MID-TERM APPRAISAL

1. PRESENTATION TO PLANNING COMMISSION MID-TERM APPRAISAL MINISTRY OF POWER

2. INSTALLED CAPACITY AS ON 31.08.2009 TOTAL:1,52,388 MW

3. 11th PLAN CAPACITY ADDITION TARGET Total: 78,700 MW 3

4. 11th PLAN CAPACITY ADDITION TARGET Total: 78,700 MW 4

5. Capacity ordered and Under Construction for implementation during 11th Plan In MW

6. STATUS OF CAPACITY ORDERED/SLIPPING PLAN w. r. t. TARGET (in MW)

7. TOTAL CAPACITY COMMISSIONED / UNDER CONSTRUCTION FOR 11TH PLAN (Fuel-wise) (Capacity in MW)

8. TOTAL CAPACITY COMMISSIONED / UNDER CONSTRUCTION FOR 11TH PLAN (Sector-wise) (Capacity in MW)

9. TOTAL CAPACITY COMMISSIONED / UNDER CONSTRUCTION FOR 11TH PLAN (year-wise) (Capacity in MW)

10. Phasing of likely capacity addition during 2009-2012 (with high degree of certainty) (Capacity in MW)

11. Phasing of likely capacity addition during 2009-2012 (on best effort basis) (Capacity in MW)

12. Performance of capacity addition as on 31.08.2009 ( in MW) 12

13. Why high degree of confidence for achieving >60,000MW capacity addition during 11th Plan. • >20,000 MW being executed by Foreign suppliers where there are no supply issues . • >14,000MW in Private sector (2,222 MW by BHEL) – No delay expected. • 2,000 MW Hydro by BHEL within their capability. • BHEL has to commission following thermal capacity: 2009-10 4,065 MW 2010-11 12,839 MW 2011-12 5,566 MW • Capacity to be commissioned during 2009-10 and 2011-12 appears to be within BHEL’s capability. BHEL has increased its manufactured Capacity to 10,000 MW/year which is likely to go up to further to 15,000 MW/Year by Dec,2009. • In case of slippage of some units in 2010-11,these could still be commissioned during 2011-12. • Some capacity from best efforts category to also materialize e.g Sipat 1980 MW

14. Main reasons for delay in erection of Projects. • Delay in placement of orders • Delayed and non-sequential supplies • Shortage of skilled manpower • Shortage of commissioning teams with BHEL. • Delay in resolution of contractual issues. • Environment and Forest clearance . • Land acquisition problems • Constraints in movement of heavy equipment due to bottlenecks in road transportation. • IT Based monitoring not implemented. • Inadequate deployment of construction machinery.

15. Areas of Concern(Thermal) Fuel Related Issues: COAL • Signing of FSA by CIL for new projects on the same conditions as for existing plants; • LOA for some 11th plan projects (North Chennai, Satpura, Vallur) under construction; • Tapering Linkage for those projects where Coal Block development is delayed(Mejia, Raghunathpur and Jalipa) • Coal supply to commissioned projects such as NTPC Bhilai, Kahalgaon,Farakka. contd.

16. Coal related issues -- contd • Shortage of more than 100MT expected in 2012-13 on account of 11th Plan Projects only when all the 11th Plan thermal Projects are likely to stabilise. • Problems in supply of Coal to Bongaigaon due to delay in development of NECL mines. • Problems in transportation of coal to Dadri. • Supply of washed coal to projects >1000km from coal mines due to delay in development of washeries by CIL

17. Fuel Related Issues(Thermal) GAS SUPPLY Allocation of gas to plants under construction ( Bawana, Rithala, Kondapalli, Utran) Allocation of Gas for development of new capacity at brown field sites where land and water is available with the developers If 40 MMSCMD Gas is made available over and above the present allocation, another 8,000 MW Gas based capacity can be attempted in 11th Plan.

18. Areas of Concern Supply /Execution by BHEL • Delay in supply of equipment mainly TG modules, Bottom Ring Headers and Control Circulation Pumps. • Commissioning of thermal capacity of 12839 MW in 2010-11 If best effort projects are included ,then 9315 MW thermal capacity to be commissioned during 2011-12 also.

19. Areas of Concern AVAILABILITY OF SKILLED MANPOWER FOR O&M OF NEW POWER PROEJCTS. Recruitment of O&M staff for capacity under execution in states and DVC

20. Areas of Concern TRANSMISSION RELATED ISSUES Delay in execution of Transmission projects in state sector. Inadequate investment in Distribution Integrated Planning in states after restructuring . Delay in procurement of Power by state distribution companies under case I bidding.

21. Mid Term Appraisal of 11th Plan – CTU Transmission System

22. XI PLAN - ACHIEVEMENT OF TRANSMISSION WORKS

23. Regulatory Issues 1. Continued Exemption to PFC from RBI NBFC Guidelines • PFC being Government NBFC exempt from RBI Exposure Norms • PFC follows its own exposure norms with Ministry of Power’s approval, as per which PFC can take exposure as under : • Government Sector : • Upto 100% of PFC’s net worth with one borrower, which can be increased upto 150% with Board approval on case to case basis • Private Sector : • PFC has been advised to follow RBI norms for Private Sector and can take lending exposure upto 20% of PFC net worth in case of Single Borrower and 35% of PFC net worth in case of a group of borrowers • With respect to Government Sector also, RBI has recently advised that all new transactions entered into by PFC have to be in alignment with RBI’s exposure norms. i.e. 20% of PFC net worth. • Business operations of PFC and capacity addition programme in the Government Sector would be adversely affected, if PFC were to follow RBI exposure norms for Government Sector also. • As per CEA projection, share of Private Sector in planned generation capacity addition is likely to increase from 9% in X Plan to 28% in XI Plan to 63% in XII Plan. • Accordingly, this paradigm shift in Power Sector requires higher exposure norms for Private Sector to sustain the business operations as well as capacity addition programme of Government of India.

24. Regulatory Issues …cont’d 2. Special Dispensation for Banks/NBFCs Exposure for Funding UMPPs and other Large Projects • The Government of India has launched a unique initiative to facilitate development of Ultra Mega Power Projects (UMPP) initially, each of 4000 MW capacity. • With a debt equity ratio of 75:25, the debt requirement for a UMPP would be of the order of Rs. 13,500 crore or above. • Such huge debt requirement requires higher borrower/group exposure norms for funding UMPPs. • In view of the lower group exposure limit, • Group exposure for one group of companies could get easily exhausted after one UMPP, • Reducing scope for participation and competition in UMPP bid process.

25. Re-structured APDRP

26. Re – structured Accelerated Power Development & Reforms Programme (R-APDRP) • Continuation of APDRP scheme during the XI Plan approved on 31.07.08 as a Central Sector Scheme. • Focus of the programme on AT&C loss reduction on sustainable basis through systematic measures : • establishment of base line data • fixing of accountability • strengthening and upgradation of sub transmission and distribution network • adoption of Information Technology (Contd. ……)

27. (…. Contd.) # Project implementation under the scheme primarily to be taken up in two parts : • Part-A includes the projects for establishment of baseline data and IT applications for energy accounting/auditing & IT based consumer service centers. • Part-B includes regular distribution strengthening projects including segregation of feeders. # Programme size of re-structured APDRP during XIth Plan - Rs. 51,577 cr. : - Part-A (Baseline System projects) - Rs. 10,000 cr. - Part-B (Strengthening & Upgradation projects) - Rs. 40,000 cr. - Part-C (Enabling activities) - Rs. 1,177 cr. - Part-D (Incentives to Utility staff) - Rs. 400 cr. (Contd. ……)

28. (…. Contd.) • Initially 100% loan for Part A and up-to 25% (90% for special category States) loan for Part B from the Govt. of India. • The entire loan for Part-A to be converted into grant after establishment of Base-line data system. • Up-to 50% (90% for special category States) loan of Part-B to be converted into grant on achieving the 15% AT&C loss in the project area. (Contd. ……)

29. (…. Contd.) • Utilities to meet the following eligibility criteria for conversion of loan into grant for Part-B: • Constitute the State Electricity Regulatory Commission • Achieve the target of AT&C loss reduction at utility level: Utilities having AT&C loss above 30%: Reduction by 3% per year Utilities having AT&C loss below 30%: Reduction by 1.5% per year • Submit previous year’s AT&C loss figures of identified project area as verified by an independent agency appointed by MoP by 30th June; • Devise a suitable incentive scheme for staff in the project area linked to achievements of milestones as laid down in Part B of the scheme.

30. Details of Projects Sanctioned under Part-A of R-APDRP

31. Details of Year Wise Progress Achieved Figures in Rs. Cr. On the basis of current year budget allocation of Rs 1730 Cr (Rs 1650 Cr loan and Rs 80 Cr grant), projects worth Rs 5,000 Cr (Part-A: Rs 4,000 Cr and Part-B: Rs. 1,000 Cr) can be sanctioned. Out of which projects worth Rs 1614.23 Cr have already been sanctioned. Budget allocation for the current year may be increased to Rs. 5,530 Cr.

32. R-APDRP for XI Plan Yearly projection of fund requirement through GBS if the scheme has to be implemented in the XI Plan as per CCEA Note (Figures in Rs. Cr)‏ Year Part A Part B Part C&D Total (Loan) (Loan) (Grant)‏ ‘08-09 325 --- 25 350 ‘09-10 1,600 50 80 1,730* ‘10-11 6,075 5,950 770 12,795 ‘11-12 2,000 4,000 702 6,702 Total 10,000 10,000 1,577 21,577 * Rs 5,530 Cr had been requested for FY 2009-10.

33. RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA(RGGVY)

34. Rajiv Gandhi Grameen Vidyutikaran Yojana (RGGVY) • Launched in March,2005, • Targeted to electrify over one lakh un-electrified villages and to provide free electricity connections to 2.34 Crore rural BPL households • Under RGGVY 90% Capital Subsidy is provided • Initial sanction was for last two years of X Plan with capital subsidy of Rs. 5000 Crore. • In the X Plan, 235 projects were sanctioned at an estimated cost of Rs. 9732.9 Crore • Revised estimate of Rs. 41812 Crore subsidy was proposed for XI Plan • Continuation of the scheme was sanctioned on 3rd January 2008 with a subsidy provision of Rs. 28,000 Crore for Phase I of in the XI Plan. • 333 projects have been sanctioned under Phase I of XI Plan costing Rs. 16,508.54 Crore

35. RGGVY OVERALL STATUS (as on 31/08/09)

36. Year Wise Implementation Status (as on 31/08/09) Bharat Nirman targets to be achieved by 2011-12

37. Major Issues Responsible for Slow Progress Delay in sanction of continuation of scheme in the XI Plan.This has caused cumulative delay in implementation of RGGVY.

38. Issues Responsible for Slow Progress RGGVY The scheme has been consistently under funded. The annual budgetary outlay has been less than the required. The year wise demands, budgetary allocations and utilization is indicated below:

39. Issues Responsible for Slow Progress RGGVY The States took long time in awarding the projects Delay by States in allotment of land for new substations Delay in release of BPL lists by States Long time taken by States in settlement of entry tax and way bills

40. Revised Targets Bharat Nirman Targets have been revised in a recent meeting in PMO. Following targets have been set up to 2012 • These targets will be achieved by 2012 • Ministry of Power will make all out efforts to complete all the projects sanctioned so far under RGGVY Ph I i.e. electrification of 118, 533 villages and 2.46 Crore BPL connections, subject to allocation of required budgetary allocations • The year wise targets will be:

41. Way Forward Focus for village electrification will be on 4 States of Assam, Bihar, Jharkhand and Orissa, which contain about 60% of balance un-electrified villages under RGGVY. Focus for BPL connection will be on 12 States of Assam, A.P., Bihar, Jharkhand, Orissa, Chhattisgarh, Gujarat, M.P., Maharashtra, Rajasthan, Tamilnadu & W. Bengal, which contain about 77% of balance BPL connections under RGGVY.

42. Balance Work To Be Covered under RGGVY: Phase II Due to limitation of funds and limitation of scope of earlier schemes of rural electrification, which were subsumed under RGGVY, a significant area of the country could not be covered Hamlets in general in Assam, Bihar, Rajasthan and Uttar Pradesh Smaller hamlets in other States A tentative estimate prepared by the MoP indicates requirement of about Rs. 28,000 Crore subsidy Ministry has requested MoF and Planning Commission to accord in-principle approval for starting process for launching phase II of RGGVY in the XI Plan 42

43. Energy Conservation

44. XITH PLAN PROVISION (Rs Crores) Planning Commission requested for making an additional provision of Rs 271.69 crores

45. Financial Targets & Achievements Financial : Expenditure incurred (2007-08 & 08-09) Rs 133.94 crores. BE 2009 – 10 Rs138 crores. Estimates 2010-12 Rs 431.61 crores. Physical : Targets met and have resulted in an avoided capacity generation of 2127 MW during 07-08 and 08-09. (The target during the XI th Plan is 10,000 MW of avoided capacity generation). The estimated avoided capacity generation in 2009-10 is 2600 MW. The savings of electricity during 2007-08 and 2008-09 is 10259.65 MU. The fuel savings are nearly 1% of the total fuel use in the country.

46. CPRI

47. CENTRAL POWER RESEARCH INSTITUTE

48. Funds Utilised of X Plan Spillover and XI Plan Ongoing Projects (Rs. in crore)

49. Thank You

50. Transmission Lines could not be utilized due to delay in commissioning of Generation Projects