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Hydropower Development in India

Hydropower Development in India. Presentation by S.K. Garg Chairman & Managing Director. National Hydroelectric Power Corporation Ltd. 27 th July, 2006, New Delhi. INDIAN POWER SECTOR. INSTALLED CAPACITY THERMAL = 83,272 MW (66 %) HYDRO = 32,726 MW (26 %)

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Hydropower Development in India

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  1. Hydropower Development in India Presentation by S.K. Garg Chairman & Managing Director National Hydroelectric Power Corporation Ltd. 27th July, 2006, New Delhi

  2. INDIAN POWER SECTOR INSTALLED CAPACITY THERMAL = 83,272 MW (66 %) HYDRO = 32,726 MW (26 %) OTHERS = 10,091 MW (8 %) TOTAL = 1,26,089 MW ENERGY SHORTAGE = 9.3 % PEAK DEMAND SHORTAGE = 12.8 % CAPTIVE GENERATION = 14,636 MW CONNECTED TO GRID PER CAPITA ELECTRICITY = 606 kwh CONSUMPTION As on 30.06.2006 SOURCE: CEA

  3. PROJECTED POWER DEMAND IN INDIA(Ending XI Plan) SOURCE: CEA / MOP

  4. HYDRO POWER IN INDIA A) POTENTIAL ASSESSED BY CEA : 1,48,701 MW B) INSTALLED CAPACITY DEVELOPED : 32,726 MW C) UNDER DEVELOPMENT : 14,021 MW D) PUMPED STORAGE POTENTIAL : 94,000 MW E) SMALL HYDRO ( < 3 MW) : 6,782 MW SOURCE: CEA As on 30.06.2006

  5. REGION-WISE HYDRO POTENTIAL IN TERMS OF INSTALLED CAPACITY (IN MW) As on 30.06.2006 SOURCE : CEA * Includes 5.25 MW in A&N Islands

  6. INDIAN HYDRO SECTOR As on 30.06.2006 SOURCE: CEA

  7. HYDRO - THE PREFERRED OPTION • ABUNDANT POTENTIAL AVAILABLE IN THE COUNTRY • CAN LEAD TO ENERGY SECURITY • IDEAL TO MEET PEAKING DEMAND • IMPROVES SYSTEM STABILITY • INFLATION FREE POWER • ENVIRONMENT FRIENDLY • OPENS AVENUES FOR SOCIO-ECONOMIC DEVELOPMENT OF REMOTE AREAS • RENEWABLE SOURCE OF ENERGY • COST EFFECTIVE • HAS ADDITIONAL BENEFITS LIKE IRRIGATION, FLOOD CONTROL, TOURISM ETC.

  8. HISTORICAL REASONS FOR SLOW HYDRO DEVELOPMENT • LONG GESTATION PERIOD • TIME CONSUMING PROCESS FOR CLEARANCES • MORE FOCUS ON THERMAL GENERATION • HIGHLY CAPITAL INTENSIVE & ABSENCE OF COMMITED FUNDS • HYDRO POTENTIAL LOCATED IN REMOTE AREAS • POOR FINANCIAL HEALTH OF SEBs • TECHNOLOGY CONSTRAINTS • INTERSTATE DISPUTES AS WATER BEING A STATE SUBJECT

  9. HYDROPOWER- THE REVIVAL • ACCEPTED AS NATIONAL PRIORITY TO ARREST DECLINING HYDRO:THERMAL MIX RATIO, DESIRABLE BEING 40:60 • EMPHASIS ON HUGE UNHARNESSED HYDRO POTENTIAL IN THE COUNTRY ESPECIALLY NORTH EASTERN REGION WHERE 98% IS STILL UNHARNESSED • KEY POLICY INITIATIVES TO ACCELERATE HYDRO DEVELOPMENT • RENEWED INTEREST OF INTERNATIONAL FUNDING AGENCIES TO SUPPORT HYDRO PROJECTS DUE TO FOCUSED ATTENTION ON HYDRO POWER DEVELOPMENT BY THE GOVERNMENT

  10. IMPEDIMENTS IN HYDRO DEVELOPMENT INFRASTRUCTURAL & ADMINISTRATIVE ISSUES • WATER IS A STATE SUBJECT • INTER-STATE DISPUTES • LAND ACQUISITION • INACCESSIBILITY OF THE PROJECT SITES • LAW & ORDER / MILITANCY PROBLEMS FINANCIAL ISSUES • SECTOR IS HIGHLY CAPITAL INTENSIVE • 14% ROE NOT VERY ATTRACTIVE • ABSENCE OF LONG TENURE LOANS • HIGH RISK ELEMENT • ADVANCE AGAINST DEPRECIATION IS DISALLOWED • FOREIGN EXCHANGE RATE VARIATION NOT A PASS THRU IN TARIFF (Cont...)

  11. ISSUES IN HYDRO DEVELOPMENT ENVIRONMENTAL ISSUES • REHABILITATION & RESETTLEMENT • ENVIRONMENT & FOREST CLEARANCE TECHNICAL ISSUES • PREPARATION OF BANKABLE DPRs • GEOLOGICAL UNCERTAINITIES • DEARTH OF COMPETENT CONTRACTING AGENCIES (Cont.…)

  12. INITIATIVES REQUIRED IN THE HYDRO SECTOR INFRASTRUCTURAL & ADMINISTRATIVE ISSUES • EFFORTS TO ARRIVE AT CONSENSUS FOR DECLARING “WATER” A CENTRAL SUBJECT FOR OPTIMUM UTILIZATION & DEVELOPMENT OF NATURAL RESOURCES. AT LEAST THE RUN OF THE RIVER SCHEMES BE DELINKED FROM STATE SUBJECT • INFRASTRUCTURE COST TO BE SHARED BY GOVERNMENT & DEVELOPER • SECURITY COST TO BE BORNE BY THE GOVERNMENT • 12% FREE POWER PROVISION TO BE REVIEWED (Cont.…)

  13. INITIATIVES REQUIRED IN THE HYDRO SECTOR FINANCIAL ISSUES • LONG TENURE (20-25 YRS.) DEBT FINANCING TO BE MADE AVAILABLE • BENEFITS UNDER MEGA POWER POLICY TO BE MADE APPLICABLE TO PROJECTS OF CAPACITY 250 MW & ABOVE • INCREASE RATE OF RETURN ON EQUITY VIS-À-VIS THERMAL TO ACCOUNT FOR CAPITAL INTENSIVE NATURE, RISKS INVOLVED. • EARLY IMPLEMENTATION OF DIFFERENTIAL TARIFF FOR PEAK AND OFF-PEAK HOURS. • ADVANCE AGAINST DEPRECIATION TO BE CONTINUED • CONTINUE PASSING OF FOREIGN EXCHANGE RATE VARIATION THROUGH TARIFF • EXPLORE ORGANISATION WISE POOLED TARIFF CONCEPT (Cont...)

  14. INITIATIVES REQUIRED IN THE HYDRO SECTOR ENVIRONMENTAL ISSUES • SIMPLIFY LAND ACQUISITION PROCEDURE & AMENDMENT TO LAND ACQUISITION ACT FOR COMPULSORY ACQUISITION OF LAND IMMEDIATELY ON SANCTION OF THE PROJECT • DEFINED SOLUTIONS FOR RESETTLEMENT AND REHABILITATION ASPECTS INVOLVING GOVERNMENT, PROMOTERS, FUNDING INSTITUTIONS ETC • MOEF CLEARANCE SHOULD BE FINAL AND BINDING TO STATES TECHNICAL ISSUES • PREPARATION OF BANKABLE DPRS THROUGH CAPABLE ORGANIZATIONS • CREATION OF REVOLVING FUND FOR PREPARATION OF DPRs • INDUCTION OF LATEST TECHNIQUES FOR SITE INVESTIGATION & ENGAGEMENT OF REPUTED CONSULTANTS FOR COMPLEX PROJECTS • TURNKEY EXECUTION ON MERIT THROUGH INTERNATIONALLY REPUTED CONTRACTING AGENCIES

  15. NHPC IN INDIAN HYDRO SECTOR

  16. PROFILE • POWER STATIONS UNDER OPERATION : 10 Nos. (3,755 MW) • PROJECTS UNDER CONSTRUCTION : 11 Nos. (5,623 MW) • X PLAN (2002-07) PROJECTS : 05 Nos. (2,480 MW) ALREADY COMMISSIONED : 03 Nos. (1,580 MW) • XI PLAN (2007-12) PROJECTS : 16 Nos. (6297 MW) • XII PLAN (2012-17) PROJECTS : 12 Nos. (12,080 MW) • LIKELY CAPACITY BY 2012 : > 10,000 MW

  17. (As on 31.03.2006) FINANCIAL HIGHLIGHTS Rs./ Cr. • AUTHORISED CAPITAL : 15,000 • PAID UP CAPITAL : 10,600 • NET WORTH : 15,300 • VALUE OF ASSETS : 23,700 • TURNOVER : 1714 • NET PROFIT : 743 • DIVIDEND PAID (2005-06) : 223 * • AVG. RATE OF BORROWING : 6% • CREDIT RATING BY : ‘AAA’ FOR DOMESTIC INTERNATIONAL AGENCIES & ‘BB+’ FOR INTERNATIONAL BORROWING * Interim Dividend of Rs 64 Crs paid

  18. POWER STATIONS UNDER OPERATION

  19. X PLAN PROJECTS

  20. XI PLAN PROJECTS Cont…

  21. XI PLAN PROJECTS Contd * CCEA in meeting held on 02.06.2006 has cleared the project, sanction letter is awaited.

  22. FUNDING PLAN Rs. in Cr. * Internal & Extra Budget Resources (IEBR)

  23. RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA (RGGVY) • NHPC HAS BEEN ENTRUSTED WITH RURAL ELECTRIFICATION WORKS UNDER RAJIV GANDHI GRAMEEN VIDYUTIKARAN YOJANA IN THE FOLLOWING AREAS WITH TOTAL ESTIMATED COST OF RS. 1550 CRORES: • PURULIA DISTRICT OF WEST BENGAL, • EAST CHAMPARAN, WEST CHAMPARAN, DARBHANGA, SITAMARHI, SHEOHAR & MADHUBANI DISTRICT OF BIHAR, • DURG, KAWARDHA, RAJNANDGAON, DHAMTARI, KANKER, RAIPUR & MAHASAMUND DISTRICT OF CHHATTISGARH • KATHUA, JAMMU, UDHAMPUR, KARGIL, SRINAGAR, BADGAM, LEH DISTRICT OF J&K • RAYAGADA, GANJAM, PHULBANI, BOUDH, PURI AND GAJAPATI DISTRICT OF ORISSA • - NHPC SHALL GET AGENCY FEE AS 12 % OF THE SANCTIONED COST

  24. INDIA HAS HUGE HYDRO POTENTIAL PROVIDING AMPLE OPPORTUNITY FOR ALL THE PLAYERS. GOVERNMENT’S FOCUSED ATTENTION AND EXTRA THRUST TOWARDS HYDRO SECTOR MAY CONTINUE SO AS TO ACHIEVE THE DESIRED HYDRO:THERMAL MIX IN THE COMING YEARS.

  25. THANK YOU

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