1. 1 Presentation on Investment Opportunities in Indian Power Sector and Cooperation with IEA By R.V. SHAHI Secretary, Ministry of Power Government of India December13, 2006

2. 2  India has been able to achieve an economic growth rate of 8% per annum during last few years.  Industrial growth rate over 9%.  Domestic savings rates have been rising and reached over 29%.  Inflation level moderate, despite of sharp rise in international oil prices.  Current Account Deficit only 1.3% of GDP.  Foreign exchange reserves about USD 170 billion. Strengths of Indian Economy

3. 3  During 2007-12, average Economic growth rate projected at 9% pa.  Power sector to also grow by 9% to sustain the economic growth.  Installed capacity to reach 800 GW by 2031-32 from the present level of 128 GW. Present captive generation 41,000 MW.  Enabling environment created by enacting Electricity Act and various policies framed thereunder. Strengths of Indian Power Sector

4. 4  New Electricity Act 2003 - Liberal and competitive framework.  Entry Barriers Removed in generation. Reduced in transmission, distribution and supply.  Open access in transmission already in place in interconnected all India grid.  Open access to consumers above 1 MW by Jan, 2009. New Liberal Competitive Framework Contd..

5. 5  100% FDI permitted in all segments.  Duty free import of equipment permitted for Mega Power Projects.  Most project execution through International Competitive Bidding. New Liberal Competitive Framework

6. 6  Total Village Electrification in 5 years. By year 2012 :  Per capita availability 1000 units.  Installed capacity over 200,000 MW.  Spinning reserves 5%.  Minimum lifeline consumption of one unit per household per day.  Inter-regional transmission capacity 37,000 MW.  Quality and reliable power supply. National Electricity Policy

7. 7 Tariff Policy  Tariff of all Generation and Transmission Projects in Private Sector through Competitive route- Public sector to complete transition in five years.  Reduction of cross subsidy to (+)(-) 20% in next five years.  Emphasis on facilitating Open Access in Distribution; clear formulation on cross subsidy surcharge.  Transmission Tariff framework sensitive to distance and direction.  Strict Implementation of Performance Standards.  Agriculture Tariff to leverage sustainable use of Ground Water Resources.  Time bound introduction of MYT.

8. 8 Competitive Tariff Bidding for Project Development  Tariff based International Competitive Bidding for selection of project developer.  7 Large coal based Ultra Mega projects of 4000 MW each being developed.  Mix of Coastal projects with imported coal and pit head integrated coal mining- cum- power projects.  Use of more efficient super critical technology – lower CO 2 emissions.  Final tariff bids already received for 2 projects- selection of successful bidder by December, 2006. Contd..

9. 9 Competitive Tariff Bidding contd..  Two more projects to be awarded in April/ June’ 2007.  Bids of other projects in pipeline.  States initiating bids for smaller capacity thermal projects.  Bids for transmission projects in pipeline.

10. 10 The Energy Strategy  Full development of hydro potential. Hydro power irrespective of size, renewable source of energy.  Domestic coal to remain primary source. Emphasis on Super Critical Plants and Clean Coal Technologies.  Import of coal on moderate scale for coastal locations.  Use of gas dependent on availability and price.  Import of gas – LNG terminals. Gas pipelines from Western and Central Asia. Contd..

11. 11 Alternate Sources of Energy  Emphasis on Biomass.  Wind power potential – success story for rapid development. More than 3800 MW added in the last four years.  At over 5500 MW, Wind capacity 4 th largest in the world.  Development of mini and micro hydroelectric projects.  Solar power needs intensive R&D for cost reduction. Extensive development of solar dependent on CDM benefits to offset present high cost. Contd..

12. 12 The Energy Strategy  Nuclear power presently 3,900 MW- Share of Nuclear power to be enhanced. No CO 2 emissions. Mastery in fuel cycle and technology. Fuel Constraint.  Rapid increase in share of nuclear power dependent on International Cooperation.

13. 13 Energy Efficiency – High Priority  Bureau of Energy Efficiency (BEE).  Standards and Labeling of appliances.  Building Codes being developed.  Energy conservation norms for industry and performance standards for equipment being developed.  Public awareness campaign launched.

14. 14 Low Energy Intensity and Low Carbon Path of Development Energy Intensity TPES/GDP (KgOE/2000PPP$) Per Capita CO2 Emissions (Tonnes/capita) India0.181.02 China0.233.66 USA0.2219.73 OECD0.1911.09

15. 15 Investment Requirements During XI Plan (2007-2012) in Power Sector  USD 50 Billion for Generation.  Another USD 50 Billion for Transmission, Distribution and Rural Electrification.  Total USD 100 Billion.  At present 43,000 MW generation capacity is already under execution. Investment of USD 50 Billion committed.  Public sector investments have been stepped up ; will need to be supplemented through private investments.

16. 16 Merchant Power Plants  Development of Merchant power plants with highly competitive tariff- a new electricity market development initiative.  To fill the demand supply gap.  Facilitated by Open access in transmission and distribution.  Full market risk to be absorbed by the developer.  Coal linkage to be provided for plants up to 1000 MW size. Captive coal blocks for plants in the range of 500- 1000 MW.

17. 17 Present India - IEA Cooperation  MoU signed with IEA during April 1998 for cooperation in power sector.  Training programmes organised by IEA on Energy statistics, forecasting etc.  Jointly organised International workshop on Standards and Labeling.  India participating in IEA Greenhouse Gas R&D programme.  India participating in IEA DSM implementation agreement.

18. 18 Proposed Future India - IEA Cooperation  Energy Efficiency and Demand Side Management.  Data Management, Demand supply mismatch projections, Energy Balance : method of assessment.  Establishing World over that Hydro power irrespective of size is renewable, and accepting these projects under CDM.  Collaboration in Clean Coal Technologies.  20 year projections for gas availability and prices.  Capital cost benchmarks for Nuclear power projects.  20 year projections for nuclear fuel availability and prices.

19. 19 THANK YOU