Decoding Indian Power Sector

Section I: Snapshot

Overview India is third largest producer and fourth largest consumer of power in the world. India’s power sector is one of the most diversified in the world. Sources of power generation range 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. Electricity demand in the country has 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, massive addition to the installed generating capacity is required. I

Market Size Indian power sector is undergoing a significant change that has redefined the industry outlook. Sustained economic growth continues to drive electricity demand in India. The Government of India’s focus on attaining ‘Power for all’ has accelerated capacity addition in the country. At the same time, the competitive intensity is increasing at both the market and supply sides (fuel, logistics, finances, and manpower). Total installed capacity of power stations in India stood at 346.62 Gigawatt (GW) as of November 2018.

Investment Scenario Between April 2000 and June 2018, the industry attracted US$ 14.18 billion in Foreign Direct Investment (FDI), accounting for 3.64 per cent of total FDI inflows in India. Some major investments and developments in the Indian power sector are as follows: • In November 2018, Renascent Power Ventures Pte Ltd acquired 75.01 per cent stake in Prayagraj Power Generation Company Limited (PPGCL) for US$ 854.94 million. • In August 2018, Kohlberg Kravis Roberts & Co (KKR) acquired Ramky Enviro Engineers Limited for worth US$ 530 million. • In April 2018 ReNew Power made the largest M&A deal by acquiring Ostro Energy for US$ 1,668.21 million. the world as of August 2018. India is world's third largest producer and fourth largest consumer of electricity in the world as of August 2018. Government Initiatives The Government of India has identified power sector as a key sector of focus so as to promote sustained industrial growth. Some initiatives by the Government of India to boost the Indian power sector: • As of September 2018, a draft amendment to Electricity Act, 2003 has been introduced. It discusses separation of content & carriage, direct benefit transfer of subsidy, 24*7 Power supply is an obligation, penalisation on violation of PPA, setting up Smart Meter and Prepaid Meters along with regulations related to the same. • Ujwal Discoms Assurance Yojana (UDAY) was launched by the Government of India to encourage operational and financial turnaround of State-owned Power Distribution Companies (DISCOMS), with an aim to reduce Aggregate Technical & Commercial (AT&C) losses to 15 per cent by FY19. • As of August 2018, the Ministry of New and Renewable Energy set solar power tariff caps at Rs 2.50 (US$ 0.04) and Rs 2.68 (US$ 0.04) unit for developers using domestic and imported solar cells and modules, respectively. • The Government of India approved National Policy on Biofuels – 2018, the expected benefits of this policy are health benefits, cleaner environment, employment generation, reduced import dependency, boost to infrastructural investment in rural areas and additional income to farmers.

Achievements Following are the achievements of the government in the past four years: • India’s rank jumped to 24 in 2018 from 137 in 2014 on World Bank’s Ease of doing business - "Getting Electricity" ranking. • Energy deficit reduced to 0.7 per cent in FY18 from 4.2 per cent in FY14. • As of April 28, 2018, 100 per cent village electrification achieved under Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY).

The Road Ahead The Government of India has released its roadmap to achieve 175 GW capacity in renewable energy by 2022, which includes 100 GW of solar power and 60 GW of wind power. The Union Government of India is preparing a 'rent a roof' policy for supporting its target of generating 40 gigawatts (GW) of power through solar rooftop projects by 2022. Coal-based power generation capacity in India, which currently stands at 190.29*GW is expected to reach 330-441 GW by 2040. India could become the world's first country to use LEDs for all lighting needs by 2019, thereby saving Rs 40,000 crore (US$ 6.23 billion) on an annual basis. All the states and union territories of India are on board to fulfil the Government of India's vision of ensuring 24x7 affordable and quality power for all by March 2019, as per the Ministry of Power and New & Renewable Energy, Government of India.

Section II : Organizations in Indian Power Sector

Ministry of Power The Ministry is concerned with perspective planning, policy formulation, processing of projects for investment decision, monitoring of the implementation of power projects, training and manpower development and the administration and enactment of legislation in regard to thermal, hydro power generation, transmission and distribution. The Ministry of Power is responsible for the Administration of the Electricity Act, 2003, the Energy Conservation Act, 2001 and to undertake such amendments to these Acts, as may be necessary from time to time, in conformity with the Government's policy objectives.

The Power Distribution Sector The Power distribution to various states is done through the utilities. Following are the utilities in India

Sr no Utility 1 Dakshin Gujarat Vij Company Limited 2 Company Limited 3 Company Limited 4 Company Limited 5 Chamundeshwari Electricity Supply Corporation Ltd. 6 Bangalore Electricity Supply Company Limited 7 State Electricity Distribution Company Ltd 8 Mangalore Electricity Supply Company Limited 9 Punjab State Power Corporation Limited 10 Hubli Electricity Supply Company Limited 11 North Bihar Power Distribution Co. Ltd. 12 Gulbarga Electricity Supply Company Limited 13 South Bihar Power Distribution Co. Ltd. 14 West Bengal State Electricity Distribution Company Ltd 15 Tamil Nadu Generation and Distribution Corporation 16 Assam Power Distribution Company Limited 17 Kanpur Electricity Supply Company Limited 18 Paschimanchal Vidyut Vitaran Nigam Limited 19 Madhyanchal Vidyut Vitran Nigam Limited 20 Purvanchal Vidyut Vitaran Nigam Limited 21 Dakshinanchal Vidyut Vitran Nigam Limited 22 Uttarakhand Power Corporation Limited 23 Himachal Pradesh State Electricity Board Limited 24 Eastern Power Distribution Company of AP Limited 25 Kerala State Electricity Board Limited 26 Southern Power Distribution Company of AP Limited 27 Southern Power Distribution Company of Telengana Limited 28 Madhya Pradesh Pash. Kshetra Vidyut Vitaran Co Ltd. 29 Northern Power Distribution Company of Telangana Limited 30 Dakshin Haryana Bijli Vitran Nigam Limited 31 Uttar Haryana Bijli Vitran Nigam Limited 32 Madhya Pradesh Poorv Kshetra Vidyut Vitaran Co Ltd 33 Jodhpur Vidyut Vitran Nigam Limited 34 Chhattisgarh State Power Distribution Company Ltd. 35 Ajmer Vidyut Vitran Nigam Limited 36 Madhya Pradesh Madhya Kshetra Vidyut Vitran Co Ltd 37 Jaipur Vidyut Vitran Nigam Limited 38 Meghalaya Power Distribution Corporation Limited 39 Manipur State Power Distribution Company Limited 40 Jharkhand Bijli Vitran Nigam Limited 41 Tripura State Electricity Corporation Limited

The details of the utilities is attached in the report

The Power transmission companies in India

Sr no Company Name Location

1 NTPC New Delhi

2 Power Grid Corp Gurgaon 3 NHPC Faridabad

4

5 Shimla/New

SJVN Delhi

6 NLC India Chennai

7 CESC Kolkata

8 JSW Energy Mumbai

9 Ahmedabad

10 Reliance Power Navi Mumbai

11 Dahej

12 Jaiprakash Pow Noida

13 Guj Ind Power Vadodara

14 Orient Green Chennai

15 Indowind Energy Chennai

16 Toshiba Transmission & Distribution

Systems (India) Private Limited Hyderabad

17 Sterlite power Transmission Limited New Delhi

18 L&T Power Transmission &

Distribution Kolkata

19 Reliance Energy Noida

20 Maha Transco – Maharashtra State

Electricity Transmission Co. Ltd. Mumbai 21 OPTIBELT POWER TRANSMISSION

INDIA PRIVATE LIMITED Pune

22 Unitech Power Transmission Ltd. Gurgaon

23 Bonfiglioli Transmissions Private

Limited Chennai

24 GE T&D India Limited Chennai

25 Ringfeder Power Transmission India

Private Limited Chennai

26 KEC International Mumbai

27 Kalpataru Power Mumbai

28 Sunil HitechEng Mumbai

29 Jyoti Structure Mumbai

30 Neueon Towers/Sujana Towers Ltd. Hyderabad

31 Private

Limited (RGPPL) Ratnagiri, MH

32 Mumbai,

TansRail Lighting Nagpur

Top Power Generation Companies in India

Gujarat Industries Power Company Ltd

GIPCL was incorporated in 1985 as public limited company. The company is involved in the business of electrical power generation. It was established under the auspices of Government of Gujarat. The registered office of the company is located in P.O petrochemical, Vadodara, Gujarat.

Jaiprakash Power Ventures Ltd

Jaiprakash Power Ventures Ltd was incorporated on Dec 21, 1994. The company is part of Jaypee Group- India’s leading infrastructure conglomerate. The company is implementing, developing and operating power projects in India. Jaiprakash Power Ventures Ltd is diversified infrastructure conglomerate in India with having interests in Cement, Real Estate, Power, Civil Engineering, Construction, Fertilizer, Hospitality, Sports, and Education.

JSW Energy Ltd

JSW Energy Ltd was founded in the year 1994. It is headquartered in Mumbai, India. It is offering a range of products including Electricity Generation, Hydroelectricity, Mining, Power Plant Equipment, transmission etc.

NHPC Ltd

NHPC Ltd was founded in the year 1975. It is headquartered in Faridabad India. The product range includes electricity generation and energy trading.

NTPC Ltd NTPC Ltd was founded in the year 1975. It is headquartered in NTPC Bhawan, Lodhi Road, New Delhi. Its service range includes electricity generation & distribution, natural gas exploration, distribution, and transportation. The company has also ventured into oil and gas exploration and coal mining activities.

Power Grid Corporation India Ltd Power Grid Corporation India Ltd was founded in the year 1989. The range of products includes transmission, distribution, and energy trading. The top power generation company is headquartered in Gurgaon, Haryana.

Reliance Industries Ltd Ltd was founded in the year 1955. It was founded by Dhirubhai Ambani. It is headquartered in Mumbai, Maharashtra. The company’s product range includes petroleum, natural gas, textile, retail, telecommunication, and media.

SJVN Ltd SJVN Limited was formed on May 24, 1988. The leading power generation company is a joint venture between Government of Himachal Pradesh and Government of India.

Tata Power Company Ltd Tata Power Company Ltd was founded in the year 1910. It is headquartered in Mumbai, Maharashtra, India. Its product range includes Electrical Power and Natural Gas. It is offering electricity generation and distribution, production, natural gas exploration etc.

Torrent Power Ltd Torrent Power Ltd was founded in the year 1996. It is headquartered in Ahmedabad India. Its product range includes Sale and distribution, energy trading, electricity generation and wind power.

Regulators and Other Government Agencies in Power Sector

Central Electricity Authority

The Central Electricity Authority of India (CEA) is a statutory organisation constituted under section 3(1) of Electricity Supply Act 1948, which has been superseded by section 70(1) of the Electricity Act 2003. The CEA advises the government on policy matters and formulates plans for the development of electricity systems.

Central Electricity Regulatory Commission

As entrusted by the Electricity Act, 2003 the Commission has the responsibility to discharge the following functions:- Mandatory Functions:-

• to regulate the tariff of generating companies owned or controlled by the Central Government;.

• to regulate the tariff of generating companies other than those owned or controlled by the Central Government specified in clause (a), if such generating companies enter into or otherwise have a composite scheme for generation and sale of electricity in more than one State;

• to regulate the inter-State transmission of electricity ;

• to determine tariff for inter-State transmission of electricity;

• to issue licences to persons to function as transmission licensee and electricity trader with respect to their inter-State operations;

• Improve access to information for all stakeholders.

• to adjudicate upon disputes involving generating companies or transmission licensee in regard to matters connected with clauses (a) to (d) above and to refer any dispute for arbitration;

• to levy fees for the purposes of the Act;

• to specify Grid Code having regard to Grid Standards;

• to specify and enforce the standards with respect to quality, continuity and reliability of service by licensees;

• to fix the trading margin in the inter-State trading of electricity, if considered, necessary;

• to discharge such other functions as may be assigned under the Act.

• Advisory Functions:-

• formulation of National Electricity Policy and Tariff Policy;

• promotion of competition, efficiency and economy in the activities of the electricity industry;

• promotion of investment in electricity industry;

• any other matter referred to the Central Commission by the Central Government. States have their own regulatory commissions @ http://www.cercind.gov.in/serc.html Power Finance Corporation

Power Finance Corporation Ltd. (NSE: PFC, BSE: 532810) is an Indian financial institution. Established in 1986, it is the financial back bone of Indian Power Sector. PFC's Net worth as on 30th September 2018 is INR 38,274 Crore .[1]. PFC is the 8th highest profit making CPSE as per the Department of Public Enterprises Survey for FY 2017-18.

Energy Efficiency Services Limited (EESL)

Energy Efficiency Services Limited (EESL) is an energy service company (ESCO) of the Government of India and is the world's largest public ESCO. It is 100% government owned, a joint venture of state-owned NTPC Limited, Power Finance Corporation, Rural Electrification Corporation and POWERGRID. EESL was formed under India's Ministry of Power to facilitate energy efficiency projects. Innovative business and implementation models can significantly reduce consumption and costs. EESL also acts as the resource centre for capacity building of state electricity distribution companies, electricity regulatory commissions (ERCs), state-designated agencies (SDAs), upcoming ESCOs, financial institutions, etc.

Bureau of Energy Efficiency (BEE) The Government of India set up Bureau of Energy Efficiency (BEE). on 1st March 2002 under the provisions of the Energy Conservation Act, 2001. The mission of the Bureau of Energy Efficiency is to assist in developing policies and strategies with a thrust on self-regulation and market pri nciples, within the overall framework of the Energy Conservation Act, 2001 with the primary objective of reducing energy intensity of the Indian economy.

Information technology in Power Sector Government adopted a massive drive to introduce Information technology in power sector to monitor the losses of distribution utilities. Massive datacenters were erected by the state power distribution utilities in this phase.

National Smart Grid Mission The next step from Information technology was to move towards smartgrids. National Smart Grid Mission has been established by Govt. of India vide MoP Office Memorandum dated 27.03.2015 to accelerate Smart Grid deployment in India. NSGM has been in operational since January 2016 with dedicated team. NSGM has its own resources, authority, functional & financial autonomy to plan and monitor implementation of the policies and programs related to Smart Grids in the country. National Solar mission The National Solar Mission is an initiative of the Government of India and State Governments to promote solar power. The mission is one of the several initiatives that are part of the National Action Plan on Climate Change. The program was inaugurate by former Prime Minister Manmohan Singh on 11 January 2010 with a target of 20GW by 2022 which was later increased to 100 GW by the Narendra Modi government in the 2015 Union budget of India. India increased its solar power generation capacity by nearly 5 times from 2,650 MW on 26 May 2014 to 12,288.83 MW on 31 March 2017. The country added 5,525.98 MW in 2016-17, the highest of any year. Wireless Planning and Co-ordination/Regional Licensing office Businesses with communication and radio equipment check with these offices for any applicable license requirement.

Section III: Doing Business in India (Products, solutions and services)

Doing Business in Indian Power Sector India is a diverse country. Indian Power sector has been absorbent of the world class technological solutions offering value and efficiency like no other sector. The key is customization of the solutions with technology and affordability (considering the market size). Primarily, the approach of Business to Government (B2G) or Business to Business (B2B) appears to be most prevalent in this sector. With this approach, the customers and stakeholders are clear. The approach in building business with Indian Power Sector can be summarized in the following way:

• Understanding the technical and power system specifications. • Understanding the market (distribution utilities, generation or transmission companies, electrical systems suppliers, equipment suppliers, communication service providers, software solution providers). • Understanding the regulatory mechanism and standards prevalent. • Giving presentations and technical demonstrations to the end customer (government/private utilities/entities) to give raise awareness about brands and products. • Understanding the economic influencers and viability. • Understanding your business channel, end customers and negotiating the payment terms. • Representations, follow-ups and propagation of the unique selling points. • Due diligence before strategic alliance. • Understanding import and taxation structure not only to you but to the end-customer. • Depending upon the product/solution/service assesses the end-end obligations, maintenance opportunities, upward compatibility/retrofitting options prudently.

Current trends in Power Sector Apart from the standard products/services required in power sector, following are the new trends in power sector market: 1) Smart Grid solutions 2) Smart Metering solutions 3) Home automation and Control 4) Assisted living solutions 5) Internet of things (Iot) solutions 6) Retrofitting/refurbishing solutions 7) Solutions for data analysis and trends 8) Public private partnership in distributions sector 9) Roof-top solars 10) Integrated Grid management and Control