Report on: Advisory Services In Transmission PPP

Summer Internship Report on

Advisory Services In Transmission PPP

Under the Guidance of

Mr. Pushpendra Singh, Senior Fellow, CAMPS,

Mr. Sudhanshu Malhotra, Principal Consultant, Energy Division, FISL,

&

Mr. Shashank Gupta, Consultant, Energy Division, FISL

At

Feedback Infrastructure Private Limited, Gurgaon

Submitted By

Pratyush Agarwal

Roll no: 108

MBA (Power Management)

Sector-33, Faridabad 121003, Haryana

(Under the Ministry of Power, Govt. of India)

Affiliated to

MAHARSHI DAYANAND UNIVERSITY, ROHTAK

AUGUST, 2013

DECLARATION

I, Pratyush Agarwal, Roll no. 108 / Semester III / Class of 2012-14 of the MBA (Power Management) Programme of The National Power Training Institute, Faridabad hereby declare that the Summer Training Report entitled ADVISORY SERVICES IN TRANSMISSION PPP is an original work and the same has not been submitted to any other Institute for the award of any other degree.

A Seminar presentation of the Training Report was made on and the suggestions as approved by the faculty were duly incorporated.

Presentation In-Charge Signature of the candidate

(Faculty)

Counter signed

Director/Principal of the Institute

ACKNOWLEDGEMENT

I am having great pleasure in presenting this report on ADVISORY SERVICES IN TRANSMISSION PPP. I take this opportunity to express my sincere gratitude to all those who have helped me in this project and contributed to make this a success.

I would like to express my sincere gratitude to Mr. Sudhanshu Malhotra, Principal Consultant Energy Division for giving me an opportunity to work under his guidance and a rare chance to work in a prestigious project.

I would like to express my heartiest thanks to Mr. Shashank Gupta, Consultant, Energy Division, Feedback Infrastructures Services Private Limited for giving me a chance to work with him, providing me with the necessary resources, ideas and facilitating me in this project.

I express my heartfelt regards to Mr. J.S.S. Rao, Principal Director, CAMPS (NPTI), Mr. S.K. Chaudhary, Principal Director, CAMPS, whose guidance was of invaluable help for me. I am also thankful to my internal project guide, Mr. Pushpendra Singh, NPTI for his support towards completion of my project.

I also extend my thanks to all the faculties in CAMPS (NPTI), for their support and guidance in my project.

PRATYUSH AGARWAL

CONTENTSDeclaration2Acknowledgement3List of Table6List of Figures7Executive Summary81.Introduction111.1Transmission privatization / IPTC111.2Problem Statement131.3Objective141.4 Organization profile152.Literature Review & Research Methodology172.1Literature review 172.2Research methodology223.Overview of Indian Power Sector244.Transmission Planning35 4.1 Transmission Planning Procedure355.Scope of work under SSSR scheme415.1SSSR scheme planning41 5.2 Advisory services provided to A Multinational Infrastructure Investment Company under SSSR sceme456.Conclusion & References 696.1Conclusion696.2References70

ABBREVIATION

Table 1

BPC

Bid Process Coordinator

CEA

Central Electricity Authority

CERC

Central Electricity Regulatory Commission

COD

Commercial Operation Date

CRF

Calamity Relief Fund

CTU

Central Transmission Utility

DICS

Designated Inter State Transmission Service Customers

EA

Electricity Act

GOI

Government of India

IEGC

Indian Electricity Grid Code

IPTC

Independent Private Transmission Company

ISTS

Inter State Transmission Service

JVP

Joint Venture Partner

LTTC

Long Term Transmission Customer

MOP

Ministry Of Power

MTC

Monthly Transmission Charge

NCCF

National Calamity Contingency Fund

NPTI

National Power Training Institute

O & M

Operation & Maintenance

PGCIL

Power Grid Corporation India Ltd

POC

Point Of Connection

PPP

Public Private Partnership

PSM

Postage Stamp Method

RFP

Request For Proposal

RLDC

Regional Load Dispatch Centre

RETL

Reliance Energy Transmission Ltd

RSA

Revenue Sharing Agreement

SERC

State Electricity Regulatory Commission

SLDC

State Load Dispatch Centre

SSSR

System Strengthening In Southern Region

TL

Transmission Line

TSA

Long Term Transmission Customer

TSP

Transmission Service Provider

List of Table

Table 1 Abbreviations 5

Table 2 Total installed capacity (2012-13)24

Table 3 Total installed capacity fuel wise (2012-13)24

Table 4 Capacity addition during 11TH plan25

Table 5 11th plan status of transmission lines27

Table 6 RAPDRP status 11th plan 29

Table 7 RGGVY status 10th plan29

Table 8 RGGVY status 11th plan30

Table 9 Estimated total fund requirement during 12th plan 32

Table 10 Estimated transmission requirement during 12th plan33

Table 11 Growth in transmission line at the end of each plan33

Table 12 RAPDRP financial status 12th plan 34

Table 13 RAPDRP status 12th plan part wise34

Table 14 RGGVY status 12th plan34

Table 15 Power scenario of southern region (April-2013)42

Table 16 Projected demand of southern region after 12th plan42

Table 17 The import requirement in southern region (present)43

Table 18 Work to be undertaken under SSSR scheme44

Table 19 Breakup of remaining FDI investment (up to2012-13) 49

Table 20 Details of foreign companies in joint venture with Indian companies50

Table 21 Technical specification of the work to be undertaken IN SSSR scheme51

Table 22 Benchmark cost of conductors part-151

Table 23 Benchmark cost of conductors part-252

Table 24 Estimation of breakup of cost under O&M 52

Table 25 Details of transmission license being issued in the past54

Table 26 Costing of various transmission elements for preparing the draft financial model.69

List of Figures

Figure 1 Methodology adopted in giving advisory to the client9

Figure 2 Offerings of feedback infra in infrastructure space15

Figure 3 Feedback group professional strength16

Figure 4 Landmark events of transmission sector21

Figure 5 Research methodology adopted during the project22

Figure 6 Work performed under primary research22

Figure 7 Work performed under Secondary research23

Figure 8 Research done through SSSR scheme documents23

Figure 9 Demand summary of all India forecast (2012-13)31

Figure 10 12th plan capacity addition requirement32

Figure 11 Requirement of transmission planning arises due to37

Figure 12 Transmission Planning objectives 37

Figure 13 Studies & analysis for transmission planning39

Figure 14 Pre-requirement for studies & analysis to be undertaken39

Figure 15 Technological options for transmission planning40

Figure 16 Transmission value chain45

Figure 17 Methodology adopted for giving the advisory & m responsibilities in it.46

Figure 18 The various functions performed by me under the live project47

Figure 19 FDI investment in Indian power sector over the years49

Figure 20 Procedure for the interconnection of transmission line53

Figure 21 Power distribution average participation method under POC mechanism56

Figure 22 Method of calculation of transmission charges through POC for 1st 2 years57

Figure 23 Method of collection & disbursement of charges under POC58

Figure 24 Advantage of POC mechanism over Postage stamp method59

Figure 25 Measures to safeguard the transmission lines because of sudden frequency variation66

Figure 26 Long term availability of transmission assets67

Figure 27 Measure to have high transmission availability68

Figure 28 Industry structure showing the interaction between various entities.................71 Figure 29 Force majeure events, impact & duration..72 Figure 30 Technical requirements for connectivity to grid73 Figure 31 Various compensation scheme in case of natural disaster.74 Figure 32 Risk mitigation in undertaking the project as per RFP..75 Figure 33 Force majeure inclusions & exclusion as in TSA..76

Executive Summary

Transmission Privatization is the order of the day. As a part of reform in power sector, electricity laws were amended, through The Electricity Laws (Amendment) Act 1998. This enactment not only treated transmission as a distinct activity but also facilitated infusion of private sector investment in transmission as a Transmission Licensee. Electricity Act 2003 also authorizes institutionalization of Privatization in the Power Transmission Sector. In order to mobilize resources from private sector, Government of India issued guidelines for private sector participation in transmission sector in January 2000. These guidelines envisage two distinct routes for private sector participation in transmission:Joint Venture (JV) Route,wherein the CTU/STU shall own at least 26% equity and the balance shall be contributed by the Joint Venture Partner (JVP) andIndependent Private Transmission Company (IPTC) Route,wherein 100 percent equity shall be owned by the private entity. With the success that we have seen with the first transmission license under IPTC, which was issued to (RETL) Reliance Energy Transmission Ltd for constructing the transmission lines in the states of Maharashtra & Gujarat under Western Region System Strengthening Scheme etc. its envisaged that the Transmission Privatization implementation can help alleviate the Transmission Sector in India as well as the reduction of losses. By definition an IPTC means the Independent Private Transmission Company(s) which will execute the Project Agreements on a particular PPP model necessary for the Projects.

A contract was signed by Feedback Infrastructure Private Ltd with a Multinational Infrastructure Investment Company in June, 2013 for being the consultant in bidding process of SSSR (System Strengthening in Southern Region) Transmission Service Agreement, which includes the construction of Transmission Lines to import power through tariff based competitive bidding from Eastern Region. This agreement is based on build own operate maintain model of PPP. Considering the Transmission Service Agreement (TSA) & Request for Proposal (RFP) of SSSR Scheme, the Technical Bid Advisory is provided to the Client. The SSSR scheme consisted of several activities which is to be undertaken by the one whose bid will be selected as per tariff based competitive bidding procedure. The successful bidder shall be called as the TSP (Transmission Service Provider) or ISTS Licensee (Inter State Transmission Service) or Transmission Licensee after acquiring the license from the concerned commission.

The figure shows the methodology adopted in giving the advisory to the Client in various phases of SSSR bidding process.

Figure 1

(I was a part of this phase, and my duty was to find & provide the latest cost of the transmission elements and other related things.I was responsible to perform several functions under these phases of the advisory.)

As the consultancy service is to be provided to a Foreign Based Company, who wants to invest as a developer in Indian power sector through its Subsidiary branch in India, and as the above project is particularly for Transmission, hence a complete strategic analysis is carried out regarding how a foreign based company can invest & enter in Indian power sector as per the CERC (Central Electricity Regulatory Commission) guidelines and regulations.

Below are the various Scope of Work performed under this project:-

Advisory regarding RFP (Request for Proposal) and TSA (Transmission Service Agreement) of the project.

Advisory regarding the Transmission charge mechanism, which includes, POC (Point Of Connection) mechanism, RSA (Revenue Sharing Agreement).

Advisory regarding the various regulations & guidelines of CERC (Central Electricity Regulatory Commission), that is required to be followed by the Licensee during the complete life cycle of the project.

Advisory regarding the procedure of interconnection of transmission lines.

Advisory regarding the technical requirement of the project to set up the transmission network & expected cost of various components to be used, for ex- cost of ACSR Zebra conductors for 765KV transmission line & Twin Moose conductors for 400KV transmission line etc.

Advisory regarding present scenario of Indian Power Sector, Power Industry Structure showing, how the various governing bodies are interconnected to one another and how they interact & finally the future prospects of this project

Advisory regarding various other issues like,

1. Transmission asset availability to be maintained & other related issues

2. Disaster relief funds provided by the government under several schemes for the loss of assets of the TSP, such as, NCCF ( National Calamity Contingency Fund), CRF (Calamity Relief Fund) etc.

3. Estimation of breakup of O&M cost through the financial reports of transmission work undertaken by PGCIL (Power Grid Corporation India Ltd). Etc.

Finally the Advisory on the cost at which the bid should be made is facilitated by developing the draft financial model, and provided an estimated cost for the same.

(Apart from advisory given to client under SSSR scheme, I have also worked under PATRAN & RAPP (Rajasthan Atomic Power Project) Transmission system strengthening schemes introduced by government, and have provided the advisory services for bidding phase to the clients for the same.)

1. INTRODUCTION1.1 TRANSMISSION PRIVATIZATION/IPTC

Transmission Privatization is the order of the day. As a part of reform in power sector, electricity laws were amended, through The Electricity Laws (Amendment) Act 1998. This enactment not only treated transmission as a distinct activity but also facilitated infusion of private sector investment in transmission as a Transmission Licensee. Electricity Act 2003 also authorizes institutionalization of Privatization in the Power Transmission Sector. In order to mobilize resources from private sector, Government of India issued guidelines for private sector participation in transmission sector in January 2000. These guidelines envisage two distinct routes for private sector participation in transmission:Joint Venture (JV) Route,wherein the CTU/STU shall own at least 26% equity and the balance shall be contributed by the Joint Venture Partner (JVP) andIndependent Private Transmission Company (IPTC) Route,wherein 100 percent equity shall be owned by the private entity.

The Transmission Privatization/IPTC is not a new concept, anymore. The success at various places has shown the potential and the difference that IPTC can bring about in power sector, i.e. With the success that we have seen with the first transmission license under IPTC, which was issued to (RETL) Reliance Energy Transmission Ltd for constructing the transmission lines in the states of Maharashtra & Gujarat under Western Region System Strengthening Scheme in the year 2004 during 10th plan etc. its envisaged that the Transmission Privatization implementation can help alleviate the Transmission Sector in India as well as the reduction of losses.

After the above project many other transmission projects came in various regions and license were issued to various private companies to undertake the work and setup the transmission assets based on different PPP models, and all are showing success in their respective regions. Further the latest transmission projects for IPTC which are passed by the government and are under bidding phase are SSSR, PATRAN & RAPP (Rajasthan Atomic Power Project) etc.

The concept of privatization in transmission was accelerated by government in its 11th five year plan. During 11th Plan, Power Grid targeted to double its network by adding about 60,000ckms of transmission lines. This would mean a capital investment of over Rs. 55,000 Crore by year 2012.

Power Grid has reported the annual capital investment of Rs. 6615 Crore during the FY (2007- 08).If capital expenditure of about Rs. 55,000 Crore for the 11th plan is to be achieved; Power Grid would require capital investment to the tune of Rs. 12,000 Crore every year.

The efforts of Power Grid in creating robust transmission network would need to be supplemented by involvement of Private Sector. Therefore, the Government of India took certain initiatives to facilitate private sector participation in transmission by bringing about certain enabling changes in the legal framework. Thereafter, Power Grid Corporation of India Limited, which was notified as a Central Transmission Utility (CTU) spearheaded implementation of a few transmission projects through Public Private Partnership (PPP) model i.e. Joint Venture (JV) route as well as Independent Private Transmission Company (IPTC) route.

The concept of IPTC has not only helped in reducing the transmission losses, evacuation problem etc but also provided a better and more efficient service to the various customers. As our project shows GOI has also envisaged the participation of Foreign based Companies in the transmission sector, which is at present a new concept under IPTC and yet very less number of players are in to it.

The implementation of POC Mechanism in IPTC for determining the Inter State transmission charges, which includes the Injection charges and the Withdrawal charges to be paid by various LTTCS, DICS & other ISTS Customers for using the transmission lines, have made the IPTC work more efficient and transparent.

The POC mechanism has removed the pan-caking condition, which was a measure concern in the earlier mechanism i.e. Postage Stamp Method, and introduced a single charge, which is the only charge to be paid by the Transmission service customers. There is another very important advantage of POC over PSM, i.e. it is Distance, Direction & Quantum of Energy sensitive and takes in to account all the above factors in determining the charges to be paid by various transmission service customers.

Under the POC mechanism, as per TSA, the transmission charges & losses are shared among various LTTCS, DICS & other ISTS customers, which is collected by CTU and is disbursed among the respective ISTS Licensee and other non ISTS licensee as per Revenue Sharing Agreement (RSA) i.e. the responsibility & liability of the ISTS Licensee is reduced.

Thus the present concept of POC mechanism in use, has not only improved the working conditions but also the overall efficiency of the IPTC.

1.2 PROBLEM STATEMENT

As our client was a Multinational Infrastructure Investment Company i.e. not an Indian firm, so the main problem was that, the company was not familiar with the Indian Power Sector, Rules, Regulations, Various Mechanism involved, Standards, Price of material and other related terms. Since the company was new in Indian Market and has not undertaken any related projects earlier in India, therefore a contract was signed by the client with Feedback Infrastructure Pvt Ltd to attain the consultancy service for the transmission related issues of Indian Power Sector as well as the technical & financial advisory for the bidding phase of SSSR scheme, such that a proper understanding of the Indian Market can be acquired and hence an accurate bidding can be made.

1.3 OBJECTIVE

The purpose of the project is to facilitate and enable the client, to make an accurate and effective bid for SSSR Transmission Scheme under IPTC, by making them understand each and every prospect and related issues of Transmission in Indian power sector, the technical & financial requirement of the scheme and also by providing them the estimated cost of bidding by developing the Draft Financial Model, such that they can have a fair chance of winning the project.

1.4 ORGANIZATION PROFILE

(Figure 2)Feedback Infrastructure Services Private Limited (Feedback Infra), established in 1990, is a leading professional and technical services company in the infrastructure sector in India. Within Feedback Infra and its Group companies, exists excellent capability to offer an integrated suite of services from concept to commissioning and beyond, across all sectors of infrastructure. A snapshot of Feedback Infras offering in infrastructure space is provided below:

All the above services are offered for various Infrastructure Sectors i.e. Energy, Transportation, WATSAN, Real Estate & Townships, Healthcare, Social Infrastructure

Headquartered in Gurgaon, Feedback Infra has 5 regional offices and 70 project offices nationally. Besides India, our team is adding value to projects in Afghanistan, the Africa Continent, Australia, Bangladesh, Bhutan, Europe, Indonesia, Malaysia, Middle East, Nepal, Singapore, Sri Lanka and Syria.

With a mission of Making Infrastructure Happen, Feedback Infra strives to improve people's lives by supporting the development process that impact communities. Feedback Infras experience highlights include:

Power sector Reforms and restructuring experience of 6 Indian States

Advising government utilities, private developers, and investors on more than 35,000 MW of new power generation capacity including PPP transactions

Helping 23 of the 28 Indian states and 4 of the 7 Union Territories in their infrastructure investment policies and strategies

Working on more than 10,000 kilometers of National and State highways

Putting together 100,000 acres of real estate development

Developing a building area of more than 23 million square feet

Supporting the infrastructure initiatives of over 25 of Indias top 50 listed companies

Growing international presence with offices in UK, Indonesia, Nepal, UAE and Ethiopia

Feedback Infras clientele includes government organizations, private sector groups, as well as bilateral and multilateral agencies in developing infrastructure policies and strategies, inviting Private sector participation, planning & implementing large infrastructure projects across sectors.

They have successfully completed over 700 projects of which about 350 projects are PPP projects, which extend across various infrastructure sectors.

Feedback Infras team comprises of Engineers, Planners, MBAs, Chartered Accountants, Social & Environmental Scientists and Transaction Advisory experts who support clients to address specific infrastructure procurement challenges. The sectorial and professional breakup of feedback groups personnel is presented below:

Figure 3

2. LITERATURE REVIEW & RESEARCH METHODOLOGY2.1 LITERATURE REVIEW

As a part of reform in power sector, electricity laws were amended, through The Electricity Laws (Amendment) Act 1998. This enactment not only treated transmission as a distinct activity but also facilitated infusion of private sector investment in transmission as a Transmission Licensee. A new Act, namely, The Electricity Regulatory Commission Act, 1998 was brought into force. This Act provided for the establishment of a Central Electricity Regulatory Commission (CERC) at the Central level and a State Electricity Regulatory Commission (SERC) at the State level for rationalization of Electricity Tariff and to introduce transparent policies and to promote efficient and environment friendly policies. For taking measures conducive to the development of electricity industry, The Electricity Act 2003 was notified which consolidates all the earlier laws.

The Electricity Act, 2003 has significantly enlarged the spectrum of responsibility of CERC. Under the ERC Act, 1998 only the tariff fixation powers were vested in CERC. The new law of 2003 has entrusted on the CERC several other responsibilities in addition to the tariff fixation powers, for instance, the powers to grant license for Inter State Transmission, Inter State Trading and consequently to amend, suspend and revoke the license, the power to regulate the licensees by setting performance standards and ensuring their compliance etc.

In order to mobilize resources from private sector, Government of India issued guidelines for private sector participation in transmission sector in January 2000. These guidelines envisage two distinct routes for private sector participation in transmission:Joint Venture (JV) Route,wherein the CTU/STU shall own at least 26% equity and the balance shall be contributed by the Joint Venture Partner (JVP) andIndependent Private Transmission Company (IPTC) Route,wherein 100 percent equity shall be owned by the private entity.

(The privatization in Transmission through IPTC route was 1st introduced during 10th Plan in 2004 under WRSSS (Western Region System Strengthening Scheme) for which the RETL became the successful bidder & won the Transmission License to carry out the complete work by following the BOOT (Build Operate Own & Transfer) model of PPP. It has shown a great success under Transmission privatization through IPTC route. But the IPTC phenomenon was accelerated by government under its 11th plan by introducing many such strengthening schemes and providing the license to private players for the same.)

The Government has announced ambitious plan to add around 1, 00,000 MW of additional generation capacity by the year 2012. It is proposed to add this capacity through Central Power Utilities, State Power Utilities and private investors. The transmission system to evacuate the above quantum of power shall be taken up by Power Grid Corporation of India Ltd. (POWERGRID) - Central Transmission Utility (CTU), State Power/Transmission Utilities and private investors. An investment of about Rs. 71,000 Crore is envisaged in transmission under central sector, out of which POWERGRID has planned to invest about Rs. 50,000 Crore on its own and the remaining Rs. 21,000 Crore is expected to be brought in by the private investors.

To attract private investment of such magnitude, Govt. of India had taken various steps to provide for an adequate administrative & legal framework & these are described below:-

(NATIONAL ELECTRICITY PLAN - TRANSMISSION)

Transmission planning is a continuous process of identification of transmission system addition requirements, their timing and need. The transmission requirements could arise from new generation additions in the system, increase in demand and general system strengthening not necessarily associate with a particular generation project. These transmission addition requirements are identified, studied and firmed through the transmission planning process. This document Draft National Electricity Plan (Vol -II) Transmission elaborates plan for development of transmission systems in India during 12th Five Year Plan period (i.e. 2012-13 to 2016-17).

(INTER STATE TRANSMISSION SYSTEM (ISTS))

Earlier ISTS was mainly owned and operated by Power Grid Corporation of India Limited (POWERGRID) which is also Central Transmission Utility (CTU). But in present scenario, Inter-State Transmission System (ISTS) schemes are built through competitive bidding and many private sector entities is operating the ISTS elements.

(PROVISION OF THE NATIONAL ELECTRICITY POLICY)

Some of transmission related provisions of the National Electricity Policy, which have implication with regard to the National Electricity Plan, are:

1) Augmenting transmission capacity keeping in view the massive increase in generation and also for development of power market.

2) While planning new generation capacities, requirement of associated Transmission capacity would need to be worked out simultaneously in Order to avoid mismatch between generation capacity and transmission Facilities. The policy emphasizes the following to meet the above Objective: -

The Central Government would facilitate the continued development of the National Grid for providing adequate infrastructure for interstate transmission of power and to ensure that underutilized generation capacity is facilitated to generate electricity for its transmission from surplus regions to deficit regions.

The Central Transmission Utility (CTU) and State Transmission Utility (STU) have the key responsibility of network planning and development based on the National Electricity Plan in coordination with all concerned agencies as provided in the Act.

Open access in transmission has been introduced to promote competition amongst the generating companies who can now sell to different distribution licensees across the country. This should lead to availability of cheaper power.

(PROVISION OF THE TARIFF POLICY)

Some of related provisions of the Tariff Policy, which provide objective in development of transmission systems through transmission tariff framework, are:

Attracting the required investments in the transmission sector and providing adequate returns.

A suitable transmission tariff framework for all inter-State transmission, including transmission of electricity across the territory of an intervening State as well as conveyance within the State which is incidental to such inter-state transmission, needs to be implemented with the objective of promoting effective utilization of all assets across the country and accelerated development of new transmission capacities that are required.

To facilitate cost effective transmission of power across the region, a national transmission tariff framework needs to be implemented by CERC. The tariff mechanism would be sensitive to distance, direction and related to quantum of flow. As far as possible, consistency needs to be maintained in transmission pricing framework in inter-State and intrastate systems.

(NEW TRANSMISSION PRICING FRAMEWORK)

Regulation on Point of Connection (POC) transmission charges are aimed at addressing the emerging needs of power market development, competition, and open access.

With this mechanism the short coming of the earlier methodology Postage Stamp Method of pan-caking of charges &cross- subsidization between regions will be removed.

The new transmission pricing methodology addresses the multiple licensee- multiple- user regimes.

(REGULATORY APPROVAL FOR EXECUTION OF INTER STATE TRANSMISSION SCHEME)

The regulation on grant of regulatory approval for execution of the Inter-State Transmission scheme to CTU will help realize the vision of the National Electricity Policy (NEP) for network expansion , system strengthening and up gradation and ensure reliable, efficient, coordinated & economical flow of electricity within and across region.

(COMPETITION IN TRANSMISSION)

The empowered committee headed by member, CERC has facilitated competitive bidding in transmission.

Prices discovered through competition were more efficient than cost plus tariff for transmission.

(THE LANDMARK EVENTS FOR TRANSMISSION SECTOR)

Development of the transmission network has been done in tandem with growth in generation capacity. The growth in transmission system is characterized by the physical growth in transmission network as well as introduction of higher transmission voltages and new technologies for bulk power transmission. Landmark events of this growth are:

Figure 4

2.2 RESEARCH METHODOLOGY

The below figures shows the Research Methodology undertaken to provide the advisory services to the client under SSSR Scheme & the various task performed under several research processes:-

( RESEARCH METHODOLOGY OUTPUT OF RESEARCHPRIMARY RESEARCHLIVE PROJECT (SSSR SCHEME) SECONDARY RESEARCH)Figure 5

Figure 6

Figure 7

Figure 8

3. OVERVIEW OF INDIAN POWER SECTOR

Indias power sector is a leaking bucket, the holes deliberately crafted and the leaks carefully collected as economic rents by various stakeholders that control the system. The logical thing to do would be to fix the bucket rather than to persistently emphasize shortages of power and forever make exaggerated estimates of future demands for power. Most initiatives in the power sector (IPPs and UMPPs) are nothing but ways of pouring more water into the bucket so that the consistency and quantity of leaks are assured

Deepak S. Parekh, Chairman, Infrastructure Development Finance Corporation.

Total Installed capacity (2012-13)

Table 2

SECTOR

MW

%

STATE SECTOR

86701.16

41.10

CENTRAL SECTOR

62826.63

29.78

PRIVATE SECTOR

61409.24

29.11

TOTAL

210951.72

Table 3

FUEL

MW

%

THERMAL

140976.18

66.82

COAL

120873.38

57.29

GAS

18903.05

8.96

OIL

1199.75

0.60

HYDRO(RENEWABLE)

39339.40

18.60

NUCLEAR

4780.00

2.30

RES** (MNRE)

25856.14

12.30

TOTAL

210951.72

** Renewable Energy Sources (RES) include SHP, BG, BP, U&I and Wind Energy

SHP= Small Hydro Project, BG= Biomass Gasifier, BP= Biomass Power,

U & I=Urban & Industrial Waste Power.

11th FIVE YEAR PLAN

GENERATION STATUS

Capacity Addition during 11th Plan (2007-12)

Based on the preparedness of the projects, it was envisaged that a capacity of about 68,869 MW is feasible for addition during 11th plan period. The sector wise break-up of feasible capacity addition during 11th plan is given in Table below:-

Table 4

SECTOR

HYDRO

TOTAL

THERMAL

THERMAL BREAK UP

NUCLEAR

TOTAL

(%)

COAL

LIGNITE

GAS/LNG

CENTRAL

9685

23810

22060

1000

750

3160

36655

(53.2%)

STATE

2637

20352

19365

375

612

-

22989

(33.4%)

PRIVATE

3263

5962

5210

0

752

-

9225

(13.4%)

ALL INDIA

15885

50124

46635

1375

2114

3160

68869

(100%)

TRANSMISSION PLANNING & STATUS

Under the Power for All missions, India has set a target of 200,000 MW of installed capacity by the end of 2012. The transmission segment has a major role in achieving this mission as an efficient transmission capacity and network will prove essential to transfer power from generating stations to distribution networks. In the past, transmission planning was done with respect to generation and was focused on setting up transmission systems that could evacuate power safely; however, with the changing scenario, the transmission sector started to move towards integrated system planning because generation capacities are distributed unevenly in different regions. While thermal capacity is in the eastern region, hydro capacity is concentrated in the Northern and North-Eastern regions. The capacity is used to evacuate power according to the demand in other regions like the Western region; thus, the integrated system planning has turned out to be a good option.

In the central sector, the central transmission utility (CTU), known as the Power Grid Corporation of India Ltd (PGCIL), is responsible for national and regional transmission planning while the state sectors have separate State Transmission Utilities (STU). Private sector participation is negligible in transmission and there is only one public-private partnership project, the Tala Transmission Project. Four private companies have been granted licenses for developing transmission projects. While three companies have entered joint ventures with PGCIL, one company is a private company that has been awarded independently.

Growth in Transmission Network over the Plan Period

The development in the transmission system was carried out in coordination with the growth in generation capacity. New and advanced technologies were introduced in the transmission system for bulk power transmission. 220 KV of transmission power was introduced in 1960, and another 400 KV was introduced in 1977. HVDC and HVDC bi-pole transmission was set up back-to-back in 1989 and in 1990 respectively.

The transmission line expanded from 52,034 ckms during the sixth plan to 221,549 ckms during the eleventh plan (up to Jan 2010) while the transmission substation size increased from 46,621 MVA to 303,637 MVA from the Sixth 5-year Plan to as on the period under review (Jan 2010).

Formation of the National Grid

In the current 5-year plan, a transmission plan has been evolved for strengthening the regional grids to establish and to operate both the regional and the national power grid to facilitate transfer of power across different regions and to support the generation capacity addition Programme of around 80 GW.

Power Grid is now working on the planned set up of a national power grid to facilitate transfer of power within the different regions in India by the end of the Eleventh 5-year Plan. This grid will support the inter-regional energy transfer and will exploit the countrys unevenly distributed energy resources. The national grid will also help the power-deficit regions to fulfill their demand from the regions that have excess power.

The Power Grid has achieved several milestones towards the development of National Grid such as the implementation of Asias longest Talcher-Kolar High Voltage Double Circuit (HVDC) bipolar link including its up gradation and the commissioning of Muzaffarpur-Gorakhpur high capacity 400 KV D/C that interconnects all four regional grids (Northern, Western, Eastern and North-Eastern) and is operating as a synchronous grid.

The difficulty encountered during the construction of the transmission lines was the Right of Way (ROW), especially in the hilly terrains of the Northern and North-Eastern regions, which are endowed with hydro resources. Transmission Super Highways are the solution for the ROWs so that they do not cause bottlenecks in harnessing generating resources. Interconnection of these highways from different parts of the country will ultimately lead to formation of a high-capacity national power grid.

The objectives underlying the formation of National Grid are:

To transfer power from surplus regions to deficit regions

Utilize maximum resources from diversified regions

Ensure reliable, economical and quality power

Many inter-regional schemes have been planned for the phased development of the National Grid.

11th plan Status of transmission lines.

Table 5

TRANMISSION LINES

UNIT

TARGET UPTO 11th PLAN MARCH 2012

765kV

CKM

7850

HVDC+/-500 kV

CKM

7432

400kV

CKM

125000

230/220kV

CKM

150000

TOTAL

CKM

290282

Technology Development In Transmission System

New technologies would need to be adopted and implemented in a proactive manner to achieve the objective of optimum utilization of the available transmission assets as well as conservation of Right-of-Way, reducing transmission costs, reduction of losses etc.

Some of the new technologies adopted/being adopted in its transmission system include:

High capacity 6000MW +800kV HVDC system

Flexible AC Transmission System (FACTS)

Application of Series Compensation

Up gradation/Up rating of transmission line

High temperature endurance conductor

Tall/Multi-circuit & Compact tower

HVDC (HIGH VOLTAGE DC TRANSMISSION)

Ahigh-voltage, direct current(HVDC)electric power transmission system usesdirect currentfor the bulk transmission of electrical power.

HVDC comes into play if very high volumes of electricity need to be transmitted over distances above 800 km. In this very advanced technology AC is converted to DC and pumped into the lines. This may seem a convoluted, complicated way. It is indeed: very few countries can today master, install and manage HVDC systems. The advantages are lower line losses, slimmer hardware across the countryside, stable grid behavior, dispersed generation of power, and overall economy. Indias hydel riches are in the North East, coals in the East and consumers all over the land. Pristine locations can silently generate power and need not create polluting industries nearby as consumers. HVDC vacates massive quantum of power with ease to far away points.

Advantages of HVDC lines:-

Lesser number of conductors and insulators and therefore reduce conductor and insulator cost

Power transmission and stabilization between unsynchronized AC distribution systems

Less corona loss and reduced radio and telephonic interference

Power loss are also reduced with DC as there are two conductors for a biploar HVDC line

HVDC lines in INDIA

At present the 3 lines are in operation while, another 3 are under progress. And these are following

Chandrapur to Padghe (Mumbai)--(1500 MW at 500 kV DC)

Rihand to Delhi (Dadri) (1500 MW at 500 kV DC)

Talchar to Kolar (2500 MW) etc

DISTRIBUTION PLANNING

In the 10th plan the emphasis was on steps to reduce the huge aggregate technical and commercial (AT&C) losses, control the theft & pilferage and rationalize the tariff structures.

Investment was also made in the distribution sector and across the states reforms were taken up. Major schemes like Accelerated Power Development & Reform Program (APDRP) for urban areas and the Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) were also initiated in the 10th plan which aimed at bringing in investment in urban areas and creating an electricity infrastructure in rural areas.

The snapshot of implementation status of RAPDRP & RGGVY under 11th plan is shown below:-

(RAPDRP PROGRAMME SIZE Rs 51577 Crores)

Table 6

RAPDRP STATUS UNDER 11th PLAN (2007-12)

AMOUNT

UNDER PART-A

UNDER PART-B

Approved

Rs 5167.73 Crore

Rs 10859.33 Crore

Disbursed

Rs 1450.09 Crore

Rs 1089.71 Crore

(RGGVY PROGRAMME SIZE Rs 33000 Crores)

Table 7

RGGVY STATUS UNDER 10th PLAN

(Allotted amount phase-1 Rs 5000 Crore)

Total villages to be electrified

587556

Total villages electrified

474982

Total villages remained unelectrified

112401

% Electrified villages

80.80%

Total Rural Households to be electrified

138,271559

Total Household electrified

60,180685

% Unelectrified Households

56.48%

% Electrified Households

43.52%

Table 8

RGGVY STATUS UNDER 11th PLAN

(Total Allotted amount- Rs 28000 Crore)

Total villages to be electrified

182432

Total villages electrified

98612

Total villages remained unelectrified

83820

(OVERALL STATUS OF FINANCIAL PROGRESS UNDER RGGVY TILL 11th PLAN - Out of 33000 Crore (i.e. 5000 Crore of 10th plan & 28000 Crore of 11th plan), only Rs23913 Crore have been used so far.)

During the 11th plan also the major objective in the distribution is also to reduce the AT&C losses and to continue with the reforms in the distribution sector to provide an affordable good quality and reliable power supply to the citizen of India, be it in urban or rural areas.

The distribution of power can be studied in two distinct components viz.:

(i) Distribution of power in urban areas, and

(ii) Distribution of power in rural areas

Public Private Partnership through rural franchisees

Management of rural infrastructure has to be based upon all inclusive growth model that involves rural set ups and provides the local Panchayat Raj institutions a supervisory function to ensure the durability and sustainability of electricity infrastructure. Franchisee system for management of rural distribution has been made mandatory under RGGVY to make the revenue model sustainable. RGGVY allows enterprising individuals, NGOs, private entrepreneurs, co-operatives, Panchayat Raj institutions to become franchisees. The franchisees system needs major push in 11th plan with initiatives for capacity building and financial support

One Megawatt Power Plants in Rural Areas

To meet the power supply requirements of rural areas stand alone / grid connected power plants of optimum one megawatt capacity power plants should be encouraged. REC should act as nodal agency for providing technical and financial support under the scheme.

SUMMARY OF 12TH FIVE YEAR PLAN

Twelfth Plan will focus on strengthening the functions of the power sector

Montek Singh Ahluwalia

(Planning Commission Deputy Chairman)

The upcoming plan by planning commission is 12th plan that will Have the Implementation period from 2012 to 2017 The capacity addition during this plan will be 1,00,000 MW Private Sector is going to be the key to Indias Power Generation Story in 12th plan. There will be more projects coming up in private sector than in central and state sectors combined together.

The 12th plan will be favorable for private sector to invest in power projects. According to a strategy plan of power ministry submitted to the Cabinet, private sector will account for 62 per cent of the 1,00,000 MW capacity slated to come up during the Plan period (2012-17), a big jump from the 20 per cent factored in for the current Plan period ending March 2012.

Demand summary of All India Forecast (In Billion Units)(As per EPS report) (2012-13)

Figure 9

12th plan capacity addition requirement

Figure 10

Estimated total fund requirement during 12th Plan (In Crores)

Table 9

GENERATION

4,95,083

TRANSMISSION

2,40,000

DISTRIBUTION

4,00,000

TOTAL

11,35.083

.

Expected transmission requirement- 2012-17

Table 10

Expected Transmission Requirement

All India

+/-800 kV HVDC Bipole Projects, 6000MW

2 to 3

+/-600 kV HVDC Bipole Projects, 4000MW

1

HVDC Bipole +/-800 kV ckms

4000

HVDC Bipole +/-600 kV ckms

1000

765/400 kV substation nos

40 to 50

765 kV Transmission Lines ckms

25,000 to 30,000

765/400 kV MVA

1,10,000

400 kV Transmission Line ckms ( 40% quad, 60% TM)

50,000

400/220 kV , 400/132 kV (MVA)

80,000

220 kV Transmission Line ckms

40,000

220/132, 220/110

95,000

Growth in transmission line at the end of each plan:

Table 11

Voltage level

6th

Plan

7th

Plan

8th

Plan

9th

Plan

10th

Plan

11th Plan

(4th year)

765kV

0

0

0

971

1704

3340

HVDC Bipole

0

0

1634

3138

5872

7452

400kV

6029

19824

36142

49378

75722

102578

220kV

46005

59631

79600

96993

114629

134190

Total ckms

52034

79455

117376

150480

197927

247560

Report on: Advisory Services In Transmission PPP

Page | 1

National Power Training InstitutePage 79

DISTRIBUTION STATUS

(RGGVY & RAPDRP STATUS UNDER 12th PLAN TILL NOW)

Table 12

RAPDRP STATUS UNDER 12th PLAN (2012-17)

AMOUNT

FOR FY (2012-13)

FOR FY (2013-14)

Approved

Rs 3140 Crore

Rs 575 Crore

+ Carry forward amount of

Last year

Disbursed

Rs 1500 Crore

Under implementation

Table 13

OVERALL RAPDRP STATUS TILL 2012-13

AMOUNT

FOR PART-A

FOR PART-B

Approved

IT-

Rs 5243.16 Crore

SCADA-

Rs 1470.44 Crore

Rs 28427.03 Crore

Disbursed

IT-

Rs 2047.86 Crore

SCADA-

Rs 412.03 Crore

Rs 4266.09 Crore

Table 14

RGGVY STATUS UNDER 12th PLAN

Financial Year

Allocated Amount

2012-13

Rs 4900 Crore

2013-14

Rs 4500 Crore

4. TRANSMISSION PLANNING

4.1 Transmission Planning & Procedure

Transmission planning is a continuous process of identification of transmission system addition requirement, its timings and need. The transmission requirements could arise from new generation addition in the system, increase in demand and general system strengthening not necessarily associate with a particular generation project. These transmission addition requirements are identified, studied and firmed through the transmission planning process.

The transmission systems that are in place in the country consist of Inter-State Transmission System (ISTS) and Intra State Transmission System (Intra-STS).

ISTS (Inter State Transmission System) is mainly owned and operated by Power Grid Corporation of India Limited (POWERGRID) which is also Central Transmission Utility (CTU). In future, Inter-State Transmission system (ISTS) schemes would be built through competitive bidding and many private sector entities would own and operate the ISTS elements. Already, a number of ISTS schemes owned by the private sector or joint venture(JV) between private sector and POWERGRID are under construction. The ISTS serves the following purpose:

(i) Evacuation of power from inter-state generation stations which have beneficiaries in more than one state.

(ii) Onwards transmission of power for delivery of power from inter-state generation stations up to the delivery point of the state grid.

(iii) Transfer of operational surpluses from surplus state(s) to deficit state(s)

or from surplus region(s) to deficit region(s).

Intra-STS within the state are mainly owned and operated by the state transmission utilities of each state. The Intra-STS serves the following purpose:

(i) Evacuation of power from the generating stations having beneficiaries in that State.

(ii) Onwards transmission within the State from ISTS boundary up to the various substations of the state grid network.

(iii) Transmission within the state grid for delivery of power to the load centers within the state.

(PROVISIONS OF THE NATIONAL ELECTRICITY POLICY FOR TRANSMISSION PLANNING)

(i) Adequate and timely investments and also efficient and coordinated action to develop a robust and integrated power system for the country.

(ii) Augmenting transmission capacity keeping in view the massive increase planned in generation and also for development of power market.

(iii) While planning new generation capacities, requirement of associated transmission capacity would need to be worked out simultaneously in order to avoid mismatch between generation capacity and transmission facilities. The policy emphasizes the following to meet the above objective:

The Central Government would facilitate the continued development of the National Grid for providing adequate infrastructure for inter-state transmission of power and to ensure that underutilized generation capacity is facilitated to generate electricity for its Transmission from surplus regions to deficit regions.

The Central Transmission Utility (CTU) and State Transmission Utility (STU) have the key responsibility of network planning and development based on the National Electricity Plan in coordination with all concerned agencies as provided in the Act. The CTU is responsible for the national and regional transmission system planning and development. The STU is responsible for planning and development of the intra-state transmission system. The CTU would need to coordinate with the STUs for achievement of the shared objective of eliminating transmission constraints in cost effective manner.

Network expansion should be planned and implemented keeping in view the anticipated transmission needs that would be incident on the system in the open access regime. Prior agreement with the beneficiaries would not be a pre-condition for network expansion. CTU/STU should undertake network expansion after identifying the requirements in consultation with stakeholders and taking up the execution after due regulatory approvals.

Structured information dissemination and disclosure procedures should be developed by the CTU and STUs to ensure that all stakeholders are aware of the status of generation and transmission projects and plans. These should form a part of the overall planning procedures.

(THE REQUIREMENT OF SUCH PLANNING ARISES DUE TO VARIOUS REASONS)

Figure 11

.

PLANNING OBJECTIVES

Figure 12

(COORDINATED PLANNING AND STANDING COMMITTEES FOR POWER SYSTEM PLANNING (SCPSP))

Optimum development of growth plan requires coordinated planning of the inter State and intra-State grid systems. In respect of development of ISTS, the focus mainly is the interface of ISTS and State grid at drawl point of the State and the ability of ISTS to deliver this power and provide additional reliability to the State grid. In respect of development of Intra-STS, the focus is to enhance ability of State grid to transmit power drawn from ISTS and its own generating stations up to its load centers. The process of integrated planning is being coordinated by the Central Electricity Authority as part of its functions and duties under Section 73(a) of the Electricity act 2003.

To fulfill this objective and carry out integrated planning through coordination and consultation with transmission utilities and other stake-holders,

CEA has constituted Regional Standing Committees for Power System Planning (SCPSP) to firm up transmission addition proposals. These Standing Committees for Power System Planning have representation of CEA, CTU, STUs of the constituent States, Regional Power Committee (RPC) of the concerned region and representatives of Central Sector Generating Companies in the region. The inter-state transmission system developed either for evacuation of the generation or for system improvement is discussed in the SCPSP of respective region(s). Transmission addition requirements arising out of Long Term Access (LTA) applications are also discussed and firmed up by the SCPSP in the presence of the applicants.

(IMPLEMENTATION OF TRANSMISSION SCHEMES (ISTS))

In respect of ISTS, after firming up of the transmission proposals in the SCPSP and considering schedule of commissioning of associated generating station, CTU and CEA take up the proposal to the Empowered Committee for consideration of its implementation. As recommended by the Empowered committee and after consideration by the Government of India, the transmission schemes are implemented either through the tariff based competitive bidding process or under cost-plus mechanism with regulated tariff by POWERGRID as the CTU.

(TRANSMISSION PLANNING STUDIES)

1. Studies and Analysis for Transmission Planning :

In the planning phase, transmission requirements for generation projects and system reinforcement needs are evolved, based on detailed system studies and analysis keeping in view various technological options, planning criteria and regulations. These studies/analysis are problem-specific, that is, in a particular exercise, only a sub-set of the analysis/studies may be necessary. The type of major system studies and analysis that are considered in the exercise are as follows:

Figure 13

2. Pre-requirements

Following are data /information is needed for carrying out various system studies/analysis under the transmission planning process

Figure 14

3. Technological Options

The various technological options that are available now for 12th / 13th Plan time frame are given below. Consideration of these options is problem- specific, that is, in a particular exercise, only a limited number of options may be relevant.

Figure 15

5. SCOPE OF WORK UNDER SSSR SCHEME5.1 SSSR SCHEME PLANNING

(Why the need of SSSR scheme arises?)

Till few years back, based on the proposed generation additions Southern region was projected to experience surplus situation and accordingly inter-regional links like Raichur-Sholapur 765 kV 2xS/c, Narendra Kolhapur 765 kV D/c (Charged at 400 kV),Vemagiri Khammam Hyderabad Wardha 765 kV transmission corridors were planned to enable export of power from SR. However, due to variety of reasons, a large number of generation projects could not took off ground. Further, to make the situation worse, even the generation projects that were under construction and planned for commissioning during 11th plan are getting inordinately delayed. The effect of these developments is that presently Southern Region is reeling under huge deficit of power to the extent of 6200 MW.

One of the high capacity transmission corridors planned for transfer of surplus power from Southern region to other regions included Vemagiri Khammam Hyderabad and Hyderabad Wardha 765 kV D/c line. This corridor was primarily meant for evacuation and transfer from Gas based generation projects in Vemagiri area. However, due to Uncertainty of availability of gas Honble CERC, in its order, have observed that the Requirement of transmission network needed for evacuation of power of the generating stations being or to be established in Vemagiri area are required to be reviewed in the light of present day developments. Commission vide its order dated 9th May, 2013 have directed CEA and CTU to examine the possibility of reconfiguring the required network in the Southern Region based on expected generation and the load and some elements of the Transmission system may be combined with the other transmission systems being built.

Keeping above into view in the present report, comprehensive power import Requirement has been worked out and based on these analyses transmission Augmentation requirements to not only meet the present deficit but also to cater to the Projected load growth has been evolved.

Power Scenario of Southern Region - Present

Present Power Load Generation Balance as per SRLDC Report (April, 2013)

Table 15

State

Installed

Capacity (MW)

Demand

(MW)

Availability

(MW)

Deficit (-) / Surplus (+)

Andhra Pradesh

14196

13761

11630

-2131

Karnataka

12716

8985

8096

-889

Kerala

2821

3407

3237

-170

Tamil Nadu

15461

12665

10783

-1882

Pondicherry

32

320

318

-2

IPPs

816

0

0

Central Sector

9310

0

0

Regional

55352

38627

32428

-6199

** Note Installed Capacity includes 12,400 MW from Renewable energy.

(From the above it may be seen that against the peak demand of about 38,600 MWDemand met is of the order of 32,400 MW leaving a gap of about 6,200 MW.)

Power Scenario of Southern Region End of 12th Plan (2016-17)

(i) Projected Demand:

Table 16

State

Demand (MW)(as per 18th EPS)

Andhra Pradesh

22445

Karnataka

13010

Kerala

4669

Tamil Nadu + Pondicherry

21446

Regional

57221 (61570)

Wherein it is seen that 22,380 MW Installed capacity is likely to be added with the dispatchable power of 19,544 MW. Under scenario that all the planned Generation projects are timely commissioned and dispatch power then the Southern Region shall be self reliant to a large extent without much inter-regional power transfer requirement. Therefore, it is necessary that while assessing transmission augmentation pessimistic scenario with respect to power availability in SR should be considered. Accordingly, a scenario incorporating pessimistic capacity additions has also been worked out.

(The import requirement in these scenarios )

Table 17

S.

no

Items

Optimistic generation additions (MW)

Pessimistic generation additions (MW)

1)

Existing Capacity

42952**

42952**

2)

Existing Availability

32428

32428

3)

Capacity addition from new generation projects

22380

17230

4)

Availability from new generation projects

19544

15760

5)

Total Availability

51972

48188

6)

Projected Demand

(2016-17)

57221

57221

7)

Import (-) / Export (+)

(-) 5249

(-) 9033

(Thus the SSSR Scheme is introduced for the purpose of importing power to meet the future demand & to overcome the deficiency of power in southern region. Here the transmission network is need to be developed between eastern and southern region, to import the power from eastern region.)

The work to be undertaken by the transmission licensee under SSSR scheme consists of:

Table 18

S.N.

Scheme/ Transmission Works

Conductors per phase

Completion Target

Transmission System for System Strengthening in Southern Region for import of power from Eastern Region

I.

Transmission Lines:

(i) Srikakulam PP Vemagiri-II Pooling Station 765kV D/c line

(ii) Khammam (new) Nagarjuna Sagar 400 kV D/c line.

Hexa Zebra ACSR or equivalent AAAC conductor and Transmission line design should be corresponding to 85o C conductor temperature operation.

Twin Moose ACSR or equivalent AAAC conductor and Transmission line design should be corresponding to 85o C conductor temperature operation.

36 months

28 months

5.2 Advisory Services Provided to A Multinational Infrastructure Investment Company under SSSR Scheme:

Figure 16

(Transmission value chain Developer InvestorEPC Contractor ManufacturerOur Client (A Multinational Infrastructure Investment Company) has entered as a developer in the Indian Power Sector through its subsidiary company.)

( THE METHODOLOGY ADOPTED FOR GIVING THE ADVISORY TO THE CLIENT FOR SSSR SCHEME )

Figure 17

(I was responsible to perform several functions under these phases of the advisory.I was a part of this phase, and my duty was to find & provide the latest cost of the transmission elements and other related things.)

(The various functions performed by the energy division team of Feedback Infrastructure Pvt Ltd to provide the advisory services to the client for the bidding phase of SSSR scheme are shown below:-)

Figure 18

(I was responsible to carry out the work under all the mentioned functions of Energy Division Team for providing the advisory to the client under SSSR scheme.)

TECHNICAL ADVISORY PHASE:

Technical advisory phase incorporates all the technical informations related to Government Regulations & Policies, Guidelines, Project (RFP & TSA), Technical requirements, etc.

The advisory provided to the client on various concerns are:

(1. Regulation & Procedure for a Foreign Investor to invest in Indian Power Sector (Reference no- 7, 14 & 15))

Policy and Promotion: Foreign direct investment (FDI) up to 100% is permitted under the automatic route for:

Generation and transmission of electric energy produced in hydroelectric, coal/lignite-based thermal and oil- and gas-based thermal power plants.

Non-conventional energy generation and distribution

Distribution of electric energy to households, industrial, commercial and other users

Power trading

(The Automatic approval can be obtained from The Reserve Bank of India. A company is only required to report to RBI within 30 days of receipt of foreign equity or allotment of shares)

49% FDI & FII:Under the Power Sectors investment policy, 49 % FDI & FII is permissible for Power Exchanges. FDI investment will be subject to the government approval.Other conditions:(i) Such foreign investment would be subject to an FDI limit of 26% and an FII limit of 23% of the paid-up capital;(ii) FII investments would be permitted under the automatic route and FDI would be permitted under the government approval route;(iii) FII purchases shall be restricted to secondary market only(iv) No non-resident investor/entity, including persons acting in concert, will bold more than 5% of the equity in these companies; and(v) The foreign investment would be in compliance with SEBI Regulations; other applicable laws/regulations; security and other conditional ties.

FDI investment in Indian Power Sector over the years:

Figure 19

Further the breakup of the remaining FDI investment in Indian Power Sector is as follows:

Table 19

(Foreign direct investment (FDI) inflows into the power sector from April 2000 to February 2013 stood at US$ 7.83 billion, according to the Department of Industrial Policy and Promotion (DIPP))

Accordingly any Foreign Power Company can enter Indian Power Sector through FDI route. This can possibly be done by forming a Joint Venture with Indian Companies or establishing a wholly owned subsidiary here in India.

Several Global Power Plant equipment manufacturing companies from Japan, Europe, and USA have formed Joint Ventures with Indian companies for establishing manufacturing base in India to work as an EPC contractor. These companies are:

Table 20

Sr.no

Foreign Company

Indian Company

Place

1.

Mitsubishi Heavy Industries Ltd (Japan)

L&T

Gujarat

2.

Hitachi (Japan)

BGR

Tamil Nadu

3.

Toshiba (Japan)

JSW

Tamil Nadu

4.

Alstom (France)

Bharat Forge

Gujarat

5.

Ansaldo Caldie (Italy)

Gammon

Tamil Nadu

6.

Babcock & Wilcox (USA)

Thermax

Maharashtra

(For making investment particularly in Transmission sector, one has to go through the Governments Competitive Bidding Process for the introduced transmission scheme, to obtain the Transmission License after being selected as the successful bidder and to become the Transmission Service Provider (TSP) of the respective area.)

(2. Conductors specification for establishing the Transmission line in SSSR scheme & an estimation of the cost of such conductor to be used.)

The conductor configuration shall be hexagonal ACSR Zebra or equivalent AAAC for Srikakulam PP Vemagiri-II Pooling Station 765 kV D/c line and Twin Moose or equivalent AAAC for Khammam (New) NSagar 400 kV D/c line. The details of hexagonal ACSR Zebra and Twin Moose shall be as follows:

Table 21

Line configuration

Minimum conductor diameter requirement based on interference criteria

ACSR conductor specified

Equivalent AAAC conductors based on 53.5% conductivity of AL Alloy

Stranding details of AAAC conductors

765KV D/C with hexagonal conductors

28.62mm diameter

Zebra:428sq.mm aluminum area

28.7mm diameter, 488sq.mm aluminum alloy area

61/31.19mm

400KV D/C with twin conductor

31.77mm diameter

Moose:528sqmm aluminum area

31.95mm diameter 604mm aluminum area Alloy

61/3.55mm

Maximum & Minimum Cost (Excluding Taxes & Duties) in Rs lakhs per Circuit km of 765 kV Transmission line for 85 C:-

Table 22

Insulator Type

Standard Porcelain

Type of Terrain

Plain

Voltage Level

765 kV

Conductor Type

ACSR Moose

Circuit Type

Single Circuit

Conductor Configuration

Twin

Triple

Quad

Max

87.73

107.68

133.37

Min

61.12

75.54

95.24

Conductor Type

ACSR Bersimis

Circuit Type

Single Circuit

Conductor Configuration

Twin

Triple

Quad

Max

90.87

113.15

139.78

Min

62.96

78.59

99.09

Table 23

Insulator Type

Antifog

Type of Terrain

Plain

Voltage Level

765 kV

Conductor Type

ACSR Moose

Circuit Type

Single Circuit

Conductor Configuration

Twin

Triple

Quad

Max

90.32

108.95

137.78

Min

63.71

76.81

99.66

Conductor Type

ACSR Bersimis

Circuit Type

Single Circuit

Conductor Configuration

Twin

Triple

Quad

Max

93.46

115.74

144.19

Min

65.55

81.18

103.50

(3. Estimation of breakup of expenses under O&M?)

Table 24

OPERATION & MAINTENANCE EXPENSES

BREAKUP OF EXPENSES IN %

Employee Expenses

60-65%

A&G Expenses (Administrative & General expenses)

5%

R&M Expenses (Repair & Maintenance expenses), sub parts includes,

30-35%

Plant & Machinery

83.95%

Line, Cable machinery

8.9%

Other Expenses

7.15%

(4. What is the procedure for the interconnection of Transmission line? )

Figure 20

(5. Details of the Transmission License being issued in the past)

Table 25

S. no

Line/SPV

Developer

Category

Award of Project Month/Year

Award of License Month/Year

1

Raichur Sholapur Transmission Company

Consortium of Patel Engineering Ltd, Simplex Infrastructure Ltd and BS Transcom

Inter State

Jan-11

Aug-11

2

East North Interconnection Company Ltd

Sterlite Technology Ltd

Inter State

Jan- 10

Oct-10

3

Bhopal Dhule Transmission Company Ltd

Sterlite Technology Ltd

Inter State

Jan-11

Sept-11

4

Western Region Transmission Ltd

Reliance Energy Transmission Ltd

Inter State

Aug- 04

July-05

5

South East UP Power Transmission Company Ltd

Isolux Corsan

Intra State

July-11

Apr-13

6

Western UP Power Transmission Company Ltd

Consortium Of Cobra And Megha Engineering & Infrastructure Ltd

Intra State

May-11

Jan-12

(6. How the POC mechanism works in the real world?)

Definition:

It is the latest transmission charge pricing methodology introduced for sharing of Inter State Transmission Systems (ISTS) charges and Losses among the Designated ISTS Customers (DICs) depending on their location and sensitive to their distances from load centers (generators) and generation (customers) and the direction of the node in the grid.

Triggers of POC:

The need for this method was triggered due to the problems confronted in the application of the present Regional Postage Stamp Method which implied that all the users of a system in a region pay same price/MW of allotted transmission capacity. However due to increasing short term transactions over the grid, allotment of power plant capacities of one region to the beneficiaries in the other regions, etc the grid and its usage is getting more and more complex every day.

Some of the main triggers are summarized below:

1. Change in the configuration of ISTS: The transmission system features a combination of a decreasing regional flows and an increasing share of unidirectional inter-regional flows mainly from central, eastern, north-eastern generating zones to power hungry western and northern zones.

2. Changing nature of use of transmission system by various other users: The Electricity Act 2003 has given an impetus to the market in the efficient use of system resources, which led to the increase in the trading of the power and also in establishment of Merchant Power Plants (MPP) in the country. Earlier the trend was that only consumers pay for the transmission charges and not the generators but due to emergence of MPPs whose beneficiaries arent identifiable they are asked as to which regions their power will be sold and are asked to pay for it. Attribution of lines to individual users is also no longer possible in a deeply meshed transmission system like India.

3. The Problem of Pan-caking: In the present methodology no distinction is being made between the transactions with regard to the power flow path for supply or delivery points neither for the time it takes place which ultimately ended with same charges for transactions taking on two adjacent buses and for those between far off located buses.

Under POC all the network users will have to pay:

Connection Charges: Relates to costs of assets installed solely for an individual user.

Charges for joint Assets and operations: For real time dispatch, energy accounting and for subsidizing the connection charges for small environmental friendly generators benefits of which will be shared by all the network users.

Network Usage Charges: Charges which are to be paid by the DICs based on the network used by them.

(The charges computation will be based on distance, direction, quantum of energy used by various ISTS customers)

The process of computation of Transmission Charges based on Load Flow analysis, which is based on two methods:

(i) Average Participation Method

(ii) Marginal Participation Method

Average Participation Method: In this method for every individual generator and customer a number of physical paths are constructed tracing the actual flow of power towards load for every injection and tracing upstream for the energy consumed by a certain user from the demand bus until some generators are reached. A simple allocation rule with some theoretical backing base allocates the responsibility for the costs of actual flows on various lines from sources to sinks in which inflows are distributed proportionally between the outflows.

(40 MW60 MWTotal required = 30 MWTotal required = 70 MWAB)Figure 21

For A the 40 MW supplier would supply-

= 30 40

(40 + 60)

= 12 MW

For A the 60 MW supplier would supply-

= 30 60

(40 + 60)

= 18 MW

For B the 40 MW supplier would supply-

= 70 40

(40 + 60)

= 28 MW

For B the 60 MW supplier would supply-

= 70 60

(40 + 60)

= 42 MW

Marginal Participation Method: Marginal participation sensitivities are obtained that represents how much the flow through each network branch j increases when the injection/ withdrawal in a bus is increased by 1 MW. Flow variation in each network branch j incurred by 1 MW injection / withdrawal at each bus is computed for each scenario, i.e. here six scenarios are considered: Winter peak & off peak, summer peak &off peak and Monsoon peak & off peak. According to Kirchhoffs law for every 1 MW increase in injection of power is to be compensated with 1 MW increase in demand at another node in the grid network. The bus which responds to this extra injection of power in the network is known as slack bus.

It is proposed to calculate POC by the following method for first two years in the implementation phase.

(POC = 50% charge by uniform method + 50% charge by hybrid methodUniform method = Total transmission charges / (total approved injection + total approved drawl).)Figure 22

Implementation Agency (NLDC): Collect the basic network data, do load flow of basic network and estimate the charges and losses of different zones and demarcating them into slabs.

Validation Committee: To validate the basic network, nodal generation, nodal demand and load flow results.

CTU: Billing, collection and disbursement of transmission charges to ISTS Transmission Licensee.

DICs: To submit network related, demand/injection forecast and commercial information to IA.

RPCs: To certify non ISTS lines being used for inter-State transmission, prepare transmission charge accounts and certify rescheduling of planned maintenance for reasons beyond control of generator.

(7. How the disbursement & collection of charges under POC takes place?)

Figure 23

(DIC 1DIC 2DIC 3DIC 4DIC 5CTUISTS 1ISTS 2ISTS 3ISTS 4ISTS 5Mode of collection - RTGS CollectionBilling)

(8. Advantages of POC mechanism over Postage Stamp Method:)

Figure 24

(Better utilization of resources and elements of transmission.It generates a balance between demand and supplyLosses are reduced due to higher revenue collection efficiency.It is highly helpful in case of peak demand/load..The interest of customer as well as the licensee is protected.Encourages open access and competition in transmission.Pan-caking condition is not presentBetter tariff petition by taking multiple factors in to account..It is much easier to use and understandIt is the future demand for effective running of transmission sector)

(9. What are the various regulations set up by CERC for Transmission?)

(CERC REGULATION 2009 (Terms & Condition of Tariff)))

Regulation 17 & 3(42):

i. The depreciation rate of transmission line (1st 15yrs- 4.67%) & (rest of the life- 1%).

ii. The useful life of transmission line is 35 years

Draft Regulation 33:

i. A separate study for sharing of transmission charges and losses for ISTS was undertaken.

ii. Connectivity and long term & medium term access may necessitate amended to these regulation.

iii. Arranging transmission for new generating station, captive power plant and buyers of electricity.

iv. Income from open access customer shall be disbursed directly to long term customers rather than reducing it from transmission charges payable by long term customer

Operating Norms of Regulation:

i. The Transmission licensee is required to file the tariff petition containing detailed calculation of different element of tariff for tariff determination.

Regulation 5(3):

i. The transmission licensee in case of existing project can provisionally bill the beneficiary or the long term customer as per earlier tariff approved by commission till 31.3.2009, for the period starting from 1.4.2009 till approval of new tariff by the commission.

ii. If the tariff provisionally billed exceeds or falls short of the final approved tariff, than transmission licensee shall refund or recover from beneficiaries within 6 months along with simple interest at the rate equal to short term prime lending rate of SBI bank on 1st April of concerned year.

(CERC REGULATION 2010 (Sharing of inter state transmission charges & losses))

On the basis of Implementation Arrangement

i. Based on the Yearly Transmission Charge, the allocation of the ISTS Charges and losses (every financial year) shall be done by an entity i.e. implementing agency, but for 1st 2yrs of the notification of these regulation the NLDC shall be the Implementing agency.

ii. To get data from Designated ISTS Customers, ISTS Licensees and non-ISTS Licensees the IA shall submit, for approval of the Commission, a detailed procedure along with the data formats within 30 days of notification of these regulations for the Implementation of the POC method.

Based on Information Procedure

i. Each ISTS entity & DICS whose network form a part of basic network shall supply the IA with Basic Network details, YTC computations etc for transmission charge computation on or before 4th week of NOV in each FY.

ii. Each DICS shall supply the IA with its demand or injection forecast for each season of the following FY to enable the IA to use such information as the basis for calculating transmission charge and loss allocators for the period.

On the basis of Commercial Agreement

i. The CTU shall enter into a separate Revenue sharing agreement with other ISTS transmission licensees to disburse monthly transmission charges among various transmission licensees.

ii. The DICs and the CTU shall enter into new transmission services agreement or modify the existing Bulk Power Transmission Agreements to incorporate the new tariff and related conditions

On the basis of Accounting, Billing & Collection of charges

i. The CTU shall be responsible for raising the transmission bills, collection and disbursement of transmission charges to ISTS transmission licensees.

ii. Monthly Transmission Accounts applicable for various Designated ISTS Customers in each region shall be prepared by the respective RPC (Regional Power Committee)

iii. CTU must collect the charges on behalf of ISTS service providers and thereafter redistribute the same to Transmission Licensees in the ISTS in proportion to their respective Monthly Transmission Charges.

On the basis of Principles & Mechanisms for sharing of ISTS charges and losses

i. By various DICS, ISTS customer, ISTS transmission licensee & other relevant entity to the implementing agency.

ii. The mechanism of sharing must ensure, the YTC of the ISTS licensee are fully & exactly covered.

On the basis of Process of sharing of transmission charges and losses

i. The IA shall collect the Basic Network data pertaining to the network elements and the generation and load at the various network nodes from all concerned entities including DICs, Transmission licensees, NLDC, RLDCs, SLDCs, RPCs.

ii. As a part of the transition to the new Point of Connection based transmission pricing methodology, the recovery of the Yearly Transmission Charge of the ISTS network shall be based on both the Hybrid Method and the Uniform Charge Sharing Mechanism (postage stamp method) by giving appropriate weightage to both.

iii. For 1st 2yrs it is computed on a basis of 50% share of both.

On the basis of Scopes of regulation

i. The losses and transmission charges are shared between power stations/generating stations, SEB/STU connected with ISTS, any bulk consumer directly connected with the ISTS & DICS.

(CERC REGULATION 2009 (Procedure, Terms & Condition for Grant of Transmission License))

On the basis of Selection of project & implementing agency

i. The Empowered Committee shall identify the projects included in the transmission plan to be developed under the guidelines for competitive bidding.

ii. If the empowered committee unable to identify the projects which are there in transmission plan than it may be developed by the Central Transmission Utility or other deemed licensee, or a state owned or controlled company identified as project developer.

On the basis of Grant of license

i. Eligibility one who is selected by competitive bidding, a project developer, GENCO which has established dedicated transmission lines & part of ISTS.

ii. Procedure- 1) application containing affidavit to commission & CTU with fee, 2) publish a notice of application within 7 days after making an application in FORM-2 of regulation in at least 2 newspaper in each state & UT where element of project and long term customer is situated, 3) within 15 days after publishing send an affidavit containing details of notice, publishing newspapers, place, date or can also directly provide them original of all, 4) the applicant may file its comments, duly supported by an affidavit, on the recommendations made by the Central Transmission Utility to commission and the suggestions and objections within 45 days after the application to CTU, 5) final grant & rejection of license is made on the basis of proposal & recommendations given by applicant, CTU, long term customer & other person who has filed the suggestions.

On the basis of Terms & condition of license

i. Obligation of license- licensee must maintain insurance till the validity of license, the licensee shall build the project in a time-bound & establish, operate and maintain the project as per agreement, comply with directions of RLDC or NLDC, follow standards & law, provide non discriminatory open access, license fee.

ii. Prohibited activity-The licensee shall not enter into any contract or otherwise engage in the business of trading of electricity

iii. Terms of license- 25yrs of validity with an extension according to the useful life of asset, tariff for extension period will be according to the tariff regulations at that point of time. For future projects one should bid for tariff for 35yrs.

iv. Accounts of the licensee- prepare accounting statement for each FY, make separate account for each business, and submit the information time to time to commission & report to commission for any change in ownership, shareholding or management of the licensee.

Revocation of license

i. When the licensee makes prolong defaults in following various regulations, laws etc

ii. When financial condition of licensee is not efficient to carry the project further.

iii. When the licensee breach the terms & conditions of its license.

iv. When the licensee fails to submit the information as required under these regulations etc

(CERC REGULATION 2012 (Standard of performance of inter state Transmission Licensees))

Transmission system availability

i. AC transmission line-90% or more

ii. ICTS -90% or more

iii. Reactor-90% or more

iv. Static VAR compensator-90% or more

v. Series compensator- 90% or more

vi. HVDC( back to back stations & bi-pole link )- 85% or more

Restoration time(must not exceed)

i. Insulator failure- 1) plain terrain ( 1 day ), 2) hilly terrain( 2days )

ii. Tower after collapse by emergency restoration system- 12 days.

iii. Tower after collapse- 1) plain terrain (30 days ), 2) hilly terrain (50 days ),

3) River bed (50 days)

iv. Snapping of phase conductor- 1) plain terrain (2days), 2) hilly terrain (3 days).

v. Failure of earth wire 1) plain terrain(2 days), 2) hilly terrain ( 3 days)

vi. Restoration of the failed ICT- 120 days

vii. Restoration of failed reactor- 120 days

Methodology for compensation

i. Any person who has suffered a loss due to non-adherence to performance standards by IST licensee may make an application to commission for award of compensation.

ii. The compensation to be paid by the inter-State transmission licensee to the affected party shall be limited to the transmission charges of the particular element to the extent to which it has affected the supply of electricity to the affected person.

iii. No claim for compensation shall be entertained if claim is made after 90 days of from the date of restoration of transmission element