feb

'09

Jan

'09

Dec

'08

Nov

'08

Oct

'08

Sep

'08

Aug

'08

July

'08

Max Min Average

-

10.00

20.00

30.00

40.00

50.00

60.00

70.00

Below

48.50

48.50 -

48.80

48.80 -

49.20

49.20 -

49.50

49.50 -

49.80

49.80 -

50.20

50.20 -

50.30

50.30 -

51.00

51.00 -

51.50

Above

51.50

Aug '09Jul '09

Jun '09

May '09

Apr' 09

Mar' 09

Feb '09

Jan '09

Dec '08

Nov '08

Oct '08

Sep '08

Aug '08

Graph 5-17: Frequency data for the NEW regions

Graph 5-18: Frequency profile for the NEW regions


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The maximum, minimum and average frequencies for the SR (Southern) region for the

period from July 08 to August 09 are depicted below:

(Source: SRLCD)

The frequency profile in different frequency bands for the SR region for the period July

08 to August 09 is depicted below:

47

47.5

48

48.5

49

49.5

50

50.5

51

51.5

Maximum

Minimum

Average

0

10

20

30

40

50

60

70

80

90

100

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

Graph 5-19: Frequency data for the SR region

Graph 5-20: Frequency profile for the SR region


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(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 Terms

Capacity tied-up85% of the actual generated power out of the installed capacity of 110MW.

Tariff and tradingmargin

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 lowerfor electricity sold on short term basis.-2% of the sales price or trading margin as per CERC whichever is lowerfor electricity sold on long term basis Upside Sharing- Any upside from the base tariff for sale on short termbasis to be shared in the ratio of 87.5:12.5 between GIL and TPTCLsubject to CERC regulations.

Term of Agreement 10 years from COD

TPTCLs obligations

No take or pay obligation. Both the parties shall endeavour to promotethe sale of electricity on short term basis. Off-take the contracted capacity for which open access approval hasbeen granted Payment of transmission charges beyond delivery point Obtain and maintain short term open access

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


25/26

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 Sales (MUs) Revenue (Crs.)

FY05 76 20

FY06 675 208

FY07 1205 604

FY08 1711 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 Indias 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).


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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 Activity Agency Status / CompletionDate

01 Appointment of Consultant for CDMRegistration and sale of CERs

M/s Zenith EnergyServices Pvt. Ltd.,Hyderabad

06.09.2007

02 Validation by Designated NationalAuthority (DNA)

MoEF, GoI Completed

03 Appointment of Designated Operational

Entity (DOE)

TUV-Nord CarbonServices, Germany

25.06.2008

04 Validation by DOE TUV-Nord CarbonServices, Germany

Completed

05 Registration at UNFCCC UNFCCC Expected by Jan2010

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

Documents

Chapter 5 Updated