-pgpm-24

8/13/2019 -PGPM-24

1/34

Assignment for PGPM 24

1.0 INTRODUCTION

Energy is an essential input for the economic development of a country in

improving the quality of life of its people. For meeting the growing energy

needs of the society at a reasonable cost, power development in India started

at the end of the 19th century. To contribute significantly to the overall energy

availability in the country, sustained attention is being given to develop and

promote nonconventional, alternate and renewable sources of energy as also

for the development of nuclear energy.

Today the installed power generation capacity in the country has increased

from 1,!"" #$ in 19!% to 1,"!,91%.&" #$ at the end of '""1"' comprising

'(,'(1.'' #$ hydro, %!,!').)' #$ thermal *including gas and diesel+,

1,&"%.!( #$ wind and '%'" #$ nuclear. In spite of this increase in installed

capacity, the energy shortage in India is of the order of approimately 9 per

cent. The pea- shortage of power averages almost 1& per cent.

The per capita consumption of the power in the country is only &" units much

below the consumption levels in development countries. In order to provide

power to all by '"1', additional capacity of 1"",""" #$ will have to be set up

in the net decade. /apacity addition plans for !1,11" #$ have been

finali0ed tatewise and pro2ect wise for the Tenth 3lan period *'""'"%+. In

the central sector, tate sector and private sector the capacity addition would

be '',)' #$, 11,1&% #$ and %,1'1 #$ respectively. For the year '""'

", a capacity addition programme of !1"9.1" #$ has been fied. The power

generation during '""1"' was &1&.'%1 456s comprising !''.""1 456s

thermal, %.99' 456s hydro and 19.'%) 456s nuclear. The target of power

generation for '""'" has been fied at &!&.&&' 456s. The plant load factor

has shown a steady improvement over the years and has improved from &'.)

per cent in 199"91 to (9.9 percent in '""1"'.

To achieve the target of providing power to all by '"1', the /enter has

initiated a number of steps with the help of the tates. These include a

programme initiated by the power #inistry for accelerated and planned hydro

development after an overall assessment and prioriti0ation with a view to

Page 1 of 34

8/13/2019 -PGPM-24

2/34


harness an unharnessed estimated hydro potential of more than 1&",""" #$

and attain the ideal hydro thermal mi ratio of !"7(" which is presently '&7%".

In central sector, various hydro schemes with a capacity of over ')""" #$

are under different stages of development.

The outlay for power sector during the 8th 3lan period was enhanced to about

s. 1!,""" crore which is approimately '1! per cent higher than I8 plan

:utlay.

For a phased development of ;ational 3ower

8/13/2019 -PGPM-24

3/34


The energy intensity of India is over twice that of the matured economies,

which are represented by the :E/> *:rgani0ation of Economic /ooperation

and >evelopment+ member countries. India6s energy intensity is also much

higher than the emerging economies?the =sian countries, which include the

=E=; member countries as well as /hina. @owever, since 1999, India6s

energy intensity has been decreasing and is epected to continue to

decrease.

The indicator of energyA3 *gross domestic product+ elasticity, that is, the

ratio of growth rate of energy to the growth rate 3, captures both the

structure of the economy as well as the efficiency. The energyA3 elasticity

during 19&A'""1 has been above unity. @owever, the elasticity for primary

commercial energy consumption for 1991A'""" was less than unity *3lanning

/ommission '""'+. This could be attributed to several factors, some of them

being demographic shifts from rural to urban areas, structural economic

changes towards lesser energy industry, impressive growth of services,

improvement in efficiency of energy use, and interfuel substitution.

The energy sector in India has been receiving high priority in the planning

process. The total outlay on energy in the Tenth Fiveyear 3lan has been

pro2ected to be !." trillion rupees at '""1B"' prices, which is '(.%C of the

total outlay. =n increase of )!.'C is pro2ected over the ;inth Fiveyear 3lan in

terms of the total plan outlay on energy sector. The ay *on 1! =ugust'""&+, the 3resident of India emphasi0ed that energy independence has to be

Page 3 of 34

8/13/2019 -PGPM-24

4/34


the nation6s first and highest priority, and India must be determined to achieve

this within the net '& years.

2.2 Demand and supply scenario

In the recent years, India6s energy consumption has been increasing at one of

the fastest rates in the world due to population growth and economic

development. 3rimary commercial energy demand grew at the rate of si per

cent between 19)1 and '""1 *3lanning /ommission '""'+. India ran-s fifth in

the world in terms of primary energy consumption, accounting for about .&C

of the world commercial energy demand in the year '"". >espite the overall

increase in energy demand, per capita energy consumptionin India is still

very low compared to other developing countries.

India is wellendowed with both ehaustible and renewable energy resources.

/oal, oil, and natural gas are the three primary commercial energy sources.

India6s energy policy, till the end of the 19)"s, was mainly based on

availability of indigenous resources. /oal was by far the largest source of

energy. @owever, India6s primary energy mi has been changing over aperiod of time.

>espite increasing dependency on commercial fuels, a si0eable quantum of

energy requirements *!"C of total energy requirement+, especially in the rural

household sector, is met by noncommercial energy sources, which include

fuelwood, crop residue, and animal waste, including human and draught

animal power. @owever, other forms of commercial energy of a much higherquality and efficiency are steadily replacing the traditional energy resources

being consumed in the rural sector.

esource augmentation and growth in energy supply has not -ept pace with

increasing demand and, therefore, India continues to face serious energy

shortages. This has led to increased reliance on imports to meet the energy

demand.

2.3 Coal

Page 4 of 34
http://www.eia.doe.gov/pub/international/iealf/tablee1.xlshttp://www.eia.doe.gov/pub/international/iealf/tablee1c.xlshttp://www.eia.doe.gov/pub/international/iealf/tablee1c.xlshttp://www.eia.doe.gov/pub/international/iealf/tablee1c.xlshttp://www.eia.doe.gov/pub/international/iealf/tablee1.xls

8/13/2019 -PGPM-24

5/34


India now ran-s third amongst the coalproducing countries in the world.

4eing the most abundant fossil fuel in India till date, it continues to be one of

the most important sources for meeting the domestic energy needs. It

accounts for &&C of the country6s total energy supplies. Through sustained

increase in investment, production of coalincreased from about %" #T

*million tonnes+ *#o/ '""&+ in early 19%"s to )' #T in '""!B"&. #ost of the

coal production in India comes from open pit mines contributing to over )1C

of the total production while underground mining accounts for rest of the

national output *#o/ '""&+. >espite this increase in production, the eisting

demand eceeds the supply. India currently faces coal shortage of '.9( #T.

This shortage is li-ely to be met through imports mainly by steel, power, and

cement sector *#o/ '""&+. India eports insignificant quantity of coal to the

neighbouring countries. The traditional buyers of Indian coal are 4angladesh,

4hutan, and ;epal.

The development of core infrastructure sectors li-e power, steel, and cement

are dependent on coal. =bout %&C of the coal in the country is consumed in

the power sector *#o/ '""&+.

2.4 ower

=ccess to affordable and reliable electricity is critical to a country6s growth and

prosperity. The country has made significant progress towards the

augmentation of its power infrastructure. In absolute terms, the installed

power capacityhas increased from only 1%1 #$ *megawatts+ as on 1

>ecember 19&" to 11) !19 #$ as on #arch '""& */E= '""&+. The all India

gross electricity generation, ecluding that from the captive generating plants,

was &1"%

8/13/2019 -PGPM-24

6/34


decade has been slower than the 36s growth, this increase could be due to

high growth of the service sector and efficient use of electricity.

3er capita electricity consumption rose from merely 1&.( -$h *-ilowatthours+

in 19&" to &9' -$h in '""B"! */E= '""&+. @owever, it is a matter of concern

that per capita consumption of electricity is among the lowest in the world.

#oreover, poor quality of power supply and frequent power cuts and

shortages impose a heavy burden on India6s fastgrowing trade and industry.

2.5 Oil and Na!ural Gas

The latest estimates indicate that India has around ".!C of the world6s proven

reserves of crude oil. The production of crude oil in the country has increased

from (.)' #T in 19%"B%1 to .) #T in '""B"! *#o3;< '""!b+. The

production of natural gas increased from 1.! 4/# *billion cubic metres+ to

1.9( 4/# during the same period. The quantity of crude oil imported

increased from 11.(( #T during 19%"B%1 to )1 #T by '""B"!. 4esides,

imports of other petroleum products increased from 1 #T to %. #T during the

same period. The eports of petroleum products went up from around ".& #T

during 19%"B%1 to 1! #T by '""B"!. The refining capacity, as on 1 =pril

'""!, was 1'&.9% #T3= *million tonnes per annum+. The production of

petroleum products increased from &.% #T during 19%"B%1 to 11" #T in

'""B"!.

India6s consumption of natural gas has risen faster than any other fuel in the

recent years. ;atural gas demand has been growing at the rate of about (.&C

during the last 1" years. Industries such as power generation, fertili0er, andpetrochemical production are shifting towards natural gas. India6s natural gas

consumption has been met entirely through domestic production in the past.

@owever, in the last !B& years, there has been a huge unmet demand of

natural gas in the country, mainly required for the core sectors of the

economy. To bridge this gap, apart from encouraging domestic production,

the import of D;< *liquefied natural gas+ is being considered as one of the

possible solutions for India6s epected gas shortages. everal D;< terminals

have been planned in the country. Two D;< terminals have already been

Page 6 of 34
http://petroleum.nic.in/petstat.pdfhttp://petroleum.nic.in/petstat.pdf

8/13/2019 -PGPM-24

7/34


commissioned7 *1+ 3etronet D;< Terminal of & #T3= *million tonnes per

annum+ at >ahe2, and *'+ D;< import terminal at @a0ira. In addition, an in

principle agreement has been reached with Iran for import of & #T3= of D;

8/13/2019 -PGPM-24

8/34


The International Energy :utloo- '""& *EI= '""&b+ pro2ects, India6s gas

consumption to grow at an average annual rate of &.1C, thereby reaching '.)

trillion cubic feet by '"'& with the share of electric power sector being of %1C

by that time. /oal consumption is epected to increase to 1& #T over the

forecast period. In India, slightly less than ("C of the pro2ected growth in coal

consumption is attributed to the increased demand of coal in the electricity

sector while the industrial sector accounts for most of the remaining increase.

The use of coal for electricity generation in India is epected to increase by

'.'C per annum during '""'A'&, thus requiring an additional &9 """ #$ of

coalfired capacity. :il demand in India is epected to increase by .&C per

annum during the same time.

It is quite apparent that coal will continue to be the predominant form of

energy in future. @owever, imports of petroleum and gas would continue to

increase substantially in absolute terms, involving a large energy import bill.

There is, therefore, an urgent need to conserveenergy and reduce energy

requirements by demandside management and by adopting more efficient

technologies in all sectors.

3.0 O%E SECTOR & RESENT SCENARIO

3.1 Genera!ion

India has the fifth largest generation capacity in the world with an installed

capacity of 1&'

8/13/2019 -PGPM-24

9/34


addition of more than 1"",""" #$ would be required. This has resulted in

massive addition plans being proposed in the subsectors of istribution

3.2 Transmission

The current installed transmission capacity is only 1 percent of the total

installed generation capacity. $ith focus on increasing generation capacity

over the net )1" years, the corresponding investments in the transmission

sector is also epected to augment. The #inistry of 3ower plans to establish

an integrated ;ational 3ower

8/13/2019 -PGPM-24

10/34


The power sector has registered significant progress since the process of

planned development of the economy began in 19&". @ydro power and coal

based thermal power have been the main sources of generating electricity.

;uclear power development is at slower pace, which was introduced, in late

sities. The concept of operating power systems on a regional basis crossing

the political boundaries of states was introduced in the early sities. In spite of

the overall development that has ta-en place, the power supply industry has

been under constant pressure to bridge the gap between supply and demand.

3ower development is the -ey to the economic development. The power

ector has been receiving adequate priority ever since the process of planned

development began in 19&". The 3ower ector has been getting 1)'"C of

the total 3ublic ector outlay in initial plan periods. emar-able growth and

progress have led to etensive use of electricity in all the sectors of economy

in the successive five years plans. :ver the years *since 19&"+ the installed

capacity of 3ower 3lants *5tilities+ has increased to )9"9" #$ *1..9)+ from

meagre 1%1 #$ in 19&", registering a &'d fold increase in !) years.

imilarly, the electricity generation increased from about &.1 billion units to

!'" 4illion units A )' fold increase. The per capita consumption of electricity

in the country also increased from 1& -$h in 19&" to about ) -$h in 199%

9), which is about ' times. In the field of ural Electrification and pump set

energisation, country has made a tremendous progress. =bout )&C of the

villages have been electrified ecept farflung areas in ;orth Eastern states,

where it is difficult to etend the grid supply.

In >ecember 19&" about (C of the installed capacity in the 5tilities was in

the private sector and about %C was in the public sector. The Industrial

3olicy esolution of 19&( envisaged the generation, transmission and

distribution of power almost eclusively in the public sector. =s a result of this

esolution and facilitated by the Electricity *upply+ =ct, 19!), the electricity

industry developed rapidly in the tate ector.

In the /onstitution of India Electricity is a sub2ect that falls within the

concurrent 2urisdiction of the /entre and the tates. The Elec!rici!y (Supply)

Page 10 of 34

8/13/2019 -PGPM-24

11/34

8/13/2019 -PGPM-24

12/34


The policy of liberalisation the

8/13/2019 -PGPM-24

13/34


8/13/2019 -PGPM-24

14/34


The Electricity Daws *=mendment+ =ct, 199) provides for creation of /entral

and tate Transmission utilities. The function of the Cen!ral Transmission

U!ili!yshall be to underta-e transmission of energy through interstate

transmission system and discharge all functions of planning and

coordination relating to interstate transmission system with tate

Transmission 5tilities, /entral

8/13/2019 -PGPM-24

15/34


The post Electricity =ct '"" scenario provides for the opportunity for

any generating company to establish, operate and maintain a thermal

generating station without the need of a license, thus providing a free

hand in setting up of a thermal generating plant. trong supportive factors conducive to investment opportunity such a

vibrant strong and stable economy, low cost indigenous fuel,

availability of s-illed manpower, indigenous power plant manufacturing

capability, presence of independent power producers and power sector

reforms initiatives as confidence building measures for prospective

investors.

Thrust to G# B life etension activities with large investment potential

for improving the performance of old thermal power stations. The 1"

3lan *'""'"%+ is targeted towards &% units *1!'%" #$+ for G#

wor-s and 1"( units *1"!1 #$+ with anticipated total cost of more

than s.1"""" crores.

5.2 Inves!men! Oppor!uni!ies in 'ydro ower Developmen!

The 1" 3lan program envisages capacity addition of 1!9 #$ from

hydel pro2ects in the total capacity addition of !111". The

8/13/2019 -PGPM-24

16/34


The high capacity interregional transmission lin-s, forming the bac- bone of

the ;ational 3ower

8/13/2019 -PGPM-24

17/34


To start with, /entral Electricity egulatory /ommission granted transmission

license on 111'"" to #Bs 3owerlin-s Transmission Dimited, a 2oint venture

company of the 3ower istribution ector could not grow with the required pace due to paucity

of funds and therefore,>istribution eforms were initiated by the istribution /ircle level, Feeder level and the

consumer level.

An!i1T0e6! 9easures&

everal tates vi0. =ndhra 3radesh, Larnata-a, #adhya 3radesh, 5ttar

3radesh, $est 4engal, #aharashtra, Lerala and

8/13/2019 -PGPM-24

18/34


of initiative to curb the theft of power which have shown improvement in

collection of revenue by the E4sB5tilities.

The Electricity =ct, '"" provides a legal framewor- for ma-ing theft of

electricity a cogni0able offence. 5nder ection 1& of the Electricity =ct, '"",

whoever dishonestly taps lines or cables or service wires, tampers, damages

or destroys meters etc. shall be punishable with imprisonment for a term

which may etend to three years or with fine or with both.

+445 9e!erin# ro#ramme&

= programme of 1""C metering has been ta-en up by tates subsequent to

3ower #inistersB/hief #inisters conference held on '(.'.'""". =s on "th

eptember, '""!, 9&C and )%C metering have been achieved in respect of

11 -K feeders and consumer feeders respectively.

Consumer Care Cen!re&

To address consumer grievances various tates have ta-en initiatives by

setting up consumer care centres and these centers are effectively operating

at @yderabad, Kadodara, 4angalore, Faridabad, >elhi and almost all tates

are ta-ing steps for implementing the consumer care centres for large towns

of the tates

5.6 $u!ure Inves!men! Re7uiremen!

Even after investment made by the 5nion 3 in

TG> system, the distribution sector needs further investment considering the

growth rates of various segments of the distribution system the pro2ections by

the end of '""("% are as follows7

;ine C3! 3m

((-K !(9!%

-K !((

Page 18 of 34

8/13/2019 -PGPM-24

19/34


11-K ''%"9)!

DK !!)(1%(

=n investment of s. )(&% crores was assessed by the $or-ing evelopment *G>+ in this sector. The identified areas are7

@igh voltage distribution system *@K>+

>emand side management

/ustom power devices

/ompact transformation devices

>istribution automation

#etering

uali!y o6 ower Supply and Cus!omer Sa!is6ac!ion&

$ith the enactment of the Electricity =ct, '"" the emphasis has been given

on providing quality and interruption free supply to customers. Leeping this

ob2ective in view /entral Electricity =uthority */E=+ has started monitoring of

reliability inde, average tripping per month in respect of 11 -K feeders in

respect of towns having population of more than ) la-hs. This will facilitate in

bench mar-ing various indices for the annual frequency and duration of

tripping. Karious tate Electricity egulatory /ommissions *E/s+ are also

in the process of ma-ing regulations for standard of performance in

compliance to various provisions of the Electricity =ct, '"".

Re#ula!ion on Ins!alla!ion and Opera!ion o6 9e!ers&

In compliance to provision of ection && of the Electricity =ct, '"", /E= is

ma-ing regulation on installation and operation of meters. This will facilitate in

Page 19 of 34

8/13/2019 -PGPM-24

20/34


uniformity of approach for location of meters, selecting type of meters and

their specification, new investment opportunities.

The Finance #inister of India h. 3ranab #u-her2ee in an article on march

"1, '""9 mentioned that 7

$ith the country6s power requirement epected to touch ),"",""" #$ by

'"1', India would need an investment of s(,"",""" crore,

This investment is possible only by attracting foreign direct investment and

publicprivate participation in the power sector, @e said at a function to lay the

foundation stone for the 1,""" #$ Tuticorin power pro2ect of ;D/ Tamilnadu

3ower Dtd, a 2oint venture of the ;eyveli Dignite /orporation and Tamil ;adu

Electricity 4oard.

/laiming that despite odds, the power sector in the country had made a

turnaround, he said NIt is time we move ahead and improve our performance

by 2oining together. $e should ensure the power shortage is the story of the

past and the people got quality power at a competitive price,O he said.

The government should ma-e efforts to generate power through various

sources by fiing targets, he added.

=t present, the energy shortage in the country was estimated at 1"C and it

touches 1C during pea- seasons. There are states, where the energy

shortage is '&C.

NThis is a serious impediment in the way of industrial development andeconomic process. o we need a crash pro2ect for capacity building and

eliminate power shortage by '"1',O he said.

6.0 CURRENT RO/;E9 IN O%ER SECTOR

Page 20 of 34

8/13/2019 -PGPM-24

21/34

8/13/2019 -PGPM-24

22/34


$hile additional gas supply from L< 4asin has eased shortage to a limited

etend, supply constraints for domestic coal remain and are epected to

continue going forward. /onsequently, public and private sector entities have

embar-ed upon imported coal as a means to bridge the deficit. This has led to

some Indian entities to ta-e upon the tas- of purchasing, developing and

operating coal mines in international geographies. $hile this is epected to

secure coal supplies it has again thrown upon further challenges. For

eample, the main international mar-et for coal supply to India A Indonesia,

poses significant political and legal ris-s in the form of changing regulatory

framewor- towards foreign companies. imilarly, coal evacuation from mines

in outh =frica is constrained by their limited railway capacity and the capacity

at ports is controlled by a group of eisting users ma-ing it difficult for a new

entrant to ensure reliable evacuation9. In this case it is essential to manage

the ris- of supply disruption by different options li-e A diversification of supply,

due diligence on suppliers, unambiguous contracting and strict monitoring

among others.

The failure to achieve the planned target from the captive coal bloc-s

presents itself as a ma2or challenge to the power sector, as only '! bloc-s

have become operational out of the total '1". Eperts believe that the non

operational status of ma2ority of these bloc-s is attributed to land acquisition

*G+ issues, permit delays and infrastructure problems1". In addition, the

developers who have been given the charge of captive bloc-s are not putting

diligent efforts to epedite the mining operations due to their lac- of

eperience in coalmine development.

/oal is the mainstay of the power production in India and is epected to

remain so in the future. =dditional power generation is li-ely to require

incremental amount of coal transportation by Indian ailways within the

country and increasing unloading at ports in India for imported coal. In both

cases India currently faces capacity shortage. @ence, a pro2ect developer has

to account for and manage its logistics chain in a manner that minimi0es

disruption to its fuel supply. In many cases this is li-ely to involve selfdevelopment of relevant supply infrastructure which poses additional pro2ect

Page 22 of 34

8/13/2019 -PGPM-24

23/34


eecution compleity for the developer. For eample, some imported coal

based power plants are also forced to set up an unloading 2etty for coal

carrying shipping vessels. This has to be ensured before the commissioning

of a power plant which requires an alternate set of pro2ect eecution s-ills in

the port sector.

>B? E7uipmen! S0or!a#e

Equipment shortages have been a significant reason for India missing its

capacity addition targets for the 1"th five year plan. $hile the shortage has

been primarily in the core components of 4oilers, Turbines and

8/13/2019 -PGPM-24

24/34


development agencies to the e#tent of $% percent of the land

required for a project, with the balance to be obtained by the

&overnment. In addition, it has been reported that in some cases,

even after land owners were asked to sell and handover their land in'Public Interest(, the project was not completed for several years

due to other delays, a fact that eroded the credibility of both the

industry and the government. )onsequently there is a significant

mismatch of e#pectations from the Project Affected Persons *PAP+.

takeholders or other land owners may collectively object of the

project e#ecution. In such cases, it is essential to proactively

manage the environment and stakeholders( e#pectations.

>B $inancial

-apid build up of the generation capacity is being aided by setting

up of ltra /ega Power Projects */PPs+ each of which is 0%%% /".

1owever, the e#ecution of the ltra /ega Power Projects */PP+ is a

significant challenge as India has not witnessed an e#ecution of

such a large scale power project before. 2urthermore, with each/PP costing above I3- 45,%%% )rore, financing such a large project

is a critical constraint for any developer. In addition, considering the

high financial stake involved through private investments, delay in

payments may put severe pressure on developers6suppliers to meet

the performance commitments.

>B> 9anpower S0or!a#e

There is a general consensus that shortage of talent in the construction sector

is a long term problem and is li-ely to continue to push up pro2ect costs and

ris-s. The flow of talent into construction and power sector has been gradually

drying up as candidates have sought an alternative A and often more lucrative

A career options. The

8/13/2019 -PGPM-24

25/34


management. Facing a desperate game of catch up, the industry needs a

genuine collaboration between pro2ect owners, contractors and governments

to attract more school leavers and graduates. /ompanies should also see- to

stay in touch with changing employee aspirations. 4y encouraging diversity in

its employment practices and by offering greater fleibility in wor-ing hours,

the sector can reach out to a wider potential audience that perhaps would not

previously have considered such a career. Investment in eisting employees

is also crucial in order to offer betterdefined career structures, with a greater

focus on training and higher salaries where possible.

6.7 Sc0edule Dependency on Transmission ;ines

ignificant enhancement in construction activity is li-ely to be required to meet

the 11th plan target of additional transmission capacity. = significant portion of

this enhancement is li-ely to be in the ;orth Eastern region, i--im and

4hutan, which have difficult terrain reducing the margin of error for pro2ect

eecution. =dditional transmission capacity is required to evacuate power

from surplus regions to supply to deficit regions and to enable electricity

trading. This is essential to meet the target of P3ower for all6. @ence, the

criticality of implementing transmission pro2ects cannot be ignored. In this

contet, it is imperative to establish sound pro2ect management principles to

the sector to help ensure timely completion of pro2ects. From the perspective

of power generation pro2ects, it is critical for pro2ect specific transmission

pro2ects to be set up before the commissioning of the plant to enable timely

evacuation of power. This adds another scheduling constraint for the pro2ect.

The most important cause of the problems being faced in the power sector is

the irrational and unremunerative tariff structure. =lthough the tariff is fied

and reali0ed by E4s, the tate

8/13/2019 -PGPM-24

26/34


E4s, in the process, have been incurring heavy losses. If the E4s were to

continue to operate on the same lines, their internal resources generation

during the net ten years will be negative, being of the order of s.*+ %%,"""

crore. This raises serious doubts about the ability of the tates to contribute

their share to capacity addition during the ;inth 3lan and thereafter. This

highlights the importance of initiating power sector reforms at the earliest and

the need for tariff rationali0ation.

7.0 DE9AND SU;Y GA

It is evident that the deficit in power availability in India is a significant

impediment to the smooth development of the economy. In this contet,

bridging the gap in demand and supply has become critical and consequently,

large pro2ects are being underta-en in different segments of the sectorH

istribution. =s India has not witnessed such a

large scale of implementation before, there is a need to review and enhance

pro2ect eecution capabilities to help ensure targets are met.

This strongly necessitates employing a comprehensive pro2ect managementstructure to address the ma2or challenges of the power sector pro2ects and to

be able to deliver them as per the planned targets. @istorical records also

indicate the presence of a wea- pro2ect management structure which does not

assess all the -ey pro2ect aspects.

=s discussed initially, the overall intent of this paper is to highlight the

opportunities and challenges of the power sector, and the pro2ectmanagement drivers that are required to address these challenges.

The table below summari0es the -ey implementation challenges and drivers

for successfully achieving the implementation of power generation plans.

Page 26 of 34

8/13/2019 -PGPM-24

27/34


FeyC0allen#es

9easures "ein#adop!ed

Resul!in# Issues Drivers 6or de!erminin#success

=ddition ofsignificantgenerationcapacity

5#33 Technical and financialcapability to eecute suchlarge pro2ects

is- Increase manifold

3ro2ect eecution

/ost B /ash flowmanagement

is- #anagementstrategy and planning

Ensuring fuelavailability andquality

3urchase anddevelopment ofcoal mines abroad

is- in operating in differentgeographies, Eg. A 3oliticalris-s

5ncertainties in logisticsoperation

is- managementthrough effectivecontracting, supplydiversification, etc

/ontrol over supplyinfrastructure

3lant equipmentshortage

3rocurement fromabroad

etting up of newsupply units

Kendor reliability

Eecution timelines

obust procurementmanagement, vendormonitoring

3ro2ect scheduling

Dand acquisitionandenvironmentclearances

peeding upprocesses

Inadequate communicationwith sta-eholders resulting inmismatch of epectationsfrom pro2ect affected person

Environment andsta-eholdersmanagement

#anpowershortage

Enhance training esource planning andmanagement

8.0 STRATEGIES TO AC'IE

8/13/2019 -PGPM-24

28/34


being properly utili0ed. In fact, a large amount of it is disposed off by burning

in open fields causing serious air pollution.

In order to utilise these resources properly, biomass should be converted to

energy which can meet a si0eable percentage of the countryJs demands for

fuel as well as energy. Three main approaches can be adopted for generation

and proper utili0ation.

1. /ollection of agricultural and forest residues to produce fuels, organic

manures and chemical feed stoc-.

2. /ollection of urban and industrial wastes as fuel in boilers and as a

feedstoc- for producing methane and some liquid fuels.

3. epending on the nature and availability of these wastes and organic

residues they can be utili0ed in different manners as described here.

1. $uel "iomass

4y some processes and procedures, biomass products li-e fuel gas, liquid

fuels, gaseous fuels etc. are obtained, which are given here

Page 28 of 34
http://www.world-agriculture.com/http://www.world-agriculture.com/

8/13/2019 -PGPM-24

29/34


4iomass from plants or animal origin are directly burnt for coo-ing

and other purposes. #unicipal and sewage wastes, industrial wastes and

agricultural wastes are converted to energy which can meet the demand

for energy in rural sector.

3addy straw and rice hus- can be profitably converted to fuel gas

by thermal decomposition */ombustion+

Ethanol, which is used as a liquid fuel can be produced from

carbohydrates by alcoholic fermentation.

$hen wood and agricultural residues are heated in the absence of

air *pyrolysis+, charcoal is the resultant product which can be used as a

fuel more advantageously than wood.

4y the process of gasification, gas is evolved which can be used as

a fuel for engines.

4iogas, which is popular in rural areas is produced by anaerobic

fermentation from farm wastes.

2. $eed "iomass

/onventionally, crop residues are used as cattlefeed. @owever, some of

them with high percentage of lignin or nondigestible constituents need certain

treatments such as soa-ing in water, al-aliBalcohol to ma-e their use as a fuel.

The oilca-es of various crop seed li-e cotton, rubber, tobacco etc. can also

be used as a feed after etraction of toic materials.

3. Or#anic 6er!ilier "iomass

>ry fermented slurry can be used as a direct organic fertili0er for crop land.

4. $i"re "iomass

The fibrous agricultural wastes and residues are being profitably utilised for

ma-ing pulp for cheap grade paper.

Page 29 of 34

8/13/2019 -PGPM-24

30/34


5. C0emical "iomass

@ighly siliconous agricultural residues li-e rice hus- and rice straw can be

converted into useful chemicals li-e morphous silicon, silicate products and

solar grade silicon. Furfural an another chemical can be produced from

biogases, cotton seed hulls, corncobs, fla fibres, oat hulls etc., which is used

as a solvent for some petroleum products.

(ii) %ind as a source o6 Ener#y

Today, people are reali0ing that wind power is one of the most promising new

energy sources that can serve as an alternative to fossil fuelgenerated

electricity.

$ith todayJs technology, wind energy could provide '"C of =mericaJs

electricity *or about the amount nuclear power provides+ with turbines installed

on less than 1C of its land area. =nd within that area, less than &C of the land

would be occupied by wind equipmentthe remaining 9&C could continue to

be used for farming or ranching. 4y the year '"'", 1" million average

=merican homes may be supplied by wind power, preventing 1"" million

metric tons of /:' emissions every year. Dessening our dependence on fossil

fuels is critical to the health of all living things, and wind energy can do 2ust

that.

The billion -$h of electricity produced by =mericaJs wind machines annually

displace the energy equivalent of (.! million barrels of oil and avoid 1.(%

million tons of carbon emissions, as well as sulfur and nitrogen oide

emissions that cause smog and acid rain. In other words, more wind power

means less smog, acid rain, and greenhouse gas emissions.

$indmills may have been around for almost 1&"" years, but it was not

imagined that wind power would become affordable enough to compete with

fossil fuels. Indeed it has. In fact, many utility services around the world offer

Page 30 of 34

8/13/2019 -PGPM-24

31/34

8/13/2019 -PGPM-24

32/34


million average =merican homes may be supplied by wind power, preventing

1"" million metric tons of /: ' emissions every year.

;essenin# our dependence on 6ossil 6uels is critical to the health of all

living things, and wind energy can do 2ust that. The billion -$h of electricity

produced by =mericaJs wind machines annually displace the energy

equivalent of (.! million barrels of oil and avoid 1.(% million tons of carbon

emissions, as well as sulfur and nitrogen oide emissions that cause smog

and acid rain. In other words, more wind power means less smog, acid rain,

and greenhouse gas emissions.

(iii) 9ini and micro 0ydroelec!ric pro:ec!sB

$ater flowing downstream is a powerful force. $ater is a renewable resource,

constantly recharged by the global cycle of evaporation and precipitation. The

heat of the sun causes water in la-es and oceans to evaporate and form

clouds. The water then falls bac- to Earth as rain or snow, and drains into

rivers and streams that flow bac- to the ocean. Flowing water can be used to

power water wheels that drive mechanical processes. =nd captured by

turbines and generators, li-e those housed at many dams around the world,

the energy of flowing water can be used to generate electricity.

(iv) Solar power

olar energy is the energy derived from the sunthrough the form of solar

radiation. olar powered electrical generation relies on photo

voltaicsand heat engines. = partial list of other solar applications includes

space heating and cooling through solar architecture,daylighting, solar hot

water, solar coo-ing, and high temperature process heat for industrial

purposes.

olar technologies are broadly characteri0ed as either passive solar or active

solar depending on the way they capture, convert and distribute solar energy.

=ctive solar techniques include the use of photovoltaic panels and solar

thermal collectors to harness the energy. 3assive solar techniques include

orienting a building to the un, selecting materials with favorable thermal

Page 32 of 34
http://en.wikipedia.org/wiki/Sunhttp://en.wikipedia.org/wiki/Solar_radiationhttp://en.wikipedia.org/wiki/Solar_radiationhttp://en.wikipedia.org/wiki/Solar_powerhttp://en.wikipedia.org/wiki/Photovoltaicshttp://en.wikipedia.org/wiki/Photovoltaicshttp://en.wikipedia.org/wiki/Heat_enginehttp://en.wikipedia.org/wiki/Solar_architecturehttp://en.wikipedia.org/wiki/Daylightinghttp://en.wikipedia.org/wiki/Solar_hot_waterhttp://en.wikipedia.org/wiki/Solar_hot_waterhttp://en.wikipedia.org/wiki/Solar_cookinghttp://en.wikipedia.org/wiki/Sunhttp://en.wikipedia.org/wiki/Solar_radiationhttp://en.wikipedia.org/wiki/Solar_radiationhttp://en.wikipedia.org/wiki/Solar_powerhttp://en.wikipedia.org/wiki/Photovoltaicshttp://en.wikipedia.org/wiki/Photovoltaicshttp://en.wikipedia.org/wiki/Heat_enginehttp://en.wikipedia.org/wiki/Solar_architecturehttp://en.wikipedia.org/wiki/Daylightinghttp://en.wikipedia.org/wiki/Solar_hot_waterhttp://en.wikipedia.org/wiki/Solar_hot_waterhttp://en.wikipedia.org/wiki/Solar_cooking

8/13/2019 -PGPM-24

33/34


mass or light dispersing properties, and designing spaces that naturally

circulate air.

(v) Nuclear power

#any researchers consider that harnessing the energy of the atom in fission

reactions is the most important alternative energy resource that we have, for

the simple fact of the immense power that it can generate.

;uclear power plants are especially cleanburning and their efficiency is

quite staggering. ;uclear power is produced at )"C efficiency, meaning that

the energy created by the fission reactions is almost equal to the energy put

into producing the fission reactions to begin with. There is not a lot of waste

material created by nuclear fissionalthough, due to the fact that there is no

such thing as producing energy without also creating some measure of waste,

there is some. The apprehensions of people such as environmentalists

regarding using nuclear power as an alternative energy source are based on

this waste, which are radioactive gases that must be contained.

The radiation from these gases lasts for an etremely long time, so it can

never be let out once contained and stored. @owever, the volume of this

waste gas generated by the nuclear power plants is small in comparison to

the volume of ;: *nitrous oidethat is, air pollution+ that is attributable to

one dayJs worth of rushhour commuter traffic in Dos =ngeles. $hereas the

radiation is certainly the more deadly by far of the two waste products, the

radiation is also by far the simpler of the two to contain and store. In spite of

the concerns of the environmentalists, nuclear power is actually

environmentally friendly alternative power, and the ris- of the enclosed

radiation getting out is actually lower than you would epect. $ith a relatively

low volume of waste material created, it should not be a difficult thing at all for

storage and disposal solutions for the longterm to be formulated as

technology advances.

Page 33 of 34

8/13/2019 -PGPM-24

34/34


The splitting of an atom produces energy in the forms of both heat and light.

=tomic power plants control the fission reactions so that they donJt lead to the

devastating eplosions that are generated by atomic and hydrogen bombs.

There is hardly any chance of an atomic power plant eploding similar to a

nuclear bomb, as the speciali0ed conditions and the pure 3lutonium utili0ed to

unleash an atomic bombJs vicious force 2ust simply donJt eist inside a nuclear

power plant. The ris- of a meltdown is very low. =lthough this latter event

has changed a couple of times, when one considers that there are over !"

nuclear reactors spread out across nations around the world, and that

nuclear reactors have been used since the early 19&"s, these are rare

incidents, and the events a-in to that which have ta-en place were the fault of

outdated materials which should have been properly maintained. Indeed, if

nuclear energy could become a more broadly accepted form of alternative

energy, there would be little question of their up-eep being maintained.

3resently, si states in =merica generate more than half of all their electrical

energy needs by way of nuclear power, and the media are not filled with grim

horror stories of the power plants regularly having difficulties.

-pgpm-24

Documents