South Asia Investor Workshop on “Cross Border Electricity ... · Planned Project Jharkhand...

MINING

Role of Power Markets and Market Intermediaries in Facilitating Investments in South Asia

24th September 2014

South Asia Investor Workshop on

“Cross Border Electricity Trade”

MiningSteel Power

o Alloy and Special Steels: Adhunik Metaliks Limited (AML) – 0.45MTPA

Orissa Manganese & Minerals Ltd (OMML): 100% Subsidiary of AMLo Iron Ore: 40- 45 MMT (Operational)o Manganese Ore: 15 MMT (Operational)

Suleipat Mines (50:50 JV)o Iron Ore: 40 MMT (Operational)

1.2 MTPA Integrated Iron Ore Beneficiation & Pellet Plant(Operational) Enhancement to 1.6 MTPA in progress

Adhunik Power and Natural Resources Ltd. (APNRL): 80.90 % subsidiary of OMMLo IPP: 540 MW o First unit of 270 MW COD declared on

21st Jan 2013o Second unit of 270 MW COD declared

on 19th May 2013Captive Mineso Iron Ore: 18 MMT (Operational)

Captive Mineo Coal: 69 MMT

Adhunik Metaliks Limited (AML) - Flagship/Holding Company

Patratu Mines (49:51 JV)#

o Coal: 450 MMT (recently allocated)

224-09-2014

o Alloy and Special Steels: Adhunik Alloys and Power Limited (AAPL) –0.45MTPA

M N Ravi Shankar, CEO – Power Trading & BDAPNRL / New Delhi

Planned Project

Jharkhand Project of 1,080 MW plants being implemented in two Stages

• Stage I: 540 MW (2x270 MW). • First unit of 270 MW – COD declared on 21st January 2013• Second unit of 270 MW –declared on 19th May 2013

• Stage II Green field Expansion : 660 MW (1x 660 MW)

Signed MoUs for additional 1,320 MW each with Chhattisgarh, Bihar and Orissa Governments

Current Implementation

Status

•Land: The Company has acquired the entire project land of 533 acres•Approvals: All approvals and clearances in place•Implementation Contract: BTG package awarded to BHEL•Evacuation: Through PGCIL substation at Ramchandrapur which is 2 km from the project site. approval for open access received

•O&M: In-house•Consultants: DCPL is the Owner’s Engineer as well as the Project Managers•LIE: Mott Macdonald

Approvals & PPA

• MoEF clearance and NOC from Pollution Control Board have been received for Phase I & II (2x270 MW)• Received Consent to Operate• Water for 1,000 MW (35.6 mcm) approved from a perennial river at a distance of 10 kms• Permission for railway siding received• Bulk Power Transmission Agreement (BTPA) signed• PPA for ~435 MW executed

324-09-2014 M N Ravi Shankar, CEO – Power Trading & BDAPNRL / New Delhi

24-09-2014 4

Role of Power Markets and

Market Intermediaries in

Facilitating Investments in South Asia


Opportunities in Cross Border Trade

Information about

Population (in Millions) 1,252 31 159 0.75 28 187 21

Installed Capacity (MW) 253,389 ~1,000 ~5,255 ~1,600 ~689 ~19,505 ~3,000

Per Capita Cons. (in kWh) 879 49 274 2420 103 458 449

Deficit (MW) 17,517 1,500 2,000 1,500 400 5,000 2,000

Cross Border Transmission capability (existing / proposed)

4000 –6000 MW

500 –1000 MW

1200 –1400 MW

1000 –

1500 MW

500 –1000 MW

500 –1000 MW

Predominant FuelThermal /

HydroThermal / Hydro

Gas Hydro HydroThermal /

HydroThermal/ Hydro

24-09-2014 5M N Ravi Shankar, CEO – Power Trading & BDAPNRL / New Delhi

Demand projections in SAARC


Per Capita Consumption


Energy and Development Concerns

• Burgeoning growth in population ( currently stands at 1.45 Billion, 20 % of WorldPopulation)

• High income and capability poverty (Income poverty varies from 39.7 for Srilankato 85.7 Bangladesh; HDI rank varies from 95 for Maldives to 146 for Bangladesh)

• High dependence on imported oil (varies from around 25 % for Bhutan to 100%for the Maldives)

• High energy poverty among the rural masses (completely isolated from moderncommercial sources of energy for cooking and lighting)

• Traditional fuel i.e. biomass and firewood consumption as per cent of totalenergy requirement is very high

• Per capita commercial energy consumption is at abysmally low level but energyintensity (energy consumption per unit of GDP) is considerably higher- hintstowards inefficient energy utilization


Strategies for a Regional Market

• Diversifying the sources of fuel supply by developing an efficient regional marketfor trading especially in electricity and gas via interconnected electricity networksor gas grid

• Developing a mechanism for R & D and sharing geological and other relevantdata, knowledge, expertise, technology and promoting capacity building at theregional level especially in energy demand management measures (conservationand energy efficiency), improving energy sector governance and in developingalternate sources like renewable (hydro, solar, biofuel etc.)

• Encouraging initiatives at all level for developing energy technology and chartingout a broad technology perspective for the region

• Facilitating in development and harmonization of regional infrastructure, financialmechanism, and regulatory mechanism

• Developing a regional risk pooling mechanism by making inter-governmental andinstitutional arrangement for Electricity Trading, jointly procuring oil and naturalgas and other natural resources

• Developing Strategic Reserves as oil shock contingencies


Energy Resource Base of SAARC

• Afghanistan: Moderate gas/hydro power potential, but large solar and windpotential

• Bangladesh: Large gas, coal and solar resource; low hydro power

• Bhutan: Large hydro power, solar and wind potential

• India: Large coal, hydro, wind and solar; but moderate gas/oil

• Maldives: Moderate wind but high solar potential

• Nepal: Large hydro potential and solar potential and moderate wind

• Pakistan: High coal, gas, hydro, Low oil; but rich solar and wind potential

• Sri Lanka: Moderate hydro, but large wind and solar resources


Potential for Regional Energy Trading

• Intra-regional trade in electricity

– Hydro electricity exports from Nepal and Bhutan to India or through India toBangladesh, Pakistan and Srilanka

– Potential for increasing grid interconnections

• Inter-regional trade in oil

– Scope for regional cooperation for routing oil imports into the region from faroff countries like Venezuela in VLCC

• Transit trade in natural gas

– Trading gas between Central Asia and Middle East and India would requirepipeline transit through Pakistan and Afghanistan. Importing gas fromMyanmar to India would require pipeline transit through Bangladesh.Countries providing transit could also access gas for their own use. Pipelinesfor transit trade under exploration- IPI ; TAPI ; MBI and QIPI


Benefits of Energy Trading in SAARC

– Immense scope for innovation and achieving economies of scale in energy production

– New Investments would take place in all countries if market is created

– Improved energy security and reliability

– Reduced costs and prices through scale effects

– Optimal utilization of huge hydro-resources in the region

– Institutional capacity building in the electricity sector of the region

– Reduced impact on the environment

– Possibility of earning substantial export revenues especially from electricity trade

– Eventual multiplier effects in terms of faster economic growth


Indian Power Trading Experience


Cross Border Electricity Exchange


India now has an integrated NationalGrid with all Regions (North, East, West,South and North East Regions) havingunified frequency.

Huge potential for cross border tradewith different SAARC countries.

Indian power sector is fairly developedand has established a market in a deficitregime, which could be set a trend in theregion

Indian National Grid


India – Bangladesh interconnection

24-09-2014 16

India - Bangladesh: Cross border transfer of 500MW across the two countries through HVDC is in place. Transactions started – Baharampur – Bheramara 400kV


India – Bhutan interconnection

24-09-2014 17

India - Bhutan: Cross border transfer of 1200MW across the two countries through HVDC is in place. Power fromvarious Hydro projects getting evacuated. Different capacities – 220kV Chukha – Birpara, 132kV Kurichu –Gelephu – Salakati & 400kV Tala - Siliguri


India – Nepal interconnection

24-09-2014 18

India - Nepal: Cross border transfer of power across the two countries through different voltages are in place atdifferent location. Nepal – Bihar 132 & 33 kV, Nepal – UPPCL 33kV & Nepal – UPCL 33kV


India – Pakistan interconnection

24-09-2014 19

India - Pakistan: Cross border transfer of power through Amritsar – Lahore lines across the two countries possibleand the system needs to be strengthened.


India – Sri Lanka interconnection

24-09-2014 20

India – Sri Lanka: Modalities for establishing a HVDC transmission system of about 1000 MW capacity usingoverhead lines and undersea cables from Madurai in India up to Anuradhapura in Sri Lanka


Regional Electricity Trading Infrastructures

Policy GovernmentSAARC Sectt.

Plan GovernmentGroup of SAARC Members

Regulations SAARC - Reg

Generation Any Grid Connected Entity

Transmission

Systems Oprn NLDCPOSOCO, NLDC (India)

Distribution / OA DISCOMs / OAEntities of Respective Country

Trading Platform Local / Shared PlatformExchanges / Bilateral

Appeal Dispute Resolutions : SAARC / CERC ????

CERC

SAARC Country

CERC CAC

Gencos IPPs

CTU PTU CTU PTU

Billing Settlement Govt. backed Transaction Nodal RPC

Trading Trading LicenseesTrading Licensees



Generators State Distribution

Companies Independent power

producers Captive generators Non-conventional

Energy Sources

Supply side Distribution Cos Large Industrial

consumers Small Industrial

consumers

Demand sideIntermediaries

Wire Owners

CTU STU Transmission

Licensees (PTU)

System Operators

NLDC RLDC SLDC Or a Agency of

SAARC

Traders

Trading Cos Generating Cos Distribution Cos

Coordinating with different Countries’ Central Regulator

SAARC – Designated Nodal Regulator



Generators (Sellers)

Single Buyer

Multi Trader Model (MTM) –Competitive Phase

Traders on Exchanges or Bilateral

DistributionUtilities / OA Consumers

PPAs

PSA

Direct on Exchanges

Generators(Seller)

DistributionUtilities (Buyers)

Single Trader

Single Nodal Trader Model (SNTM)

PPAs

PPA

Competition

DistributionUtilities / OA Consumers


Issue Probable Solution

Trading Platform Bilateral Contract / Exchanges

Transaction Mode Any Trader

Payment Mechanism Letter of Credit / Guaranted by the Sovereign

Regulatory Mechanism Common Forum of all the Regional Regulators

Delivery PointInternational Boundary

(Interconnection of the Selling Country)

Taxes / Duties To be exempted

Controlling Agency for the Trade Respective Nodal Agency (CTU for India)

Pan Caking of Losses To be rationalised (Similar to PoC to be used)

Energy Accounting Nodal agency could be (CTU of India)

Usage of Corridor by Open Access Consumers To be allowed to use the Corridor(s)

Issues in Cross Border Trade


Way forward : Indian National Grid could act asbackbone for Central and South East Asia


THANK YOU

Adhunik Power and Natural Resources Limited701, 7th Floor, World Trade Tower,

Barakhamba Lane,New Delhi – 110 001, India

+91(11)3076 4500

[email protected]

24-09-2014 M N Ravi Shankar, CEO – Power Trading & BDAPNRL / New Delhi 26

mailto:[email protected]

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South Asia Investor Workshop on “Cross Border Electricity ... · Planned Project Jharkhand...

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