South Asia Investor Workshop on Cross Border Electricity Trade

Transcription

1 South Asia Investor Workshop on Cross Border Electricity Trade Role of Power Markets and Market Intermediaries in Facilitating Investments in South Asia 24 th September 2014 MINING

2 Adhunik Metaliks Limited (AML) - Flagship/Holding Company Steel Mining Power o Alloy and Special Steels: Adhunik Metaliks Limited (AML) 0.45MTPA Captive Mines o Iron Ore: 18 MMT (Operational) o Alloy and Special Steels: Adhunik Alloys and Power Limited (AAPL) 0.45MTPA Orissa Manganese & Minerals Ltd (OMML): 100% Subsidiary of AML o Iron Ore: 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 Patratu Mines (49:51 JV) # o Coal: 450 MMT (recently allocated) Adhunik Power and Natural Resources Ltd. (APNRL): % subsidiary of OMML o IPP: 540 MW o First unit of 270 MW COD declared on 21st Jan 2013 o Second unit of 270 MW COD declared on 19 th May 2013 Captive Mine o Coal: 69 MMT 2

3 Jharkhand Project of 1,080 MW plants being implemented in two Stages Planned Project Stage I: 540 MW (2x270 MW). First unit of 270 MW COD declared on 21 st January 2013 Second unit of 270 MW declared on 19 th 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. open access received O&M: In-house Consultants: DCPL is the Owner s Engineer as well as the Project Managers LIE: Mott Macdonald approval for 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

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

5 Opportunities in Cross Border Trade Information about Population (in Millions) 1, Installed Capacity (MW) 253,389 ~1,000 ~5,255 ~1,600 ~689 ~19,505 ~3,000 Per Capita Cons. (in kwh) Deficit (MW) 17,517 1,500 2,000 1, ,000 2,000 Cross Border Transmission capability (existing / proposed) MW MW MW MW MW MW Predominant Fuel Thermal / Hydro Thermal / Hydro Gas Hydro Hydro Thermal / Hydro Thermal / Hydro

6 Demand projections in SAARC

7 Per Capita Consumption

8 Energy and Development Concerns Burgeoning growth in population ( currently stands at 1.45 Billion, 20 % of World Population) High income and capability poverty (Income poverty varies from 39.7 for Srilanka to 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 modern commercial sources of energy for cooking and lighting) Traditional fuel i.e. biomass and firewood consumption as per cent of total energy requirement is very high Per capita commercial energy consumption is at abysmally low level but energy intensity (energy consumption per unit of GDP) is considerably higher- hints towards inefficient energy utilization

9 Strategies for a Regional Market Diversifying the sources of fuel supply by developing an efficient regional market for trading especially in electricity and gas via interconnected electricity networks or gas grid Developing a mechanism for R & D and sharing geological and other relevant data, knowledge, expertise, technology and promoting capacity building at the regional level especially in energy demand management measures (conservation and energy efficiency), improving energy sector governance and in developing alternate sources like renewable (hydro, solar, biofuel etc.) Encouraging initiatives at all level for developing energy technology and charting out a broad technology perspective for the region Facilitating in development and harmonization of regional infrastructure, financial mechanism, and regulatory mechanism Developing a regional risk pooling mechanism by making inter-governmental and institutional arrangement for Electricity Trading, jointly procuring oil and natural gas and other natural resources Developing Strategic Reserves as oil shock contingencies

10 Energy Resource Base of SAARC Afghanistan: Moderate gas/hydro power potential, but large solar and wind potential 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

11 Potential for Regional Energy Trading Intra-regional trade in electricity Hydro electricity exports from Nepal and Bhutan to India or through India to Bangladesh, 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 far off countries like Venezuela in VLCC Transit trade in natural gas Trading gas between Central Asia and Middle East and India would require pipeline transit through Pakistan and Afghanistan. Importing gas from Myanmar to India would require pipeline transit through Bangladesh. Countries providing transit could also access gas for their own use. Pipelines for transit trade under exploration- IPI ; TAPI ; MBI and QIPI

12 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

13 Indian Power Trading Experience

14 Cross Border Electricity Exchange

15 India now has an integrated National Grid with all Regions (North, East, West, South and North East Regions) having unified frequency. Huge potential for cross border trade with different SAARC countries. Indian power sector is fairly developed and has established a market in a deficit regime, which could be set a trend in the region Indian National Grid

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

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

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

19 India Pakistan interconnection India - Pakistan: Cross border transfer of power through Amritsar Lahore lines across the two countries possible and the system needs to be strengthened

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

21 Regional Electricity Trading Infrastructures Policy Plan SAARC SAARC Sectt. Group of SAARC Members Country Government Government Regulations SAARC - Reg CERC CERC CAC Generation Any Grid Connected Entity Gencos IPPs Transmission CTU PTU CTU PTU Systems Oprn POSOCO, NLDC (India) NLDC Billing Settlement Govt. backed Transaction Nodal RPC Distribution / OA Trading Platform Trading Entities of Respective Country Exchanges / Bilateral Trading Licensees DISCOMs / OA Local / Shared Platform Trading Licensees Appeal Dispute Resolutions : SAARC / CERC????

22 Regional Electricity Trading Infrastructures SAARC Designated Nodal Regulator Coordinating with different Countries Central Regulator Supply side Intermediaries Demand side Generators Wire Owners System Operators Traders Distribution Cos State Distribution Companies Independent power producers Captive generators Non-conventional Energy Sources CTU STU Transmission Licensees (PTU) NLDC RLDC SLDC Or a Agency of SAARC Trading Cos Generating Cos Distribution Cos Large Industrial consumers Small Industrial consumers

23 Regional Electricity Trading Infrastructures Single Nodal Trader Model (SNTM) Generators (Seller) Multi Trader Model (MTM) Competitive Phase Generators (Sellers) PPAs Direct on Exchanges PPAs Single Trader Competition Traders on Exchanges or Bilateral Single Buyer PPA PSA Distribution Utilities (Buyers) Distribution Utilities / OA Consumers Distribution Utilities / OA Consumers

24 Issues in Cross Border Trade Issue Probable Solution Trading Platform Transaction Mode Payment Mechanism Regulatory Mechanism Delivery Point Taxes / Duties Controlling Agency for the Trade Pan Caking of Losses Energy Accounting Usage of Corridor by Open Access Consumers Bilateral Contract / Exchanges Any Trader Letter of Credit / Guaranted by the Sovereign Common Forum of all the Regional Regulators International Boundary (Interconnection of the Selling Country) To be exempted Respective Nodal Agency (CTU for India) To be rationalised (Similar to PoC to be used) Nodal agency could be (CTU of India) To be allowed to use the Corridor(s)

25 Way forward : Indian National Grid could act as backbone for Central and South East Asia

26 THANK YOU Adhunik Power and Natural Resources Limited 701, 7 th Floor, World Trade Tower, Barakhamba Lane, New Delhi , India +91(11) mnrs@adhunikgroup.co.in